updated 9/16/2010 1:06:55 PM ET 2010-09-16T17:06:55

Guests: Adam Green, Elijah Cummings, Mike Papantonio, Austan Goolsbee,

Karen Hunter, Michael Medved, Jesse Jackson, Roy Sekoff

ED SCHULTZ, HOST:  Good evening, Americans.  And welcome to “The Ed Show” tonight from New York.  These stories on the table and hitting my hot buttons at this hour.

Well, the Democrats think that they got a big victory when psycho talking Tea Partier Christine O‘Donnell clinched her primary, but they better stop popping the champagne.  O‘Donnell represents a serious Republican shift to the right and they love it.  If we don‘t get a withhold of this game now, the country will go right down the tubes.  Commentary on that.

And President Obama made a brilliant move about an hour ago, stealing the headlines from the nut job Tea Partiers who are celebrating and sticking it to the Republicans who are holding down the middle class in this country.  He used the word hostage.

Austan Goolsbee, the new chair of the Council of Economic Advisers sounds off in the battleground story tonight.

And Republicans, are eating they eating their own?  Karl Rove attacked the Tea Party‘s new darling, and the righties are ripping him.  From the drugster to the slamheads (ph) to Sarah Palin, I mean they all got a piece of Rove today.  I‘ll sort it out for you in a moment.

But this is the story that has me fired up tonight.  Now, I don‘t care how many psycho talkers won last night.  And I don‘t care, but, folks, it looks like the Democrats really need to get this thing in gear.

What happened is bad for America in my opinion.  The so-called political experts think the Tea Party senate candidate Christine O‘Donnell‘s win in the Delaware primary signals an upcoming civil war in the Republican party.

Here‘s DNC chair Tim Kaine on the Today Show.

(BEGIN VIDEO CLIP)

TIM KAINE, DNC CHAIRMAN:  The other thing I think it shows is the deep civil war going on in the Republican party.  I think the message is moderates aren‘t welcome, moderates keep out.  Mike Castle, a classic moderate Republican who had been governor and a nine term congressman rejected.

And that means that the moderate and independent voters are going to have to look really long and hard before supporting these candidates.

(END VIDEO CLIP)

SCHULTZ:   All right now governor, I have great respect for you and I don‘t want to get in a scrap with you but I completely disagree with that.  You‘re on this kick that there is a civil war.  There is no civil war within the Republican party.  It took less than 24 hours for the Republicans to embrace their newest Tea Party flavor of the week.  Everybody loves a winner.

Here comes Mitt Romney.  And now he‘s in front of the parade, RNC chairman  Michael Steele, Senate Minority Leader Mitch McConnell is in love now and, of course, we have NRSC head John Cornyn never misses an opportunity to jump in front of the camera and say, oh yeah, I was with O‘Donnell all along.  Here comes Sarah Palin and every conservative talk show host in America, they‘re just wrapping their arms around O‘Donnell.

Now, I guarantee you that Jim DeMint is pretty much drunk with power at this hour tonight, high-fiving Republicans behind closed doors.  What we are seeing is a masterful rebranding of the Republican party.  They don‘t care how crazy their candidates are - O‘Donnell, Sharron Angle, Rand Paul, they don‘t care.

You see, the key is they just have to have an R behind their name on the ballot.  That‘s what it‘s all about.  There‘s no way Republicans and right-leaning independents are going to absolutely going to flock to the Democrats because they think the Tea Party is too crazy to be on the ballot. That‘s why Tim Kaine needs to quit psycho analyzing the Republican party and focus on our team.

And let me focus on this for a moment.  It‘s the old football coach.  His buddy‘s across the field and after the game, the coach comes up and says, you know, I didn‘t like the way you ran the score up on me.

Coach, it‘s not my job to get your team ready.  It‘s my job to get my team ready.  That‘s what this is all about.  We have to get our team ready.

The key to all of this is the base.  Are the base Democrats going to find it in their heart, their soul and are they going to do something about it in November or let the Tea Partiers take over the Republican party?

Now, did we miss the press release today?  I don‘t know, was there a press release out there today, Mike?  Does Mike Castle who lost to O‘Donnell in Delaware, right, did he throw his support behind President Obama today?  I don‘t think so.

Do you mean to tell me we had this big discussion on the program last night and in the country last couple of days on talk radio about how the President of the United States should not be allowed to go talk to public school children, but when it comes to election, you know, these same righties, well we can‘t help out the Tea Partiers.

Let me tell you something, the Republicans love what‘s going on right now. They love the narrative that‘s been developed against the president that they absolutely hate and want to destroy.  They want to destroy the progressive movement.  They think it is cancerous on America.

So the bottom line here now is for our team tonight, what are we going to  do?  Which brings me to the state of New Hampshire.  Last night, a community activist named Ann McLean Kuster, she smoked blue dog Joe Lieberman disciple Katrina Swett by 42 points for the Democratic nomination for New Hampshire‘s second congressional district.

Now, you might be thinking that‘s not a real big deal.  Yes, it is.  Amazing progressive grassroots support put Kuster right over the top in the Progressive Change Campaign Committee poured in over $100,000 on her campaign.

And she‘s a lefty, using $10 donations, and $3 donations and $5 donations.  Gosh, where have I heard that before?  Because of progressive support Kuster has out raised her Republican challenger Charlie Bass 3 to 1.

So, don‘t tell me it can‘t happen.  It can happen.  This is the model that the Democrats need to focus on.  I don‘t care what their team does over there.  In the long run, they‘re losers if we do what we have to do.  We have to stay energized, and that‘s what this march is all about on October 2nd, to get some confidence in our tackle box, so to speak.

We‘re six weeks away from what is going to be a very powerful moment in American history.  Are we going to stay the course or are we going to just “here I am, back to it again, quit and do like Sarah Palin” just quit.  Turn your back on the people and go make a million dollars.  Big deal.

The progressive movement is much more than that.  Get your cell phones out, folks.  I want to know what you think.  Tonight‘s text survey question is—do you think the Tea Party movement is bad for America?  Text a for yes, text b for no to 622639.  We‘ll bring you the results later on in the show.

Joining me now is Adam Green, co-founder of the Progressive Change

Campaign Committee.  You can find them on line at boldprogressives.org

Adam, good to have you with us tonight.

ADAM GREEN, PROGRESSIVE CHANGE CAMPAIGN COMMITTEEE:  Good to be here.

SCHULTZ:  Do you believe that you have the model that has to be followed if the Democrats are going to keep the majority?

GREEN:  Yes.  The model is fight really hard on behalf of the little guy, on behalf of middle-class families, ignore those who say that selling out to corporations is the only way for Democrats to win.  And if we actually stand up for our values then voters will actually be excited to come out in November for Democrats.

SCHULTZ:  So how do you instill that in the base between now and November?

GREEN:  Well, we have to keep drawing contrasts like we did just in yesterday‘s big victory.  This was a people powered victory.  It was a progressive victory.  And what was beautiful was it was a really clean contrast.

On the one hand, we had Ann McLean Kuster, a real progressive who put middle-class families front and center in her election.  She campaigned for strong Wall Street reform and made an active issue out of how she supported tax cuts for middle-class but was dead set against tax cuts for millionaires.

On the other hand we had Katrina Swett who as you mentioned was Joe Lieberman‘s presidential co-chair when he ran for office.  She was an early supporter of the Iraq war and early supporter of Bush‘s tax cuts for  millionaires and she actually said that Ann Kuster was too progressive and told Democratic party activists to, quote, don‘t go with your heart in this election.

Well they said, no thanks, we want the populist progressive candidate, someone who will but middle-class families and middle-class jobs front and center, and by a whopping 71% to 29% margin, she won.

So we need to keep exciting the base like that and being populist.

SCHULTZ:  The Nation, which we all read an awful lot, says this is a victory for the professional left.  I kind of chuckled when I read that today. What do you make of it?

GREEN:  Well, if by professional left, the nation means over 1,000 grass roots volunteers that Ann McLean Kuster had within her district in New Hampshire going door to door - I saw them for myself yesterday calling thousands and thousands of voters.  Well, that‘s one thing.

SCHULTZ:  So hold it right there.  That‘s the key, lefties.  Listen to what Adam is saying, if you do the work, if you do the door-to-door, if you do the social networking, if you stick to the principles and you show up and get it done, look what‘s going to happen.

Now, that is the message, Adam?

GREEN:  That‘s exactly right.  And, you know, for those in less competitive districts than this New Hampshire 2nd district, I would point t that tens of thousands of people went to our Web site, boldprogressives.org, nearly 10,000 people contributed through our web site to Ann McLean Kuster and others signed up to do phone banking from their homes to key target voters.

And through this we not just turned out Democrats, but we turned out  independent voters and even some like-minded Republican voters who said, look, this Republican party is getting crazy.  I want a real populist candidate who will fight for middle-class families like mine.

SCHULTZ:  Adam Green, you‘re doing what you have to do.  Thanks for doing it, and congratulations.  Great work.  Keep going.

For more, let‘s bring in Mike Papantonio, host of the nationally syndicated Ring of Fire.    Mike, good to have you with us tonight.

Your take on what has unfolded in the last 24 hours.  We‘ve seen the righties out there distance themselves from O‘Donnell but as soon as she wins, oh sure, we‘re going to support her.  What do you make of it?

MIKE PAPANTONIO, RING OF FIRE:  I‘m always concerned, Ed, when you are concerned.  And I hear it in your voice you‘re concerned.  You are concerned about the same thing we all should be worried about, and that is election are won by energy and effort and motivations.  That‘s what gets people out to vote. We know the history Republicans show up in midterms, progressives don‘t.

There is a bright side to this, Ed.  And let me just give that bright side.  In 2009, 50% of Americans supported the teabagger movement.  They didn‘t see them as being crazy and frenzied.  Today less than 25% of the American public supports them.

Like it or not - I don‘t know whether the Republicans think it is good or bad, but like it or not, they have morphed into the Republican party.  You use the term tea bagger in the same term that you use Republican.

And so what happened here is the way I‘m seeing it is billionaires like Coke invented the Tea Party and now they‘re looking, back and they‘re saying, in inventing the Tea Party, did we destroy the Republican party?

Now, you said something that scares me.  And you said no.  That is a scary thought.

So let me spin it the best way I can.  Let me put a happy side to it  because I think, you know what, you‘re right a lot more than I am right.  But I got to look at this as positive as I can.  There was a day, there really was a  day, when you had the moderate Republicans, genuine independents and blue dog Democrats that never would have found themselves voted for an ideologue Republicans, but the other side of that is that you very rarely have seen Democrats brought in by the frenzied right.

I mean, there‘s two sides of it.  I can‘t think of an election where you can say Democrats, I mean, ideologue Democrats have been brought in by the frenzied right.  So I at least I feel good about that.

SCHULTZ:  But Mike, the turnout has not bode well so far this year for Democrats number one, so the base has to be fired up.  The base is the key to this in November.

The other thing is that President Obama has been a target of the right wing.  They‘ve been a target of the Republicans.  They‘ve said no to everything because they want him out of office, and their thirst for power is unbelievable and they‘re not going to parcel out whether this person is way to right, I can‘t support them.  No.

I think the moderate Republicans are going to continue to vote for anybody that has an R behind their name.  That‘s the alarm that liberals have got to hear tonight in my opinion.

PAPANTONIO:  Well, they have to hear it, but they have to do what you‘re saying.  And there is an answer.

I mean, any time you have fear without a potential answer, that‘s a problem, but your answer here is the same thing all of us are saying.  Look, October 2nd you‘re going to be in Washington D.C.  And you‘re going to be saying to that crowd as you give your speech that we can do something.

Number one, not to assume that what all of the wisdom talkers of the typical Democratic leadership is saying is correct in that we can‘t look at this as an opportunity unless we do the second part, that‘s to get motivated like we did in the last election, show up like we did, and forget all of these differences.  Forget the fact that Obama didn‘t deliver every single thing he said he would deliver, forget the fact that Rahm Emanuel destroyed the progressive arm of the Democratic party.

We have to put that aside and we have to understand that if they don‘t listen to you when you are out there speaking in Washington and telling them to show up to vote, we be living in the time when Boehner is running things, and McConnell is running things, and Jeff Sessions is running things, Michelle Bachmann is running things.  That‘s a real possibility.

SCHULTZ:  I can‘t take any more of those names.  OK.  Mike, I can‘t take anymore of those names.  Great to have you with us, my friend.  Let‘s keep battling away.  Appreciate, Mike.

Coming up—the righties are going berserk at Karl Rove  for trashing a new Tea Party queen.  They‘re calling him every name in the book.  And I have to be honest with you, it‘s been a lot of fun to watch.

And paranoid false prophet Beck is totally freaking out with his prediction of violence from the left.  I think he‘s totally lost his mind.  We‘ll get rapid fire response on that.

And Bill O‘Reilly calls Steve Doocy a pinhead.  And Michael Steele is trying to get the speaker fired?  Not going to happen.  Speaker Pelosi is just too good.

Congressman Elijah Cummings is going to return fire on all of that next on “The Ed Show” on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to “The Ed Show.”  And thanks for watching tonight.

The circus rolled into Washington on the RNC chair Michael Steele‘s fire Pelosi bus tour today.  The folks headlining this freaks show, well, you lie Joe Wilson, Michael Steele and psycho sister Michele Bachmann.  They‘re are all revved up and they want to can Pelosi.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN:  When we hung that sign many months ago, folks in this town and elsewhere didn‘t think we were serious.  Guess what, folks, we‘re dead serious.  It‘s time to fire Pelosi.

REP. MICHELE BACHMANN, ® MINNESOTA:  Speaker Pelosi, I am here to deliver a message from the job creators of Minnesota‘s 6th district, if you go forward with your out of control spending, if you go forward with your dramatic tax increases and your job-killing policies, you will kill more jobs in Minnesota‘s sixth district.  Speaker Pelosi, I am calling on you to cut taxes, cut spending so we can have job creation going forward in this country.

Knowing you won‘t do that, we are here to wish you a happy retirement.

(END VIDEO CLIP)

SCHULTZ:  OK, hold it right there.  I know a little bit about Minnesota, OK, but I will give an assignment to the wonderful viewers of “The Ed Show” tonight.  Why don‘t you go check out the foreclosure rate in Minnesota‘s sixth district and then come back and watch tomorrow night.

Bachmann, what are you talking about?  You have the highest foreclosure rate in Minnesota in your district.  Now I don‘t think House Speaker Nancy Pelosi is intimidated by these jokers.  She showed nerves of steel, talking about the Democrats‘ chances in the midterms, doubling down on her claim that her party they will hold the House.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, (D) CALIFORNIA:  I absolutely predict that again.  I am not yielding one grain of sand.  I want the same big, strong majority we have. This has nothing to do with me.  It‘s about our fight for the American people and I think that‘s the contrast that will be drawn.

Republicans are there for the special interests.  The special interests are pouring tens of millions if not $100 million into this campaign.

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Congressman Elijah Cummings of Maryland.

Congressman, good to have you with us tonight.

REP. ELIJAH CUMMINGS, (D) MARYLAND:  Good to be with you.

SCHULTZ:  Are we seeing now a better opportunity in the wake of last night?  Or is it going to be tougher, your thoughts?

CUMMINGS:  I think we‘re seeing a better opportunity.  But let me go back to the speaker.  She is right.  This is not about her.  This is about choices that people have to make, the electorate have to make.  And clearly, the speaker has consistently been one who has governed with a sense of the next generation as opposed to the next general election.  And that‘s going to be the choice.  Are we going to save Social Security? Are we going to do social security in as our Republican friends are saying?

And so Americans are going to have a clear choice.  And the fact is  that right now, Ed, as you well know, the Republicans are holding hostage this tax bill so that we can reduce the taxes for the middle class, but they want so badly, so badly, to give a tax cut to the richest of the rich, the millionaires and billionaires that they would hold hostage that tax cut for the middle class, and that‘s very sad.

As I listen to my friend Ms. Bachmann, it makes me sad that the Republicans like Michael Steele now and Ms. Bachmann and others are moving towards gimmicks while the people in my district, they don‘t have time for gimmicks.  They want people to come up with solutions.

And that‘s what the Democrats have done over and over again, coming up with solutions, well-thought-out solutions opposed at every turn by the Tea Party Republicans, and it becomes very, very difficult.  And it‘s very painful to watch it to be frank with you.

SCHULTZ:  Well, obviously, there is not going to be a whole lot getting done between now and the election.  But the narrative that is playing out right now, it seems very clear, that the Democrats are for the middle class and that‘s the biggest voting block in the country.

CUMMINGS:  That‘s right.

SCHULTZ:  That economic portion of the country.

CUMMINGS:  That‘s right.

SCHULTZ:  So how do you get them excited?  I mean, it‘s just a big job to convince that you‘ve got more on the table for them than the Republicans or is that too simple?

CUMMINGS:  It‘s not easy.  The attention of the electorate is focused on all kinds of places.  And people are in pain.  And I understand why they‘re in pain and we understand why they‘re upset.

But we‘ve got to keep explaining to them that we are on the path to recovery.  The things that we are trying to do and have been doing are getting us there.

And a lot of people don‘t want to hear about the way things were when President Obama came into office, but you almost have to let them have a point of reference, Ed, so they can understand how far we have come, but, yet, still how far we‘ve have to go and that it is taking time to do that.

Believe me, if we could wave a magic wand and have every single person who wants a job to have a job today, we would do it.  But when this president came into the White House, he not only was - came into a ditch that had been created by our predecessors, but that ditch had quick sand at the bottom.

SCHULTZ:  Yeah.  But at this point, Congressman, I think it really, we‘re at a juncture where the Democrats are going go have to go out there and stir the emotion.

CUMMINGS:  That‘s exactly right.

SCHULTZ:  Stir the emotion and just say don‘t give up.  It‘s been less than two years.  And if it works, it works.  If it doesn‘t it doesn‘t.

CUMMINGS:  That‘s right.  And Ed, I‘m in total agreement.  We have got to go out and there say, look, we know that we‘re on the path to recovery.  We need you.  Let‘s do this together.  It can be done.  Forget the naysayers, we‘ve got to get this done.  This is America.  We can do this.

SCHULTZ:  Congressman, see you October 2nd.  Good to have you with us.

CUMMINGS:  Look forward to seeing you, too.

SCHULTZ:  Up next, Palin endorsed Tea Party queen Christine O‘Donnell says the president is un-American.  I‘m slamming the first-timer right into the zone.

(COMMERCIAL BREAK)

SCHULTZ:  And in psycho talk tonight, one day after her primary victory, Republican Senate candidate and chastity champion O‘Donnell, Christine O‘Donnell makes her virgin voyage into the zone.

During the 2008 election, O‘Donnell showed her wing nut colors in an appearance on FOX News with this analysis of the Democratic party.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Let me get Christine O‘Donnell‘s thoughts on this. Who do Republicans want to run against?

CHRISTINE O‘DONNELL:  I would prefer Barack Obama because he is so liberal that he‘s anti-American.

(END VIDEO CLIP)

SCHULTZ:  She had the righty lingo down pretty good back then, didn‘t she?  But O‘Donnell has learned a lot in the last two years.  Her victory speech last night borrowed all kinds of material from her fellow famous Tea partiers.

(BEGIN VIDEO CLIP)

O‘DONNELL:  The cause is restoring America.

SARAH PALIN:  We must restore America and restore her honor.

O‘DONNELL:  Some words of wisdom from Thomas Jefferson.

GLENN BECK, FOX NEWS HOST:  John Adams, George Washington, Thomas Jefferson.

O‘DONNELL:  Don‘t ever underestimate the power of we the people.

BECK:  The power of one person making a difference.

O‘DONNELL:  You betcha.

PALIN:  You betcha.

O‘DONNELL:  You betcha.

There‘s another woman I got to thank.  You betcha!

(END VIDEO CLIP)

SCHULTZ:  Well, Christine, you sound like you‘re trying to be the next Sarah Palin, and you are well on your way.

By the way, welcome to psycho talk.

Coming up, President Obama hit it out of the park today.  He came out and ripped into the tan man and his Republican pals for holding down the middle class and holding them hostage in America.

Austan Goolsbee, chairman of the White House Council on Economic Advisers was standing with the president today.  He‘ll bring us straight talk next in the battle ground.

And everyone from slamheads (ph) to the Drugster is bashing Bush‘s brain today after he hammered the newest member of the nut-job family.  Huffington Post co-creator Roy Sekoff can‘t wait to take swings on this subject.

All that, plus Beck‘s insane paranoia continues.  Reverend Jesse Jackson is in the playbook tonight with a big story out of Chicago.

And New Jersey governor Chris Christie, he‘s doing everything he can to trim the fat.  I mean, the budget.

You‘re watching “The Ed Show” on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Austan Goolsbee, chairman of the White House Council on Economic Advisers was standing with the president today.  He‘ll bring us straight talk next in the Battleground.  

And everyone from slamheads (ph) to the drugster bashing Bush‘s brain today after he hammered the newest member of the nut job family.  “Huffington Post” co-creator Roy Sekoff can‘t wait to take some swings on this subject. 

All that plus, Beck‘s insane paranoia continues.  Reverend Jesse Jackson is in the Playbook tonight with a big story out of Chicago.  And New Jersey Governor Chris Christie, he is doing everything he can to trim the fat—I mean, the budget.  You‘re watching THE ED SHOW on MSNBC.  Stay with us.     

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  The Battleground story tonight, the republicans are trying to destroy this president by destroying the economy.  Minority Leader John Boehner must have been taken to the republican wood shed recently.  No more talk of a tax cut compromise from him.  But today, President Obama called the republicans out accusing them of holding the middle class hostage. 

(BEGIN VIDEO CLIP)

OBAMA:  Right now, we could decide to extend tax relief for the middle class.  Right now, we could decide that every American household would receive a tax cut on the first $250,000 of their income.  Once again, the leaders across the aisle are saying no.  They want to hold these middle-class tax cuts hostage until they get an additional tax cut for the wealthiest two percent of Americans. 

(END VIDEO CLIP)

SCHULTZ:  Well, this is who the republicans are and who they have been all along.  It‘s just about tax cuts for the middle class, right?  Here is Nebraska Senator Mike Johanns talking on C-span about small business. 

(BEGIN VIDEO CLIP)

SEN. MIKE JOHANNS ®, NEBRASKA:  Small businesses today need another loan like they need to kick in the pants.  

(END VIDEO CLIP)

SCHULTZ:  Totally out of touch.  Only two republican senators voted to move forward on the small business bill and both of them are retiring.  I think the republicans don‘t want to do anything to help job creation in this country because a better economy will only hurt their chances at the ballot box. 

Joining me now is Austan Goolsbee, the new chairman of the Council of Economic Advisers for the White House.  Austan, good to have you with us tonight. 

AUSTAN GOOLSBEE, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS:  Yes, great to see you again, Ed.

SCHULTZ:  This has been good news in recent days for the White House, is it not?

GOOLSBEE:  I wouldn‘t say good news.  I mean, what we want on the policy side is to get these small business packages through and they get the middle-class tax cuts through because they‘re both very important for the economy and the fact that they won‘t go along and we can‘t do this is not so great.  Now, it‘s heartening that two republicans looked at the small business situation and stopped with game-playing and so it looks like we‘re going to get a vote on that.  That part is good news. 

SCHULTZ:  Well, there will probably be some other republicans come along because you have been hammered among the middle class.  I mean, this is the soft under belly politically for the republicans.  No doubt about it.  They‘re not doing anything for the middle class and they haven‘t.  But what is—tell our audience tonight, what is $30 billion in lending going to do for this economy?  What are your expectations?

GOOLSBEE:  Well, I think it can do two things that are important. 

One, you should be proud, Ed, this kind of the son of the old Ed plan. 

SCHULTZ:  I told you this back at that gig that we were at in Washington. 

GOOLSBEE:  You did. 

SCHULTZ:  I said, look, you got to get money to small businesses. 

GOOLSBEE:  Yes. 

SCHULTZ:  You know, I‘m glad.

GOOLSBEE:  As you know, small business is more dependent on bank credit than any other kind of business. 

SCHULTZ:  No doubt.

GOOLSBEE:  Large business said no to capital markets and anybody who has been dependent on banks has really been suffering because of the credit crunch.  So, I think cheap capital will allow them to expand. 

SCHULTZ:  The credit, the lending, but what did you make of Senator Johanns from Nebraska saying that?

GOOLSBEE:  I don‘t know what he was talking about, because if you talk to—I talk to a lot of small business leaders and small businessmen around the country, and women, and they say that credit is extremely tight, their collateral is being pinched by the bank.  They‘re being told that they can‘t have credit when they need it, and the other thing that I would say to Congressman Johanns is that that‘s not the only thing the small business initiative would do.  It would cut eight different taxes.  It would set the capital gains rate to zero for anybody who starts their own business or invests in a small business.  This thing is important.  We need to do it. 

SCHULTZ:  It‘s very important and you and I have been talking about this for well over a year.  This is Pete Sessions talking about the democrats‘ agenda.  This is how they throw it back at you and it‘s totally false.  Here it is. 

(BEGIN VIDEO CLIP)

REP. PETE SESSIONS ®, TEXAS:  Democrats have an agenda that is all about destroying jobs in this country and in turn the middle class of this country.  Republicans will not tolerate that. 

(END VIDEO CLIP)

SCHULTZ:  That is psycho talk.  I mean, this is unbelievable.  I mean, what they‘re saying and how they‘re twisting it.  In the meantime, here‘s what the republican plan is when it comes to tax cuts.  Mitch McConnell has this out there.  They want to give a tax cut proposal over the next first ten years of $3.9 trillion.  This is what it would cost the economy.  How can you lose this argument in any way, shape or form, Austan?

GOOLSBEE:  Well, look, I‘m just a policy guy.  I don‘t know about the politics or what it means, but all I know is if you line up ten out of ten experts, would agree that the least effective form of getting the economy going is tax cuts to the very highest income people. 

SCHULTZ:  Yes.

GOOLSBEE:  And all of the objective analysis has shown that.  So if you look at these tax  cuts, where we all should be able to agree to extend the tax cuts for 98 percent of Americans, really, the tax cuts on the first $250,000 for everyone, and then it would apply to 98 percent of Americans exclusively.  Let‘s do that. 

SCHULTZ:  All right. 

GOOLSBEE:  And then if you want to help the economy, pass the small business bill.  Pass the president‘s efforts to get investment in this country for tax incentives for investment.  Don‘t use the money for very high income people. 

SCHULTZ:  Yes. 

GOOLSBEE:  Which is $700 billion are borrowing that‘s not going to work. 

SCHULTZ:  Yes.  That‘s not going to work.  All right.  NBC News is reporting just a little while ago that Elizabeth Warren has been named as a special adviser to the White House in the Treasury Department in dealing with the consumer advocacy group.  There‘s been a lot of people on the left that have been advocating for Elizabeth Warren.  What can you tell us about this?

GOOLSBEE:  Well, you know, Elizabeth Warren is an old friend of mine.  I like her very much but I‘m not going to scoop anybody on any announcements.  She has been a tireless advocate of Consumer Financial Protection, and it was really kind of came up with the brain child of the Consumer Financial Protection Bureau. 

SCHULTZ:  Austan, good to have you with us tonight now.  I hope you can fix the economy, but senior from Waco, Texas, can you do something about the cowboys holding on the last play of the game?

(CROSSTALK)

GOOLSBEE:  You‘re killing me.  I thought we were friends.  How can you do this to me? 

SCHULTZ:  All right.  Thanks.  Now, let‘s get some rapid fire response from our panel tonight on these stories.  I know the conventional wisdom says that Tea Party victories are good for democrats but I still think independents will vote with Tea Partiers over liberals in a bad economy.  

Glenn Beck‘s insane paranoia continues today.  He says Tea Partiers stand for peace because the left is all about violence.  

And, well, let‘s get the panel‘s thoughts on the DNC‘s new look and it‘s slogan, “Change that Matters.” 

All right.  With us tonight, Karen Hunter, journalist and publisher and also Michael Medved, radio talk show host with us this evening. 

All right.  Let‘s go trough the results of last night.  Karen Hunter, does this help the democrats, all these Tea Partiers getting ushered in last night and getting set up for November?

KAREN HUNTER, JOURNALIST:  I know a lot of people think that it helps but it really, you know, it doesn‘t help either party to be honest with you.  These folks are speaking to a fringe but they‘re not really a fringe.  When you think about Christine O‘Donnell, you‘re looking at somebody who just got her degree a couple of weeks ago because she owed a school debt, she was sued by the IRS, had a tax lien foreclosed on her house.  She is Middle America and people are relating to this and relating to people like Sarah Palin because she‘s just like them. 

SCHULTZ:  Michael Medved, is this the new Republican Party?  I mean, I made a comment earlier in the program tonight, moderate republicans aren‘t going to turn to the democrats or turn anybody else other than Tea Partiers.  I mean, if they‘ve got an R behind their name on the ballot, they‘re going to get the vote.  What do you think?

MICHAEL MEDVED, RADIO TALK SHOW HOST:  I think you are exactly right, Ed.  And I disagree with Karl Rove, I think Christine O‘Donnell is electable.  I didn‘t support her, I thought Mike Castle would have been a stronger candidate for our side.  But she is electable.  It‘s also important to notice that right next door to Delaware over in Maryland, there was another Tea Party Sarah Palin supported candidate, Brian Murphy who got crushed by the mainstream republican Bob Ehrlich in the gubernatorial race.  So, that‘s not so simple.  Look, the Republican Party is a big tent.  We got some people in the center and we‘ve got some people in the right. 

SCHULTZ:  Big tent? 

HUNTER:  What?  And I think you‘re wrong on that.  There‘s not an our side.  I think, a lot of these politicians are forgetting that it is we the people and right now people are voting for people that they relate to.  And it doesn‘t matter what their party is.  It doesn‘t matter whether they are Tea Partiers or democrats, or republicans, they are voting for people who are speaking to them. 

MEDVED:  Karen, what it does matter, it‘s not speaking to people.  It‘s what direction you want to move the country, and there is an overwhelming majority of Americans who believe that government shouldn‘t get bigger, that we shouldn‘t spend more, that taxes should not get higher, and that‘s your American majority.  That includes republican moderates, and conservatives, Tea Partiers and a lot of thinking democrats, too. 

SCHULTZ:  With that, Karen, what about the tax cuts that the president was talking about this afternoon that we should all be able to agree on that tax cuts.

HUNTER:  I‘m going to say, with all of that, you know, there‘s no plan on the other side.  Just we don‘t want this, we don‘t want that.  But at least the president is trying to do something to change this country and trying to do something to put us on the right track after 12 years, you know, that debacle that we had under George W. Bush.  So, I mean, yes, we do want something different and yes, we do want people who are going to work for us and we do want smaller government, the majority of us, myself included.  But there are no great ideas coming from the Republican Party outside of this Tea Party movement. 

MEDVED:  Again, it‘s called the opposition party.  And tight now, the president says, you can either go forward or you can go in reverse.  If you‘re driving toward a cliff, you don‘t want to keep going forward.  You want to go in reverse and then make a sharp right turn. 

HUNTER:  We went over the cliff.  He is trying to pull back. 

SCHULTZ:  All right.  I want to turn now to Glenn Beck and his insane paranoia. 

MEDVED:  Do we have to?

SCHULTZ:  We have to because he‘s in the middle of this whole thing and people actually follow this guy.  This is what he said, he‘s inciting violence in my opinion.  Here it is. 

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS ANCHOR:  Violence is coming and it is coming from the left.  And so America must have a clear choice.  You really are—you really are the people that are peaceful, that believe in the free market system, that believe in small government, that don‘t believe in corruption, that don‘t believe in special interests and earmarks and everything.  That‘s who you really are. 

(END VIDEO CLIP)

SCHULTZ:  This president believes in the free market.  He doesn‘t believe in corruption.  I don‘t know where this guy is coming from.  But Michael Medved, you‘re a national talker.  He says that violence is coming.  Is that responsible?

MEDVED:  No, it is not responsible.  Let me say that on the left and on the right and Ed, I want to call you out a little bit.  I don‘t think you really believe that John Boehner and Mitch McConnell want to wreck the economy. 

SCHULTZ:  Oh, I do.  I do. 

MEDVED:  We are all Americans.

SCHULTZ:  Just look at how they vote. 

MEDVED:  And by the way, there are people on my side who say that Barack Obama is deliberately wrecking the economy and they are wrong.  We all want American people to work.  We all want the economy to get better.  We all have a stake in it.  And I think that this kind of rhetoric that one side wants violence and one side is decent and one side is bad and one side is good.  Listen, we got to get together on this.  That was why people elected Barack Obama. 

(CROSSTALK)

SCHULTZ:  Maybe, you can explain all the record filibusters that we‘ve had to live through.  Michael, come on.  You are living in a cocoon, if you think that the liberals are the problem here.  There have been proposals after proposals—and it‘s the party of no.  You know that. 

HUNTER:  Well, the problem with Michael Ed.

MEDVED:  You have big majorities in both houses.  You have had Nancy Pelosi talked today about a big, strong, democratic majority.  You got it.  You‘re responsible for what‘s happened last two years. 

SCHULTZ:  Michael, look how many bills the House has passed and look what the Senate has done with it.  The 60 votes has been a problem for the democrats.  But there has been obstruction big time. 

MEDVED:  All of the big things that Obama wanted, he got from Congress. 

(CROSSTALK)

MEDVED:  He got financial reform.  He got Obama care.  He got stimulus.  He got it all and now look. 

SCHULTZ:  I will bring you back and talk more about this.  Karen Hunter, obviously, you will be back again.  But challenging me.  I love it, Michael.  It‘s great.  Good to have you with us tonight.  We‘ll do more of that.

MEDVED:  Thank you.

SCHULTZ:  All right.  Up next, Mr. Pinhead himself Bill O‘Reilly is stirring up the trouble with one of his colleagues.  And the brave men and women keeping our streets safe say, they‘re in danger.  Folks, when cops put out an SOS, we have got to respond. 

Reverend Jesse Jackson brings the passion on that subject next from Chicago in the Playbook.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And it‘s not too late to let us know what you think.  Tonight‘s text survey question is, do you think the Tea Party movement is bad for America?  Text A for yes, text B for no to 622-639.  Results coming up.  Stay with us.         

(COMMERCIAL BREAK)

SCHULTZ:  And in my Playbook tonight.  Police officers are supposed to protect the public, but in Chicago, it‘s the officers themselves who say they are in danger.  The city‘s fraternal order of police says a decline in man power is putting their safety and citizens‘ safety at risk.  Today, hundreds of union members marched in front of Chicago‘s police headquarters protesting the superintendent‘s policies and demanding he resign. 

Joining me now is Reverend Jesse Jackson, President of the Rainbow PUSH Coalition.  Reverend, how dire is this situation and what‘s the solution?

REV. JESSE JACKSON, PRESIDENT, RAINBOW PUSH COALITION:  Well, critical.  On the one hand, 900 police have retired and 300 have been hired.  We need more police.  We have support for Baghdad but not for Chicago.  On the other hand, they are really protesting because the citizens are demanding more diversity and an end to police brutality.  A guy who they marched for, they beat a man in a wheelchair who was shackled, and we turned it over to civil rights and got two years in jail.  They are protesting that.  Another case of police beating a woman behind the counter.  They were fighting for him.  So, it is not just about more police, it‘s also about police accountability and fairness. 

SCHULTZ:  Well, can they function when the rank and file wants the superintendent to resign.  He says today, he won‘t resign. 

JACKSON:  Well, he should not resign on the basis that they are fighting him.  Chicago is paying $50 million plus on Jon Burge alone.  He confessed convicted torturer, for example and that‘s an issue.  But in all of these cities, we need more police.  And we have enough troops for stability and security in Baghdad but not in Chicago and New York and L.A., and we need them.  But their reasoning has little to do with enough police as it does with the behavior of police, the woman beaten behind the bar or the man shackled and handcuffed and beaten. 

SCHULTZ:  Reverend, yes.

JACKSON:  Jon Burge, the man is on defense.

SCHULTZ:  Reverend, all of the shootings in Chicago, is it the economy?  Is it the stress on society? What do you think?

JACKSON:  Well, it‘s a combination, you know, plants close, and drugs and guns are coming.  They are not marching against access to m-16 and ak-47s.  The flow of—when the police are outgunned and guns are on the market, you can buy semiautomatic weapons.  We should march against the flow of weapons of mass destruction.  We have not done that, and that‘s a critical significant issue. 

SCHULTZ:  Reverend, good to you have with us tonight.  Thanks so much. 

JACKSON:  Thank you.  And the Bears will beat Dallas on this coming Sunday. 

SCHULTZ:  The Bears will beat Dallas?

JACKSON:  That‘s my prediction. 

SCHULTZ:  The Bears barely beat Detroit, Reverend.  If that guy caught the ball from Detroit.  We‘ll do this again. 

JACKSON:  And the Dallas barely lost but they did lose.  Talk about it next week. 

(LAUGHTER)

SCHULTZ:  Final page in the Playbook tonight.  We all know “FOX & Friends” psycho talker Steve Doocy isn‘t big on details but this one brings it to a new level. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN:  Thank you, Mr. O‘Reilly.  We will be watching tonight at 9:00 Eastern. 

BILL O‘REILLY, “THE O‘REILLY FACTOR” HOST:  8:00 Eastern. 

UNIDENTIFIED MAN:  I‘m going to be watching at 9:00. 

(LAUGHTER)

O‘REILLY:  You‘re a pinhead. 

(CROSSTALK)

O‘REILLY:  9:00 Eastern.  Only 13 years I have been on at 8:00.  Only 13.  You know what?  You want to know what a pinhead is? 

UNIDENTIFIED MAN:  That‘s what you do for Pinheads and Patriots.

O‘REILLY:  Wait.  Wait.  Can I get Doocy‘s on the cover?

(END VIDEO CLIP)

SCHULTZ:  Well, I agree with Bill O‘Reilly on this one, Steve Doocy is a psycho talking pinhead.  No doubt about it. 

Coming up, Uncle Rupert‘s family is beating Karl Rove and slamhead (ph) in an ad.  “Huffington Post” co-creator Roy Sekoff gets in on the scrap, next in THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And finally tonight, conservatives are banning together to support the psycho talking Delaware State candidate Christine O‘Donnell at the expense of Karl Rove.  Last night on Hannity‘s show, Karl ripped into O‘Donnell. 

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER BUSH ADVISOR AND DEPUTY CHIEF:  It does conservatives little good to support candidates who at the end of the day while they may be conservative in their public statements do not advance the characterizes of rectitude and truthfulness and sincerity and character that voters are looking for.  But I think, there‘s just a lot of nutty things she‘s been saying. 

(END VIDEO CLIP)

SCHULTZ:  And the right wing backlash against those comments erupted on the blog of air waves.  O‘Donnell kicked things up this morning in her fellow righties followed suit.

(BEGIN VIDEO CLIP)

CHRISTINE O‘DONNELL, WINS DELAWARE GOP SENATE PRIMARY:  I think he‘s seeing that he is one of the so-called experts whose credibility was hurt last night.  Everything that he is saying is un-factual.  And it‘s a shame. 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  I never heard Karl so animated against a democrat as he was against Christine O‘Donnell last night.  Why is he so mad at a republican?  Where was this anger directed at a democrat ever?

SARAH PALIN ®, FORMER ALASKA GOVERNOR:  My message to those who say that the GOP nominee is not electable or that they‘re not even going to try, well, I say, buck up. 

(END VIDEO CLIP)

SCHULTZ:  Let‘s bring in Roy Sekoff, the founding editor of the “Huffington Post.”  Roy, what do you make of the family feud?

ROY SEKOFF, FOUNDING EDITOR, “HUFFINGTON POST”:  Well, I think we‘re going to have to erect a tombstone, Ed, that says moderate republicans rest in peace.  I mean, it‘s clear that we have a real identify crisis happening between the GOP, with the old guard like Rove and the insurgent bomb throwers like Palin and O‘Donnell.  And this seems like it would be a good thing for democrats but I don‘t think we should rush into that because the energy is all still on the republican side.  We see the turnout is higher, and we see on these polls where they‘re asking interest in voting, much, much, much higher on the republican side.  So, the question becomes—where are the democrats going to get that energy from?

SCHULTZ:  Well, this candidate has failed to pay her taxes for five years. 

SEKOFF:  Yes, yes. 

SCHULTZ:  She had to get that rectified, and is also misrepresented her education.  Saying, she graduated which she didn‘t.  Now, if a liberal did that, what do you think the right wing would do?

SEKOFF:  She‘s shown that, you know, you don‘t have to pay your bills, you don‘t have to pay your taxes.  You can mooch off your campaign, you can have no visible means of support.  That is no longer impediment to making it in the U.S. Senate.  This is the brave new world of Tea Party politics that we‘re entering. 

SCHULTZ:  Roy Sekoff, always a pleasure.  Good to have you with us tonight.  We‘ll see how the fights end.  

SEKOFF:  We‘ll talk football next time, Ed. 

(LAUGHTER)

SCHULTZ:  Absolutely.  The Raiders right, in your land. 

Tonight in our text survey question I asked, do you think the Tea Party movement is bad for America.  Seventy four percent of you said yes, 26 percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  “HARDBALL” with Chris Matthews starts right now in the place for politics, MSNBC.  We‘ll see you tomorrow night on THE ED SHOW from the nation‘s capital Washington, D.C.  Have a great one. 

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