updated 8/31/2010 12:03:15 PM ET 2010-08-31T16:03:15

Guest Host: Lawrence O‘Donnell

Guests: Ezra Klein, Evan Kohlmann, Ashley Carson, Douglas Brinkley, Paul Goodloe, Bill Press

           

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LAWRENCE O‘DONNELL, GUEST HOST (voice-over):  Which of these stories will you be talking about tomorrow?

Social Security and Medicare, the most popular government programs ever created, now squarely in the sights of Republican candidates who want you to believe neither one is constitutional.

Hate in the heartland?  Far from the proposed Park 51 project in New York City, a federal investigation underway of possible arson at the charred construction site of an Islamic center in Tennessee.

Helping New Orleans: on the eve of your free help clinic, the president marks the fifth anniversary of Hurricane Katrina, pledging continued support for residents of the Gulf Coast.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  And all of America, not just people here, not just folks in the White House, but all of America, remains concerned and remains committed to their rebuilding.

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O‘DONNELL:  Hurricane Earl continuing to strengthen in the Caribbean, intensifying as it moves across the Atlantic.  We‘ll have the latest projections and details.

And scripted spirituality.  In preparation of Saturday‘s Beckoning, Glenn cleared the slate and cleared his mind.

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GLENN BECK, FOX NEWS HOST:  I am only writing a few bullet points and I am doing that so I don‘t get in the way of the spirit in case he wants to talk.

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O‘DONNELL:  Well, he did want to talk.  You‘ll hear what he said to Beck.

All that and more—now on COUNTDOWN.

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BECK:  Don‘t believe me.  Just watch it yourself.

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O‘DONNELL:  Good evening from Los Angeles.  I‘m Lawrence O‘Donnell, in for Keith Olbermann.

The man poised to replace a two-term incumbent as the Senate nominee from the great state of Alaska says that Social Security is unconstitutional.

And in our fifth story tonight: he says that he might want to privatize it.

Attorney Joe Miller came out of nowhere, brandishing an endorsement from Sarah Palin to challenge Senator Lisa Murkowski in last week‘s primary and currently leads by about 1,700 votes with counting still under way.

Toward the end of the campaign, Murkowski, desperate, began telling voters Miller would take away Medicare and Social Security.

On CBS yesterday, Miller did not exactly back away from that claim. 

Cue: Bob Schieffer.

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BOB SCHIEFFER, CBS NEWS:  You have also taken some fairly controversial, some would say, very extreme positions.  First, you say you want to phase out Medicare.  You want to privatize Social Security.

I have to say, there are a lot of people who are in Alaska on Medicare and are getting Social Security.  Isn‘t that position going to be a problem for you in this election, in this general election?

JOE MILLER ®, ALASKA SENATORIAL CANDIDATE:  Well, yes—and I would suggest to you that if one thinks the Constitution is extreme and you‘d also think that the Founders are extreme, we just simply want to get back to basics—restore essentially the constitutional foundation of our country, and that means the federal government becoming less onerous, less involved in every, basically, item of our lives.  And what that means is there does have to be some transition.

With respect with Social Security, what we said consistently throughout this race is that if you paid into the system, if you‘re dependent on the system, we have got to get the fiscal house in order at the national level so that we can continue to pay those benefits.

But to suggest that there is nothing that can be done, that we have to continue as the way things are, ignores the fact the trust fund is empty, it‘s full of IOUs, it ignores the fact that as of April of this year, there are more expenditures or there are more outlays coming out from Social Security than in-lays, and it would be incredibly irresponsible for us to sit back and say that this is something that shouldn‘t be addressed.

There are a lot of different options out there.  We have to look at all the options that are out there, including privatization.  It‘s something certainly that Bush championed in his first administration, something that Representative Ryan is looking at.  I believe that it is irresponsible.  It is basically part of the crisis of leadership in D.C. to not look at Social Security and understand that there has got to be a solution posed.  We‘ve got to take a look at it and make sure that we create a solution so our seniors aren‘t left out in the cold.

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O‘DONNELL:  Of course, the president believes that it‘s irresponsible to not look at the future of Social Security, specifically his National Commission on Fiscal Responsibility and Reform.

Including the occasionally intemperate co-chairman, Alan Simpson, the former Republican senator from Wyoming, the White House said last week, Mr.  Obama will not fire Simpson from the commission after he apologized for saying in an e-mail that Social Security is, quote, “like a milk cow with 310 million” of those things.

But calls for Simpson‘s departure continued to mount this weekend.  In addition to Vermont Senator Bernie Sanders, several Democratic members of Congress now say Simpson should step down, along with two Democratic Senate candidates, not to mention the national organization for women and other advocates for women or the elderly.

Joining us tonight is Ashley Carson, executive director of the Older Women‘s League and the recipient of Senator Simpson‘s angry e-mail and his apology.

Thanks for your time tonight, Ashley.

Tell me, what was the part of the e-mail you found offensive to women specifically?

ASHLEY CARSON, EXEC. DIR., OLDER WOMEN‘S LEAGUE:  I think there were a number of parts, the part you just highlighted, of course.  But there were more subtle attacks on women.  There‘s a statement specifically about my ability to possibly read a graph from the Social Security Administration‘s chief actuary, Steven Goss.

And this sort of goes back to the, you know, the old ways of saying that women are bad at math.  It also attacks my credibility and basically stated that I‘m not doing honest work.

O‘DONNELL:  Ashley, the White House has accepted Alan Simpson‘s apology.  How about you?

CARSON:  I‘m very appreciative of Mr. Simpson‘s apology and that he reacted so quickly, you know, by sending the apology.  But it just really doesn‘t suffice.  This man has shown a consistent decade‘s long pattern of doing things that just show bad judgment and I really think he needs to be removed.

Our fiscal situation is very serious.  And, you know, the president has created this commission, and we need to have somebody who has better judgment than Mr. Simpson co-chairing.

O‘DONNELL:  Who would you—who would you suggest that the president replace him with by executive order?  That seat on the commission has to be held by a Republican.  So who is the Republican that you would recommend the president replace him with?

CARSON:  You know, I don‘t really have a recommendation off the top of my head.  But I would, of course, advocate that we have more women on the fiscal commission.

O‘DONNELL:  Sticking with the Republican issue, are there any Republicans that you would listen to on the subject of Social Security and entitlements?

CARSON:  I really think the issue of Social Security should be taken, you know, outside of the executive order for the commission, just because I don‘t think it‘s the appropriate place to look at the long-term solvency of Social Security.  There are really no experts on Social Security‘s adequacy and solvency on the fiscal commission, and I really think it could be better.

The long term problems, which there aren‘t any problems in Social Security for 30 years, could be better fixed by a group of experts.  And I hope it would be bipartisan.

O‘DONNELL:  Ashley—Ashley, there are problems in Social Security for you.  It is solvent until—

CARSON:  You‘re right.

O‘DONNELL:  2037.  But workers your age who are contributing to Social Security every day, we can currently tell you that when your time comes to collect, the money will not be there, according to all the projections that we have today.  That‘s one of the reason the commission is looking at it.

The another reason is that it specifically written into their executive order by the president—the president has ordered them to look at it.  The president says he wants to look at things, including changes to address the growth of entitlement spending.

So, is your problem with President Obama opening up this issue that he‘s ordered Alan Simpson to look at?

CARSON:  No.  And, of course, I think the president should be looking at Medicare, Medicaid and Social Security.  I don‘t think there‘s a crisis in Social Security.  When you say it will run out in 30 years, that‘s actually not factually correct.

O‘DONNELL:  It will never run out—it will never run out of money.  It will always collect money.  But it will only be able to pay you 75 percent of the benefits that they project for you to receive.

CARSON:  Right.  And that‘s—

O‘DONNELL:  It will always be able to pay 75, 60 cents on a dollar because it‘s going to always be collecting something.

CARSON:  Right.

O‘DONNELL:  It‘s never going to go empty.  Is that going to be OK with people your age to collect 65 percent of what they‘re projecting?

CARSON:  No, I think we‘d like to fix the—the long-term problem so that in 2037, everybody can receive 100 percent of their benefits—everything they‘ve paid in over their working lives.  And there are a number of things we can do now to ensure that 100 percent of benefits are paid and one of those things is raising the cap on taxable earnings.

And President Reagan prepared for this in the ‘80s.  We raised the cap to cover 90 percent of earnings.  And the Older Women‘s League certainly advocates that we put the cap back at 90 percent because it‘s dropped down consistently to around 80 percent or, I think, 83 percent.

And so, if we could bump that back up, we could solve a lot of the problem in 30 years.

O‘DONNELL:  The thing is you have to do—the sooner you do it, the more of an impact it has, as you know.

CARSON:  Exactly.

O‘DONNELL:  We‘re going to be talking a lot more about this as the weeks go on, especially when this commission comes out, if they can possibly reach an agreement.  We‘ll find out if they can.

Executive director of the Older Women‘s League, Ashley Carson—thank you for your time tonight.

CARSON:  Thank you.

O‘DONNELL:  Let‘s turn now to MSNBC contributor, Ezra Klein, also columnist for “Newsweek” and a staff reporter for “The Washington Post.”

Good evening, Ezra.

This commission, always controversial, 18 members, Democrats and Republicans—they require 14 votes of the commission in order to issue a report.

Has Alan Simpson ruined this?  Has he made it maybe politically impossible for this commission to come to an agreement or have its recommendation taken seriously?

EZRA KLEIN, MSNBC CONTRIBUTOR:  I don‘t really buy it.  If Alan Simpson has ruined it, it was never going anywhere in the first place.

Look, I think what people should be watching here is not that Alan Simpson said something offensive in a letter, which is sort of like saying Alan Simpson woke up today and put on his shoes.  That‘s pretty par for the course with him.

What, I think, you should be looking at is that the commission is pretty much narrowing its case in Social Security.  All the rumors we see coming out of it, all the reporting coming out of it, the different things people are fighting over.  They don‘t seem to be getting anywhere on taxes.  They‘re too scared to do anything more on health care.  But Social Security seems to be falling in their sights.

And I have a bit of a problem with that.  I mean, we can go with the solvency here a bit more.  But it isn‘t the only thing in the picture.  And while, I think, there‘s some argument for it to be part of a larger deal, it isn‘t—

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O‘DONNELL:  They can‘t possibly—they can‘t possibly do their job by looking at Social Security.  They‘ve been ordered to, in effect, balance the budget by 2015, leaving interest payments aside.  Tweaks in Social Security—

KLEIN:  Yes, but

O‘DONNELL:  -- do not have effects—any real effects on that short-term.

KLEIN:  Right.  But what I‘m actually—what I‘m hearing is if they can‘t come to the full agreement, which is the sort of balanced budget they we‘re talking about here, that there is a high likelihood we‘ll get a partial agreement out of there—something that doesn‘t fit the commission‘s early—initial mandate but does give some sort of start, some signal that the bond markets, things of that nature.

So, I do think that there‘s a possibility that they can‘t get to the actual hurdle they need to get to those 14 votes for something that‘s very big, but they end up coming up with something smaller, what they will call “a confidence-building measure.”  Maybe it will be good.  Maybe it will be bad.  But it does appear increasingly that it will be centered around Social Security.

O‘DONNELL:  You know, the solvency projection target for Social Security among Social Security actuaries is actually 75 years for very good reason.  They are—they take the longest view of anyone in government.  It‘s for workers like you if we‘re content to sit here and say it‘s OK if we have to pay, you know, three-quarters of the benefits in 2037.  It‘s the younger workers, the workers in their 20s and 30s that will be hit very, very hard by that and very suddenly.

But the issue that this commission seems to be facing is how do we address Social Security?  Are there any elements within Social Security that the Democrats are going to be willing to negotiate on?

KLEIN:  Yes.  I mean, they would probably negotiate on the payroll cap.  But I think we need to step back a bit here.  One thing about Social Security, 75-year shortfall, it is not that big.  In fact, it is the exact same amount of money it would cost to extend the Bush tax cuts for the top 2 percent over the same amount of time.  So, we are talking about an amount of money—

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O‘DONNELL:  You‘re going to have to hold it there.  You‘re going to have to hold it there.

So—is that to say the Democrats should be willing to violate FDR‘s principle that Social Security be self-funding and pay for itself so that the workers can actually claim that what they‘re getting is what they earn?

KLEIN:  It depends on the deal that they‘re offered, right?

O‘DONNELL:  Are we now supposed to depart and pay for Social Security out of general revenue for the first time?

KLEIN:  It depends on the deal they‘re offered.  But I actually don‘t particularly see a problem with that.  As I—as I see it, there are a lot of things in the budget don‘t make sense, the amount we spend on health care, defense, the tax code.

But when I‘ve started looking at Social Security, I came with the impression that it should be cut.  We should raid the payroll tax cut—payroll tax cap.  And then the more I look into it, it actually seems like a program functioning pretty efficiently.  There are a lot of places I would begin cutting before there.

So, you‘re right—you would have to go outside of self-sufficiency for the program.  But at the end of the day, what we do need to balance is the federal budget, which is why likely initially architecture of the commission, which looks at everything.  When you‘ve been doing Social Security across Social Security, you end up making choices that are probably going to be worst policy than looking at things in a more coherent fashion.

O‘DONNELL:  And the federal budget can actually be balanced without looking at Social Security in a relatively short term.

KLEIN:  Sure.

O‘DONNELL:  But their interest is, of course, that longer actuarial projection for Social Security.

KLEIN:  Which is primarily Medicare problem, you know, as we both talked about before.

O‘DONNELL:  Right.  Right.  Which is growing much faster than Social Security.

KLEIN:  Right.

O‘DONNELL:  But, you know, when they talk about retirement age, FDR picked 65 as the compromise number.  When he picked that number, the life expectancy for male workers in the United States was 58.  So, you know, this program was never intended to be paying people for decades and decades.  It does that now, does it pretty effectively, but to do it long term, someone is going to have to do something serious about adjusting it.

KLEIN:  But one thing on is that, workers who did get to 65, they did live a fairly long time.  And most of the gains we‘ve seen—

KLEIN:  In about 10 years.

KLEIN:  Most of the gains we‘ve seen since then have come in the upper half, right?  So, richer workers, affluent workers, workers who don‘t work menial jobs in most cases, they do live a lot longer.  Workers in the bottom, half of the income distribution, they gained a couple years, many, many fewer—which is why I‘m a little bit skeptical of the retirement age side of this.  I‘d be much more inclined to something like means testing towards the payroll tax cap change than I would be towards raising the retirement age across the board.

Folks who don‘t have sort of jobs like you and I, or like a lot folks doing this, making these arguments, I‘m a little bit more worried about them.  If I heard this sort of affluent people saying, you know, you should raise the tax cap on my earnings, that‘s one thing.  When they‘re all saying you should make people who don‘t want to retire—who want to retire early, retire later, I‘m a little bit more skeptical of that.  It seems like it‘s offloading pain onto people who have less of a voice in this conversation.

O‘DONNELL:  Right.  And I think that‘s where the conversation belongs.  You can do a few of these things.  You don‘t have to do all of them.  If there‘s something in there you really hate, you can fight that but you‘re going to have to give on something else.

KLEIN:  Sure.

O‘DONNELL:  But we‘ll be back on this subject a lot, Ezra.  “Washington Post‘s” Ezra Klein—thank you very much for your time tonight.

KLEIN:  Thank you.

O‘DONNELL:  Coming up: Glenn Beck told his followers he would listen for the voice to tell him what to say on Saturday.  We have tapped into his feed and will bring you the other half of the conversation and a COUNTDOWN exclusive.

And federal investigators are now looking into a suspicious fire at the site of a proposed mosque in Tennessee.

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O‘DONNELL:  The job is not finished in the Gulf for those affected by Katrina or BP.

Coming up: The promises made by President Obama echoing those made five years ago.

And Hurricane Earl becomes a category 4 storm as it batters the northeastern Caribbean.  Coming up: the paths it could take up the East Coast, right into the holiday weekend.

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O‘DONNELL:  As a suspicious fire mires a mosque construction site in Tennessee and as shots are fired at that site, opposition to the proposed Islamic community center in New York may be engendering something even worse.

In our fourth story: A brand-new recruiting tool for the Taliban in Afghanistan.

First, at the expansion of the Islamic center of Murfreesboro, Tennessee, four pieces of equipment were set ablaze early Sunday morning with the help of an accelerant, according to authorities there.  A federal investigation is underway.

Later the same day, there were reports of shots being fired near that same construction site.  Muslim congregation members were surveying the fire damage when they heard nine shots, though they were uncertain as to their proximity.

Meantime, the ongoing opposition to the Park 51 Islamic community center in New York might now be used by the Taliban in Afghanistan.  Taliban operative Zabiullah is telling “Newsweek,” quote, “By preventing this mosque from being built, America is doing us a big favor.  It‘s providing us with more recruits, donations and popular support.”

He explained that the Taliban uses it as part of a list of talking points for villager and potential recruits.  “We talk about how America tortures with waterboarding, Guantanamo, about the killing of innocent women and children in air attacks.  And now, America gives us another gift with its street protests to prevent a mosque from being built in New York.”

Another Taliban official who remains active in the insurgency told “Newsweek,” quote, “I expect we will soon be receiving more American Muslims like Faisal Shahzad who are looking for help in how to express their rage.”  Shahzad confessed to the Times Square bombing plot.

Let‘s call in MSNBC terrorism analyst and senior partner with Flashpoint Global Partners, Evan Kohlmann.

Good evening, Evan.

EVAN KOHLMANN, MSNBC TERRORISM ANALYST:  Good evening.

O‘DONNELL:  Now, it‘s easy to see how Taliban members might want to shoot off their mouths with reporters in making claims and, you know, they are as full of crazy spin as anybody else who might get near reporters.  What is your sense of the how true this might be that this Islamic center issue may actually being used as a recruiting tool?

KOHLMANN:  It‘s really quite simple—the same way that people are using this issue to rally foolish people here in this country and get them all worked up.  The Taliban are doing the exact same thing in Afghanistan.  Zabiullah Mujahid is not just a representative of the Taliban.  He‘s their chief spokesman.

And while this may be for propaganda purposes, there‘s no doubt they‘re using this.  They‘ve used the Koran burning episode.  They‘ve used the Prophet Mohammed cartoons.  All of these are wonderful, symbolic issues to whip people up into a frenzy.

Now, whether or not they are justified in doing this, it will succeed.  And look at what Faisal Shahzad said.  Look at what Nidal Hasan wrote to Anwar Al-Awlaki.  They reflected not only issues going on in the Muslim world outside of the United States but issues going on inside the United States.

We have to be very careful here.  Up until now there‘s only been a scattering of American Muslims that have been recruited into terrorist plots or terrorist networks.  But if we keep up this crazy rhetoric and we keep alienating people, then I guarantee you, there will be—the other people who will follow in this path and most likely they will be American Muslims who have been exposed to this nonstop for the past three weeks—talk about how Islam is a devilish religion, how Muslims are evil.  This is entirely unproductive and it‘s mostly the work of chicken hawk politicians who are putting our troops‘ lives at risk and our civilians‘ lives at risk.

O‘DONNELL:  But to get this in perspective, it strikes me that as provocations go or recruitment tools go, this sounds like one of the weaker ones.  I mean, you know, he rattled off torture in Guantanamo Bay and the killing of innocent women and children.  Doesn‘t that sound like a more effective tool than, you know, some people on the streets of New York, you know, yelling about where they want things located?

KOHLMANN:  It has to do with the timing really.  You have to understand that the Park 51 controversy is not taking place in a vacuum.  It‘s taking place at the same time where you have the incident down at the Murfreesboro mosque, you have protests elsewhere in the United States against mosques, and you have a crazy lunatic out in Gainesville who wants to burn Korans for fun.

All of this is coming together and it‘s getting noticed by al Qaeda and by al Qaeda supporters.  And their greatest fear, their greatest fear on the part of al Qaeda, is that the mosque itself will be built because they view that as some kind of plot by President Obama to win back the dignity and honor for America.  So, they‘re not—they‘re not afraid about the mosque not being built.  They‘re hoping that we will build it—or rather, they‘re hoping we won‘t build it.  They are against this 100 percent.

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KOHLMANN:  I mean, you have to understand that their perspective is they want us to tear each other apart.  They want this country to tear itself apart with racial and religious prejudice and conflict.  And we are falling right into that trap.  It‘s disastrous.  It‘s a terrible mistake and it‘s—unfortunately, we‘re following—we‘re falling into a trap they‘ve set for us.

O‘DONNELL:  But we don‘t want to suggest there‘s anything we could actually do to tone down their recruitment rhetoric.  I mean, if we actually did build the mosque and it was underway next week, and there was a ribbon-cutting, you know, a month later, they‘d still be spinning all the same nonsense, all the same provocative stuff to their recruits.

KOHLMANN:  Look, mosque or no mosque, let‘s just end the rhetoric.  Let‘s stop calling Muslims evil.  Let‘s stop talking about Sharia like it‘s some kind of flesh-eating virus.

Islam is a religion, like all other religious.  Muslims have a right to pray and practice their faiths in the United States without being demonized.  If we demonize them, we will suffer the consequences of that.

It is entirely unacceptable and, again, it is American servicemen out in the field who are trying to negotiate with our Muslim allies and are trying to win our Muslim allies in the fight against al Qaeda who are facing this problem firsthand.

If you want to help out Muslims—rather, American servicemen in the field, if you want to help out American diplomats, if you want to make America the shining city on the hill, then we have to live up to these principles.  We can‘t just talk about the Constitution or talk about the Bill of Rights.  We have to live up to it.  We have to show an example that other people can respect us rather than fear us.

O‘DONNELL:  MSNBC terrorism analyst Evan Kohlmann, demonstrating clearly that the location of that mosque in New York is not as some politicians like to call it a local issue.  Thanks for your time tonight, Evan.

KOHLMANN:  Thank you very much.

O‘DONNELL:  Still to come, big promises were made after Katrina, but which ones were kept?  Where did the billions in government aid end up?

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O‘DONNELL:  It was one of the worst natural disasters in U.S. history, followed by one of the worst man-made disasters in U.S. history.  Eighteen hundred people lost their lives, millions left to deal with unprecedented destruction and devastation.  Our third story, in the five years since Hurricane Katrina struck, some rebuilding continues but many wounds have not healed.  Many neighborhoods still forgotten. 

President Obama making his tenth trip to the Gulf over the weekend to mark the anniversary, speaking at Xavier University and praising the resilience of New Orleans. 

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  It was a natural disaster but also a manmade catastrophe.  A shameful breakdown in government that left countless men and women and children abandoned and alone.  It was not hard to imagine a day when we‘d tell our children that a once vibrant and wonderful city had been laid low by indifference and neglect.

But that‘s not what happened.  Together, we are helping to make New Orleans a place that stands for what we can do in America, not just for what we can‘t do.  Ultimately, that must be the legacy of Katrina.  Not one of neglect, but of action.  Not one of indifference, but of empathy.  Not of abandonment, but of a community working together to meet shared challenges. 

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O‘DONNELL:  Later, in an exclusive with NBC‘s Brian Williams, the president addressed the criticism his administration has received for another manmade catastrophe, the BP oil disaster. 

(BEGIN VIDEO CLIP)

OBAMA:  The only thing we had in common with the Katrina response was Thad Allen, who came in and helped to organize rescue efforts, and he did so under Katrina; he did so for us.  But if you look, we had immediately thousands of vessels, tens of thousands of people who are here.  And what we‘re seeing now is that we have a lot more work to do.  But the fact is, because of the sturdiness and swiftness of the response, there‘s a lot less oil hitting these shores and these beaches than anybody would have anticipated given the volume that was coming out of the BP oil well. 

(END VIDEO CLIP)

O‘DONNELL:  But as the administration prepares to hand out billions of dollars to Gulf Coast residents affected by the oil disaster, another lesson to be learned from the previous administration.  President Bush pledged nearly 15 billion dollars for the creation of a so-called Gulf Opportunity Zone. 

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GEORGE BUSH, FORMER PRESIDENT OF THE UNIETD STATES:  Within this zone, we should provide immediate incentives for job creating investment, tax relief for small businesses, incentives to companies that create jobs and loans and loan guaranties for small businesses, including minority owned enterprises, to get them up and running again. 

(END VIDEO CLIP)

O‘DONNELL:  As “Newsweek” reports, Louisiana received more than half of that money.  But instead of funds reaching those in need, much of it went to the state‘s oil industry.  Two billion to oil production projects, including one billion to expand a refinery that wasn‘t flattened by Katrina. 

New Orleans received less than one percent of the nearly six billion dollars in bonds issued state-wide so far.  The Lower Ninth Ward receiving none of it. 

Joining me now is Rice University history professor, “Vanity Fair” contributing editor, and author of “The Great Deluge, Hurricane Katrina, New Orleans and the Mississippi,” Douglas Brinkley.  Doug, thanks for joining us tonight. 

It‘s taken some time for both you and Harry Shearer and others to get across that this was not a natural disaster, that what happened was the failure of levees not holding, which was, in fact, a manmade disaster.  Do you think that is yet comprehended nationwide?  It‘s certainly understood in New Orleans. 

DOUGLAS BRINKLEY, AUTHOR:  Definitely understand in New Orleans, not nationwide.  We built Lego levees, shoddy levees.  The Army Corps of Engineers created this disaster.  And the city of New Orleans deserves a national levee system.  People like in the Lower Ninth Ward, where the Industrial Canal breached, they built homes thinking they were safe, that the Army Corps wouldn‘t build faulty levees. 

And so we really need to—I think Harry Shearer is doing a great job of getting out there and saying this levee system is not good enough.  A couple five years ago, after the storm, everybody said let‘s make a—like the Netherlands, a Dutch system—the Dutch saved Rotterdam and Denhog (ph) and Amsterdam from the sea.  We haven‘t built a levee system with a Category Four or Five protection level. 

You‘re looking, as we‘re talking, at a hurricane hitting the East Coast.  Another kind of hurricane coming anywhere near that Mississippi River mouth, towards New Orleans is not good news for New Orleans.  It needs a levee and dike system it deserves, because New Orleans is one of the world‘s great cities and we need to protect it. 

O‘DONNELL:  Doug, I was there shortly after Katrina.  I was there again recently.  Are there areas of New Orleans that should not be rebuilt because of the flood threat? 

BRINKLEY:  It‘s all a question of money.  What‘s happened in neighborhoods where—journalists who go to New Orleans are confused, because you go to the above sea level parts of New Orleans, the tourist area, the French Quarter, Garden district, and you see people in restaurants, and the Saints won the Super Bowl. 

Then you go to places like the Ninth Ward and very little action has happened.  Yes, there is a Musicians‘ Village that‘s due to habitat.  Or yes, Brad Pitt‘s Make it Right Foundation Homes—these are marvelous programs and a lot of church volunteers, grassroots organizers have done an incredible job. 

But there‘s been no attempt to really help these poor neighborhoods.  There are over 50,000 areas that are blighted in New Orleans right now.  If you can‘t go back—the Lower Ninth used to be 60 percent homeowners, over that.  But people want to come back.  There‘s tens of thousands of people trying to come back. 

How do you come back if the banks won‘t give you a loan?  How do you come back if you don‘t have schools?  How do you come back if hospitals are closed?  You know, if insurance companies won‘t cover you?  So nobody is being honest to people in these neighborhood.  It‘s death by 1,000 bits of indifference. 

So they‘re a tale of two cities now, a New Orleans that‘s coming back, the tourist district and the port, and the poorer neighborhoods that I think have been neglected by our country. 

O‘DONNELL:  Doug, where did the money go?  I knew that those Opportunity Zones were just going to be give outs through the tax codes to businesses, many of which were going to be what they were doing anyway.  We‘ve seen that before in what they‘ve called enterprise zones that have failed in their attempts to do what they claim they can do.  I never expected that money to show up. 

But what about the rest of the money that was promised in direct aid to Louisiana and New Orleans?  What happened? 

BRINKLEY:  You have to understand New Orleans is seen as a blue city.  It‘s a Democratic mayor.  It‘s had Democratic congress people operating in a red state.  And so a lot of the money that goes to Louisiana gets tied up in what the state wants.  New Orleans is given a bad deal.  Charity Hospital, the longtime historic hospital right off the French Quarter, that used to serve poor people, middle class people, is shut.  Yet Baton Rough, LSU‘s hospitals are flourishing. 

There‘s been a shift in the money emphasis to Baton Rouge and the oil and gas industry, as you mentioned at the outset.  And the problem I have with these oil and gas companies in Louisiana is they‘re treating the state like a third world country.  They‘re not putting resources back.  Oil and gas doesn‘t operate in New Orleans hardly anymore.  And they don‘t care about the wetlands. 

What our country‘s done to America‘s wetlands has been tragic.  This is one of our great areas.  It‘s like the Everglades or Yosemite.  Look at the license plates of Louisiana, Sportsman‘s Paradise.  It‘s not a sportsman‘s paradise anymore.  They built Mr. Go, the Mississippi River Gulf Outlet.  That was big navigation.  It‘s shut now.  It caused a wind tunnel effect during Katrina. 

They‘re using toxic dump zones all over Louisiana.  Companies come in, dump their junk in Louisiana and pull out.  So Louisianans now, in my opinion, and America has to stand up for the wetlands.  And some of this money from offshore drilling has to come back in to the poor neighborhoods of New Orleans and help them rebuild properly. 

O‘DONNELL:  Historian Douglas Brinkley, I know you have so much more to say about this.  We won‘t be giving up on this subject.  Thanks for your time tonight, Doug. 

BRINKLEY:  Thank you. 

O‘DONNELL:  A reminder that the two-day free health clinic, fully funded through your generosity, begins tomorrow in New Orleans.  Non-medical and medical volunteers are still urgently need.  Please visit FreeClinics.us for more information. 

Coming up, what a difference a day makes in the head of Beck.  The no politics of Saturday became politics as usual on Sunday morning, with Beck making it clear to his followers the president isn‘t like us. 

And when Rachel joins you at the top of the hour, she makes the case as to why the Beltway is getting it wrong on Republicans in the midterms.  They aren‘t uniting.

(COMMERCIAL BREAK)

O‘DONNELL:  Hurricane Earl, the second major storm of the 2010 Atlantic season, is gaining strength tonight and has people on edge from the Virgin Islands to Maine.  In our second story, earlier tonight Earl was upgraded to a Category Four hurricane, with winds over 130 miles per hour.  The eye of the storm traveled just north of the Virgin Islands on Monday.  A hurricane watch and tropical storm warning is in effect for most of Puerto Rico.  The main damage to that island is expected to come from rain, not wind. 

Joining us now is Weather Channel meteorologist Paul Goodloe.  Paul, where is this thing going?  I need to know specifically where is it going to be Friday afternoon when I‘m trying to get on a plane at JFK. 

PAUL GOODLOE, WEATHER CHANNEL METEOROLOGIST:  By Friday afternoon, it should be approaching the northeast, maybe even Long Island as well.  That is the big—the question is where will it actually be come this weekend, the beginning of the holiday weekend.  The good news is towards the end of the holiday weekend, talking about Sunday and Monday, this shouldn‘t be anywhere near the mid-Atlantic, northeast or even New England, an afterthought.  But we have to get there first. 

Right now, again, it‘s passing by Puerto Rico, as you mentioned.  The big question is where will it go?  Right now, it is going to slow down a little bit, and has the potential to become a Category Five hurricane.  Right now, it‘s Category Four.  But it‘s supposed to strengthen overnight into Tuesday.  And that could bring it to that Category Five point. 

The good news is, after that, it should start to weaken as it starts approaching the southeast coast.  Now, again, worst case scenario, it travels very close to the Outer Banks, maybe even skims the Outer Banks, and also skims the mid-Atlantic and then perhaps even skims Long Island and New England.  That‘s the worst case scenario.  And that‘s if the big ridge, which is keeping the northeast very hot the last couple of days—if that slowly erodes, then that slows down and slows down a cold front, which would help push Earl further out towards the Atlantic. 

Best case scenario, the ridge moves on out, cold front moves on in, which will drop your temperatures, by the way, for the weekend, but also helps to act as hurricane repellent, and it turns Earl more back towards the open Atlantic.  What will happen in terms of your beach plans or getaway plans is maybe some clouds, maybe some rough surf again for the beaches.  But the direct impacts will be well off to the Atlantic. 

So we have best case and worst case.  And it really depends what happens over the next 48 to even 72 hours, as it moves past the Bahamas and then towards the southeastern U.S. 

O‘DONNELL:  Paul Goodloe of the Weather Channel, I hope you do not have an exciting hurricane tracking week.  I hope that thing dies out quickly.  Thanks for your time tonight, Paul. 

GOODLOE:  Sure. 

O‘DONNELL:  Up next, an exclusive on COUNTDOWN.  We reveal the identity of the voice speaking to Glenn Beck.

(COMMERCIAL BREAK)

O‘DONNELL:  Congresswoman Michele Bachmann claims over a million people were at Glenn Beck‘s rally Saturday.  CBS news says 87,000.  In our number one story, whatever the final tally, there is no question that after Glenn Beck restored honor to America on Saturday, many, many more people watched him attack President Obama for his religion on Sunday.  We‘ll get to that in a minute with Bill Press. 

The big miracle Glenn Beck predicted would occur during his Saturday spectacle was actually captured on home video.  Those are geese flying in a V formation over the reflecting pool just before the event began.  Today on Fox News, Beck played the clip and dubbed the very common occurrence God‘s flyover because the military wouldn‘t allow Beck to have one with airplanes. 

And then there was Beck‘s speech.  As Keith hinted last week, the crack COUNTDOWN staff learned the frequency Beck was going to use to transmit his event Saturday.  They realized this gave them a unique opportunity to learn exactly who this voice is that Beck hears.  You will recall Beck‘s claim from last Wednesday. 

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS ANCHOR:  Instead of going for a speech writer or anything else or trying to write something very eloquent, I am only writing a few bullet points.  And I am doing that so I don‘t get in the way of the spirit in case he wants to talk. 

(END VIDEO CLIP)

O‘DONNELL:  And so when Saturday rolled around, we simply plugged into the frequency and taped the original source of the transmission of the voice Beck is hearing.  Let‘s roll the tape from where we first intercepted the Beck signal. 

(BEGIN VIDEO CLIP)

KEITH OLBERMANN, MSNBC ANCHOR:  Before you put it on, should we test it?  Hello, Glenn, it‘s you know who.  Now, Glenn, let‘s get this over with.  Just as we rehearsed.  Just say hello, America. 

BECK:  Lord, I think I‘m one of your dumber children.  Speak slowly. 

OLBERMANN:  Hello America. 

BECK:  Hello America. 

OLBERMANN:  All right, Glenn.  We have a great deal to get through here.  Read the Gettysburg Address. 

BECK:  Four score and seven years ago, our fathers brought fourth—

OLBERMANN:  now blubber. 

BECK:  Give it to me.  Give it to me. 

OLBERMANN:  Tell them one man can change the world. 

BECK:  One man can change the world. 

OLBERMANN:  Now, Glenn, tell them about your hotel. 

BECK:  And the hotel I‘m staying at—

OLBERMANN:  all right, we‘re nearly there.  Just tell them to look—where are they supposed to look?  Tell them to look forward. 

BECK:  Look forward. 

OLBERMANN:  Look west. 

BECK:  Look west. 

OLBERMANN:  Now the heavens. 

BECK:  Look to the heavens. 

OLBERMANN:  Very good, Glenn.  Nice job today.  Let‘s end it here now. 

BECK:  It does not end here—

OLBERMANN:  Glenn, end it now. 

BECK:  It shall not end now. 

OLBERMANN:  OK, when? 

BECK:  It shall not end in my generation, in your generation. 

OLBERMANN:  Listen, America‘s honor has been restored.  The nice people can stop hating their president.  It‘s after 1:00 p.m.  Let‘s wrap this up.  Just say God bless and good afternoon. 

BECK:  God bless.  Good night.

OLBERMANN:  Glenn, tonight you‘ll have a vivid dream about Johnny Damon of the Detroit Tigers baseball team.  Refer to him throughout the day tomorrow, won‘t you?  Demonic. 

BECK:  The Pope even said—this is Pope Benedict—that it is demonic, not divine. 

(END VIDEO CLIP)

O‘DONNELL:  Let‘s bring in syndicated radio host Bill Press, the author of “Toxic Talk: How the Radical Right Poisoned America‘s Airwaves.”  Bill, I think you can figure out who the guy in the sunglasses was.  You were there on Saturday. 

BILL PRESS, RADIO TALK SHOW HOST:  I was there. 

O‘DONNELL:  So, look, on a typical summer Saturday on the mall, 80,000 is not a big deal.  That‘s just the flow through traffic of tourists.  What is your sense of how many people there were actually Beck supporters?  Like what percent of the crowd?  Half the crowd, three-quarters of the crowd? 

PRESS:  First of all, I‘m glad to know that Glenn Beck is channeling Keith Olbermann.  I wish he listened to him more often, Lawrence.  I have to tell you, I give him credit for getting a big crowd.  Look, they pumped this—they pimped this on Fox News for about a year.  There were more than 80,000 people there, I believe.  I don‘t know.  I‘m not a counter.  I‘d give them 100,000 anyhow.  I think it shows the power of Fox News to attract that many people. 

I think it also shows, which is a little worrying to me, that there‘s a lot of energy on the other side.  And the energy is not with our base.  The energy is with the Tea Partiers these days.  They were out. 

O‘DONNELL:  Getting a crowd there is pretty easy.  I‘ve been on a lot of film shoots on the mall.  And you‘ll get 20,000 people watching a film shoot that they didn‘t even know was going to happen that day.  Let‘s get to what Beck said.  Beck said that America today begins to turn back to God.  But as Steve Bennen (ph) at “Washington Monthly” points out, the question of whose God Beck is talking about has been racing around the Internet all day.  The “Christian News Wire” says, for example, quote, “Glenn Beck promotes a false gospel, however many of his political ideas can help America.”

They also said on “Christian News Wire,” “our country was founded on Judeo-Christian values.  Mormonism is not a Christian denomination.”  Is this—how strange is this for Beck trying to be a religious leader of Christian conservatives who don‘t regard his religion as something that they can follow? 

PRESS:  Look, it is totally bizarre.  First of all, the guy is a talk show host.  I‘m a talk show host.  He‘s nothing but a talk show host.  And he‘s suddenly metamorphosed, after two years of just total politics, slamming Obama day in and day out—he‘s suddenly metamorphosed into some combination of religious hot stream, of some combination of a Jimmy Swaggart and an Oral Roberts.  And then he says Obama‘s problem is he follows Liberation Theology, which he calls a perversion of the Christian gospel. 

Let me tell you something, Lawrence, we don‘t need a Mormon to teach Christians what the gospel is all about. 

O‘DONNELL:  Author and radio talk show host Bill Press, thanks for getting out there on the mall for us, Bill.  Your accounts are invaluable. 

Thanks, Bill. 

That‘s COUNTDOWN from Los Angeles for August 30th.  I‘m Lawrence O‘Donnell, in for Keith Olbermann.  My new show “THE LAST WORD” debuts Monday, September 27th at 10:00 p.m. Eastern on MSNBC.

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