updated 11/10/2010 12:01:14 PM ET 2010-11-10T17:01:14

Guests: Janis Karpinski, Luke Russert, Glenn Greenwald, Mark McKinnon

           

RACHEL MADDOW, MSNBC:  Now, it‘s time for THE LAST WORD WITH LAWRENCE

O‘DONNELL.

Good evening, Lawrence.

LAWRENCE O‘DONNELL, HOST:  Rachel, you don‘t need George W. Bush to interview.  That was a much better segment without him.

MADDOW:  You know, I can figure it out.  So I think I know what he would say for most of my questions.

O‘DONNELL:  Exactly.  Right.  We could all figure it out.  He would dodge.  You better off without him.

MADDOW:  I‘ll get a puppet.  Thanks, Lawrence.

O‘DONNELL:  Thanks, Rachel.

Two years ago, George W. Bush said, “The true history of my administration will be written 50 years from now.”  And then he sat down to write his history of his administration.  So, you can now buy this for 35 bucks—or wait 50 years for the true story.

(BEGIN VIDEOTAPE)

(MUSIC)

MATTH LAUER, NBC NEWS:  You said that history is not ready to judge you yet.

GEORGE W. BUSH, FORMER U.S. PRESIDENT:  That‘s right.

O‘DONNELL (voice-over):  History‘s judgment may have to wait, but which president will make it into the history books?

President Bush today—

BUSH:  I gave it my all.

UNIDENTIFIED MALE:  He‘s a good guy.

O‘DONNELL:  Or the politician who campaigned as a uniter and then divided America—

UNIDENTIFIED MALE:  There‘s a disconnect between George W. Bush, the president, and George W. Bush, the person.

O‘DONNELL:  -- against science, against the environment and against equal rights.

UNIDENTIFIED FEMALE:  Everything from 9/11 and Hurricane Katrina.

UNIDENTIFIED FEMALE:  You‘ve led tens of thousands of people into war and to their deaths.

O‘DONNELL:  An administration that used the military for a political backdrop.

LAUER:  You stood on the deck of that aircraft.

BUSH:  Major combat operations in Iraq have ended.

LAUER:  “Mission Accomplished.”

BUSH:  No question it was a mistake.

O‘DONNELL:  And defended torture.

LAUER:  Why is waterboarding legal, in your opinion?

BUSH:  Because the lawyer said it was legal.

UNIDENTIFIED MALE:  It‘s outrageous, though not surprising.

O‘DONNELL:  Now, short on apology.

LAUER: Do you think a lot of the headlines this morning out of this interview are that President Bush fesses up to mistakes.

UNIDENTIFIED MALE:  Actually, if you watch the interview, he didn‘t.

BUSH:  Apologizing would basically say the decision was a wrong decision, and I don‘t believe it was the wrong decision.

O‘DONNELL:  Even when the mistakes are obvious.

BUSH:  I should have landed.  The problem is that when the president lands, resources are taken off the task at hand.

OPRAH WINFREY, TALK SHOW HOST:  Kanye West went on the Katrina relief program and said George Bush doesn‘t care about black people.  Can you see how the perception would be that you were—

BUSH:  I can see—no.  You don‘t call a man a racist.  I‘m confident my heart is right.

O‘DONNELL:  The history of George W. Bush.

BUSH:  I hope I‘m judged a success.

(END VIDEOTAPE)

O‘DONNELL:  Good evening from New York.  I‘m Lawrence O‘Donnell.

President George W. Bush‘s book tour for his new memoir, “Decision Points,” is reopening old wounds—like 9/11, Hurricane Katrina, financial meltdown and the time he was drunk at a family dinner and horrified his parents by asking a woman guest what sex was like after 50.

And then there was the torture of prisoners at Abu Ghraib and Iraq.

(BEGIN VIDEO CLIP)

LAUER:  The American soldier is operating as guards at a prison called Abu Ghraib—

BUSH:  Yes.

LAUER:  -- had terribly mistreated prisoners.  Can you just give me your first reaction, your first emotions when you heard the news?

BUSH:  Yes, sick to my stomach.  Not only did they mistreat the prisoners.  They had disgraced the U.S. military and stained our good name.

LAUER:  You said you felt blindsided.

BUSH: Yes, because I wasn‘t aware of the graphic nature of the

pictures until later on.  And some people in the White House expressed that

my view into the newspapers which then caused Secretary Rumsfeld to come in and offer his resignation.

           

LAUER:  How would you rate that decision to keep Rumsfeld in that position when he offered his resignation?

BUSH:  I think it was the right decision to make.

(END VIDEO CLIP)

O‘DONNELL:  Former Brigadier General Janis Karpinski was stationed at Abu Ghraib during the torture of prisoners there and has told her side of the story in her book, “One Woman‘s Army: The Commanding General of Abu Ghraib.”  She joins me now.

General Karpinski, what‘s your reaction to what you just heard?

FMR. BRIG. GEN. JANIS KARPINSKI, MSNBC CONTRIBUTOR:  I—I don‘t know any other word to use than to say that I was flabbergasted.  When I saw portions of the interview on the TV last evening, I couldn‘t watch it.  It was so—so annoying and obnoxious.  It‘s just infuriating, infuriating.

O‘DONNELL:  Is he pretending not to know things about Abu Ghraib that you think he does?

KARPINSKI:  Absolutely.  Or maybe his ignorance is showing now.  Maybe the people that surrounded him who knew clearly all of the details of Abu Ghraib didn‘t share them with him and he never wanted to hear them.  His objective may have been different than theirs.

There were people who discussed the policies.  He was well aware of the policies.  Even in the interviews and in his book, he justifies the technique, especially waterboarding.  He minimizes it and says we used it on three prisoners.  On one of those prisoners—

O‘DONNELL:  Let‘s listen to what President Bush -- 

KARPINSKI:  You know, one prisoner was—

O‘DONNELL:  Let‘s listen to what President Bush actually said about waterboarding in that interview.

(BEGIN VIDEO CLIP)

BUSH:  I said to our team, are the techniques legal?  And a legal team says, yes, they are.  And I said use them.

LAUER:  Why is waterboarding legal in your opinion?

BUSH:  Because the lawyer said it was legal, said it did not fall within the Anti-Torture Act.  I‘m not a lawyer.  And—but you got to trust the judgment of people around you, and I do.

(END VIDEO CLIP)

O‘DONNELL:  General, you don‘t have to be a lawyer to know that we have prosecuted people for waterboarding.  We‘ve court-martialed people for waterboarding in our history.

How could he so easily arrive at the conclusion listening to one lawyer that that was not torture?

KARPINSKI:  Or a team of lawyers.  Because he sent them out to find a way to make it legal, and they came back and said, we found a way and it‘s legal.  And because all of them said it was legal, he said, OK, go ahead and use it -- 183 times on one of those prisoners.

And there‘s no connection between what he authorized, what his lawyer said was legal and what happened at Abu Ghraib.  That those same techniques could not possibly have migrated to Abu Ghraib from what his policies and what he identified as legal activities.  No possible connection.  That‘s so terribly wrong.

O‘DONNELL:  Is it your sense that what was going on at Abu Ghraib was an acting out of a spirit about this that came down from the White House, from the top down?

KARPINSKI:  Absolutely.  And the person who changed the character of behavior at Abut Ghraib amongst the soldiers was General Miller, who was the commander at Guantanamo Bay, Cuba, was well aware of these policies and had implemented those policies at the direction of Secretary Rumsfeld and Dr. Cambone and people in that same committee.

And he came to Iraq.  He stayed for a couple of weeks, worked with the military intelligence people, brought contractors that had experience from Guantanamo, and all of the procedures started to change.  And that was when they transferred responsibility for Abu Ghraib from my control to the military intelligence commander‘s control.

O‘DONNELL:  And you‘ve talked about the tremendous—

KARPINSKI:  And so, all of those—

O‘DONNELL:  You talk about the tremendous pressure that everyone was under to get actionable intelligence out of the prisoners.  Was there too much pressure, so much so that people stopped caring about procedures and how they were doing things?

KARPINSKI:  I think they were completely blind to how far they were moving away from what the policies were they had practiced and they adhered to.

In 2003, the military intelligence interrogation teams who were following the law were getting very little information from the people that were being brought in.  And they were asking them a set of questions that was still following the direction or the real purpose, the stated purpose, for being in Iraq and that was WMD.  And their questions were al related to the search for WMD.

It all changed when General Miller arrived.  And the questions changed, the directions changed.  These interrogators were put under additional pressure because the number of interrogations that had to be conducted was a hundred-fold from what they were conducting in the early part of the aftermath of the declaration of mission accomplishment.

O‘DONNELL:  The controversy, when it erupted, got so hot in Washington that it prompted Donald Rumsfeld to offer his resignation to President Bush.  Should the president have taken it and should he have taken it because of Abu Ghraib?

KARPINSKI:  Absolutely.  I mean, but there were several other missteps he made, if you recall, he made the comment about you go to war with the army that you have, not necessarily the army that you want.

O‘DONNELL:  That was something Donald Rumsfeld said.

KARPINSKI:  Yes.

O‘DONNELL:  Yes.

KARPINSKI:  Yes.  And he said it in response to a soldier who said, you know, we‘re not getting the equipment.  Some of us don‘t even have protective vests, and we don‘t have vehicles that have the armoring on them.  We‘re putting things together over here.  Our lives are at stake.

And that was his response: you go to war with the army that you have, not necessarily the army that you want.

So, there were many opportunities, but I think President Bush—I wasn‘t there.  I don‘t think like President Bush does, but his response in not taking Rumsfeld‘s resignation I think was because he wanted him there to share in the blame for this mess that they found themselves in.

O‘DONNELL:  Janis Karpinski, former brigadier general in charge of Abu Ghraib prison in Iraq—thank you very much for your insight tonight.

KARPINSKI:  Thank you.  Have a good evening.

O‘DONNELL: The leadership fight in the House Democratic Caucus is getting hotter.  Steny Hoyer is publicly listing his supporters and Jim Clyburn is calling the move disrespectful.  Meanwhile, Nancy Pelosi isn‘t stepping in to solve the dispute.

And, later Glenn Greenwald joins me for what I hope is the first series of interviews with people who hate me.

(COMMERCIAL BREAK)

O‘DONNELL:  Coming up: fighting in the House.  Steny Hoyer tries to hang on to the number two position in the Democratic leadership, but Jim Clyburn stands in his way.

And blogger Glenn Greenwald hated every word I said and every word I didn‘t say on election night.  He‘ll be here to tell you why.

And later, let‘s try to figure out what deep dark (AUDIO BREAK) Glenn Beck to call me MSNBC‘s—his words—new hot lover boy.

(COMMERCIAL BREAK)

O‘DONNELL:  When the Republicans take control of the House of Representatives in January, Democrats will lose more than just control of every legislative action, every chairmanship, they will also lose a leadership post.

With Nancy Pelosi announcing her intent to remain leader of the Democrats now as minority leader, that effectively pushes everyone else down one notch.

Current Democratic majority leader, Steny Hoyer, would take a step down to whip, which is currently occupied by Congressman Clyburn of South Carolina.  Only problem: Congressman Clyburn doesn‘t want the take a step down.

Joining me now is Luke Russert, who covers Congress for NBC News.

Luke, Nancy Pelosi wants to stay in charge.  How much has she done if she‘s in charge and wants to stay in charge—how much has she done, can she do to put an end to this fight?

LUKE RUSSERT, NBC NEWS:  Well, Lawrence, sources tell us that Nancy Pelosi has been in constant contact with both Hoyer and Clyburn over the last few days.  Obviously, she doesn‘t want a big public spectacle between these two.  Why?  Because they both represent factions of her caucus—

Clyburn represents African-Americans and Hoyer represents moderates.

She did not want them obviously having a public spat because she feels that would not have—would not be a unified Democratic Party.

Now, what exactly can she do in terms of stifling this?  Not that much

so far.  Both sides have told us that they believe they have the votes to

become whip.  Hoyer has actually ruled out a lot of public endorsement so

much so that it angered Clyburn today.  He said, comments on the lines of -

why are we making it a numbers game?

           

But if you look at the people endorsing who are Hoyer, Lawrence, you have guys like Henry Waxman, Howard Berman, who are pretty much California Democrats, Pelosi-crats, if you will.  Those are the type of people that if they are endorsing Hoyer, it almost looks like Nancy Pelosi is giving the go ahead that, OK, you know what?  We‘re not going to try and stop Hoyer any way around here.  We‘re not going to try to get behind Clyburn—much like she got behind John Murtha back in 2006, as there is a lot of animosity between Hoyer and Pelosi going back through all the years.

I believe they were interns together back in the 1960s for a Maryland senator, Lawrence.

O‘DONNELL:  And, you know, measuring the microscopic differences politically between these Democrats has some people saying that Clyburn is to the left of Hoyer and so, it becomes interesting that people on the extreme left of the party in the House, people like Henry Waxman and I believe Barney Frank also today coming out for Steny Hoyer.

So, this is not breaking down along the lines of Blue Dogs for Hoyer, which some people thought it might, and liberals for Jim Clyburn, is it?

RUSSERT:  No, not at all.  And that reflects a lot of what some of the rank-and-file members have told us, is that there‘s a desperate want for a guy like Steny Hoyer to be in the leadership because it balances out the House Democratic leadership team.

Understand that a lot of the folks who were all about Nancy Pelosi coming back were the progressives and were the liberals.  She‘s a hero to a lot of them for what she was able to do with cap-and-trade, health care, financial regulatory reform, without a doubt.

But they also understand that heading into what will be a contentious election year in 2012, if the face of the party is Nancy Pelosi, if the face of the party is Jim Clyburn, two of the more of the left of center folks, the House Democrats, and Steny Hoyer is kicked to the curb, that might not necessarily resonate well with a lot of swing voters in a lot of important places, like Ohio, like Pennsylvania, like Virginia.  Those are the type of places where a lot of Democrats think Steny Hoyer‘s message of fiscal responsibility and compromise could work well.  They want him to be part of the leadership team.

O‘DONNELL:  Luke, is there a Solomon‘s solution here?  There‘s been some reports about maybe we can create something for Jim Clyburn.  Is there something to create?

RUSSERT:  Well, there‘s always the role of assistant to the speaker or in this case it would be assistant to the minority leader rather.  That certainly is a possibility.

There‘s also talk of—you have to remember, Lawrence, there are some huge openings on committees for the Democrats.  Appropriations is open.  Jim Clyburn could possibly go there.  There‘s talk of him going to the Budget Committee.  She could also place him on one of those high-powered committees so a lot of folks on the CBC and a lot of his liberal allies would feel he‘s not getting shafted in any way.

O‘DONNELL:  Luke Russert, patrolling Capitol Hill for us—thanks for your time tonight, Luke.

RUSSERT:  Always a pleasure.  Be well.

O‘DONNELL:  Sarah Palin opens up her own little fight with “The Wall Street Journal.”  She tries to talk about economic issues quoting an article from “The Journal,” and the writer lashes back, explaining just how wrong Palin is.

And why does Glenn Beck have very strong feelings about me which he summarizes in this description: MSNBC‘s new hot lover boy?  That‘s tonight‘s “Rewrite.”

(COMMERCIAL BREAK)

O‘DONNELL:  Ahead on THE LAST WORD: After our messy debate on “MORNING JOE” last week, Glenn Greenwald joins me to continue that debate.

And later, Sarah Palin‘s continuing problem with the facts.  She got a quote from “The Wall Street Journal” so wrong that even “The Wall Street Journal” had to call her out for it.  Is the Palin mystique wearing thin for the right?

(COMMERCIAL BREAK)

O‘DONNELL:  In our spotlight tonight, a guy who hates me.  Last week on “MORNING JOE,” I got into an argument with Glenn Greenwald, the blogger for Salon.com.

Here‘s how it started.

(BEGIN VIDEO CLIP)

GLENN GREENWALD, SALON.COM:  I just want to underscore one point which is about these labels.  I mean, if you look at who actually lost in this election, it wasn‘t the liberals who lost.  The Progressive Caucus was re-elected by a rate of 95 percent.  The people who bore the brunt—

(CROSSTALK)

O‘DONNELL:  Glenn, Glenn, Glenn, Glenn, Glenn.  That‘s the silliest thing you can say.

GREENWALD:  No, you were on television all night pointing to people like Russ Feingold—

O‘DONNELL:  Glenn, where do the liberals live?

GREENWALD:  Right.  Well, you were on television—

O‘DONNELL:  Where do they live?

(CROSSTALK)

O‘DONNELL:  They live in—

GREENWALD:  Alan Grayson lives in a district that -- 

O‘DONNELL:  And he lost.

GREENWALD:  -- that is Republican—that has been Republican for decades.  And you pointed to his loss as proof that liberalism fails.

(END VIDEO CLIP)

O‘DONNELL:  And it went downhill from there.  You can see the full version of it on our Web site.  I think I interrupted Glenn more than I should have.  I shouldn‘t have interrupted him at all and I told him immediately after that show that I wanted to come on this show to continue the discussion.

My basic complaint to Glenn was that his blog about what a terrible job I did on election night misquoted me.  It actually didn‘t quote me at all.  It summarized what I said in a way that wasn‘t supported by the actual quotes of what I said on election night.

Now, since then, Glenn has done a thorough job, which you can see on our Web site and his Web site, of juxtaposing what I actually said with what Glenn thinks I said, and what I don‘t think I said.

You can go there.  You can make your own judgment.  We don‘t have to get into that argument again here, about how accurately Glenn summarized my comments.

Joining me now from Rio de Janeiro for what we both hope is a more civilized continuation of the discussion we began last week, Glenn Greenwald of Salon.com.

Glenn, I know most people when they do guest shots on these kind of shows and you‘re allowed eight minutes and six minutes and whatever it is, you leave thinking, I wish I‘d said this, I wish I‘d said that.  Pick it up right now with what you wish you could have said if we had more time Friday morning on “MORNING JOE.”

GREENWALD:  Sure.  Well, I was actually pretty satisfied with the things I was able to say, although I do want to add what I think is the critical point.  And I tried making this point and, hopefully, we can—we can talk about it a little more thoroughly now, which is I think the lesson from the 2010 election and from the Democrats resounding defeat is that if you are a party in power, you essentially need to do two things in order to win an election.

Number one is you need to have a coherent message about what you stand for and effectively communicate that to the citizenry.  And secondly, and more important, is you need to enact policies that actually benefit people‘s lives in a perceptible and tangible way and that help them alleviate the problems and suffering that they have.

And I think Democrats in this election didn‘t lose because they were too liberal.  They lost because they failed to do either of those in the minds of voters.  And the Blue Dogs—their reliance predominantly on Blue Dogs as part of their party and their party identity was a major reason—not the only reason—but a major reason why they failed and why they lost the election.

O‘DONNELL:  But, Glenn, my point about Blue Dogs is, you cannot have a Chairman Barney Frank, you cannot have a Speaker Nancy Pelosi, you know, liberals from each end—each coast, in powerful positions in the House without Blue Dogs in the House to vote for Nancy Pelosi as speaker.  When you lose the Blue Dogs, you lose the majority. 

GREENWALD:  OK.  And here‘s why I fundamentally disagree with you on that.  If you look at what happened in 2010, I think everybody agrees that voters didn‘t vote for the Republican party because they suddenly loved the Republicans.  They voted for Republicans because there was a wave election in hostility to the Democratic party. 

In 2006 and 2008, the same thing happened but in reverse.  People didn‘t vote for the Democratic party because they loved Democrats.  They were furious with Republicans over the Iraq war, over Republican corruption.  It was a wave election.  And the Democrats could have had a lot of progressives in those swing districts who could have gotten elected. 

In fact, many progressives did get elected in conservative districts that people say can never happen.  Alan Grayson did, Carol Shay Porter in New Hampshire, John Yarmuth in Kentucky, Jerry McNerney in California.  These were solid progressives who ran as unapologetic progressives, who won and removed Republican incumbents and won in conservative or swing districts. 

The problem is that the DCCC wanted to follow this standard D.C.  advise, which was the country hates liberalism; Democrats must move to the right.  And they forced a bunch of former Republican Blue Dogs into those seats, when they could have had progressives in there.  And they built this huge majority with a bunch of people who don‘t share any of the Democratic views, when it would have been far better to have a smaller, more ideologically cohesive majority that could have gotten a lot more done for the American people. 

O‘DONNELL:  So Glenn, knowing the congressional district map as you do, in the 50 United States, you believe that there are 220 districts in the United States, let‘s say—let‘s just give Nancy Pelosi a majority of six.  OK?  And there‘s 220 seats in this country that you can win with liberal candidates? 

GREENWALD:  Well, you mean with liberal candidates or something short of Blue Dogs.  I wouldn‘t recommend candidates running around the deep south or the west saying, hi, I‘m a liberal.  Please vote for me.  That‘s what‘s I think is so important, too, is that these labels are not really significant.  What actually matters is the policies that people support. 

Let‘s just have clarity on this which is—this is what I think is critical about Blue Dogs.  When we talk about blue Dogs, we‘re not really talking about people who are moderates or centrists.  In the segment before, I heard somebody—Luke Russert say that, you know, Steny Hoyer represents the Blue Dogs who are fiscally conservative and fiscally responsible. 

They‘re not fiscally conservative.  The Blue Dogs almost uniformly endorsed all the policies that busted the budget, from the Iraq war and endless war to tax cuts for the rich, without any concern for how they‘re going to be paid for. 

What Blue Dogs are is servants of Wall Street.  They‘re loyalists to the corporate and lobbyist class.  When you incorporate all of those people into the Democratic party, you water down the message.  You prevent policies from being enacted that help ordinary Americans, because they block them.  And no, you do not need to go to Wall Street loyalists in order to build a Democratic majority. 

Democrats should have confidence in their position to go to the American people and say, here‘s what we believe in, and to convince the American people that that is the right way of looking at things.  I think Democrats can do that. 

O‘DONNELL:  Glenn, when is the last time you saw a Democratic majority in the Congress that fits the description of the Democratic majority in the Congress that you would like to see? 

GREENWALD:  Well, I think, essentially we had that all the way up until the Gingrich revolution.  And since then, you know, Democrats have had periods of time when they‘ve won majorities.  But the problem is that pretty much beginning in the mid-1990s, the Democrats got convinced that they had to follow the advice of Dick Morris and the DLC, and that the only way they could win—or the best way they could win was by moving to the right.  I think that policy has been a failure. 

Prior to that, in the ‘70s and 60s and ‘50s, they had all kinds of majorities that way, because Reagan changed the way the electorate voted, thought about politics.  Obama said he wanted to be that kind of transformative president too, to go before the people and say, this is the right way of looking at politics.  . 

O‘DONNELL:  I was working in the Congress when you think this House of

Representatives existed, right up to 1994.  Let‘s remember in 1994, with

that liberal majority in the House, they couldn‘t even get a health care

bill out of John Dingell‘s committee.  It couldn‘t report a bill.  No bill

no health care bill ever went to the floor of the House to even be debated or voted on. 

           

This Blue Dog Congress that we just lost, this Blue Dog dominated, in your view, Democratic House of Representatives passed a health care bill that the Congress you liked in 1994 couldn‘t. 

GREENWALD:  Yeah, I mean, you know, obviously the Democratic Congress had good achievements.  I think those achievements would have been much better had the Democrats not followed the Rahm Emanuel standard D.C.  strategy of let‘s build a majority by moving as far as possible to the right.  One of the reasons why Americans ended up disliking the health care bill was because it didn‘t kick in soon enough, so they didn‘t perceive that there were benefits in their lives.  Those won‘t happen until 2014. 

There was no private option to compete with the private health insurance industry that Americans hate.  So the Republican demagoguery that you‘re going to be forced to buy health insurance from the private health insurance industry actually worked because it was true.  You see this down the line. 

You‘re right to point to exit polls saying that people avoid the label liberal.  But if you look at individual policies that typically get labeled liberal, from harder financial regulations to the public option to preserving and protecting Social Security and Medicare to cutting defense spending, these are all policies that Blue Dogs typically and continuously water down and prevent from being enacted.  I think Democrats will be much more popular if they didn‘t rely on candidates who constantly negated their own views. 

They could build a majority not by having hard core self-identified liberals running in conservative districts, but by having people who weren‘t servants of Wall Street who are just willing to put a D after their name in order to get elected be such an integral part of the electoral strategy. 

O‘DONNELL:  Glenn, as I said, I disagree with your summary of what I was saying on election night.  And one of the things you said was I was blaming liberals, which I don‘t think I was.  But we‘re going to leave that for the nice juxtaposition you‘ve set up on your website about my actual video and what I said and what you‘ve summarized I said. 

But I want to close the segment with something that I did on television a few years ago, because this is important to me.  There is no one—there is no one in any sector of the television business who has defended liberals, and specifically the word liberal, to a larger audience than I have.  I want to show you a scene that I wrote for the “West Wing” in 2005.  It‘s what I have always wanted to hear a candidate say when accused of being a liberal. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I know you like to use that word liberal as if it were a crime. 

UNIDENTIFIED MALE:  I‘m sorry.  I shouldn‘t have used that word.  I know Democrats think liberal is a bad word.  So bad you had to change it, didn‘t you?.  What do you call yourselves now, progressives? 

UNIDENTIFIED MALE:  It‘s true.  Republicans have tried to learn liberal into a bad word.  Liberals ended slavery in this country. 

UNIDENTIFIED MALE:  A Republican president ended slavery. 

UNIDENTIFIED MALE:  Yes, a liberal Republican.  What happened to them?  They got run out of your party.  What did liberals do that was so offensive to the Republican party, senator?  I‘ll tell you what they did.  Liberals got women the right to vote.  Liberals got African-Americans the right to vote.  Liberals created Social Security and lifted millions of elderly people out of poverty. 

Liberals ended segregation.  Liberals passed the Civil Rights Act, the Voting Rights Act.  Liberals created Medicare.  Liberals passed the Clean Air Act, the Clean Water Act. 

What did conservatives do?  They opposed every one of those programs, every one.  So when you try to hurl that word liberal at my feet as if it were something dirty, something to run away from, something that I should be ashamed of, it won‘t work, senator, because I will pick up that label and I will wear it as a badge of honor. 

(END VIDEO CLIP)

O‘DONNELL:  Glenn Greenwald of Salon.com, I wish we had more time.  Jimmy Smits just used up the rest of your time.  Thank you very much for restoring sanity to our debate. 

GREENWALD:  Thank you for having me.  I appreciate it, Lawrence. 

O‘DONNELL:  In one breath, Glenn Beck calls me a new hot lover boy. 

That gets him tonight‘s Rewrite. 

And later, what is Sarah Palin doing to the Republican party?  From insulting Reagan to not knowing the price of groceries, is Palin‘s presidential star finally starting to fade?  Republican Mark McKinnon of the Bush and McCain campaigns joins us.

(COMMERCIAL BREAK)

O‘DONNELL:  Time for tonight‘s Rewrite.  It should surprise no one that my exchange on “MORNING JOE” last week with Glenn Greenwald, two lefties going at it, attracted the attention of Glenn Beck. 

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS ANCHOR:  What did Larry O‘Donnell say?  He‘s Olbermann‘s co-worker, fellow news anchor, the new hot lover boy over there. 

(END VIDEO CLIP)

O‘DONNELL:  OK.  New hot lover boy, so far so good, I guess.  Then Glenn showed his audience my smoking gun. 

(BEGIN VIDEO CLIP)

BECK:  It‘s a question not asked very often, what did Larry O‘Donnell say?  He‘s Olbermann‘s co-worker, fellow news anchor, the new hot lover boy over there.  He said on Friday he‘s not a liberal, no, no, no.  I mean, he could play it straight as an arrow on the air.  What is he?  He‘s not a liberal.  This is what he said. 

O‘DONNELL:  I, Glenn—unlike you, I am not a progressive.  I am not a liberal who is so afraid of the word that I have to change my name to progressive. 

GREENWALD:  I‘m not either. 

O‘DONNELL:  Liberals use me.  I am a socialist.

BECK:  The crew on the set laughing and chortling.  But I don‘t about you, I don‘t pal around with communists.  I don‘t know any radical revolutionaries.  I don‘t know any socialists. 

(END VIDEO CLIP)

O‘DONNELL:  It was actually Republican Joe Scarborough who was laughing because he has heard me say it so many times before.  Remember when Richard Nixon said we‘re all Keynesians now?  Well, that‘s the way it‘s remembered, but he didn‘t actually say those words.  The preeminent conservative economist of his day, Milton Friedman, said it in the December 31st, 1965, issue of “Time Magazine.”  Later, as president, Nixon echoed Friedman, saying “I am now a Keynesian.” 

That‘s as close as a prominent Republican has ever come to saying, I am now a socialist. 

The policies advocated by the British economist John Maynard Keynes were, not wrongly, regarded as socialistic.  When I was working in the Senate in 1993, trying to pass a large package of Medicare cuts advocated by a Democratic president and opposed by Republicans, I realized we‘re all socialists now. 

The enactment of Social Security in 1935 and Medicare in 1965 were opposed by conservatives on the grounds that both were socialism.  They were right.  A government funded pension and welfare benefits for poverty stricken mothers was a European socialistic idea imported whole to the United States by President Franklin Roosevelt. 

But by 1935, enough members of Congress in both parties regarded the cruelties of unbridled capitalism as too much to bear.  Capitalism was not to be overthrown, but tempered at its harshest edges with doses of practical socialism. 

At that time, the elderly were the most poverty stricken among us, and utterly helpless in a job market that had no use for 75-year-olds.  The opposition was right about Medicare, too.  It was a socialist idea, a socialist idea whose time had come in a capitalist society.  And so it, too, was supported by enough Democrats and Republicans who saw the need for a socialistic model to completely replace the truly lethal cruelty of capitalism in the health care marketplace for people 65 and older. 

And so by the middle of the 20th century, the United States had become what economists call a mixed economy.  It was no longer a capitalist economy, nor was it a socialist economy.  It was a mixed economy.  And so is now every country in the world, including China and Cuba. 

There are no capitalist countries anymore.  And there are no socialist countries.  Every country has a mix of both.  The argument in this country is not socialism or no socialism.  Glenn Beck and no one else on the Fox News payroll advocate the abolition of any of the socialist programs that the government enacted in the 20th century.  All right, maybe Glenn Beck is opposed to agriculture subsidies or something like that.  I don‘t know about you, but I find him very hard to follow. 

But everyone else at Fox News is. of a sudden, up in arms about President Obama‘s tepid contribution to our already socialistic health care system.  But that‘s more about hating Obama than hating socialism.  Glenn Beck and Bill O‘Reilly seem to think that I cracked on the air last week and finally admitted my darkest secret, my acceptance of the practical socialism that has allowed the United States to continue to be a humane and great country. 

They haven‘t been listening.  Two weeks ago, on Bill Maher‘s show, Bill and I both admitted to being socialists.  And we threw Barack Obama in with us.  Back in September, I talked to the “Hollywood Reporter.”  This was their headline: “New MSNBC Host Admits to Being a Socialist.” 

I started saying things like that publicly over ten year ago.  What I‘ve been trying to do by saying is make people understand what socialism is, and that every taxpayer in this country, every Social Security recipient, every Medicare beneficiary, and everyone who uses the Post Office is participating in successful socialism, practical socialism every day. 

We need to take the political sting out of the word socialist.  In the presidential campaign, when silly old John McCain began calling Barack Obama a socialist, everyone, not just me, should have said, so are you and so am I. 

Socialists like John Boehner and Mitch McConnell and now Rand Paul should not be able to hurl that word as a slur against other socialists.  There is good socialism and bad socialism.  Socialism that won‘t work is ill conceived, too expensive, not grounded in reality.  I will join Glenn Beck in the opposition to that kind of socialism.  Bad socialism is bad. 

But not all socialistic notions are bad.  We should not allow this country to live in fear of a word.  Socialism has contributed mightily to the quality of life in this country, as has capitalism, and both will continue to. 

We can continue to lie to ourselves about this the way Glenn Beck and Bill O‘Reilly do, or we can look to the truth of ourselves and realize what “Newsweek” realized in 2009, 16 years after I did, we are all socialists now. 

(COMMERCIAL BREAK)

O‘DONNELL:  Yesterday, the most recent losing vice presidential candidate who will never be president tried a rare foray into monetary policy.  Sarah Palin criticized Federal Reserve Chairman Bernanke‘s plan to spur economic growth by buying 600 billion dollars in Treasury Bonds. 

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER GOVERNOR OF ALASKA:  All this pump priming will come at a serious price.  And I mean that literally.  Everyone who goes out shopping for groceries, you know that grocery prices have certainly risen.  And you know, look at commodity prices.  Coffee‘s up 40 percent and soy and cotton and corn.  Well, pump priming would push grocery prices even higher. 

(END VIDEO CLIP)

O‘DONNELL:  Yes, grocery prices have risen.  But by how much?  As Sudeep Reddy of “the Wall Street Journal” points out, the Consumer Price Index‘s measure of food and beverages for the first nine months of this year showed average annual inflation of less than 0.6 percent, the slowest pace on record since the Labor Department started keeping this measure in 1968. 

Upon learning of the Journal‘s correction, Palin took to her Facebook page writing, “really?  That‘s odd because just last Thursday, November 4th, I read an article in Mr. Reddy‘s own “Wall Street Journal” that noted that an inflationary tide is beginning to ripple through America‘s supermarkets and restaurants; prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months.” 

What Palin failed to mention was the rest of that paragraph, which read “an inflationary tide is beginning to ripple through America‘s supermarkets and restaurant, threatening to end the tamest year of food pricing in nearly two decades.” 

“Slate writer John Dickerson posted a correction on Palin‘s Facebook wall, but his comment was deleted both times he tried. 

Joining me now, media adviser for the presidential campaigns of President George W. Bush and John McCain, Mark McKinnon.  Mark, thank you very much for joining us.  Mark, you worked with Sarah Palin in debate prep during the vice presidential campaign.  Did you see anything in that candidate that indicated this loser of the vice presidency was capable of bucking that history that goes all the way back to Henry Cabot Lodge in 1960 -- every vice presidential candidate in the television age never, ever, ever gets to the presidency after they lose the vice presidency?

MARK MCKINNON, FORMER ADVISER TO PRESIDENT BUSH:  Well, Lawrence, I think Sarah Palin‘s getting closer to her sell by date.  Congratulations on your evolution on the show, by the way.  You know, she‘s comparing herself to Ronald Reagan.  And you know, I didn‘t know Ronald Reagan.  Ronald Reagan was not a friend of mine.  But I can guarantee you this, Sarah Palin is no Ronald Reagan. 

She talked about his movie.  She didn‘t even get the name of his movie right.  She‘s comparing herself to a real icon of the party.  So I think it‘s problematic.  I think that the Republican party is beginning to realize that Sarah Palin‘s crashed this party a little too long and that it‘s not good for the Republican party.  It‘s not good for the prospects of Republican nominee and then win a general election in 2012. 

O‘DONNELL:  Mark, what do you think is going on with guys like Newt Gingrich, Rudy Giuliani, who publicly say—Gingrich did this on television recently—that, of course, she‘s qualified.  She‘s more qualified than Joe Biden.  And Giuliani the same thing.  They pump up Sarah Palin and her credentials.  Is that—are they just playing to Palin backers, hoping that they don‘t alienate them in any way for their own future possible political prospects? 

MCKINNON:  Yeah, I think that that‘s the interesting thing about the primary.  Everybody is dancing around Sarah Palin.  The interesting thing is that they talk about was she as qualified as Barack Obama, but then they turn around and say that Barack Obama is not qualified.  So that doesn‘t really square very well. 

We‘re beginning to see very quickly now, as a result of these elections, that she put up some candidates that really weren‘t qualified.  They lost. We lost.  The Republicans could have taken the Senate if not for Sarah Palin.  So her stock is falling and pretty rapidly now, I think. 

O‘DONNELL:  Mark, is there any way of Palin rewriting what we know to be, based on the mathematical history of this last election, which is if she didn‘t help Christine O‘Donnell get that nomination in Delaware, if she didn‘t help some of these Tea Partiers to get those nominations to the Senate, then the Democrats would have lost those seats, that they were then able to win because of the nominees that Sarah Palin delivered to the Democrats.  Is she going to be able to somehow rewrite that in the Republican convention as some kind of champion? 

MCKINNON:  No, she‘s not.  It wasn‘t strategic.  It was impulsive and it cost the Republicans the leadership of the Senate.  And that‘s what people are seeing now.  They‘re looking at this and they‘re realizing that she may be able to win the nomination, and you look at a crowded field in Iowa and if she runs, you can see the pathway there, particularly if you have eight guys and Sarah Palin, and look at the constituency of those primary voters.  It‘s possible. 

But it‘s highly problematic, because she may be able to win a nomination, but there‘s no way that she can win a general election. 

O‘DONNELL:  Mark McKinnon of Public Strategies, a Republican insider, formerly of the Bush and McCain campaigns, thank you very much for joining me tonight, Mark.

MCKINNON:  Thanks, Lawrence. 

O‘DONNELL:  You can have THE LAST WORD online at our blog, TheLastWord.MSNBC.com.  And you can follow my Tweets @Lawrence.  That‘s tonight LAST WORD.  “COUNTDOWN” is up next. 

END   

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