updated 8/2/2010 1:32:50 PM ET 2010-08-02T17:32:50

Guests: Gov. Jennifer Granholm, Steve Benen, Kent Jones, Kate Sheppard>
CHRIS HAYES, GUEST HOST:  Good evening, Lawrence.  Glad to hear the show has a name.  Thank you—
O‘DONNELL:  And a date.
HAYES:  And a date.  Thanks, Lawrence.
And thank you for staying with us for the next hour.

We begin tonight with President Obama on the offense, taking on one of the most, if not the most unpopular decisions he had to make as president.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Look, this was a hard decision.  I didn‘t want government to get into the auto business.  I‘ve got enough to do.
But I believed that if each of us were willing to work and sacrifice in the short-term, workers, management, creditors, shareholders, retirees, communities—we could once again see the best cars in the world designed, engineered, forged and built right here in Detroit, right here in the Midwest, right here in the United States of America.
(APPLAUSE)
(END VIDEO CLIP)
HAYES:  That was President Obama today in Detroit, Michigan, hailing the success of the controversial auto industry bailout that he pushed through shortly after taking office in 2009.  Mr. Obama traveled to a G.M.  plant in Michigan today to celebrate the remarkable renaissance that the auto industry is enjoying right now.  Thanks in part to the boost it got from the federal government.
It‘s worthwhile to take a trip into the time machine to remember just how unpopular the administration‘s decision to come to the rescue of the auto industry was.
It‘s really—it was a lifetime ago in political terms, but the question of whether or not to bail out the auto industry came at a very tricky time for Barack Obama.  It happened in late 2008, after he won the presidential election, but before he was sworn into office.  So, President-elect Obama was forced to lobby for the auto industry bailout not from the Oval Office or the White House, but on programs like “60 Minutes.”
(BEGIN VIDEO CLIP)
OBAMA:  For the auto industry to completely collapse would be a disaster in this kind of environment—not just for individual families, but the repercussions across the economy would be dire.  So, it‘s my belief that we need to provide assistance to the auto industry.
(END VIDEO CLIP)
HAYES:  It‘s true that when you‘re the incoming president, you do have all sorts of political capital on your side.
But keep in mind what Barack Obama was arguing for there.  He was arguing for another government bailout in the wake of the extraordinarily unpopular financial industry bailout.  It was a politically treacherous stand to take.  At the time, six in 10 Americans were opposed for any bailout for the auto industry.  Bailouts of any kind were viewed with the same sort of disdain.
Arguing for an auto industry bailout was political suicide.  People hated this thing—and congressional Republicans jumped right on the bandwagon.  They attacked the auto bailout as both doomed to fail, but more assiduously, as an assault on the very heart of the American system of free enterprise.
(BEGIN VIDEO CLIPS)
SEN. RICHARD SHELBY ®, ALABAMA:  It‘s just postponing the inevitable.  This is a dead end.  It‘s a road to nowhere.  And it‘s a big burden on the American taxpayer.
REP. JOHN CARTER ®, TEXAS:  When Americans cast their vote for Barack Obama and they cast it for the Democratic Congress, did they also intend that this country should adopt social democracy, that lesser form of Marxism?
REP. TED POE ®, TEXAS:  You can‘t call it a bailout because that might be too honest a statement to our citizens.  So we call it a bridge loan.  Actually, it‘s a bridge loan to nowhere.
Does anybody really think the federal government knows anything about the car business?
SEN. DAVID VITTER ®, LOUISIANA:  I think the average American would say, what, isn‘t that putting the cart before the horse?  Isn‘t that—to use a common phrase—just ass backwards?
SEN. JOHN ENSIGN ®, NEVADA:  How does anyone expect some car czar, or some politician, to be able to make the decisions that are right from a business standpoint for these car companies?
REP. DAN BURTON ®, INDIANA:  He believes in a collective society and I think he has very strong socialist tendencies and it really scares me.
(END VIDEO CLIPS)
HAYES:  Well, 18 months later, Obama has still yet to unveil his secret plan to collectivize the means of production economy-wide.  And the very same American auto industry that Republicans had declared totaled and too expensive to repair is now cruising.
(BEGIN VIDEO CLIP)
OBAMA:  Today, for the first time since 2004, all three U.S.  automakers are operating at a profit, the first time in six years.
(CHEERING AND APPLAUSE)
OBAMA:  Last year, many thought this industry would keep losing jobs -
as it had for the better part of the past decade.  Today, U.S. automakers have added 55,000 jobs since last June—the strongest job growth in more than 10 years in the auto industry.

(APPLAUSE)
(END VIDEO CLIP)
HAYES:  And celebrating one of the genuine policy successes of this administration, the president also took an opportunity to draw a sharp political contrast between his administration‘s efforts to save the auto industry and the GOP‘s desire to see it sold for scraps.
(BEGIN VIDEO CLIP)
OBAMA:  I want you to remember, though, if some folks had their way, none of this would have been happening.  Just want to point that out, right?  I mean, this—this plant—this plant and your jobs might not exist.  There were leaders of the “just say no” crowd in Washington.  They were saying, “Oh, standing by the auto industry would guarantee failure.”  One of them called it the worst investment you could possibly make.
(BOOS)
OBAMA:  They said—they said we should just walk away and let those jobs go.  I wish they were standing here today.
(END VIDEO CLIP)
HAYES:  Remember, the Republicans cast the auto industry bailout as if it were the end of the American free market system, as if the cultural revolution was right around the corner.  And today, now the auto bailout has become a success story, now that Marxism has failed to descend upon America—what‘s the response from Republicans?  Crickets.  Nothing.  Not much of a peep at all.
(BEGIN VIDEO CLIP)
OBAMA:  They just might come around if they were standing here and admit that by standing a great American industry and the good people who work for it, that we did the right thing.  It‘s hard for them to say that.  You know, they don‘t like admitting when I do the right thing.  But they might have had to admit it.
(END VIDEO CLIP)
HAYES:  The auto industry bailout became this sort of right-wing trope about socialism and the perils of government interference.
But to the degree that it actually worked, it‘s a powerful refutation of those arguments and an endorsement of government intervention.
Bailing out the automakers was a politically treacherous thing to do for President Obama.  I mean, let‘s be honest, it‘s not exactly the first thing you‘d want to do when you take office, but it was the necessary thing to do, it was the right thing to do.  And, in the end, whether Republicans want to admit it or not, it paid off.
Joining us now is Democratic governor of Michigan, Jennifer Granholm.
Thank you for joining us tonight.
GOV. JENNIFER GRANHOLM (D), MICHIGAN:  Chris, thank you so much for having me on.
HAYES:  So, I want to ask you what your sense of the state of the auto industry is, and whether this was—whether this bet, this high-stakes political bet looks like it‘s paying off right now as the president argued today?
GRANHOLM:  Well, it certainly is paying off through our eyes and through the eyes of the millions of Americans who now have jobs, who would have had jobs if it were not for president standing up firm to have a manufacturing industry in America.
The president realizes that the auto industry is really the backbone of manufacturing.  It affects the glass industry.  It affects the rubber industry.  It affects the electronics industry.  It affects—you know, almost every manufacturing industry touches the automobile.  And if he had not stepped in to save this, then we would be a nation that manufactures very little.
It would—it would be so harmful to our energy security, because, of course, we want to wean ourselves from foreign oil.  But if we don‘t have an auto industry to get there, then that would be dissipated.
And then, it would also jeopardize our national security.  Because as the president said today, during World War II, when we needed to make B1 bombers and ground transportation, who did we turn to?  That manufacturing industry.  Those plants were converted to manufacture the means for our nation‘s defense.
If we don‘t have manufacturing in this country, we are a weak nation.  And the president understood that.  He came in.  He said, “I‘m going to do something that‘s unpopular but right for America and for these jobs.”
And I can tell you, in Michigan, we are grateful.  And in auto communities across the country, people are grateful.
HAYES:  Even with the success of the bankruptcy process that‘s been undertaken for General Motors and Chrysler, your state, Michigan, still has one of the highest unemployment rates in the country.  I think it‘s around 13.2 percent.
What do you want to see from Washington to reduce that unemployment rate, to help recovery in the state of Michigan?
GRANHOLM:  One of the things that he has done—that the president has done and that Washington must continue to do in this country is to continue to invest in research and development and clean energy solutions.  Because states like mine can convert from old manufacturing to new manufacturing.  We have advanced manufacturing in our DNA, to make the products that will—that will lead our nation to energy independence and be able to export those products.
That help from Washington—when I say “help,” I mean, you have to invest in some of the up-front research and development in order to get those kind of solutions spread in America.  And that‘s why, for example, the battery industry—the president today was at the plant that will manufacture General Motors‘ first electric vehicle, the Volt.  That battery that is going to be running that electric vehicle is going to be made in Michigan.
Before the president stepped forward with the Recovery Act, we didn‘t have batteries made in America that would power the electric vehicle.  Now, we do.  In fact, Michigan will create 62,000 jobs because of 16 battery plants that have now come as a result of the federal government‘s commitment to this industry.
So, strategically investing in industries that we know we are going to need in the future, and research and development to make sure that we can level the playing field with other countries, and frankly, Chris, we‘ve got to ensure that we enforce trade agreements and only enter into trade agreements that are fair, like other countries do.
HAYES:  Governor, when you watch the debate in Washington—and there‘s a lot of noise being made about balancing the budget, obviously.  There was a long period of obstruction, particularly from the Republican Party, almost exclusively from the Republican Party, for extension of unemployment benefits—do you get a sense of a disconnect between the sense that representatives in Washington have about the level of economic distress the country is going through and the actual level of economic stress the country is going through?
GRANHOLM:  I feel like—I watch these debates, when day talk about the deficit being the most important thing, as opposed to jobs and economic growth being the most important things.  I feel like, what aren‘t they seeing?
People here, what if you didn‘t extend unemployment?  What would that mean for them?  That means you‘ve got more people that are facing foreclosure.  More people who can‘t put food on the table.
And what does that mean for the public systems?  There‘s just—it seems like there‘s an illogic to it, when you can invest in order to create growth.  Not just in unemployment benefits—of course, you get a big bang for your buck on having money stimulate the economy through unemployment.  But invest strategically in sectors that you know will cause growth to happen.
Those decisions about investing in order to grow—if you grow, that‘s going to bring down your deficit.  That is the smartest economic strategy to be able to both help citizens get jobs and to reduce the deficit.
HAYES:  And quickly, finally here, Governor, I know that you‘re in Marshall, Michigan, tonight, which is a unified command post for the oil spill in the Kalamazoo River.  What‘s the latest on the containment there?
GRANHOLM:  Well, you know, I had—I asked the EPA administrator, Lisa Jackson, to come in and we just did a flyover today.  As compared to two days ago, things—I really am grateful for the EPA for sending resources and for being the lead agency on controlling this.  A couple of days ago, I wouldn‘t have been so positive.  Today, I feel much better.  We‘ve got a long way to go, but I feel much better.
HAYES:  Democratic Governor Jennifer Granholm of Michigan—thank you so much for your time tonight.  Have a great weekend.
GRANHOLM:  You bet.  Thanks.
HAYES:  Republicans would love it if Democratic Congressman Charlie Rangel‘s misdeeds would dominate the headlines 24/7.  As for another ethics investigation, one involving Nevada‘s Republican Senator John Ensign, Mr.  “I had an affair with a campaign aide and then helped the lobbying career of my former mistress‘ husband”—that one can‘t go away soon enough.  “Washington Monthly‘s” Steve Benen joins me next.
And later, Rand Paul and big coal—a love story.
(COMMERCIAL BREAK)
HAYES:  With one day still left to go in the month, July is already the officially deadliest month for U.S. forces in Afghanistan since the war began nearly nine years ago.  Six U.S. service personnel were killed in separate attacks in the past two days, bringing the death toll for the month to 66.  The previous deadliest month in Afghanistan?  Last month, June.  Let‘s hope that streak ends now.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEAN HANNITY, FOX NEWS:  With only 96 days remaining until the 2010 midterm elections, one of the most powerful Democrats in Congress has been charged with 13 counts of ethics violations.
UNIDENTIFIED MALE:  For Democrats, it‘s lose/lose.
MIKE HUCKABEE ®, FORMER PRESIDENTIAL CANDIDATE:  Sean, the last thing they want—the last thing they can afford to have is a protracted public display of what Charlie Rangel‘s personal finances and his ethical problems really are.
MEGYN KELLY, FOX NEWS:  Republicans have got to be enjoying this, right?
KARL ROVE, FMR. BUSH AIDE:  Look, these were very serious charges.  I mean, 13 different counts.  If this happens in September, this is not good for Democrats.
(END VIDEO CLIPS)
HAYES:  That was a little preview of what‘s to come this election cycle.  If all that undisguised giddiness is any indication, you could expect to see Republicans far and wide spending campaign 2010 running against New York Congressman Charlie Rangel and his 13 alleged ethics violations.
And the Rangel case—if the Rangel case goes to trial in the House, it will happen in the fall, right before the election—not exactly ideal timing for the Democrats.  As we noted on this show last night, ethics violations are serious business.
But if you want to talk election-year political scandal, I‘ll see your Charlie Rangel House Ethics Committee trial and raise you a John Ensign sex and lobbyist federal grand jury investigation.
For those of you keeping track at home, the John Ensign sex and lobbyist scandal started last June when the Nevada Republican admitted having had an affair with Cindy Hampton, one of his campaign staffers who just happened to be married to one of his top Senate staffers, Doug Hampton.  When the affair ended, Ensign‘s parents cut the Hamptons a $96,000 check.
And then here‘s the part that got the FBI‘s attention.  Senator Ensign himself allegedly helped Doug Hampton—his former aide and the husband of his one-time mistress—get a job as a lobbyist, which is actually against the law.  You‘re not allowed to lobby the government immediately after leaving it.
The scandal might not have started in an election year, but it has
become an election year scandal by virtue of its staying power.  Tonight,
there are in developments in the year-old scandal.  Because late last
night, the Senate passed a resolution that will allow staffers from Senator
Ensign‘s office to testify in front of the grand jury that‘s investigating
him.  That‘s important news.  Or if you‘re John Ensign, probably bad news -
because there‘s another John ensign investigation going on in the Senate Ethics Committee.

Senator Ensign‘s staffers have allegedly reportedly—already reportedly testified there, and what they—what did they say?  According to reporting from “The Hill” newspaper last month, quote, “Staffers for Senator John Ensign have said the Nevada Republican and his senior aides knew a one-year lobbying ban was being broken when they helped a former staffer set up a short-lived career on K Street.  Staffers told Senate ethics investigators that several aides in the office openly discussed Douglas Hampton‘s lobbying job and the one-year revolving-door ban it appeared to violate.”
So, the staffers who have already reportedly giving damning testify about Senator Ensign to the ethics committee are now free to give the same damning testimony to the grand jury.
And it‘s not just Senator Ensign‘s staff spelling the beans, just last week, we learned that his good friend, Senator Tom Coburn of Oklahoma, has turned over 1,200 pages of Ensign-related documents to the Department of Justice to aid in its investigation of Senator Ensign.  Coburn was among Senator Ensign‘s roommates at the C Street house, reportedly helped negotiate a financial settlement for the Hamptons once the affair ended.
So, if Charlie Rangel‘s ethics case is going to make things difficult for Democrats this election season, I wonder what John Ensign‘s criminal probe is going to do for Republicans.
Joining us now is “The Washington Monthly‘s” Steve Benen, who wrote today about the two scandals.
Steve, it‘s nice to see you.
STEVE BENEN, WASHINGTON MONTHLY:  Thank you, Chris, it‘s good to see you.
HAYES:  All right.  So, you wrote about those two scandals today in a blog post up at “The Washington Monthly” and you pretty much asked why is the Rangel‘s scandal getting so much more attention than the Ensign scandal.  You asked the question.  Now, I‘m going to make you answer it.
Why—why is it getting so much more attention?
BENEN:  It‘s puzzling, isn‘t it?  You know, when you think about it, Ensign seems to have all the elements that one would look for in a feeding frenzy.  You know, we have—we have a family of values conservative Republican caught up in a sex scandal.  Then, we got corruption and lobbyists and hush money.
And in those circumstances, giving that it‘s a sitting senator, it‘s tempting to think the media would be all over this.  This would—you‘d have reporters staked out in front of his house, you‘d have editorials about him resigning.  And yet, none of that‘s actually happening.  Most of the attention is focused on Rangel, and before this, former Congressman Massa.
And so, it does raise the question, of course, you know, why is that?
You know, one of the things that I see a lot from the left is called this rule called IOKIYAR, which, of course, stands for, “It‘s OK if you‘re a Republican.”  I know it‘s a cliche but a certain level; it seems kind of incredible here.
It seems that once you got to weigh the various factors of these two scandals—the ethics violation of Rangel is a huge story.  The criminal investigation of a Republican senator is not.  It makes you wonder.
HAYES:  Yes.  I mean, I will even say that I was—I have been following the story, I think, largely through this show, and the fact that it‘s a grand jury investigation is really, really gotten buried.
Let me—let me propose an alternate theory here, which is that the reason there‘s a difference is because Republicans have actually done a better job banging on Charlie Rangel and his problems than Democrats have done on John Ensign.  Do you think that‘s the case?  I mean, I hardly ever see Democratic politicians mentioning this.
BENEN:  That‘s an excellent point.  I think when you look at the two, we have both Democrats and Republicans criticizing Rangel, and in the case of Democrats, trying to distance themselves, and in the case of Republicans, trying to exploit it.
When it comes to Ensign‘s scandal, not only is the media generally avoiding this story, but at the same time, Democrats in the Senate are also avoiding it.  I think, though, that that might change.  I think that as Rangel becomes more central to the Republican election strategy, Democrats realize they have a trump card.  If you want to talk about Rangel, they‘ll say, we can talk about Ensign and we can talk about Senator David Vitter of Louisiana, who was caught recently with prostitutes.
HAYES:  OK.  So, finally, I want to ask you about the other big development in the Ensign scandal: Tom Coburn‘s decision to turn over all those e-mails.  Last year when his role in the affair was first made public, he said he was not going to talk at all because he was, quote, “counseling Senator Ensign as a physician and as an ordained deacon” and it‘s privileged information, he‘s not going to tell anyone.
Of course, Senator Coburn is an OB/GYN.  So, that sort of raised weird questions about what exactly that physician/patient relationship was.
So, what do you think—do you think that spells trouble for Ensign, the fact that Coburn is now talking?
BENEN:  I think it does.  I think that‘s a potential problem.
One of the things that Ensign has to count on is complete and unanimous support from his Republican colleagues.  The fact that Coburn initially wanted—balked at the idea of trying to cooperate, which both defied common sense and anatomy, I guess, once you get past that, and Coburn says he wants to actually cooperate, you get to a situation where it‘s conceivable that those e-mails and those materials that were turned over to federal investigators are potentially damaging.
And so, that‘s a key development in this, the fact that Coburn is willing to cooperate with investigators.  And I think that probably makes Ensign awfully nervous at this point.
HAYES:  Yes, I imagine if we see a grand jury indictment, it will be a big story.
Steve Benen of “The Washington Monthly,” thanks so much—
BENEN:  I think that‘s the key.
HAYES:  Thanks so much for joining us tonight.  I really enjoyed it.
BENEN:  Thank you, Chris.
HAYES:  Republicans are in slash and burn mode over the deficit.  We
must slash these wasteful programs that don‘t stimulate the economy, like -
food stamps?  Really?  That people buy food with?  That‘s next.

(COMMERCIAL BREAK)
(BEGIN VIDEO CLIPS)
REP. KEVIN BRADY ®, TEXAS:  To Democrats, deficits don‘t matter.  They thought they could attach this bill—it‘s a big spending bill—talk the rest of Congress to adding even more to our deficit, and Congress balked.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  Our friends on the other side simply refuse to pass a bill that does not add to the debt.
SEN. JON KYL ®, ARIZONA:  You do need to upset the costs of increased spending, and that‘s what Republicans objected.
(END VIDEO CLIPS)
HAYES:  All those responses can be boiled down to one word: no.
After maxing out their credit card during the Bush years, Republicans all of a sudden want to tell—want to tell Democrats to pinch pennies at the worst possible time.
In case you haven‘t noticed, we‘re in a recession, pretty bad one—states are going broke, people are unemployed, making them more dependent upon social services.  When demand for those social services goes up, the price tag for providing them does as well.
What do you want is borrow money to pay for these increased costs, to prevent the economy from further contraction.  Balancing the budget at a time like this slows the recovery.  The GOP is adamant any new spending must be offset by cuts elsewhere.
OK.  So, what are they willing to cut?  How about repealing $35 million of tax breaks for the oil and gas industry—as Senator Bernie Sanders proposed.  Surely the fiscally conscious Republicans would consider that the way to go.  No, the measure got exactly zero GOP votes and was defeated.
What about offsetting those Bush tax cuts the Republicans are so eager to preserve?  No deal.
What about the Democrats‘ pay-as-you-go proposal that would offset all new spending?  Surely, they‘d be down with that, right?  Nope.  Voted down.
So, without the Republicans willing to offset any of those costs, the Democrats now find themselves cutting, of all things, food stamps.
Joining us now to explain why that is a terrible, terrible idea is Ezra Klein, “Washington Post” reporter, “Newsweek” columnist, MSNBC contributor, and the organizers of the last left-wing conspiracy.
Ezra, thank you for being here.
EZRA KLEIN, MSNBC CONTRIBUTOR:  Can‘t be talking about that on the air, Chris.
HAYES:  Ezra—OK, why are they cutting food stamps?  And why is that a bad idea?  I thought you spelled it out really well today on your blog.
KLEIN:  So they would say they‘re doing a technical fix.  In the stimulus plan, we took food stamps and increased them across the board by 13 percent.  And we did that because, A, food stamps are the best form of stimulus we‘ve got.  It is a $1.70 of economic activity for each dollar you put towards it.  And B, because we thought the price of food would go up.  A lot of people would need help. 
The thing is, the recession was so bad.  Inflation was essentially nonexistent, so the price of food didn‘t go up.  So now, people feel - and I think this is a bit of a naughty take on it - that, actually, we‘ve given these people - these poor people who need food stamps too much.  It‘s been too generous. 
So they have decided to cut $6.7 billion from the program and put it somewhere else.  It‘s a bit of an odd idea for a couple of reasons.  But one, as you note, this is a program that goes directly to poor people.  It‘s not like tax cuts for the rich, not like farm subsidies.  In a long recession, it‘s what you want.  But this is where we are starting with our deficit reduction, it appears.
KLEIN:  Well, and also, we should note it‘s about $80 a month, right, the sort of average food stamp allowance that people get.  The program is now called SNAP, we should also point that out, right? 
KLEIN:  Yes.  It‘s very low, and it‘s important to say how it‘s structured.  You don‘t get a check.  It isn‘t like a tax here, but you get something more like a credit card, which you can only use at a grocery store. 
So you can also kind of save the money.  It goes directly into the economy.  Now, the way this works, it means it would change it in 2015 as opposed to 2018 when it‘s currently set to expire, the increase.  But still it‘s a really efficient program that helps a really needy group. 
HAYES:  All right.  So can you provide actually the background or the legislative context in the amendment Senator Majority Leader Harry Reid attached that sought to move this money? 
When I heard it this morning, I found myself after a few clicks reading about an aviation bill and I was confused.  Yes, how does this work? 
KLEIN:  It‘s the “Sophie‘s Choice” of budgeting.  What‘s going on here is that we did a lot of state and local funding in the original stimulus.  But now, the recession has been longer than the stimulus, was set to go forth, so now, that money is expiring, which means Medicaid and schools, which are two things states fund, are about to run out of money. 
Now, this is a problem, because in a recession, a lot more people need Medicaid and our children still need to go to school.  So they‘ve been trying to figure out how to get money back to Medicaid and to the schools. 
Now, Democrats want to do what you normally do in a recession and
do it on the deficit, as Republicans did for tax cuts and Medicare
prescription drug benefits, and many other things.  But in this case, it
would make sense -
HAYES:  And the war. 
KLEIN:  Because you want to put - yes, and the war.  But you want to put new dollars into the economy now.  That got voted down by Republicans.  So the package got whittled down.   We‘re now looking at much less money for Medicaid and education than we need. 
And they‘ve had to find offsets that Republicans will accept.  And one of the few they‘ll accept, it turns out, is this food stamp cut, as opposed to say, paying for $6.7 billion of the $3 plus trillion of the Bush tax cuts that were set to extend next year. 
HAYES:  Ezra Klein of “The Washington Post,” “Newsweek” columnist, and also an MSNBC contributor, great thanks.  Have a great weekend, man. 
KLEIN:  Thank you. 
HAYES:  Mountaintop removal of coal.  It‘s not that bad.  That‘s what tea party standard bearer Rand Paul says.  Defending big coal in Kentucky - that‘s next. 
(COMMERCIAL BREAK)
KLEIN:  The coal industry is in the midst of an epic public relations battle aimed at convincing America that burning coal is actually clean and patriotic.  The weapons wielded in this battle have not always been what you might call effective. 
In fact, you might even call them embarrassing.  Take the coal carolers, for example.  These little lumps of blinking coal sang the classic Christmas carols with just a few small changes. 
(SINGING)
HAYES:  Merry Christmas to all and to all a good black lump.  And then there was the whole FACES debacle, FACES as in the Federation for American Coal Energy Security.  Last year, Rachel reported that if you went to “FACESOfCoal.org” or “FACESOfCoal.com,” you would see all these regular people - regular old people with faces who were supposedly pro-coal. 
Regular old people whose images whose faces were apparently purchased on “iStockPhoto.com” clip art.  Here‘s the image of women at a flower shop from “iStockPhoto.com.”  And here‘s that same woman, same flower shop, only now, she‘s one of the “FACES of Coal.” 
Here‘s a group of happy business people.  And here they are again at “FACESOfCoal.com.”  I could go on and on, but you get the idea. 
One of the more serious end of the coal industry PR disasters was the scandal from this time last year involving fake letters to Congress.  A coal industry‘s PR firm stole letterhead from the NAACP and used it to write letters to Congress to make it look like the NAACP was against cap-and-trade. 
So I think we can fairly conclude the coal industries public relations campaigns of late have been about as humiliating as the Detroit Lions 2008 winless season.  Unlike The Lions, who still have to play by the same rules, the coal industry now gets to play by new ones, thanks to the Supreme Court, its ruling in the Citizens United case. 
The court ruled earlier this year that corporations can spend unlimited amounts of money in candidate elections, and spend they will. 
John Cheves at the “Lexington Herald Leader” reports that a number of coal companies plan to, quote, “pool their money and defeat Democratic congressional candidates they consider anti-coal.  Companies hope to create a politically active nonprofit so they won‘t have to publicly disclose their activities.”
They want to defeat Democrats like Congressman Ben Chandler from Kentucky, Congressman Nick Rahall from West Virginia, and Jack Conway, who is running for Senate, also in Kentucky. 
Why these three Democrats?  Well, let‘s see.  Congressman Chandler co-sponsored mine safety legislation and voted for cap-and-trade - the horror.  Congressman Rahall is running against this guy. 
On the left there, that‘s Eliot “Spike” Maynard.  He is a former West Virginia Supreme Court justice who ruled in favor of Massey Energy in an appeal over a $50 million jury verdict.  Massey is one of the energy companies pooling its money to get Maynard elected.  Oh, and who is that on his right?  That‘s the CEO of Massey, and they are on vacation in Monte Carlo together. 
Which brings us to the final Democrat, Mr. Conway.  He‘s running for Senate against Rand Paul, who tells “Details” magazine this month that mountaintop removal isn‘t so bad.  Quote, “One of them is 800 acres with a sports complex on it, elk roaming, covered in grass.  Most people would say the land is of enhanced value because now you can build on it.”
Joining us now is Kate Sheppard, who reports on energy and environmental politics for “Mother Jones” magazine.  Kate, great to see you. 
KATE SHEPPARD, REPORTER, “MOTHER JONES” MAGAZINE:  Great to see you, Chris. 
HAYES:  All right.  Let‘s start with the coal companies, who really seem to be working overtime to achieve the most villainous reputation possible.  The coal companies that are pooling their money to defeat Democrats in the fall, who are they and what do we know about them? 
SHEPPARD:  Well, the two main coal companies to think about here, one is the International Coal Group, which seems to be the ring leader on this effort.  They‘re the ones who sent these letters that are kind of trying to lure the others into part of this 527 idea. 
Well, the International Coal Group - their most recent bout with infamy was in 2006.  They had a mining disaster in West Virginia that killed 12 miners.  Well, then you look over at Massey Energy, who also seems to be discussing being part of this effort.  They owned the mine that had the explosion in early April where 29 miners died. 
So between them, they have 41 miner deaths here.  So these are people who are really concerned about new rules that might actually crack down on the mining industry. 
HAYES:  You‘ve reported on Massey Energy, its direct involvement in West Virginia politics.  What do they do there and what can we expect from them now that the Supreme Court has opened the floodgates to unrestricted corporate spending in elections? 
SHEPPARD:  Well, I think that that example of Blankenship, hanging out on the French Riviera there with his buddy, Spike Eliot, is a great example. 
I mean, if they‘re not directly spending on politicians, they‘ve been really, really good about yielding their influence, whether that‘s vacations or just basically intimidating everyone in the state or helping fund all these deferent front groups, FACES of Coal, as we‘ve talked about.  They‘ve done a pretty good job of using significant financial influence over state politics there. 
HAYES:  That‘s what‘s sort of hilarious.  It‘s not like there‘s no voice for coal in Kentucky and West Virginia.  I mean, more or less (UNINTELLIGIBLE) local government.  So there‘s this section in the letter where they talk about, now, they can find their voices. 
I wonder, is Massey‘s CEO Don Blankenship as sort of - as cartoonishly evil as he‘s been portrayed? 
SHEPPARD:  Everything I‘ve seen makes him out to be exactly that sort of unabashed evildoer that he seems to be.  I mean, it‘s also important to note that, not only do they already have a voice in the state politics.  The coal industry spent $15 million on lobbying last year, so they already have a voice in Washington. 
It‘s very clear.  They don‘t need to spend millions of dollars on elections in order to do that.  But now, they‘ll have that opportunity as well. 
HAYES:  Well, let‘s talk about that.  I mean, in the wake of the death of the - of any kind of cap-and-trade and the new energy bill proposed by the Democrats in the Senate, which doesn‘t have a price on carbon, how much of that was the coal companies, frankly?  I mean, they seemed to be the ones that were providing the biggest - the kind of backbone of the opposition on this? 
SHEPPARD:  Well, absolutely.  I mean, the coal companies are extremely powerful.  They got a pretty good deal in the house bill last year.  There‘s $60 billion in there for so-called clean coal energy, and they still managed to get a number of coal state Democrats and Republicans to vote against it. 
Then, we look at the Senate and we couldn‘t even get anything off the ground there.  There are a number of coal state Democrats and Republicans who are rabidly against this.  And we look at these candidates that they‘re calling anti-coal - it‘s almost laughable. 
Talk about Jack Conway down in Kentucky who‘s running for Senate.  He‘s the Democrat here who is running against Rand Paul.  I mean, to call him anti-coal - this guy has said blatantly that he will never vote for a cap-and-trade bill. 
He opposed the house bill, and he even, as attorney general, tried to challenge the Environmental Protection Agency‘s finding that greenhouse gases are indeed a threat to humankind.  They tried to file a suit there.  So the idea that this guy is out there to beat up coal is just silly. 
HAYES:  Well, that‘s - yes.  And it seems like, in covering Capitol Hill, when it comes to any coal issue, what you end up is less partisan divides and more just intense regional blocks.  I mean, you know, it never looked like you were going to get a lot of coal state senators to vote for cap and trade. 
Going back to Rand Paul and his sort of utopian vision of mountaintop mining, for those who aren‘t familiar, can you talk us through what mountaintop mining is and tell us about the actual practice? 
SHEPPARD:  Well, if Rand Paul thinks that this makes land more beautiful, perhaps he likes living on the moon.  I mean, basically, coal companies are out there turning coal - these mountains into moonscapes.  They‘re blowing the tops off, dumping all this waste into surrounding streams. 
And then, you know what, for the most part, leaving it with very, very little, if any, reclamation.  You know, they‘ve destroyed hundreds of mountains in Appalachia, and then followed up by destroying streams and the health and livelihoods of all the people who live in these areas. 
So it‘s an extremely hazardous practice and this rosy picture he paints doesn‘t really jive with reality from anyone I‘ve talked to who actually lives in these areas. 
Kate Sheppard, reporter from “Mother Jones” magazine, thanks so much for being here this evening.  Have a good weekend. 
SHEPPARD:  Thanks for having me, Chris. 
HAYES:  When you gaze upon the majestic spectacle of the Coliseum in Rome, do you think - you know what this needs, advertising.  A scary game of what if, still ahead.
(COMMERCIAL BREAK)
HAYES:  Do you ever get that feeling as you‘re E-mailing your boss to call in sick or sending around the Double Rainbow Guy video to your friends that somewhere a liberal is laughing all the way to the bank?  Michael Reagan, conservative talk radio host and son of President Reagan - he explains the connection. 
(BEGIN VIDEO CLIP)
MICHAEL REAGAN, CONSERVATIVE RADIO TALK SHOW HOST:  Are you aware if you have AOL, G-mail, or any one of the famous E-mail service providers, that when they send money to Washington, 90 percent of it goes to liberal causes and to liberal candidates?  People like Nancy Pelosi, Harry Reid, Barack Obama - is that where you want your money to go? 
(END VIDEO CLIP)
HAYES:  I‘d just say, I‘ve had the liberal E-mail service provider conspiracy - never had the liberal E-mail service provider conspiracy laid out to me with such stunning clarity. 
Michael Reagan has a solution.  He‘s selling his last name - well, let‘s be honest here - his dad‘s last name, as an E-mail address.  Imagine, ChrisHayes@Reagan.com, for $34.95 a year.  Reagan doesn‘t say exactly what he‘ll do with the money other than promote true Reagan values, which, come to think of it, is pretty accurate. 
What better testimony to the legacy of Ronald Reagan than unleashing the power of the market, no matter how awful or degrading the result.  
(COMMERCIAL BREAK)
HAYES:  Remember the foreclosure crisis?  Back in 2007, when the first tremors of subprime failure began to reverberate throughout financial markets, foreclosures were on everybody‘s mind. 
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE NEWS ANCHOR:  NBC News in depth.  Tonight, the growing housing crunch. 
TRISH REGAN, CORRESPONDENT, CNBC:  Borrowers are getting caught in the middle of the biggest mortgage crisis in decades. 
BRIAN WILLIAMS, ANCHOR, NBC NIGHTLY NEWS:  Listen to this number on mortgage foreclosures in this country.  They‘re up 93 percent nationwide last month from the same period last year.  This situation is dire. 
Tonight, there are now hard numbers that would further indicate a real foreclosure crisis in this country. 
(END VIDEO CLIP)
HAYES:  That was in 2007.  We don‘t hear so much about foreclosures anymore but that doesn‘t mean they‘ve gone away.  In fact, as the coverage has ebbed, the actual problem has surged. 
According to Reality Track, which publishes the database of foreclosures, 75 percent of the nation‘s top metro areas posted increasing foreclosures in the first half of 2010.  In the first half of 2010, more than 1.6 million properties received foreclosure filings. 
And that‘s an eight percent increase in total properties from the first six months of 2009 which puts us on pace to top three million filings this year. 
Now, foreclosures are what you might call a lose-lose-lose situation.  It‘s the worst kind of outcome for everyone involved.  Homeowners lose their homes and have to suffer dislocation.  Banks end up owning a piece of property they don‘t want.  And neighbors see their property values depressed because they‘re on a block with a foreclosed home. 
Everyone agrees this is a worst case scenario.  And in March of 2009, the Obama administration set aside $50 billion of TARP money to launch the Home Affordable Modification Program, or HAMP, which was their solution to the problem. 
The Web site states that, quote, “If you can no longer afford to make your monthly loan payments, you may qualify for loan modification to make your monthly mortgage payment more affordable.” 
HAMP is supposed to keep families in their homes by inducing banks to modify mortgages and make them affordable.  But that‘s not what happened.  Sixteen months later, the HAMP program is a disaster.  In fact, it may just be the single biggest failure of the Obama administration. 
Last Wednesday, at the Senate Finance Committee hearing on the TARP update, Iowa Republican Senator Chuck Grassley described the program like this. 
(BEGIN VIDEO CLIP)
CHUCK GRASSLEY (R-IA):  In a program that Treasury said would result in three to four million modifications, there have been only 340,000 permanent.  In fact, there have been 430,000 failed trial modifications, meaning failed modifications vastly outnumber successful ones. 
Moreover, Treasury still has not established performance goals or benchmarks for the program, meaning that there‘s no effective way for us to know whether this $50 billion program is accomplishing intended purposes. 
That‘s not accountability.  That‘s not transparency and it‘s just more taxpayers‘ money flying out the window. 
(END VIDEO CLIP)
HAYES:  The last time I was on the show, three weeks ago, I spoke about people who owe more money on their home than it‘s worth, which is called being underwater.  That‘s why I‘m wearing the snorkel mask there. 
Those people who are underwater are more or less the people HAMP is designed to help.  There are three ways it promises to do so.  First, it gets lenders to lower the interest rate which is fine, but it only means you‘re still paying interest on a loan that is too big which is like handing the homeowner some scuba gear.  You can breathe but you‘re still underwater. 
Second way is by extending the term of the loan which is like giving a homeowner a snorkel.  You can stay underwater longer and longer and longer, but eventually you need to come up for air and live your life. 
And third, the program can reduce the principal of the loan, which is actually like pulling a homeowner up and out of the water and on to dry land.  The problem, because the administration has put no requirements on what the banks need to do, most of the modifications aren‘t reducing the principal.  That‘s optional. 
And banks are opting out because they‘re already raking in big bucks and see no need to write down big chunks of loans on overvalued homes.  But it‘s not just that HAMP is not solving the problem.  It‘s actively making it worse. 
According to “Huffington Post‘s” business reporter, Shahien Nasiripour, more homeowners have been bounced from HAMP than have received permanent relief.  Last month, analysts at Fitch Ratings projected that as many as 75 percent of HAMP modifications will ultimately result in re-default despite the lower monthly payments. 
If you talk to anyone who has actually interfaced with the program, you‘re likely to hear horror stories about a bureaucratic nightmare in which they were forced to jump through hoops that never actually resulted in much real help. 
The White House often argues that its policy failures are the result of obstructionist Republicans or a noncompliant Congress.  But they can‘t lay this at the feet of anyone but themselves.  They appropriated $50 billion to administer the HAMP program, so this is totally on them.  And rather than helping homeowners, what they have done is throw them to the tender mercies of the banks. 
Barack Obama famously got his start as a community organizer on the south side of Chicago, an area that has been decimated by foreclosures.  If the 25-year-old Barack Obama were around to see this, I think he would be disgusted. 
(COMMERCIAL BREAK)
HAYES:  As the world‘s ancient monuments decay with age, preserving these treasures becomes increasingly urgent.  Unfortunately, preservation is also very expensive.  Such is the dilemma facing the Coliseum in Rome.  For more details on that developing story, here‘s Kent Jones.  Hi, Kent. 
KENT JONES, MSNBC CORRESPONDENT:  Hi, Chris.  You know, to generate the money to fix that masterpiece of antiquity, the Italian government is exploring a very modern financial solution - very modern.  Take a look. 
(BEGIN VIDEOTAPE)
(voice-over):  The Coliseum‘s got issues.  After 2,000 years, the world‘s most famous sports venue needs some serious repairs.  We‘re talking $32 million worth.  So how does the Italian culture ministry, which isn‘t exactly made of lira, intend to pay for fixing one of the Seven Wonders of the World? 
Bravissimo!  The they‘re reaching out to the private sector.  Corporate sponsorship is exactly what that tired old relic needs.  Just look what corporate advertising has done for the aesthetics of American stadiums.  Ciao, bello. 
Now, can you imagine that at the Coliseum?  Echo.  Aah.  Mmm.  Ooh.  The new improved coliseum would finally speak to our era.   And hasn‘t capitalism suffered under the heel of preservationists long enough?  All that prime space just sitting there, naked. 
Shouldn‘t we put these so-called monuments to work?  And if the Coliseum can‘t find any corporate backers, there‘s always this. 
(END VIDEOTAPE)
HAYES:  You know, I was thinking that the natural - what are the natural sponsors here?  There are all those cats outside the Coliseum, the Purina tie-in, possibly. 
JONES:  Sure, why not?  Why not?  They haven‘t monetized this thing. 
Come on. 
HAYES:  As long as it‘s not Sbarro‘s. 
JONES:  I wouldn‘t worry too much. 
HAYES:  Thanks a lot, Kent.  Appreciate it.  Have a great weekend. 
JONES:  Sure.  You, too. 
HAYES:  All right.  That does it for us tonight.  I‘m Chris Hayes and thank you for watching this week.  I really appreciate it.  Rachel is going to be back on Monday. 
And I really want to thank the staff of THE RACHEL MADDOW SHOW who are totally incredible.  You never see them up here but they‘re amazing and they really had my back. 
Have a great weekend.  Good night.
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