updated 7/22/2010 10:50:58 AM ET 2010-07-22T14:50:58

Guests: Al Sharpton, Eric Boehlert, Jim McDermott, A.B. Stoddard, John Feehery, Norman Goldman, William Barber, Bertha Lewis

ED SCHULTZ, HOST:  Good evening, Americans, and welcome to THE ED SHOW tonight from New York.

These stories are hitting “My Hot Buttons” at this hour.

Oh, we‘ve got a dandy tonight.

Right-wing hate merchant Andrew Breitbart and Fox News, well, they‘ve tried to destroy the career of another prominent African-American government official.  My commentary and reaction from Reverend Al Sharpton in just a moment. 

An explosive scandal at the Republican National Committee.  The RNC‘s treasurer and bean counter just accused Michael Steele of trying to hide $7 million in debt.  I‘ll get “Rapid Fire Response” on that. 

And racial tensions erupt at a school board meeting about busing in North Carolina?  Is this the ‘60s all over?  Nineteen people were arrested last night. 

I‘ll talk to one of them.  Reverend William Barber of the NAACP coming up in the ‘Playbook.”

But this, of course, ,is the story that has me fired up tonight. 

America is laser-focused on a USDA official Shirley Sherrod. 

Now, folks what we have here is a manufactured story supplied by a hate merchant.  And, of course, it was cooked up and promoted by the right-wing network across the street, sold as a racial hate story.  And a White House that clearly overreacted without the having all the facts. 

The White House just can‘t stand up to Fox News, can they?  I think that is the bottom line.  When are they going to learn?  Of course, now they‘re worried about what Glenn Beck is going to say, because, you see, Glenn Beck, he went after Van Jones, and of course they buckled. 

When the hate merchant himself, conservative blogger Andrew Breitbart, posted fake videos of a primp and hooker asking for help at an ACORN office, what did the White House do?  Democrats just caved. 

Now to the issue at hand, Shirley Sherrod, the target of the right-wing‘s latest smear attack.  Well, she falls victim for a while. 

The way this has played out it, it sure seems to me that the White House threw her under the bus early on because they were just afraid of Fox News.  Because Fox said it, it must be right. 

Breitbart is completely shameless about the story.  Listen to what he told Hannity last night on the show. 

(BEGIN VIDEO CLIP)

ANDREW BREITBART, CONSERVATIVE BLOGGER:  The whole point was to show that for the NAACP to spend five days on national TV saying the Tea Party is racist without any evidence, when we can prove that the central argument didn‘t happen, and the mainstream media won‘t play it, for them to talk about racism, they should not be throwing stone in glass houses. 

(END VIDEO CLIP)

SCHULTZ:  This is a classic, my friends.  Breitbart cooked up a story to prove a point and to protect the Tea Party.  That‘s what it‘s all about.

And what did Fox News do?  Well, they jumped all over it. 

Heck, he‘s a right-wing blogger and media expert.  And, of course, the White House panicked. 

Sean Hannity played the doctored video of Sherrod over and over on Monday night.  Remember, this is the same host who played tape on a show that pretty much misrepresented and exaggerated a Tea Party protest. 

“Slant Head” and other brain wizards across the street, well, actually, they do this all the time for one reason.  They know they will never face any consequences of a serious news organization whatsoever. 

I mean, look at the pattern—Van Jones ACORN, Shirley Sherrod.  They are people and there are people in the right-wing machine that are on a crusade to make powerful black people villains in this country. 

White House Press Secretary Robert Gibbs had a message for Shirley late this afternoon. 

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  I think without a doubt, Ms. Sherrod is owed an apology.  I would do so certainly on behalf of this administration.  I think if we learn—if we look back and decide what we want to learn out of this, I think it is, as I said, everybody involved made determinations without knowing all the facts and all of the events. 

(END VIDEO CLIP)

SCHULTZ:  No, no, no, no.  Wait a minute here.  The mistake was made -

just my personal observation, folks—the White House is afraid of Fox News.  And they don‘t know how to use progressive media.  They think they have no friends. 

Just because Fox says something, they take it hook line and sinker? 

That‘s the mistake, Mr. Gibbs.  I don‘t think you really value communicating with the base.  You don‘t evaluate it enough, how powerful it is. 

They don‘t understand that we‘re in the middle of this ideological war, this cultural war in this country.  The administration took the right-wing bait hook, line and sinker, overreacted, and then they told Shirley to resign. 

They need to make it right.  And this afternoon they did.  Agriculture Secretary Tom Vilsack stepped up to the podium and took full responsibility. 

(BEGIN VIDEO CLIP)

QUESTION:  Are you absolving the White House of any responsibility here in this situation? 

TOM VILSACK, AGRICULTURE SECRETARY:  You know, it‘s not my place to absolve anything from anything other than to accept responsibility for what I did.  And I am accepting that responsibility with deep regret. 

This is a good woman.  She‘s been put through hell.  And I could have done and should have done a better job. 

(END VIDEO CLIP)

SCHULTZ:  Vilsack said that Sherrod was very gracious in the conversations today, and he offered her a new position at the Department of Agriculture.  But what have we gathered in all of this? 

Now, let‘s go back to the beginning here about how this all started and how they operate. 

This Breitbart is a master at trying to destroy people professionally. 

He‘s a right-winger.  He has an agenda, no doubt about it. 

I saw him in the hallway here today on MSNBC, asked him to be on the program tonight.  He‘s too tired and he doesn‘t know about tomorrow. 

This is how hate merchants operate.  They go where they can find safe haven.  They go where they can be promoted. 

But one other thing that I think we must consume in all of this is that Fox News took his word for face value, made it a story because they‘re on an agenda, went after the Obama administration.  And who did they turn to first?  Gosh, the tape I was seeing, there was Newt Gingrich right there, first in line with Hannity on Monday night, ready to trash everybody in line at the NAACP, ready to trash this employee, Shirley Sherrod, who has a long record of helping White people. 

But this is how they play the game.  And the sad part of all of this is that if they can‘t find a story to problem a point, hell, they‘ll just make it up.  They‘re Fox News.  They don‘t have to answer to any journalistic principles.  That‘s who they are. 

But for some reason, the White House almost buys into this culture of destruction and doesn‘t stand up to it. 

To hell with them.  I want to know why any Democrat in the Congress, any Democrat in the Senate, any Democrat anywhere, why do you even go on those programs over there?  They don‘t tell the truth.  They beat you up. 

What do you gain?  You‘re just talking to a bunch of right-wingers anyway. 

Come solidify the base, something that this White House I think has had a hard time doing during the health care debate, during the financial reform, during the unemployment relief conversation that‘s going on in this country.  This should be a wakeup call to the White House. 

This ought to be a wakeup call to all Democrats going into the midterms, that those folks over there are playing for keeps.  And until the Democrats and the progressives in this country understand that we are in a cultural war, a cultural fight for this country for the wage earners, for the workers of this country who they care nothing about and want to destroy everybody they possibly can to grab the power back in this country, we won‘t win.  We won‘t win. 

Now, I have the freedom to say whatever I want on this program as long as I don‘t slander anybody, but I can‘t make up facts.  I can‘t make up my own set of facts.  That‘s the difference. 

Get your cell phones out.  I want to know what you think tonight, folks. 

Tonight‘s text survey is—pay attention to this one—Do you think the White House is scared of Fox News? 

Text “A” for yes, text “B” for no to 622639.  We‘ll bring you the results later on in the show. 

Joining me now is Reverend Al Sharpton, the president of the National Action Network. 

Reverend, great to have you with us tonight.  I‘ll ask you the question. 

REV. AL SHARPTON, PRESIDENT, NATIONAL ACTION NETWORK:  Thank you. 

SCHULTZ:  Do you think that the White House is afraid of Fox News? 

SHARPTON:  I think the White House and President Obama was committed to trying to bring the country together, and I think that they thought by talking to everyone and trying to work along with everyone, that they would set a tone that the country obviously wanted and voted for.  So I think some have exploited it and misused it, and I think that they did the right thing trying to reach out to everyone and talk to everyone. 

I think it‘s very clear from this incident that some people abuse outreach for weakness.  I really think it shows strength to reach out.  I think the lesson that we can learn from this, the teaching moment here, is that we need to not deal in this pettiness of “gotcha” and really deal with what you said, the real issue, and that is there are those that are trying to have a cultural war and bring this country back. 

The reason I oppose the politics of the Tea Party is not just some signs.  And they have been ugly and nasty and racist in some of their rallies.  It‘s that they‘re really trying to bring us back into a states‘ rights party country. 

They‘re trying to say health care should be states‘ rights.  That‘s why they were in front of the Congress.  They‘re trying to say that immigration should be.  That‘s why they‘re supporting Governor Brewer. 

And I think the teaching moment for the White House and civil rights organizations is we shouldn‘t engage in the trivia.  Let‘s deal with the core thing, and that is the right-wingers trying to realign power back to pre-1950s America. 

We can get in this fight back and forward, or we can concentrate on trying to get the goals done that elected this president that I think he‘s committed to.  So I don‘t think it‘s fear.  I think they tried to do what they said, and I think that there are others that are so prone on trying to do their agenda, they don‘t know how to deal with people that try to deal with them fairly.

SCHULTZ:  But Reverend, you talk about this pettiness.  I agree with you, but it almost destroyed the career of a public servant.  And this is the danger—

SHARPTON:  Absolutely.

SCHULTZ:  -- here.  And Fox News has a pattern of doing this kind of stuff.  And until the Democrats are willing to openly call them out and not refer to them as a news organization, this stands the chance of happening again.  And, of course, they are empowered by Republicans like Newt Gingrich. 

He wants to be president of the United States.  He‘s on Hannity‘s show reporting a lie.

SHARPTON:  I absolutely agree with you that they almost destroyed this woman.  I think also the teaching moment is people that were in the audience when she spoke, they should have stood up immediately and said that is not what happened.  They didn‘t need the real tape to say that‘s not what we heard.

I think all of us need to step back and look at ourselves in the mirror and say, wait a minute, we ought to not be reacting to them, we have let them set the argument and set the tone.  We need to move forward on the agenda that most Americans wanted.  And I think that if we do that, that the country will get behind that as they did President Obama when he ran in 2008. 

I think that what we cannot do is allow this moment to be us against each other, us against them, “gotcha” all over again.  That‘s how we got here. 

I think we‘ve got to deal with the issues at hand: health care, education, criminal justice, protecting people‘s civil rights.  I think that‘s where we need to focus. 

Let them react to us.  Let‘s quit playing their game.  If you fight their fight, you‘re going to lose every time. 

SCHULTZ:  Reverend Al Sharpton, great to have you with us tonight. 

Thanks so much for joining us on this subject. 

SHARPTON:  Thank you.

SCHULTZ:  For more on this, let‘s bring in Eric Boehlert, senior fellow, Media Matters.  And he went head to head with Mr. Breitbart this morning. 

Eric, it‘s not a laughing matter because somebody almost lost their career over this. 

Do you think the White House learned a lesson about Fox News today? 

ERIC BOEHLERT, MEDIA MATTERS:  I think so.  And I think they realize they overreacted.

Look, the first mistake they made, or the Department of Agriculture, or whoever was making the calls, they believed something that Andrew Breitbart put on his Web site.  That‘s mistake one. 

And then they believed a smear campaign, a character assassination attack that Fox News was peddling.  That‘s mistake number two. 

So, hopefully they‘ve learned their lesson.  Democrats have to stand up to this media mob, and they realized that they don‘t have the facts on their side, they don‘t have truth on their side.  This right-wing media mob only has fear on their side. 

SCHULTZ:  What‘s the silver lining here for the progressives in this country? 

BOEHLERT:  Well, this is a wakeup call.  As you said, Fox News is not a news organization. 

You know, for a minute, let‘s give the White House credit. 

Last year they took on Fox News and they said Fox News is not a legitimate news organization.  Remember, the beltway press corps went bonkers.  They said how can you say that about Fox News?  How can you call out Fox News as not being legitimate? 

I don‘t think there‘s anyone in D.C. six, eight, nine months later who would stand up to next to Roger Ailes and say this guy is running a great news organization.  So they got it right last year.  They should get back to the message. 

This right-wing mob is not legitimate.  They‘re out to destroy people. 

And we should not pay attention to them.

And Media Matters will tell you, 99 times out of 100, these phony attacks are bogus.  And just give a little light of day and they‘re going to crumble and they‘re going to fall apart. 

SCHULTZ:  Eric, great to have you with us tonight. 

I‘m calling on Newt Gingrich to show some character and step out and say that he spoke way too soon about this story. 

BOEHLERT:  Absolutely. 

SCHULTZ:  I mean, there‘s no question about that. 

Eric, good to have you on.  Thanks for your time tonight. 

BOEHLERT:  Thanks for having me.

SCHULTZ:  Coming up, I‘m surprised Michael Steele made it through the day without getting kicked out of the RNC.  The party‘s own treasurer, the bean counter, is accusing him of cooking the books.  We‘ll get to the bottom of this one at the bottom of the hour. 

Plus, Congressman Jim McDermott is fuming over the heartless, shameless Senate Republicans, and so am I.  They are intentionally making 2.58 million Americans wait for their unemployment checks. 

He‘ll sound off coming up. 

All that, plus I‘ll show you where Geraldo, O‘Reilly and Beck go to spend quality time together. 

A member of Favre‘s inner circle says the quarterback is a drama queen. 

And, of course, “The Drugster” is back in the “Zone.”  You won‘t want to miss it. 

You‘re watching THE ED SHOW on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW and thanks for watching tonight.

Old, white, rich Senate Republicans are holding unemployed Americans hostage tonight.  2.5 million desperate Americans thought checks would be in the mail yesterday, but the grand old obstructionist party decided to play more mind games with the lives of the American people. 

Senator Harry Reid said it best: “Now I hope the American people understand how callous this is.  People are desperate, can‘t make house payments, car payments, can‘t pay for kids‘ food, and they are having us wait 30 hours after cloture‘s been invoked.”

The cloture vote, of course, stops everything, stops the debate.  And then there‘s 30 hours.  But normally they just go ahead as a gentleman‘s agreement and do the vote. 

But, of course, they have decided to wait 30 hours to take the final vote on it, and the Republicans have the right to do that being the minority party. 

After this finally does clear the Senate it, goes to the House. 

For more on that, let me bring in Congressman Jim McDermott. 

Jim, how do you feel that they‘re making them wait 30 hours?  What‘s it say about the Republicans? 

REP. JIM MCDERMOTT (D), WASHINGTON:  It‘s unbelievable, Ed. 

You know, you think they‘ve gone as far as they could possibly go, and then they go another step further.  They are the most unfeeling bunch you can imagine.  I mean, it‘s going to take time to crank up those state agencies to get those checks out.  And every day counts when you‘re right on the edge. 

SCHULTZ:  What do you think the strategy is here?  Why are they doing it?  They know it‘s going to pass.

MCDERMOTT:  I have no idea.  It makes no sense.

It‘s almost as though they‘ve lost their own mind and are believing their own press releases that if Obama doesn‘t—if we don‘t get the checks out there, Obama will look bad and the people will vote for us.  Now, how silly that is, I can‘t tell you.  But that‘s what it looks like they think. 

SCHULTZ:  Is this going to be a slam-dunk in the House? 

MCDERMOTT:  Absolutely. 

SCHULTZ:  OK.

MCDERMOTT:  We‘ll be on the floor tomorrow afternoon and it will pass, and it will be gone by 4:00. 

SCHULTZ:  All right.

Now, Senator Deb Stabenow told me today from Michigan that they are working on something for the 99ers. 

Let‘s say that they do.  Would thing for the 99ers, in your opinion, pass the House easily? 

MCDERMOTT:  If we could get it out of the Senate, we would certainly be able to pass it in the House.  I mean, there‘s nobody who wants do something more for the 99ers.  I would say right now, to start something in the House and count on the Senate is really believing in the tooth fairy.  It‘s got to start in the Senate this time. 

SCHULTZ:  Have you ever in your long career in the Congress seen a situation like this become a political football where politicians are using the American people like political footballs to kick around like this?  I can‘t recall.  Tom Harkin told me the other night he‘s never seen anything like it in 30 years. 

MCDERMOTT:  I haven‘t either.  You know, there are some political footballs here.  And we can kick banks around and we can kick a lot of things around, but we‘ve never kicked human beings around the way we‘re doing right now.  This is really unbelievable, and I simply don‘t understand how it helps their political opportunities in the future. 

Americans are going to remember this just like they remembered when the Republicans shut the government down in 1995.  They said, what is this about?  And they never forgot that.

And I think that that kind of thing is really what the Republicans are doing to themselves right now.  We‘re sort of watching them commit suicide just standing out there with no clothes on. 

SCHULTZ:  Congressman Jim McDermott, good to have you with us tonight. 

Thanks so much. 

MCDERMOTT:  You‘re welcome.

SCHULTZ:  You‘ve been great on this fight all along. 

MCDERMOTT:  Thank you. 

SCHULTZ:  Coming up, “The Drugster” is going nuts over this Shirley Sherrod story.  He says the NAACP is racist.  This from a guy that said the president is only successful because he‘s black. 

I‘m bouncing him right into the “Zone” next.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, “The Drugster” checks back into the “Zone.”

Rush is losing his mind over the NAACP calling on the Tea Party to denounce racism.  Take a listen. 

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  You don‘t need Shirley Sherrod, or whatever her name is, to racism at the NAALCP (ph).  All you need to know is Jeremiah Wright is a featured speaker at the NAALCP (ph).  That‘s all you need to know.  The NAACP is as racist an organization as there has been and is in this country. 

(END AUDIO CLIP)

SCHULTZ:  Oh!  Now, this is a guy who made racist comments about Donovan McNabb, then, of course, got fired by ESPN.  And also, always played a song called “Barack the Magic Negro.”  And just last week, hours after George Steinbrenner died, he called him a cracker who made African-Americans millionaires. 

Hey, Drugster, I know you‘re not big on show prep, but let me show you what a real racist organization looks like.  This is what a racist group looks like. 

Rush, for you to say the NAACP is as racist an organization as you have ever seen in America is just big, fat “Psycho Talk.”  

Coming up, another day, another scandal for Michael Steele.  And you know, this is the one that might take him down completely. 

The RNC‘s treasurer, the bean counter, is accusing Steele of hiding $7 million of RNC debt.  I‘ll get “Rapid Fire Response” in just a moment.

And right-wing nut job Andrew Breitbart, well, this guy makes me sick.  He‘s an absolute pro at hatchet jobs.  Before Shirley Sherrod, let‘s see, he victimized ACORN‘s Bertha Lewis. 

She will be joining me live here on THE ED SHOW to smoke this guy out. 

All that, plus Jim “Waterloo” DeMint wants to kill the estate tax, the ultimate way to protect the richest one percent of the country and the concentration of wealth. 

And a 40-ton whale jumps on to a boat.  I have to admit, we don‘t catch them quite this big at Big Eddie‘s North Country Lodge. 

I‘ll tell you what happened to the people on the boat when we come back. 

You‘re watching THE ED SHOW on MSNBC.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  And thanks for watching.  Tonight, the Battleground story this evening, oh, trouble inside the National Republican Committee.  The treasurer of the RNC is accusing Michael Steele of deliberately trying to hide $7.1 million of debt.  Randy Pullen made the allegations in a letter to RNC Budget Committee members.  The “Washington Times” broke the story this morning.  The RNC‘s communication director says, the allegations are completely bogus telling the times, quote, “We have always followed the guidelines of our legal counsel and treasurer and have put in place additional oversight to ensure that all invoices are handled in a proper, open and transparent manner.”  Invoices.  Hmm.  Now, this goes back to April and May, you know, when these junkets were taking place at these voyeur clubs, I believe. 

Joining me now is A.B. Stoddard, associate editor and columnist for “The Hill.”  A.B., is this just another storm that Michael Steele is going to have to whether, I mean, to account for another $7.1 million in debt after not reporting it correctly, what do you make of this?  How much trouble is it?

A.B. STODDARD, “THE HILL” ASSOCIATE EDITOR AND COLUMNIST:  Well, as we know, as a rule, Michael Steele doesn‘t back down no matter what happens.  And that‘s what has been the mark of his stormy 18 month tenure at the Republican National Committee.  Randy Pullen, the treasurer is accusing Michael Steele of hiding the debt, he‘s always a member of a sort of a different and warring faction as often talked about as a possible replacement for Michael Steele.  And if he ends up obviously convincing enough of the membership that he has evidence that these debts were hidden possibly, it happens that Michael Steele ultimately will have to step down.  For now, you know, his staff is saying that the debts have been repaid. 

Nothing was hidden and that you know, they‘re conducting a thorough review.  So, we‘ll see what Randy Pullen manages to pull off in the next couple days.  But, you know, Michael Steele hangs on, he makes a habit of it.  

SCHULTZ:  Well, the federal elections commission doesn‘t take kindly to all money not being reported properly.  I mean, they could be looking at some big fines here.  And here is a party that‘s running around the country talking about the Obama administration not knowing where all the money is, and looking low and behold in their own backyard.  I mean, when you have an accountant sending a letter out, accountants can be wrong legally.  I mean, there‘s got to be some teeth to this, don‘t you think?

STODDARD:  Well, you know, there‘s some disagreement today among the experts whether or not the SEC will take legal action.  I just, again, we‘ll have to wait and see what that means.  What does this mean politically for republicans?  Does that mean the democrats are going to hang on because the Republican National Committee doesn‘t have an effective leader?  I don‘t think so.  I think in the short term, Ed, republicans benefit from this because for months now, for actually over a year now, republican donors have decided to send their money elsewhere.  They‘ve taken it, you know, to individual candidates, to the Republican Governors Association, to the senate and house campaign committees, club for growth, whoever they want.  And so, in the short run, republicans still have enough money to go around even though the RNC might not. 

SCHULTZ:  Yes.

STODDARD:  And I think in the long run though, it does become a problem for republicans.  This is a leaderless party.  And sooner or later, they‘ll going to have to decide after this election, especially if they‘re in charge of one branch of government, you know, who are the grown-ups in the party and what kind of an operation are they going to have trying to win the White House back in 2012.  

SCHULTZ:  You alluded to this.  Pullen who wrote the letter, do you think he‘s got a vendetta against Steele?  Do you think that they‘re—the mixed between him was so great that he‘s just trying to torpedo him?

STODDARD:  Well, I mean, he might have grounds.  I‘m not saying that he doesn‘t have grounds.  We‘re going to find out what happens, you know, in the coming days and weeks.  I just know that starting in last March when Michael Steele had barely just taken office, he was already in so much trouble that Randy Pullen managed to pull, you know, some sort of a semi coup and get a good governance agreement and to affect that really reined in Michael Steele‘s authority at the RNC and he did it because there were enough people dissatisfied with Steele‘s leadership already in just whatever, had been eight weeks, so that Randy Pullen and Michael Steele have been at odds ever  since.  It doesn‘t mean that he doesn‘t have enough proof that Michael Steele has those debts, I‘m just saying at this point we don‘t.  So, we‘ll see what happens.  

SCHULTZ:  A.B.  Good to have you with us tonight. 

STODDARD:  Thank you, Ed.

SCHULTZ:  Thanks so much.  

Now, let‘s get some rapid fire response from our panel on these stories. 

Waterloo Senator from South Carolina Jim DeMint is bragging on the internet about his plan to hijack a small business bill, hijack a small business bill to extend a Bush tax cut for the rich.  Got that?  DeMint tweeted that he will force a vote to permanently kill the estate tax, which republicans like to call the death tax.  

A new Quinnipiac poll shows President Obama‘s approval rating hitting a new low.  If the election were held today, a republican candidate would beat him by three points. 

And I‘ll get the panel‘s take on the latest RNC‘s scandal that we‘re just talking about.  The committee‘s treasurer accuses Michael Steele of hiding $7 million in debt. 

Joining us tonight, Norman Goldman, nationally syndicated radio talk show host.  Norman, good to have you with us and also John Feehery, always a pleasure, John, republican strategist.  Let‘s talk about Mr. Steele cooking the books.  John, is this an issue?  What do you think?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Well, yes, I think A.B. hit it exactly right.  What the result of this will be is that people with big donors will give their money to other groups like the RGA, the senatorial committee or the congressional committee and steer clear of the RNC.  I happen to think that I‘m not sure who to believe here.  I‘ve talked to the committee, just like A.B. the other night, they say that the debt has been paid off.  They have guys like Michael toner and Tom Josefiak who are very respected former FEC commissioners doing an audit, looking at all of this and keeping oversight over the committee‘s expenses.  But you know, this is kind of another embarrassment for the committee and it might be internal politics but the result is going to be the money is going to go elsewhere.  

SCHULTZ:  Embarrassment.  Once again, Norm, the righties can‘t count.  

NORMAN GOLDMAN, NATIONALLY SYNDICATED RADIO TALK SHOW HOST:  Ed, you know, it‘s hilarious.  They steal all the taxpayers‘ money when it comes to the Wall Street bailouts in 2008, $700 billion, no hearings, no discussions.  No strings attached.  The moment somebody makes off with $7 million of their money, they get mad about it, it really shows you where their priorities are, whose interest their serving.  

SCHULTZ:  All right.  Let‘s talk about Jim DeMint.  Jim DeMint now wants to deep six the estate tax.  Only one percent of the American people would be affected by this.  It looks like he‘s playing big-time to the rich, John Feehery.  And the president is in favor of 45 percent of an estate tax over $3.5 million of an estate.  Doesn‘t this just prove that the republicans are the party of the rich?  What do you think?

FEEHERY:  Well, keep in mind Ed, in 2010, the estate tax goes from 0 to 55 percent which is going to cause all kinds of problems with the economy.  I would say that. 

SCHULTZ:  With one percent of the people.  

FEEHERY:  This is very popular in your deck of the woods, Ed, not New York City but in back home in Midwest in the farm region.  A lot of rural Americans support this.  People like Blanche Lincoln are supporting a compromise measure with Jon Kyl, Max Baucus, they all think that the death tax is going up as high as it is, it is going to do in 2011.  It will be very, very dramatic impact on small family farms, it‘s called business and it‘s going to be bad.  

SCHULTZ:  Small farms $3.5 million, I just disagree with that.  They always say that this is going to kill farmers.  It‘s not.  This is inherited wealth.  Norm, your take.  

GOLDMAN:  Ed, that‘s the biggest bunch of baloney.  John, I love you but you‘re just dead wrong.  The point is that one percent of people we‘re talking about that 55 percent hits the people at the very top.  And I‘m sure that the democrats would love to make a deal and make it quite clear that the only people they‘re going to go after are people not with family farms, not with small businesses, you guys have been demagoguing this issue and trying to portray it as a little guy issue.  All you‘re doing is serving the interests of the same Wall Street bozos who already stole our money.  Why don‘t you just knock it off and talk the truth to us?  This is a joke.  

FEEHERY:  This is not a Wall Street issue, if you look at people that strongly support it, it‘s the people in rural America.  And if you look at the democratic senators who support getting rid of the death tax, you‘d be surprised who they are, including Max Baucus and Blanche Lincoln.  

GOLDMAN:  And John, they‘re taking money from the same people who are funneling money to the republicans. 

FEEHERY:  Wait.

GOLDMAN:  Hang on, I‘ll let you speak.  Just hold on a second, John.  The point is half the democrats are in the bag for the same corporations as the republicans.  That‘s the sad truth.  People like Blanche Lincoln and Max Baucus are not the real Democratic Party.  Alan Grayson is the real Democratic Party.  

FEEHERY:  They‘re not taking money from anybody.  Keep in mind, this is their money that‘s being taken away from them and vast appearance.  As you, believe me.

SCHULTZ:  That was taken away from them because they‘re dead. 

(LAUGHTER)

FEEHERY:  You know what?  They tax you while you‘re alive and they tax you while you‘re dead.  That‘s what the democrats want to do, you want to tax them when they‘re dead.  

SCHULTZ:  John, I don‘t think people should get something for nothing and especially with the concentration of wealth in this country when you‘ve got political power because money runs our system, why should anybody be any more powerful than anybody else because they‘re a member of the lucky sperm club.  I mean, that‘s basically what it comes down to.  

GOLDMAN:  John, we have people paying in this country paying their fair share.  Hardworking people pay their fair share.  

FEEHERY:  You know.

(CROSSTALK)

GOLDMAN:  Hang on, John.  We have a huge military to protect, Rush Limbaugh‘s estate.  They should help pay for all those nuclear weapons and nuclear sub marines. 

FEEHERY:  You know, half of this country pays nothing in federal taxes.  Not a dime in federal taxes.  

GOLDMAN:  Because they don‘t have two nickels to rub together.  

FEEHERY:  The fact of the matter is that the estate tax getting rid of the estate tax, that fairness issue and it actually helps mostly small businesses. 

(CROSSTALK)

SCHULTZ:  All right.  In the midst of all of this, in the midst of all of this, we‘re not far away, what, 100 days from the midterm close to it, a new Quinnipiac poll says that if the president were to run against a republican, he would lose by three points.  Norm, what do you make of this?  The erosion in all of this, here are the numbers.  GOP candidate, 39, President Obama, 36.  Depends on candidate, 13 percent.  And 12 percent of the people are undecided.  They really don‘t know.  The erosion here is with white independent men in this country.  What do you make of it, Norm?

GOLDMAN:  Well, Ed, sadly when George W. Bush did his bring him on, bring him on and, you know, wanted dead or alive and this kind of stuff, I mean, with white men that resonates.  Because white men voters like John Wayne.  And this president is too cerebral for them, he‘s too calm, he‘s too collected, he‘s too professorial.  If this president—President Obama wants to increase his numbers with white men, he‘s going to have to start sadly playing tough and speaking like John Wayne.  That‘s what he‘s going to have to do and he‘s just going to have to get used to it.  

SCHULTZ:  John Feehery, your take on the numbers. 

FEEHERYT:  Listen.  During the last election, President Obama did very poorly with white men also.  The biggest erosion is not just with a white man but also independent voters.  A lot of the women voters have changed to the republican candidate.  The fact that any republican candidate now can beat President Obama, it says something about where this president‘s agenda is going.  He‘s not just resonating with middle class Americans.  And he‘s in big trouble.  The best thing that can happen to President Obama is if the republicans take over the Congress.  And I think that‘s what‘s going to happen.  

SCHULTZ:  John Feehery, Norman Goldman.  Great to have you guys with us tonight.  Thanks so much.  

Coming up, racial tensions have boiled over in North Carolina.  Nineteen people were just arrested for protesting a school bussing system that could lead to segregation.  The president of the North Carolina, NAACP Reverend William Barber was one of the people arrested, sounds off next here on THE ED SHOW.  Stay with us.                

(COMMERCIAL BREAK)

SCHULTZ:  And this just in.  Secretary of Agriculture Tom Vilsack is meeting with the Congressional Black Caucus right now in order to explain how the White House is handling the forced resignation of Shirley Sherrod.  And it‘s not too late to let us know what you think in our text poll tonight, our text survey question is, do you think the White House is scared of FOX News?  Text A for yes, text B for no to 622639.  Results coming up.  Stay with us.                                  

(COMMERCIAL BREAK)

SCHULTZ:  And in my Playbook tonight, racial tensions are rising in a North Carolina school district over claims a new bussing system would re-segregate schools.  The Wake County School board voted to scrap their forced bussing method, a policy put in place in the 1970s to promote diversity in public schools.  The new plan leaves many black students in underachieving schools and the white students in better schools.  Protesters pushing the importance of diversity clashed with police at a board meeting yesterday.  And 19 people ended up getting arrested.  One of the people arrested was Reverend William Barber, head of the North Carolina State NAACP chapter.  Reverend Barber, good to have you with us tonight.  

REVEREND WILLIAM BARBER, NC NAACP CHAPTER PRESIDENT:  Good to be here.  

SCHULTZ:  You bet.  Was it your intention to get arrested?  What happened here?

BARBER:  Well, we‘ve been pushing forever since January and it‘s really not about bussing because 99 percent of the kids in Wake County already go to school within ten miles.  In 2000, we put in place a socioeconomic diversity plan, that was about student achievement and trying to guarantee that no more than 40 percent of children would be in any one school.  This radical school board has backed by republicans and decided that they wanted to come in and scrap this program that actually took us 46 years to get to after Brown versus board of education.  Wake County, one of the most recognized school systems in the nation, some of the best scores in the nation.  So, the program was working because it made sure that we didn‘t have high pockets of racially identifiable poor schools. 

SCHULTZ:  Yes.  Reverend, if it‘s working, why did they want to change?

BARBER:  Well, because they‘re using a 1968 southern strategy playbook, they‘re putting up neighborhood schools as a weird issue which is nothing more that we believe than just a way of talking about private schools with public dollars.  All of them believe in vouchers.  There is some slight majority.  They‘re all backed by ultraconservatives.  The chair sits on the board of a private school academy.  That‘s where their ideologue and their ideas are coming from.  Thousands of people marched yesterday.  That‘s the story, black and white.  More than seven denominations saying, we don‘t want to go backwards, we want to go forward.  Wake County Schools are touted all over the nation.  There‘s a book, “Why they have no bad schools in Wake County,” and instead they want to tear up this socioeconomic diversity plan.  And instead of working on what we know worth, stop re-segregation, focus on equity in funding. 

SCHULTZ:  So, where is this stand?  I mean, how is this—I mean, if they voted to do this, and the decision‘s been made, what‘s the next move?

BARBER:  Well, the decision is made but we believe it‘s a violation of our constitution both federally and our civil rights laws.  And North Carolina is one of the few states that also has a constitutional right for every child to have a sound basic quality education.  So, we‘re doing community education.  So, we‘re going to be doing litigation, we‘re going to continue to demonstrate.  Ed, we know what works.  If you have stop re-segregation, have high quality to smaller classroom, focus on Math and Science and reading and history, focus on parental involvement and community involvement and equity in funding and deal with the disproportionate and rates in graduation.  We know what works to make excellent schools.  They want to go backwards.  We want to go forwards.  

SCHULTZ:  And reverend, you can say unequivocally that minority students are going to be horribly affected by this, the socioeconomic mixture here is just going to be putting black students at a disadvantage, correct?

BARBER:  Not only can I say it, studies are showing from Harvard that we are re-segregating schools faster than 1973.  We know that Harvard is the racial—schools are not the friend of school excellent but diverse schools are the friend of school excellence. 

SCHULTZ:  Sure.  Reverend Barber, thanks for being here tonight.  Keep up the fight. 

BARBER:  Thank you so much, Ed.

SCHULTZ:  You‘re definitely on the right side of the issue, no question about it.  It is rolling back to the 1960s.  I can‘t believe it.  

Some final pages in my Playbook tonight.  I‘m proud to announce that we‘re taking THE ED SHOW on the road to help some hard-working Americans in need.  On Wednesday, August 4th, I‘ll be broadcasting from a free health care clinic in Washington, D.C.  That was made possible in large by the viewers of MSNBC‘s “COUNTDOWN” show with Keith Olbermann.  You can register for care or donate services and time by going to freeclinics.u.s. 

Also, there will be so many people suffering without insurance down in the gulf.  So, we‘re heading down to New Orleans for a free clinic at the Convention Center on August 31st and September 1st.  Your donations and all kinds of volunteers are going to be needed in New Orleans.  Again, the address is freeclinics.u.s.  Hope you can help us out. 

Brett Favre‘s agent Bus Cook, I love this story, might be looking for a new job any moment now.  In an interview with “Men‘s Journal,” he blasted Brett Favre, the quarterback calling him a drama queen for talking to an ESPN reporter about his ankle surgery.  Bus hammered Favre for his annual indecision on whether he‘s going to come back and play in the National Football League at the age of 40 saying, quote, “Don‘t play, don‘t play.”  Can I say that on the air?  I don‘t think I can.  People getting sick of it.  I‘m getting sick of it.  It‘s a family show.  I shouldn‘t say that on the air. 

I‘m all about catching big fish but not like this.  A couple of folks sailing off the coast of Cape Town, South Africa, how about this for a surprise.  A 40-ton whale jumped out of the water and crash landed on their boat.  Nice fish!  A couple who saw it disappears underwater and all of a sudden it came crashing onto the boat.  Miraculously, nobody was hurt.  And there were nor leaks in the boat.  Now, that‘s a good boat.  And I have to say, we don‘t catch them that big at Big Eddie‘s North Country Lodge but we sure, we would like to. 

And finally tonight, three strikes in Geraldo, a picture really is worth 1,000 words.  Here are the three stooges out at the Yankee game last night.  Geraldo, Bill O‘reilly and the Beckster.  I don‘t know, it was nut job night at the stadium or not but they were in the front row. 

Coming up, right wing blogger nut job Andrew Breitbart makes his career lying.  He twists the facts and then his buddies at FOX News help him carry out the message.  

Before Shirley Sherrod it was, ACORN CEO Bertha Lewis, she was the victim.  She sounds off on how the right wing hatchet job machine has to be challenged, that‘s next on THE ED SHOW.  Stay with us.  

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  And finally tonight, Shirley Sherrod is only the latest victim of Andrew Breitbart and the right wing media‘s vicious lies against innocent people.  Before Sherrod, Breitbart victimized the ACORN by scamming everyone with his infamous edited pimp videos and crushed the organization‘s public image. 

Joining me now is Bertha Lewis, ACORN CEO and Founder of the Black Institute.  Bertha, nice to have you with us tonight.  When you saw the story unfold in the last 48 hours, did it bring back a lot of the memories?

BERTHA LEWIS, ACORN CEO:  Oh, it was dejavu all over again.  Absolutely.  Absolutely.  But you knew that this was going to happen.  It worked before and they were going to do it again.  And like you said earlier, Ed, if you can‘t argue on the facts, then let‘s just make it up. 

SCHULTZ:  Bertha, do you think the White House has to get tougher with news organizations and there has to be a vetting process here?  The White House is doing some pretty standup stuff right now.  The Congressional Black Caucus just finished meeting with Ag Secretary Tom Vilsack.  And we‘re told that Barbara Lee was satisfied with what was being said, but clearly, this was the White House and the administration listening to a bogus report on FOX News.  What do you make of it?

LEWIS:  Well, it was not only the White House, it was, you know, a whole cadre of folks doing this.  Here‘s what we are in.  We are in a 21st century age of McCarthyism.  The news organizations that parroted what FOX did when FOX said, oh, you‘re not covering it, just swallowed it whole.  We have got to not be so competitive and trying to do speed and get the scoop.  You‘ve got to have some journalistic integrity and the White House progressive organizations, any fair-minded organizations, get the facts.  Don‘t be judge and jury.  Don‘t rush to judgment.  If there‘s anything that the ACORN legacy has really brought to bear, and by the way, you know, we were not only fired from the public, we were unconstitutionally done in.  And that should be a fear and a warning to everybody.  So, the White House needs to get tough.  They need to be more circumspect and you know what?  I agree with Obama before.  Don‘t go on FOX because it‘s not news.  It‘s entertainment. 

SCHULTZ:  What‘s the future of ACORN, in your opinion?

LEWIS:  Well, we are fighting the unconstitutional Bill of Attainder, of Defund ACORN Case, we are still out there trying to help folks in foreclosure, jobs, jobs, jobs, jobs. 

SCHULTZ:  No doubt.  

LEWIS:  So, poor people haven‘t gone away.  People of color haven‘t gone away.  ACORN hasn‘t gone away.  We might have been changed but we are still fighting to make sure that our constitution is upheld and that low and moderate income people in this country get a fair shake.  

SCHULTZ:  But what the right wing media put you through, tarnished the image of the organization, changed a lot of lives. 

LEWIS:  Yes, it did.  

SCHULTZ:  And they‘re playing with people‘s lives.  I think, that is the real message in all of this in the real lesson.  Bertha Lewis, great to have you with us tonight.  Thanks so much.  

LEWIS:  Thank you, Ed.  

SCHULTZ:  Tonight, in our text survey, I asked you, do you think the White House is scared of FOX News?  Seventy six percent of you said yes, 24 percent of you said no.  That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to ed.msnbc.com or check out our radio website at wegoted.com.  I‘ve got a book signing tomorrow night at that Rio Hotel in Las Vegas.  We‘ll see you then.  “HARDBALL” with Chris Matthews starts right now on the place for politics, MSNBC. 

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

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