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'The Rachel Maddow Show' for Tuesday, May 11, 2010

Read the transcript to the Tuesday show

Guest: Sen. Robert Menendez, Satish Nagarajaiah, Bernie Sanders, Brian Katulis

CHRIS HAYES, GUEST HOST:  Good evening, Keith.  Thank you so much.

               

Rachel has one measly night off.  So, here I am.  Thanks for staying

with us.

Among other things, we have the story of the 96 to nothing Senate vote

on a bill with roots in Ron Paul and Bernie Sanders as its sponsor.  We

will try to explain how the underwater volcano of oil in the Gulf of Mexico

might be finally be stanched.  And for good measure, we‘ll try to explain

Egypt‘s 30-year-long emergency, John Boehner‘s answer to the tax rate, the

answer to every sixth grade boys biggest question, and, of course, a

renegade yo-yo fraud currently marauding in the Midwest.

But, first, the big news out of Washington today which was, of course,

the highly-anticipated congressional hearings over the B.P. oil spill—a

disaster of a spill that continues to paralyze the Gulf of Mexico going on

three weeks now.  The thing that happens after disasters like this and

after every bad things that happens really is that those in the position of

authority try to figure out what went wrong, who is to blame.

If you crash your car into someone and the cops show up, they want to

know whose fault it was.  In this case, if you spill the biggest amount of

oil in the ocean over 20 years, the question on the table for Congress is:

whose fault was it?  Who‘s to blame?

Today, we were supposed to get answers to those questions, but if

you‘ve been paying attention for the last 10 years—heck, if you have

been paying attention for the last 100 years, you know it‘s never quite

that easy.  What we got today was not so much answers but rather “the buck

stops over there” blame gaming.

The gilded age version of this, which I love, back when corruption was

quaint, was summed up nicely in this iconic cartoon by Thomas Nast.  The

caption on the bottom: “Who Stole the People‘s Money?”  There is this big

circle of people pointing to the guy next to him; nobody willing to take

responsibility.

A hundred years later, this “blame the other guy” strategy is known on

the Internet as the shaggy defense.  It‘s named after a classic song

called, “It Wasn‘t Me,” a woeful tale of a man in (INAUDIBLE) having an

affair and his subsequent advice about how to get out of it.

(MUSIC)

HAYES:  Yes, “It Wasn‘t Me,” a timeless chronicle of moral culpability

and the perils of excuse-making.

Over the last 10 years, this miserable decade of failure after

failure, every time there‘s supposed to be a reckoning, the Shaggy defense

is what we get from people in charge.  It wasn‘t me.  Nobody is ever to

blame for anything anymore.  Every time institutional failure happens, it

wasn‘t me.

On the Iraq War, for example, George Bush made an art form out of

pulling out the

Shaggy defense.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FMR. U.S. PRESIDENT:  The intelligence failure on

Iraq, a lot of people put their reputations on the line and said the

weapons of mass destruction is a reason to remove Saddam Hussein.  It

wasn‘t just people in my administration.

I think it was just bad analysis.  But, it wasn‘t just our CIA.  It

was intelligence services all over the world that believed the same thing.

(END VIDEO CLIP)

HAYES:  Wasn‘t me.  It was the intelligence agencies, and not just

ours, everyone else‘s.  Brilliant, brilliant use of the Shaggy defense. 

Top notch really.

After Hurricane Katrina, those who headed up the field response

effort, they didn‘t hesitate—they went right for the Shaggy defense.

(BEGIN VIDEO CLIPS)

MICHAEL BROWN, FMR. FEMA DIRECTOR:  Mr. Chairman, it is my belief that

FEMA did a good job in the Gulf States.  I very strongly personally regret

that I was unable to persuade Governor Blanco and Mayor Nagin to sit down,

get over their differences, and work together.

REPORTER:  What was mobilized?  I mean, were National Guard troops in

position?  Were helicopters standing by?  Were buses ready to take people

away?

RAY NAGIN, FMR. NEW ORLEANS MAYOR:  No.  None of that.

REPORTER:  None of that.

NAGIN:  None of that.

REPORTER:  Why is that?

NAGIN:  I don‘t know.  That‘s a question for somebody else.

(END VIDEO CLIPS)

HAYES:  Yes, that‘s a question for somebody else.  Don‘t look at me. 

Don‘t look at me.

More recently, in the wake of this big financial crisis, Wall Street

executives at firms like Goldman Sachs have sort of perfected the Shaggy

defense.

(BEGIN VIDEO CLIPS)

MICHAEL SWENSON, GOLDMAN SACHS OFFICIAL:  We did not cause the

financial crisis.  I do not think that we did anything wrong.

DANIEL SPARKS, FMR. GOLDMAN SACHS OFFICIAL:  Regret to me means

something that you feel that you did wrong.  And I don‘t have that.

(END VIDEO CLIPS)

HAYES:  Boom.  Shaggy defense.  It wasn‘t them.

There‘s this—there‘s this well-worn pattern in this country of our

elites passing the buck to someone else when disaster strikes.

So, what do you think happened today in Congress when the question of

who‘s to blame for the Gulf oil came up?

Well, to set the stage—here are your options.  The blame lies with

either: B.P., who operated the oil well; Transocean, who owned the oil rig;

or Halliburton, who was doing the work on the oil well at the time.

So, here we go.  Bp, you‘re up first.  You operated the well that‘s

now leaking out of control.  So, that‘s your bad, right?

(BEGIN VIDEO CLIP)

LAMAR MCKAY, BP AMERICA PRESIDENT:  B.P., as a leaseholder and the

operator of the well, hired Transocean to drill that well.  Transocean, as

owner and operator of the Deepwater Horizon drilling rig, has the

responsibility for the safety of drilling operations.

(END VIDEO CLIP)

HAYES:  Well plead, sir, it wasn‘t you.  It was Transocean.

All right, Transocean, your move.  You own the rig.  So, it must be

your fault, right?

(BEGIN VIDEO CLIP)

STEVEN NEWMAN, TRANSOCEAN PRESIDENT & CEO:  Liability and culpability

and ultimate responsibility for the events that resulted in the incident

are one thing.  As the lease operator and the well owner, that falls on

B.P.

(END VIDEO CLIP)

HAYES:  Touche.  Transocean puts right it back on B.P.  The Shaggy

defense in all of its glory, mutually assured Shaggy defense.  Anything

else you want to add to that, Transocean?

(BEGIN VIDEO CLIP)

NEWMAN:  The one thing we do know is on the evening of April 20th,

there was a sudden catastrophic failure of the cement, the casing or both. 

Without a failure of one of those elements, the explosion could not have

occurred.

(END VIDEO CLIP)

HAYES:  Aha, a new player.  Well, Halliburton were the ones doing the

cement work at the time.  So, it looks like they‘re to blame.

Halliburton, what do you have to say for yourself?

(BEGIN VIDEO CLIP)

TIM PROBERT, HALLIBURTON:  I need to emphasize that Halliburton as a

service provider to the well owner is contractually bound to comply with

the well other‘s instructions on all matters relating to the performance of

all work-related activities.

(END VIDEO CLIP)

HAYES:  You hear that?  The well owner, which would get us right back

to B.P.  Shoot.  I was kind of guessing it would in the end Halliburton to

blame.  I mean, isn‘t that the default reaction in most terrible situations

since 2003?

Instead, it was B.P., Transocean and Halliburton all shifting the

blame, all giving their own version of the Shaggy defense.  And given this

country‘s recent history, that wasn‘t necessarily surprising.  That‘s what

people in-charge do in post-disaster situations like this.

But it doesn‘t really help us get any closer to understanding what

went wrong here.  And if everyone is to blame then no one is to blame. 

That means there‘s little incentive for Halliburton or Transocean or B.P.

to make sure this never happens again.

Joining us now is Democratic Senator Robert Menendez of New Jersey. 

He‘s a member of the Senate Energy and Natural Resources Committee where

those oil executives testify today.

Senator Menendez, thank you so much for joining us tonight.

SEN. ROBERT MENENDEZ (D), NEW JERSEY:  Good to be with you.

HAYES:  Watching these hearings, it certainly seemed like these

executives were just shifting the blame back and forth.  Is that how it

seemed to you in the room?

MENENDEZ:  Well, absolutely.  I said in my first line of questioning

that I can see we have the liability circle working already and no one

wants to be responsible, which is why my legislation to raise the

individual liability to $75 million to $10 billion is essential—so that

they can‘t run away individually or collectively from their responsibility

to the fishermen, to the shrimp fishermen, the commercial fishermen, to the

coastal communities, the estuaries that are going to be harmed.  That‘s why

we need to do this because as they play the blame game, we want to make

sure that people are made whole.

HAYES:  Well, explain that.  If you raise the cap through this

legislation, the idea is that there is so much liability to go around, we

can kind of spread it to all the parties—is that the idea?

MENENDEZ:  Well, right now, for example, B.P. has only a $75 million

liability.  That‘s beyond the cleanup, of course.  They‘ll have to clean

up.

But when commercial fishermen are harmed, when shrimp fishermen are

harmed, when seafood processing plants are harmed, when those coastal

communities lose tourism and on and on and on, their liability is $75

million.  That‘s ridiculous.  So, we want to raise to that to $10 billion.

And considering that B.P. made $5.6 billion in profit, not proceeds,

profits, in the first three months of this year alone, I think they can

afford to pay it.

HAYES:  Given everything you did here today and with all the kind of

blame shift that was going on, were you able to discern who is most

responsible at this point?  I mean, of the three parties you had in front

of you, is there a—is there a clear villain here?

MENENDEZ:  Well, I don‘t think we were able to deduce that today.  And

we‘re certainly going to need once the clean up—once the oil spill is

contained and the cleanup moves on and then we‘re going to have a full

investigation.

But it seems to me, personally, that there is plenty of liability

across the entire spectrum of that table.  And it also seems to me that we

have to question our federal inspection standards as to how it is that the

blowout protector which was supposed to stop this all from happening and

had about a dozen different safeguards, none of which worked, ultimately,

could possibly be in a situation where none of them could work.  How were

they tested, under what standard to make sure that that would have never

been possible?

So, I think there‘s plenty to go around.  But above all, I just don‘t

want while B.P. chases Transocean which chases Halliburton for the people

in the Gulf region to have to wait.  That‘s why raising the liability

standards would make those people whole right away instead of what we saw

on Exxon Valdez where people had to wait 20 years.  Many of them got

nothing because they just fell off, you know, the process—the legal

process along the way.  I don‘t want to see that happen here.

And it‘s also a lesson to these companies that they‘re going to have

to really rein in the essence of what they‘re doing and it makes us think

twice of drilling offshore.  I hope we understand there‘s such thing as too

safe not to fail.

HAYES:  You know, you mention offshore drilling.  And, obviously, the

White House made quite a bit of coming out in support of offshore drilling

and the timing of this has happened just in the wake of that announcement. 

Do you think this is an embarrassment for the administration that seemed to

stake a lot of political capital on opening up the oceans for drilling?

MENENDEZ:  Well, I think the administration made a huge mistake here,

as someone who represents the state of New Jersey and knows a lot of

colleagues along the coastal states.  We have multibillion economies built

on tourism, fishing industries.  New Jersey has a $50 billion commercial

tourism and fishing industry.  We could not afford a spill like this on the

beaches of New Jersey and what it would mean to our economy and our habitat

for over a generation.

And after all, the Energy Information Administration, the federal

entity that tell us if we were going to open both the east coast, the west

coast, all of the Gulf, and the Alaska shorelines, we would end up having 3

percent of the world‘s oil even though we ultimately consume 25 percent of

the world‘s oil in an international market.  Even the oil that we create

doesn‘t stay here necessarily domestically.  It goes into a world market.

So, the bottom line is we can keep chasing after a 19th century, you

know, fossil fuel that creates global warming problems or we can begin to,

you know, transfer our energy needs to new renewable energy sources.  This

should be a wakeup call to accelerate that process.

HAYES:  Democratic Senator Robert Menendez of New Jersey—thank you

so much for your time tonight.

MENENDEZ:  Thank you.

HAYES:  B.P. is trying something new to cap the still spilling oil in

the Gulf.  It‘s called a junk shot.  And given that name and their recent

record, that has to work, right?  We explain with a highly technical,

completely made up educational film we shot this afternoon.  Next.

Plus, the Senate voted 96 to nothing today for a bill that wasn‘t

something like Meryl Streep is great and everything bill.  Federal Reserve,

they‘re looking at you.  Stay with us.

(COMMERCIAL BREAK)

(MUSIC)

HAYES:  You ever find yourself using words that you are not maybe 100

percent sure you know the meaning of?  For the longest time I was using

firmament as if it meant foundation, something firm.  But it turns out it

means the sky.  Oops.

But the one place you don‘t expect to find ambiguity or error is in

the definitive august not to mention gargantuan Oxford English dictionary. 

And yet, Australian scientist Stephen Hughes just discovered that for 99

years the OED has been misleading its readers about the true definition of

siphon, saying that liquids move through a siphon, quote, “by means of

atmospheric pressure, which forces the liquid up the shorter leg and over

the bend of in the pipe.”

It turns out siphoning works by simple gravity.  The OED says it will

take his comments into account in future additions.  Nice to see someone

accept their responsibility for an error for a change.

Up next: More chances to increase your vocabulary, thanks to the oil

crisis in the Gulf of Mexico.  Now, we are clear on dictionary—

dictionary definition of siphon, it‘s time to get to work on the junk shot.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE:  As thousands of gallons of crude oil gush from and

underwater volcano in the Gulf of Mexico, the race is on to cap that well. 

For help, the oil turns to Dr. Buford P. Troleum (ph).  He is the man to

know when things go wrong.

This is the safest industry in the world.  Things never go wrong but

when they do, I can fix it.

The oil is gushing nearly a mile below the water surface, making the

usual solutions more difficult.

I have designed this big box to put over the flowing oil.  We‘ll

attach a pipe to the top and voila—the oil is contained.

But days later—failure.

Well, that was unexpected.  But no matter, I have another idea.  A

smaller box, it could work.

While crews work to put that second box together, Dr. Troleum puts

finishing touches on his plan.

I call it a junk shot.  You put junk in up here and then blows down

here.  It could work.

Only time will tell if Dr. Buford P. Troleum‘s ingenious creations

will stop the oil.  But if they don‘t—

All I need are wigs and pantyhose to soak up the oil.

Will these solutions work?  Stay tuned to THE RACHEL MADDOW SHOW to

find out.

(END VIDEOTAPE)

HAYES:  Kudos to THE RACHEL MADDOW SHOW crack archivist who unearthed

that amazingly prescient educational film from the show‘s early years, some

20 years before Rachel‘s birth.

Anyway, we know one thing about the Deep Horizon oil disaster tonight

we didn‘t know this morning.  That smaller box nicknamed the “top hat”

which represents try number two to cap the well is now on-site at the oil

spill.  B.P. hopes to lower it over the leaking pipe by Thursday.

Meantime, 210,000 gallons of crude continue to gush into the Gulf of

Mexico every day—when and how the responsibilities stop that

unrestrained continuous blast of petroleum remains to be seen.

Joining us now is civil and environmental engineering professor,

Satish Nagarajaiah, of Rice University.

Thanks so much for your time tonight.  I hope I got your name right.

SATISH NAGARAJAIAH, RICE UNIVERSITY:  Yes, you did.

HAYES:  Excellent.

So, the smaller box, the top hat—what makes it different than the

bigger box and more likely to work?

NAGARAJAIAH:  The primary thing is, you know, they will be actually

sending the box down at the end of a pipe—in a pipe, if you will, and

that outer pipe will actually be sending down warm sea water.  And that

will keep the box warm and hopefully, it will not plug up the way the

bigger one did and the ice plug will be prevented from forming.  And,

hopefully, it will work.

HAYES: So, the problem the last time was that they put down this big

thing and it was so cold that there was—there was freezing that happened

inside the pipe and that blocked it up and that is going to be warmed with

warm water.  Is that—is that—am I getting that right?

NAGARAJAIAH:  Yes, you are.

HAYES:  OK.  If that fails, they‘re now talking, we read in the papers

about the junk shot which sounds totally absurd to all of us who are

following this.  Is that really what it sounds like?  I mean, are we now

considering actually just pumping garbage into the leak?  How—how could

that plausibly be a solution?

NAGARAJAIAH:  Well, it‘s not garbage, really.  The reason why they are

going to pump in rubber pieces and golf balls and things like that is you

want to jam up the oil and gas which is coming up the well and flowing

through the blowout preventer right now.  If you can jam these things

inside that with, you know, these pieces of rubber, then they have a better

chance of getting cement and mud into the well to plug it.

HAYES:  OK.  So you put the rubber down, it temporarily stops it.  But

doesn‘t that—I‘m maybe betraying a tremendous amount of ignorance here. 

But doesn‘t that pressure have to go somewhere?  I mea, if you—if you

are able to kind of stem the pressure that‘s pushing up and gushing up with

the junk, isn‘t that going to just sort of seep out somewhere else?

NAGARAJAIAH:  Well, it is.  Some of it is still going to come out. 

They are going to access the BOP from a valve and they will be able to

control that, you know, flow of oil and gas through that valve which they

are going to access from the site.  And so—with that, they will be able

to control the flow eventually, of course.

HAYES:  This technology, if you can call a junk shot with technology,

was used, in our understanding, extensively in the Gulf War 20 years ago. 

You have this—it seems—a strange situation which the well drilling

technology is advanced, we‘re drilling at much deeper levels, but it

doesn‘t seem like the cleanup or kind of emergency techniques have

advanced.  Is that more or less where we are right now?

NAGARAJAIAH:  Well, this is an unprecedented accident which I think

nobody was expecting.  So, the industry is scrambling to get measures in

place to plug the well.  And that‘s the reason why I think some of these

techniques are being tried which have never been tried at this depth.  And,

you know, I think it‘s a learning experience even for the industry right

now.

HAYES:  Yes.  It certainly seems like a learning experience.

Satish Nagarajaiah, professor of civil and environmental engineering

at Rice University—thank you so much for your time tonight.

NAGARAJAIAH:  My pleasure.

HAYES:  An amazing “rub your eyes and blink” moment happened in the

Senate today—a unanimous bipartisan vote.  Their target?  The Federal

Reserve.  Just who does the fed give money to anyway?

Vermont Senator Bernie Sanders joins me next.

(COMMECIAL BREAK)

(MUSIC)

HAYES:  Something truly remarkable happened in Washington today.  The

United States Senate passed something by the way of a 96 to zero vote -- 96

in favor, zero against, which means Democrats and Republicans voted

together for the same thing.  And this incredible unanimous vote was not

for one of those things that always passes no matter what, things like

renaming a post office or declaring grandmother‘s appreciation day or a

bill with the word “patriot” in the title—although that last one did get

one dissenting vote props to Russ Feingold.

No.  They voted 96 to nothing today in favor of an audit of the

Federal Reserve.  So, what exactly is an audit of the Federal Reserve and

how did it become the impetus for perhaps the single greatest act of

bipartisanship since President Obama took office?

Well, let‘s start with the Federal Reserve itself.  The Fed is the

nation‘s bank.  Its job is to lend money to other banks.  That‘s what it

does and that‘s what it has always done.

But beginning in 2007, you might recall, the economy went into an

apocalyptic death spiral and the system went haywire and suddenly, the fed

wasn‘t just loaning money to commercial banks, it was loaning money to all

sorts of parties it had never before lend money to, and doing it in all

kinds of ways it had never done before.

Most troubling of all, the Fed wouldn‘t say who any of those borrowers

were and how much they got.  And if the idea of the Fed just handing out

cash and refusing to tell anyone who they were handing it to sounds crazy

that‘s because it is crazy.

Here‘s what happened in March of last year when Senator Bernie Sanders

of Vermont huffed and puffed and tried to get Federal Chair Ben Bernanke to

tell him who was on the receiving end of $2.2 trillion with the “T” in

emergency federal loans.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I), VERMONT:  Will you tell us who got that money

and what the terms are of those agreements?

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN:  In terms of the terms, we

explain the terms exactly.  We explained what the collateral requirements

are.  We explained—

SANDERS:  To whom did you explain that?

BERNANKE:  It‘s on our Web site.

SANDERS:  Yes.  OK.

BERNANKE:  So, all that information is available.  In our commercial

paper—

SANDERS:  And who got the money?

BERNANKE:  Hundreds and hundreds of banks.  Any bank that has access

to the U.S. Federal Reserve‘s discount—

SANDERS:  Can you tell us who they are?

BERNANKE:  No.

(END VIDEO CLIP)

HAYES:  Nope.  You just catch that.  He just plain wouldn‘t tell

who the Fed is giving money to.  Now, the effort to combat that secrecy and

account for the basic facts of who‘s getting how much money from the Fed on

what terms has given rise to the ultimate strange bedfellows political

coalition.  The “Audit the Fed alliance” includes lefty bloggers like Jane

Hamsher and the uber conservative, right-wing, anti-tax crusader Grover

Norquist.  It includes Congressman Alan Grayson, one of the most liberal

members of the House, and Congressman Ron Paul, one of the most

conservative.

And now, remarkably, the audit the Fed movement includes all of

the 96 senators who are present today. 

Joining us now is Independent Senator Bernie Sanders of Vermont,

the sponsor of the Audit the Fed Amendment that passed unanimously today. 

Sen. Sanders, I hope you are not too fatigued from taking a victory lap. 

Thanks for coming here tonight. 

SEN. BERNIE SANDERS (I-VT):  My pleasure.  Good to be with you.

HAYES:  So first, tell me what exactly your amendment does.  It is a

little hard, I think, for folks to get their heads around this.  What is

the scope of this audit and then what is it going to tell us? 

SANDERS:  Well, for a start, it forces Ben Bernanke to tell the

American people what he refused to tell me on the day that I asked him

those questions.  And essentially on - by December 1st, 2010, anybody in

this country who has a computer will learn which financial institutions or

foreign banks received loans often zero interest percent or low interest -

very low interest loans from the Fed.  So that is number one.  There is

going to be disclosure. 

Number two, what we put into this amendment is to ask the GAO to

do an investigation of possible conflicts of interest between the feds and

the heads of the largest financial institutions in this country.  It has

always seemed very strange to me you can have a situation where people like

Lloyd Blankfein, the CEO of Goldman Sachs could be involved in meetings

with the Fed fighting, for example, for $185 billion bailout of AIG. 

And guess what, Chris - it turns out that Goldman Sachs got $13

billion repaid from AIG to Goldman Sachs - 100 cents on the dollar.  Now,

to my mind, that looks like a conflict of interest.  But that is what the

GAO will take a look at. 

You have situations where Stephen Friedman, who was a member of

the board of Goldman Sachs, happened to be the head of the New York Fed. 

And in that capacity, he pushed for Goldman Sachs to become a bank-holding

company gaining access to the Fed window. 

He also bought a lot of stocks which went up during that period. 

To my mind, again, and I think to many people, that appears to be a

conflict of interest.  What is going on when you have the heads of multi-

trillion dollar financial institutions sitting down behind closed doors

with the Fed and working out deals which benefit some of the most wealthy

and powerful people in this country? 

Point is, the Fed is the most powerful, in my view, government

agency.  It has operated for decades with virtual total secrecy.  We are

now beginning to lift the veil of that secrecy, learning what is going on. 

And I think that is an important step forward for the American people. 

HAYES:  The biggest headline that comes out today from the political

perspective, I think, is about the unanimous vote.  You know -

SANDERS:  Yes.

HAYES:  How did this coalition come together at a time when

practically nothing ever gets a bipartisan vote, let alone a unanimous one? 

SANDERS:  Chris, that‘s an excellent question.  And let me tell you,

you know, this unanimous vote is a little misleading, because if you and I

chatted two weeks ago I would have told you I wasn‘t quite sure we would

get, you know, the 50 or 60 votes that we needed. 

But I‘ll tell you there is a lesson from this.  And the lesson is

that when you have strong grassroots progressive organizations like the

AFL-CIO, SEIU, “MoveOn.org,” prepare to work with some of the strongest

grassroots conservative organizations. 

And millions and millions of people get mobilized and they say,

“You know what?  We want to know what is going on in the Fed.  It is our

money.  It‘s not their money.  We want to know if there are conflicts of

interest.” 

When you have the type of grassroots effort, that energy

percolates on up, and it makes it harder and harder for members of the

Senate to say, “You know what?  No, I‘m going to protect the secrecy of the

Fed.” 

That just didn‘t work today.  And I‘m very proud that so many

people came together.  And I think it‘s a lesson for the future.  If we

focus on economic issues, you are going to find working class people,

whether they‘re consider themselves progressive or conservative, prepared

to come together to fight for justice in our country. 

HAYES:  You know, there‘s also another reason, it seems, that the

votes came in which was that you had modified the language of the amendment

from your original language.  Largely, it was reported, I imagine, due to

pressure from the White House and other folks in the administration. 

Are you satisfied with what you came out with?  Are there things

you want to see strengthened when it goes to conference committee?  Because

the House has actually a kind of stronger version in some respects. 

SANDERS:  Well, yes and no.  There are some aspects of the House bill

which are stronger.  For example, they have unlike my amendment, which is a

one-time audit of the Fed in terms of emergency provisions passed since

2007.  Theirs is ongoing. 

And I support that.  I support that.  That was in my original

amendment.  On the other hand, what we have that the House amendment does

not have - is we have specificity.  We have disclosure, which the house

bill doesn‘t have. 

And also, we have very clear language that the GAO is going to

have to take a hard look at conflicts of interest.  The House bill is a

more general bill, basically says which is what my bill in the Senate said,

the GAO will audit the Fed.  But we have a lot more specificity in this

bill and I think that is a positive thing. 

HAYES:  Great.  Sen. Bernie Sanders, Independent of Vermont, thank you

so much for joining us tonight. 

SANDERS:  Good to be with you. 

HAYES:  House Minority Leader John Boehner is sick of Obama‘s high

taxes.  Sick of it.   But the last time taxes were this high, Milton Berle

had the number one TV show and John Boehner was in diapers, if by high, you

mean low.  That‘s next.

(COMMERCIAL BREAK)

HAYES:  Coming up, just about the entire gamut of news from the Obama

administration‘s all ostensibly bad options in Afghanistan to a straight-up

imposter yoyo expert wreaking havoc on morning TV shows across the Midwest. 

There is so much more on our combination platter tonight. 

But first a few of holy mackerel stories in today‘s news,

beginning with a grab bag full of disclosure.  I‘m not offering much in a

way of commentary or analysis on President Obama‘s nomination of Elena

Kagan to the Supreme Court because my wife works in the White House

Counsel‘s Office. 

Also, Kagan went to my high school, dashing all hopes I had of

earning the superlative graduate most often attacked by the right wing. 

That said, there is a statistic that should be noted every time a

Republican feigns bereavement and complains about the liberalizing of the

Supreme Court. 

And it is this.  Two academics, conservative appeals court judge

and his colleague at the University of Chicago conducted a study released

last year in which they ranked every single Supreme Court justice between

1937 and 2006 - 70 years‘ worth of justices placed along the liberal-

conservative spectrum. 

And what they found was this - of the most five conservative

Supreme Court justices of the past seven decades, of the five most extreme

right-wing justices, four are serving on the current court. 

The justice we now consider to be the moderate swing vote,

Anthony Kennedy - he is ranked as the 10th most conservative justice since

1937.  On the left, not a single one - not one of the five most liberal

justices is serving today. 

Which means, paradoxically, that if we want a court that exhibits

the cherished beltway value of centrism, what we really need are some

serious radicals on the bench.  Only Noam Chomsky - 40 years younger and

had no paper trail.  A boy can dream. 

Next up, there is a notable and quantifiable perception gap in

America when it comes to taxes, specifically how much in taxes people

believe they paid.  When asked about their taxes earlier this year, 77

percent of respondents told pollsters that their taxes remained the same or

went up. 

That theme, the “Obama is raising our taxes” theme, has been

stoked to great effect by Republicans.  Regarding last month‘s job

increases, the spokesperson for House Minority Leader told “Roll Call”

today, quote, “While positive signs are good news and we expect our economy

will recover, it will be because of the hard work and entrepreneurship of

the American people - and despite Washington Democrats‘ job-killing agenda

of more spending, higher taxes and more regulation.” 

Hear that?  Higher taxes.  Here is where Congressman Boehner‘s

itinerant logic runs smack into the tax returns of actual Americans.  An

analysis by “USA Today” found that Americans actually paid less in taxes

last year than at any other time since records have been kept, since the

mailbox at 1600 Pennsylvania Avenue was labeled the Trumans. 

That is a percentage of income, meaning every job created in

America in the last 60 years materialized despite even more heinous job-

killing over-taxation than our current socialist president is able to

inflict. 

And finally, today was a day like any other in Egypt.  The sun

rose.  The Nile flowed south to north.  The emergency laws were extended

for another two years.  A day like any other. 

The emergency laws have been in place for nearly 30 years ever

since the president - the assassination of President Anwar Sadat.  They

allowed the government to go around certain constitution protections. 

The police can detain terrorists, drug suspects indefinitely and

civilians can be denied trials in lieu of military tribunals.  In the past,

the government has used the emergency laws to break up rallies, seize and

censor newspapers and spy on its citizens. 

But here‘s the thing - Egypt‘s 30-year-old emergency laws are as

much an emergency as Billy Idol leaving the band, Generation X, to begin a

solo career.  If you don‘t get that reference, you are not alone.  I

actually don‘t either.  But I am reliably informed it happened in 1981.  In

other words, a really long time ago.

(COMMERCIAL BREAK)

HAYES:  As a guest host of this show tonight, I want to send a special

message to the next generation, to the millions of sixth grade boys tuned

in right now to this show, all trying to figure out how much cologne is too

much and how tough is tough enough. 

Gentlemen, listen up.  If you want to win their hearts, forget

the macho jerk routine and just learn to sing like Lady Gaga, like this

guy. 

(SINGING)

That, young fellows, is how you get them to notice you, if you

notice the swooning in the background.  His name is Greyson Michael Chance. 

And I think he just put Lady Gaga and Justin Bieber out of work.  The only

danger is he has peaked in the sixth grade.  But even then, a peak it will

have been. 

(COMMERCIAL BREAK)

HAYES:  Afghan President Hamid Karzai is in Washington as part of a

four-day visit.  And fresh off around a publicly scorning Mr. Karzai, the

Obama administration has launched a charm offensive with their only

official ally in the hotter of our two wars. 

(BEGIN VIDEO CLIP)

HILLARY CLINTON, UNITED STATES SECRETARY OF STATE:  I offer a very

warm welcome to President Karzai and the members of the Afghan government

gathered here.  It is a special pleasure to host you and your distinguished

delegation in Washington for what is truly a historic gathering this week. 

(END VIDEO CLIP)

HAYES:  Wow.  It doesn‘t feel like that long ago that the U.S.

government was dismissing Karzai after he made a series of statements

dismissing the United States and threatening to join the Taliban.  It is

because it wasn‘t that long ago.  Like, about a month, remember? 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Is Karzai our ally? 

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  Karzai is the

democratically-elected leader of Afghanistan. 

UNIDENTIFIED FEMALE:  Following up on Jake.  Is he a credible partner

to the U.S.? 

GIBBS:  Again, he is the democratically elected leader of Afghanistan. 

(END VIDEO CLIP)

HAYES:  So that‘s patched up and the administration has now publicly

embraced Karzai and his government despite appearances that the folks,

nominally running Afghanistan remain as corrupt as ever. 

Whether or not the Obama administration and President Karzai say

nice things about each other, the United States fortunes in Afghanistan

remain tied to the Karzai government. 

Nearly nine years into the war there, there have been over 1,000

American casualties.  The U.S. has given more than $51 billion.  President

Obama has established a July 2011 deadline to bring some troops home.  And

to some, it‘s a fresh sense of urgency to get something done. 

Amid that mood, there comes a new report today from the Center of

American Progress.  Its suggestion is that there is no plan for the Afghan

government to decrease its dependence on foreign aid and emerge as a self-

sustaining nation. 

Consider this - quote, “the Afghan government remains heavily

reliant on international support for almost 80 percent of its budget.  This

major alliance on international aid means the Afghan government‘s key

constituency is the international donor community, not its populace.” 

“The Afghan state‘s long-term survival requires the generation of

domestic revenues and a reduction of dependence on foreign aid.” 

The problem isn‘t that American taxpayers are investing in what

continues to be a desperately poor country.  That is an absolute moral

duty.  The problem is that we seem to be creating a situation in which

Afghanistan is turned into a ward of the American state in perpetuity. 

Joining me now is Brian Katulis, senior fellow at the Center for

American Progress.  Brian, thanks so much for being here. 

BRIAN KATULIS, SENIOR FELLOW, THE CENTER FOR AMERICAN PROGRESS: 

Thanks for having me on, Chris. 

HAYES:  So Brian, according to the report your think-tank put out

today, we seem to be creating a situation doesn‘t advance either the well-

being of the Afghan populace or U.S. interests.  And this one-line report

really brought me up.  It says, “Afghans continue to act as bystanders as

their state is rebuilt.”  How did we get to this state? 

Well, I think a big part of it is the path that was carved out by

the previous administration.  And as you know - you know, this was the

forgotten war for so many years.  We unnecessarily went into Iraq, and I

think we were distracted.  So now, we‘re playing catch-up. 

And in the process of playing catch-up, I don‘t think we have a

clear long-term plan of what the end state is.  My colleagues, Caroline

Wadhams(ph) and Colin Cookman, in this report, I think, lay out the extreme

challenges that exist for helping build Afghan institutions, which I think

everybody admits is central to the strategy in Afghanistan. 

HAYES:  Yes, I mean, you hear this conversation about building

stronger institutions and cracking down on corruption.  And it begins to

feel a little despair-inducing.  Is there a path forward for doing that

when so much of the current strategy seems to rely on keeping Karzai as a

partner? 

KATULIS:  Well, I think we‘ve been fixated on Karzai.  And what I‘ve

seen in visits to Afghanistan is you‘ve got a lot of good people who want

just the basic things you and I have - security, economic development. 

And there are a lot of people we can work with.  Karzai, I think,

is a real stickler here.  I mean, as you mentioned, it‘s been a rocky

relationship.  And just a few weeks ago, he was threatening to join the

Taliban, the guys we were trying to fight. 

So managing that relationship, but then trying to not put all of

our eggs in the Karzai basket, I think, is part of the strategy here and to

develop institutions at multiple levels, not just at the national

government, but in the district and the provinces, too. 

HAYES:  President Karzai is in town, of course, this week, and is

going to be here for a while.  I‘m wondering what your - what are those

meetings?  I mean, if you‘re a fly on the wall in those meetings, what are

the conversations you think are happening here?  What does Karzai want to

see coming out of this meeting?  What does the White House want to see

coming out of it? 

KATULIS:  Well, I hope from the U.S. perspective, there‘s some tough

talk behind closed doors, because as we‘ve seen in public and we‘ll see in

public, there‘s got to be - you know, this is the kiss-and-make up mode

after the last couple of weeks of difficult talk in public. 

I hope that the United States and the Obama administration is

pretty clear about cracking down on corruption and strengthening governance

because it‘s a self-defeating proposition if we‘re going to be sending

troops and U.S. taxpayer money over there and our partner is not as serious

about strengthening his own government. 

So from the Karzai end, I think he‘s looking for an enduring

strategic relationship.  And I wouldn‘t be surprised if the U.S. and

Afghanistan announce a dialogue similar to what we have seen with Pakistan,

a long-term strategic dialogue that sends a signal that even if our troops

are starting to leave next summer, we‘re going to be there for the long

haul and we‘re trying to build a partnership here. 

HAYES:  Do you think the fact that we are seeing a level of violence

in Afghanistan and continued news reports about civilian casualties

undermines essentially the independence of Karzai, makes it more difficult

for him to really stand out? 

KATULIS:  Well, look.  You go back to that 80 percent figure.  Eighty

percent of his funds in his government come from us and the international

community.  I think that makes it very difficult for him to stand up on his

own. 

I think one pathway forward we need to talk more about is how can

Afghanistan use its own natural resources to basically develop its own

economy and its own system there? 

And then, second, you know, we have issues like this offensive in

Kandahar, the second largest city Kandahar.  There‘s some questions about

whether the United States and Afghanistan are in full agreement about

whether - or how to proceed in Kandahar. 

And I think this will be discussed, and I think we really need to

listen to our Afghan partner here in terms of, how do we move forward?

HAYES:  Brian Katulis from the Center for American Progress, thanks

for being here. 

KATULIS:  Great.  Thank you. 

HAYES:  Coming up on “COUNTDOWN,” an anti-gay minister gets rumbled

with a Rent Boy and resigns from an anti-gay group.  Perfect topic for

Keith to ask Michael Musto about.  We‘ll be right back.

(COMMERCIAL BREAK)

HAYES:  We turn now to our yoyo fraud correspondent, Kent Jones. 

Kent, who knew your beat would be so easy? 

KENT JONES, MSNBC CORRESPONDENT;  Oh, there‘s a lot going on, Chris. 

Here is a shocking cautionary tale about a man, a yoyo, and a web of lies. 

Look. 

(BEGIN VIDEOTAPE)

(voice-over):  Meet Kenny Strasser, a.k.a. K-Strass. 

KENNY STRASSER, YOYO MASTER:  I am just a 35-year-old kid at heart.  I

don‘t have a girlfriend.  Don‘t want one. 

JONES:  Kenny Strasser was pitched to local TV producers as a master

yo-yo artist whose mission was to travel around schools in the Midwest

teaching children about the benefits of environmentalism while delighting

him about his yoyo prowess.  

He‘s the perfect local morning TV guest, right?  So here on WSAW

“Sunrise 7” show in Wausau, Wisconsin, it‘s Kenny Strasser, master yoyo

artist. 

STRASSER:  And you‘re like this, you know -

JONES:  Correction, master yoyo.  With little more than a yellow ball

cap and super-sincere story line, Strasser managed to talk several other TV

stations into dazzling their viewers with his yoyo skills.  They even let

him rap. 

STRASS:  Hey there up in the sky, it‘s the K-Strass, the yoyo guy. 

JONES:  When he appeared on a show in Green Bay, Kenny Strasser, yoyo

master, said he forgot the string.  You‘ve got to hand it to him.  This is

some deep weird Andy Kaufman territory here.  As they say, he commits to

the material. 

STRASSER:  Let‘s bring it back home for a clean landing, 10-4. 

JONES:  But next time, we‘ll call you. 

(END VIDEOTAPE) 

HAYES:  Thank you, Kent.  That was awesome. 

JONES:  Anytime. 

HAYES:  That does it for us tonight.  I‘m Chris Hayes, Washington

editor of “The Nation” magazine.  “COUNTDOWN” with Keith Olbermann starts

now.  Good night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY

BE UPDATED.

END   

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