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'The Rachel Maddow Show' for Monday, July 11th, 2011

Read the transcript to the Monday show

Guests: John Stanton, Nicolle Wallace, Michael Nutter

O‘DONNELL:  You can have “THE LAST WORD” online at our blog, LastWord.MSNBC.com.  You can follow my tweets @Lawrence.

THE RACHEL MADDOW SHOW is up next.

Good evening, Rachel.

           

RACHEL MADDOW, HOST:  Good evening, Lawrence.  It‘s great to have you back, we missed you.

O‘DONNELL:  Good to be back.  Thanks.

MADDOW:  All right.  Thanks to you at home as well for staying with us for the next hour.

Combine the dramatic escalation of something that people like to complain about anyway, combine that with advanced warning, combine that with a really snappy nickname in a part of the country that gets tons of news coverage anyway, and what do you have?  You have Carmageddon.

(BEGIN VIDEO CLIPS)

BRIAN WILLIAMS, NBC NEWS:  If you live near it, you know it‘s coming. 

It‘s called Carmageddon and it‘s just days away.

UNIDENTIFIED FEMALE:  Los Angeles is buckling up for Carmageddon.

LESTER HOLT, NBC NEWS:  You‘re likely to hear Carmageddon a lot this coming week.

UNIDENTIFIED MALE:  Millions of people in Los Angeles, they‘re used to traffic, but they‘re bracing for Carmageddon next weekend.

UNIDENTIFIED FEMALE:  I know people that are literally living because they‘re worried about it.

GEORGE LEWIS, NBC NEWS:  If the worst-case predictions of officials come true, all the surrounding streets and freeways will be gridlocked, Carmageddon.

(END VIDEO CLIPS)

MADDOW:  One of America‘s largest cities is bracing for a disaster that comes with advanced warning.  A disaster of the transportation variety, L.A.‘s 405 Freeway is one of the single busiest roads in the entire country.  And this weekend, as you heard, they are expecting it to be Carmageddon!

California officials, shutting down a 10-mile stretch of the 405 from the San Fernando Valley to west Los Angeles, 10 miles of the busiest stretch of road in the entire country, it will be closed off all weekend.  The 405 is being shut down to make it bigger, to expand it from four lanes on each side to six lanes.

And if the half million or so cars that use the 405 on any given weekend still want to travel that route, and they instead this weekend are forcing them to use side streets and alternate routes to get where they are going, well, then -- 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Traffic reporters say on a scale of one to 10 this

-- 

           

UNIDENTIFIED MALE:  It has a potential of being really a nine.

(END VIDEO CLIP)

MADDOW:  An eleven.

Here‘s the thing about Carmageddon, though.  This is a manmade potential catastrophe.  Not just in the larger sense that we humans make too much traffic, but in the smaller sense, that this mother of all traffic jams, this traffic jam to end all traffic jams that is expected for this weekend in L.A., it is being caused by deliberate action, and it is well-meaning deliberate action.  They are taking this freeway out of commission in order to work on it, but it‘s all planned out in advance.

Carmageddon, as bad as it is likely to be, is not a natural occurrence.  This is not an accident.  This is not happenstance.  It is a disaster of California‘s own making.

In Washington, the economic version of Carmageddon shares that same quality.  It is also manmade, it also not accidental.

The economic version of Carmageddon for the country is this threat to not lift the debt ceiling in Congress.  Despite about whether or not the U.S. is just  going to default on our debt.

Economic Karmageddon, like L.A. Carmageddon, is a manmade disaster.  It is happening because the Republicans in Congress have made an overt decision that this disaster should happen or at least we should risk this disaster happening.

Since John F. Kennedy was president in 1962, Congress has voted to raise the debt ceiling 74 times.  Seven times during the Johnson presidency, seven times during the Nixon presidency, six times under Gerald Ford, six times under Jimmy Carter, on and on, over the last five decades, raising the debt ceiling has happened roughly once a year.

In recent times, the only time we haven‘t had to raise the debt ceiling was in the late 1990s, toward the end of the Bill Clinton presidency.

Why did we not have to do it at the end of the Bill Clinton presidency?  Because President Clinton by the time he left office was presiding over budget surpluses, not budget deficits.  So, the debt ceiling didn‘t have to go up.

George W. Bush did away with that little problem very quickly.  After years of not having to raise the debt ceiling under Bill Clinton, under George W. Bush, we started incurring massive deficits again, and so, we had to start raising the debt ceiling again routinely.

(BEGIN VIDEO CLIP)

TIM RUSSERT, FORMER MODERATOR, MEET THE PRESS:  We are confronting a situation we hadn‘t in a few years, and that is the debt limit, where the government can‘t borrow any money.  It‘s frozen at $5.95 trillion.  What are we going to do about that?

MITCH DANIELS, THEN-BUSH BUDGET DIRECTOR:  We‘re going to raise it, as a reasonable government must.  This is really housekeeping, Tim.  This has nothing to say or do with future spending.  This simply reflects decisions made in the past, and it ought to be treated as the housekeeping matter it is.

(END VIDEO CLIP)

MADDOW:  The housekeeping matter it is.  That was then George W. Bush budget director, Mitch Daniels, who now is both Indiana‘s governor and a hot vice presidential prospect for the Republicans heading into 2012.  Mitch Daniels arguing that raising the debt ceiling ought to be treated as the housekeeping matter that it is.  No news here, just do it, don‘t even talk about it.

During the George W. Bush administration, they did just treat the debt ceiling as a housekeeping matter.  The debt ceiling was raised seven separate times during the George W. Bush presidency with lots of Republican support every time they did it.  In fact, today‘s Republican leadership in Congress, which has taken such a strong stand against it this time around, they voted to raise the debt ceiling 19 times during the Bush years.  But now, it‘s all different.  Now, not only have Republicans balked at raising the debt ceiling, they have also made a big show of turning their backs on any effort to negotiate with Democrats a reduction in the deficit, a reduction in debt.

They voted against implementing pay-as-you-go budget rules in Congress.  They voted against establishing a bipartisan deficit commission.  Even Republicans who had proposed that in the first place voted against it when President Obama agreed to it.  They walked out of the “gang of six” debt talks that were being held in the Senate.  They walked out of the bipartisan debt talks that were being convened by Vice President Joe Biden.

And on Saturday night, Republican speaker of the House, John Boehner, said he‘d no longer negotiate with the president on the grand deal they had been negotiating to get Republicans to agree to vote for the debt ceiling rise.

If you were looking for any signs tonight, Monday night, that the Republican Party is eager to avert this economic karmageddon, I do not have signs to share with you.

Republican congresswoman and Republican candidate Michele Bachmann told a crowd of more than 100 supporters gathered in Iowa today that she has never voted to raise the debt ceiling during her time in Congress and won‘t this time either.  Quote, “It‘s time for tough love,” she said.

Potential Republican presidential nominee Sarah Palin is on the cover of “Newsweek” this week hyping her own presidential prospects.  What is her advice on the debt ceiling to Speaker of the House John Boehner?  She says, quote, “I will be very, very disappointed if Boehner and the leaders of the Republican Party cave on any kind of debt deal in the next couple of months.”

Notice she‘s not saying hold out and make sure you get a good deal, Republicans.  She‘s saying, don‘t do it at all.  She‘s saying, don‘t raise the debt limit.  Let economic karmageddon happen.

In Minnesota, the showdown at the federal level has been happening on a smaller scale.  It is now day eleven of a complete shutdown of the Minnesota state government, the longest shutdown in that state‘s history.  And in the midst of that, former Minnesota governor and presidential hopeful Tim Pawlenty is hoping to revitalize his, frankly, kind of lousy presidential chances by cheerleading for his state‘s government shutdown, by describing the shutdown itself as a good thing.

One Minnesota political scientist telling “The New York Times” today that there may be a lesson in this, a rather scary one for national politics.  Quote, “That Minnesota would have a protracted government shutdown—I never thought that was possible.”

This political scientist, Lawrence Jacobs, quote, “The big lesson for Minnesota is the unthinkable is possible.  You have a tendency to think in these sorts of situations it‘s just a game of chicken, that there will be a resolution, that the debt ceiling will be lifted.  But sometimes, a game of chicken ends in a car crash.”

The last thing that Republicans walked out of in terms of trying to avert this car crash was a meeting that President Obama convened yesterday in Washington.  You may remember that Mr. Obama told everybody who was going to attend that meeting that they should dress casually because they were going to be there for a long time, right?  That‘s why we have all these pictures where they look vaguely, slightly, Iranian, maybe, because they‘re not wearing ties.  Women look the same they always do at these meetings, but the men, hello, Ahmadinejad fashion sense there.

Even though they were tie less because they were supposedly going to be there all day working on it, House Speaker John Boehner, before the meeting even started on Sunday, told reporters that he could not support any big deal that the president wanted, period.  So, in the end, their long day of sweaty, tieless negotiations only lasted an hour and 15 minutes, and they all went home.

There is a real economic crisis in this country.  It is an unemployment crisis.  But that is not what they are having crisis negotiations about in Washington, but they are having crisis negotiations about in Washington is about something the country has done 74 times since John F. Kennedy was president, including seven times under George W. Bush, something Republicans have just decided that they‘re not going to do this year.

Joining us now is John Stanton.  John is a reporter for “Roll Call” newspaper.  Jon, it‘s nice to see you.  Thanks for joining us.

JOHN STANTON, ROLL CALL:  Good to be here.

MADDOW:  Where do the talks stand right now and the positions of the two sides?

STANTON:  Well, the talks are not really doing much right now in the talks, frankly.  They had a meeting today at the White House where they discussed what Vice President Biden and Majority Leader Eric Cantor and a few others come up with as a sort of suite of options for addressing the problem, and they then went back to their respective caucuses to discuss it.

I think the problem that‘s happening right now, is leadership on the Republican side is finding itself caught between the reality of needing to deal with the debt limit and the fact that the Tea Party movement and strong conservative, fiscal conservatives in the country that voted them into power last year don‘t want to see that, and they are having two competing realities that are sort of butting heads and they‘re not quite sure, frankly, how to chart the course, I think.

MADDOW:  John, I went back in and look at news coverage of some previous fights over the same issue, and the ‘80s and ‘90s, lots of presidents have had to deal with the other party trying to leverage the debt ceiling vote into something else they want in terms of policy.  What seems unique this year is the overt calls by Republicans that the debt ceiling shouldn‘t just be leveraged into something else the Republican Party wants, but that it‘s an overtly bad thing to raise it, that a shutdown and the type of crisis we would have without the debt ceiling is, itself, is good to achieve.

Is that something new?

STANTON:  It is new, I think.  I think it is a reflection of the conservative sort of tilt of the party over the last year and a half, two years.  You know, the sort of populist movement, economic movements that are going on within the Tea Party particularly really bring that to bear.  I mean, you‘ll notice that Speaker Boehner doesn‘t ever say it will be OK for the debt limit to be reached and for us to default.  He‘s very careful never to say that, but at the same time they try to not, sort of, antagonize those on the right that have said it should be allowed to default.

And, you know, this is a very tricky problem for them because they know when they do end up raising it, the people that don‘t want to raise them are going to blame them.  Almost no matter what deal they can come up with is not going to be good enough for those people and they‘re not sure, sort of, what that is going to mean politically over the next, year, or year and a half.

MADDOW:  One of the things you have to worry about in a really high stakes negotiation is whether the person who‘s actually sitting at the table doing the negotiating can promise, can deliver what he or she is promising.

Is there—is it just tactical positioning and is it just spin for Democrats to be questioning whether or not John Boehner really does negotiate on behalf of the Republican Party, whether he can deliver votes if he agrees to a deal?

STANTON:  No, I think—I think it is a legitimate question.  I think that, you know, the deal that he and President Obama were talking about last weekend, which the president was pushing to what they call decouple the Bush tax cuts to essentially allow the tax cuts for the richest Americans to expire, when those details started to come out, there was a lot of push back from Republicans—rank and file Republicans, members of leadership.  And Boehner looked at that and realized there was no way he could sell that kind of a deal to his party, that there were not enough Republican votes, even if he got a lot of Democrats, he could not get that through the House.

MADDOW:  Is he also potentially facing a challenge by Eric Cantor or somebody else in the Republican leadership for his seat?

STANTON:  Well, both of them will say that‘s not true, that that‘s not happening.  There is a lot of speculation, though, in Washington about that relationship.  You know, folks have been looking at how the two of them have been jockeying on this issue and, you know, have been wondering is Eric Cantor trying to position himself as a more conservative leader so that if this deal goes through and John Boehner takes a huge hit from the right, that he can maybe step in.

I honestly don‘t know at this point that‘s a realistic option, but there‘s certainly a lot of speculation about it right now.

MADDOW:  John, I don‘t know if you‘re superstitious guy or not, but I‘m feeling really skeeve out by the fact that there‘s like heat lightening flashing behind you that whole time that we‘re talking.  You don‘t see that as a particularly bad sign, do you?

STANTON:  It‘s a little apocalyptic, yes.

MADDOW:  Yes.

(LAUGHTER)

STANTON:  You‘re actually in your black suit and your black tie, you actually are a perfect setting for doing the apocalyptic “be afraid” segment with us.

John Stanton, reporter for “Roll Call” newspaper—thanks a lot for joining us, man.  I appreciate it.

STANTON:  Thanks.

MADDOW:  All right, how many frequent flyer points do you get for a flight that cost you $63 million.  Debunktion Junction is just ahead.

Plus, “Best New Thing in the World” today involves an American athlete with the name of a super hero who, in fact, just did something super heroic in sports terms.

It‘s all coming up.

(COMMERCIAL BREAK)

MADDOW:  Election Day is tomorrow.  Details coming up on that next.

Plus, the mayor of Philadelphia will be here to talk about how the crisis in Washington will redound to the cities and the states.

Plus, “Best New Thing in the World” coming up at the end of the show.  It‘s the kind that involves leaping to ones feet and cheering at the television even if you don‘t fully understand why you feel that way.  That‘s coming up.

(COMMERCIAL BREAK)

MADDOW:  Tomorrow is Election Day.  Yes.  In Wisconsin, it‘s the primaries for the recall of state senators that followed Republicans stripping union rights in that state.  The notable thing in those elections is that Republican activists are running tomorrow as if they are Democrats.  They are running sort of openly as fake Democrats in the Democratic primary to try to create electoral chaos to complicate the Republican recall effort.

In southern California tomorrow, there is also an election, Congresswoman Jane Harman is retiring and now, her strongly Democratic district in Los Angeles is hosting a rather strange special election to replace her.  I say it‘s strange for a couple of reasons.  One strange thing about this race is that although this is a district where Barack Obama beat John McCain by 31 points, the Republican who‘s not running as anything remotely near moderate, he‘s running as a hard right Republican candidate doing things like calling Planned Parenthood a murder mill, for example.

New poll out in this race today shows the Republican Craig Huey is his name trailing 8 points behind the Democratic in the race.  The Democrat in the race is named Janice Hahn.

But the strangest thing about this race is that it‘s also given rise to the most ostentatiously racist political ad of the year, so far, it‘s only July.  It‘s an odd that run against the Democrat, Janice Hahn.  You may have already heard about this already if only because the words you have to use to describe it are link bait.

The ad shows black men as gang members dancing with guns, eventually stuffing money into the bikini bottom of the Democratic candidate who is portrayed as a poll dancer shaking her butt at the camera.  There‘s also a lot of threatening swearing from the gang member guys with guns.

The Republican candidate running in this contest, it should be clear, did not run this ad.  This is not the candidate‘s ad.  This is done by an outside group that has not yet disclosed its donors.  And although the Democratic candidate filed a complaint with the FEC alleging that the Republican in the race illegally cooperated with the group that did the ad, both the group and the Republican candidate are denying any collusion.

Now, when this appears in the end of your ad, there is—yes, including that fine print there.  There is no mistaking that this ad is designed to be provocative.  It is designed to get attention by virtue of how offensive it is.

And in this case, mission accomplished.  Lots and lots of national attention to this race, to Janice Hahn, and to the issue on which the racist ad is attacking her simply by virtue of how disgusting this ad was.  The Republican candidate responded to all that attention by making clear that he had nothing to do with the ad itself.  But he then focused his own attacks on Janice Hahn on the very same issues highlighted in the racist ad.

Someday, we will know who the donors are to the group that put out the poll dancing, black gangster, gun ad.  But we don‘t know yet, and voters will not know before tomorrow‘s election.

And if there is something freeing about anonymity, if there is something about being anonymous that frees people up to do things and say things, they might not say or do otherwise.  What does the big shift of political money this year to identity-shielding institutions mean for what this year‘s and next year‘s elections are going to look like?

There‘s all this Beltway hand-wringing, right, over the fact that Republican candidates for president this year have raised $80 million less than what the Republican candidates had raised at this point in the last presidential cycle.  It is striking, at the end of June 2007, Republicans had raised nearly 100 million bucks.  This year, it‘s less than 40 million bucks, at least that we know about so far.  That is a huge gap.

But, then, hey, also, that forgettable sounding Romney-related PAC, restore our future.  Oh, they‘ve also raised $12 million of their own.  And Karl Rove‘s group American Crossroads just told “The Christian Science Monitor” that his group plans on raising and spending $120 million.

And will we know who those donors are?  In some cases no, not at all. 

In some cases, not before the election.

Money is not leaving politics.  Money isn‘t going away.  It‘s just going to places where it can be kept more anonymous than traditional campaigns.

So, if you like the ads running against Janice Hahn in California by some anonymous group no one has ever heard of, who‘s donors nobody knows about, then I think you are going to love what‘s ahead this year.

Joining us now to tell me it‘s no big deal is Nicolle Wallace, someone I really enjoy disagreeing about politics.  She is White House communications director under President George W. Bush and senior adviser in the McCain-Palin campaign.  She‘s also the author of the novel “Eighteen Acres,” which is now out in paperback and looks lovely in its new paperback edition.

Congratulations.

NICOLLE WALLACE, AUTHOR, “EIGHTEEN ACRES”:  Thank you.

MADDOW:  Nice to see you, Nicole.

WALLACE:  Nice to see you.

MADDOW:  Are you going to tell me that this is no big deal?

WALLACE:  I have good news and bad news, which do you want first?

MADDOW:  Bad.

WALLACE:  OK, the bad news is—well, the bad news for my side is these ads never work.  So, if he loses, he‘s down by eight points, which is sizable ground to make up on Election Day, it will probably be in part because of the way this ad reflects on him.  Now, you and I know that he has disavowed the ad.  He‘s actually condemned the ad.  You know, he‘s called it bigoted and racist.

And part of the reason that you don‘t—these ads are always deplorable.  They are always condemned.  No campaign wants to lose control of the paid messaging on their side.

MADDOW:  But these ads exist for a reason.

WALLACE:  Well, here‘s the good news.  The good news is that Democrats have outgunned Republicans in terms of the outside money they‘ve raised and the outside ads that they‘ve run in the last two—in the two presidential campaigns I worked on, 2004, they outgunned the Republicans by $100 million.  And in 2008, they outgunned Republicans by close to $100 million.

MADDOW:  In 2010, Republican leaning groups doubled what Democratic leaning groups did outside the party.  Doubled.

WALLACE:  But we haven‘t ever seen Republican outside groups outgunned the Democrats in a national presidential election.

MADDOW:  Not in the presidential, but in 2010 we did.  2010, they doubled it.  I don‘t think you can—I don‘t think you can say one side or the other is going to disarm in this.  I think both sides are going to do tons of outside money.

WALLACE:  Look, I worked for the one Republican who tried to outlaw outside money.  John McCain, you know, it was struck down by the Supreme Court.  But no presidential campaign of either party ever welcomes the paid advertising activities of outside groups, because they can‘t control them.  It‘s illegal.

MADDOW:  Right.

WALLACE:  So neither side wants the outside groups.  I mean, you know, they all condemn the outside groups, but the one thing they both agree they don‘t want the outside groups doing is putting up ads like this.

MADDOW:  So, in the George W. Bush campaign against Kerry, the reaction of the swift boating stuff was overtly—oh, not only is that not us, we hate it, we‘re not making that our campaign, that‘s not our case, that‘s not the way we‘re arguing against John Kerry—you think that the George W. Bush campaign would be happier had those things gone away?

WALLACE:  Well, we never would have raised those issues.

MADDOW:  But they helped.

WALLACE:  So, if the swift boat veterans had not—you know, John Kerry has said that they helped create a caricature of him.

MADDOW:  Yes.

WALLACE:  I think that the MoveOn.org campaign against George W. Bush, which depicted him as a pretty vicious war criminal was far more damaging than the image—look, I think it was pretty equal in 2004.  I think MoveOn.org, which was funded largely—which funded completely by anonymous donors, but we know who some of them were, because they were proud of their activity.  They had an incredibly—they really got off the ground the anti-war movement and Cindy Sheehan was, you know, carried that legacy into 2005 and 2006 when public support for the wars in Iraq and Afghanistan fell throw the floor.

So, you cannot take anything away from the outside money and the impression that the outside groups made and the advertising they did in 2003 and 2004.

MADDOW:  But saying those things don‘t work on either side, I think, doesn‘t make sense.  I mean, I think that this incredible—

WALLACE:  They don‘t work in a campaign like this.  I mean, this is not going to accrue his—we won‘t know until the exit polls.

MADDOW:  But then he makes the decision.  So, the first thing that makes any sort of impression in this campaign, certainly, the first thing that gets any national media attention, the only media attention of this campaign is this ad that‘s super racist and obnoxious, that‘s hitting Janice Hahn on this very obscure issue about gang remediation efforts in Los Angeles.

After that happens, the Republican candidate decides, I‘m not down with that racist ad at all, but you know what we need to talk about here, gang remediation efforts in Los Angeles.

WALLACE:  And she has answered and she has answered it and I think rebutted it in a way that it looks, from just absorbing the local media coverage, that the voters in that district are satisfied with her response that she never had anything to do with the -- 

MADDOW:  It was a 31-gap in the 2008, though.  And it‘s 8-point gap in this race.

WALLACE:  Look at what the nice run on.  I mean, the single thing that unifies independence and the far right of the conservative movement, the Tea Partiers, is the national debt and size of the government.  So, you know, we say, we see that in polls, but if that‘s true, this may be one place we see it playing out.

I mean, some of his support, you can‘t look at the support that he has and view it as you said, as so much greater than the support that the Republican presidential candidate had just two and a half years ago now and view it as disconnected from what‘s happening in the country.  The truth is there are a lot of independent voters.  California is a state that is practically bankrupted itself.  So, California is a state where they understand how detrimental government debt can be.

MADDOW:  But there‘s—I mean, you look at the last special congressional election we had in Upstate New York, and what was driving that one in this deep red district, we get a blue result because people are so upset about the vote against Medicare with the Paul Ryan plan.  So, if you—I mean, we can decide that people are upset about the debt, on your side, we can decide on my side that people are upset about Republicans wanting to kill Medicare, there are national wins that approach these things.

WALLACE:  Sure.

MADDOW:  But I think this anonymous money funding something totally disgusting, absolutely has helped the Republican candidate there and what I‘m worried is that in 2012, we‘re going to have so much anonymous money as a proportion of the overall money in the race that we should expect a lot more ugliness, even if it is in both sides.

WALLACE:  I don‘t think you‘ll find anyone that run, any candidates that are enthusiastic about anonymous money—I mean, because of the things that are done against them.  So, you know, it‘s not something where you find a lot of vocal supporters.  And I think, again, I work for the guy that tried to get rid of it, and he was struck down by the Supreme Court.

So, I‘m not a fan of anonymous money.

MADDOW:  Yes.

WALLACE:  And I think it can do more harm than good.  I think that‘s why, you know, these ads get a lot of national attention because they are so appalling.

MADDOW:  Well, I think conservatives should start arguing about that in public because it‘s five straight—

WALLACE:  If MoveOn.org joined arms with the conservative groups and

said everything we do will be positive, everything we do will be a biased

but -

(CROSSTALK)

WALLACE: I think that would be great.

MADDOW:  This is not a mirror image issue, though.  You‘ve got five straight rulings from the Supreme Court, five in a row, that struck down all the campaign finance laws that we got, and every time it‘s the conservative majority of the court doing this and it‘s conservative groups who are bringing the cases that are resulting in these laws being struck down.

WALLACE:  They are being struck down on the grounds of free speech, you know?

MADDOW:  It‘s been a conservative jihad on finance law.  So, to say the conservatives are upset that this is happening, I think it‘s nice -- 

(CROSSTALK)

WALLACE:  My point is they benefit less.  That they benefit less from outside money.  I mean, there‘s less of it on the Republican side, so they benefit less.

MADDOW:  You‘re so game.  I love it.

WALLACE:  They are strong advocates for the First Amendment, what can I tell you?

MADDOW:  Yes, that‘s what it‘s—

(CROSSTALK)

WALLACE:  All that free speech thing.

MADDOW:  Nicolle Wallace, White House communications director under President George W. Bush, senior advisor for the McCain-Palin campaign, the author of “Eighteen Acres”—I really do enjoy totally disagreeing with you about this.

WALLACE:  It‘s fun for me too.

MADDOW:  And, Nicolle Wallace, because you are a fellow northern Californian who is starving for cheap Mexican food—

WALLACE:  Yes.

MADDOW:  -- which is hard to come by in New York City.

WALLACE:  Terrible here.

MADDOW:  I hereby bequeath to you the menus (INAUDIBLE) of the three best cheap Mexican places in midtown that deliver, including one truck that delivers.

WALLACE:  Oh, I love.  The truck that delivers, only in New York, thank you.

MADDOW:  You‘re welcome, enjoy.  This offer not available to all THE RACHEL MADDOW SHOW guests, some restrictions apply.

(LAUGHTER)

(COMMERCIAL BREAK)

MADDOW:  If you have concerns that in America today, there‘s just too much separation between our nation‘s love of alcohol and our nation‘s love of firearms, then the great state of Ohio has good news for you.

(BEGIN VIDEO CLIP)

GOV. JOHN KASICH ®, OHIO:  Have you ever been stopped by a policeman who was an idiot?  I have this idiot pulled me over on 315.  He‘s an idiot.

(END VIDEO CLIP)

MADDOW:  Ohio Republican Governor John Kasich giving new meaning to the word loaded on “Debunktion Junction.”  That‘s ahead.

(COMMERCIAL BREAK)

MADDOW:  “Debunktion Junction,” what‘s my function?

First up, true or false—the president of Belarus is cracking down on people clapping for him.  Is that true or false?

True.  Normally, you would think the kind of dictator who has ruled Belarus for the last 17 years, this man here in the funny hat, Alexander Lukashenko, a man who rigged his most recent reelection in December to have himself win by 79 percent of the vote, you‘d think a guy like that would love applause as much as he loves hat.  But in this case, no, Lukashenko has banned public gatherings in Belarus.

But some people in his country are brave enough to want to show that they are against him, and this clapping thing here, this is how they have been showing they are against him.

Predictably, this is what happens to people who get caught.  Clapping is a new form of protest in Belarus.  It started about month ago as flash mob style rallies involving only a few hundred people.  Now, it‘s grown to reportedly involve thousands with about 1,700 people arrested so far, including, not kidding, a one-armed man arrested for clapping.  Seriously.

Next up, Russia is about to take advantage of what will soon be its monopoly on human space flight by jacking up its prices for rocket rides into orbit.  Is that true or false?

True.  Take a look at the space shuttle Atlantis blasting off Friday for the very last mission of the American space shuttle program.  After Atlantis lands safely back on Earth in 10 days, the only way our astronauts will be able to get back up space again is paying for rides on Russia‘s Soyuz rockets.

Since President Bush announced he was ending the space shuttle program in ‘04, Russia has renegotiated the price they are charging for a ticket into orbit.  This summer, they‘ll be the only game in town.  They are jacking the price up almost 60 percent.

By five years from now, which is the earliest that any private commercial spacecraft might be able to compete with Russia, by then, they will have tripled the ticket price for when they started charging it.  They will be charging $63 million a ride, which we‘ll have to pay if we want to put somebody in space because no more American shuttle.  Duh, capitalism.

And, finally, in the state of Ohio, it is now legal for gun owners to carry concealed weapons into bars.  Ohio has just legalized concealed firearms specifically in places where alcohol is served.  Is that true or is that false?

True.  What could possibly go wrong?  Ohio‘s Republican Governor John Kasich signed Senate Bill 17 into law at the beginning of this month.  If you were among those worrying what was wrong with Ohio these days is its saloons didn‘t have enough guns in them, that problem has been fixed.

The law does have one loophole.  While you can have your gun in a bar, while you are in the bar with your gun, you are forbidden from getting drunk.  So, once you‘re drinking, once you‘re drunk, you are not allowed to have the gun on you in the bar anymore.

Think about that for a second.  It must have a little excitement to the otherwise humdrum life of an Ohio cocktail waitress or bartender.  People get drunk in the bar now, what do you do?  Check to see if they got a concealed weapon now that they are drunk, and if they do, then you get to persuade that armed drunk person that he‘s no longer allowed to have the gun on him anymore?

That‘s a nice Saturday night special.

(COMMERCIAL BREAK)

MADDOW:  Behold the great recession, the one you will tell your kids about.  The one you‘re trying to explain to your kids already.

An economics blog called “Calculated Risk” put this chart shows all the recessions since World War II basically, and we‘re way down there at the bottom.  We are living that red line, that is the rates at which jobs have been lost in the great recession and the non-rate at which jobs in which jobs have comeback.  That red line is an unhappy place and we are there.  But at least we‘re not at the very bottom anymore.

The word recession is used to describe an economy that is not growing at all.  If your economy doesn‘t grow for two straight quarters, for six months, that‘s a recession.  Our economy still is still atrocious but it is not technically in recession anymore.  After a nauseating rollercoaster plunge at the end of the Bush administration, our economy did start growing again, very, very slowly, but still growing, and that‘s better than the alternative.

This shows what‘s happening with GDP, gross domestic product—a phrase that describes the result when I try to cook anything.  Gross domestic product.

And it also describes the whole economy.  GDP is the sum total of everything from you buying shoes to the government buying stuff like stop signs.  GDP has been growing since about two years ago.  We are at least above zero.

And even though it hasn‘t been enough yet to get us out of this deep, dark slaw of despond, it is growth, so technically, we are in recession anymore.

Dozens of times since the Kennedy administration, Congress has voted to raise the debt ceiling so the country can pay what it already owes, so we can keep the lights on, keep government in business, keep government in business, keep buying stop signs, and supporting veterans, and building roads, and collecting taxes, and all the many things that government does.

But Republicans in Congress this year have decided that they will not to take that routine step that they‘ve taken dozens of times before, that some of them personally, like John Boehner and Eric Cantor and Mitch McConnell have taken over and over and over again with little or no resistance.

This time Republicans say they will not vote to raise the debt ceiling unless Democrats agree to literally trillions of dollars in spending cuts.  Even after President Obama offered up trillions in spending cuts, including cuts to Medicare and Social Security, the Republicans still say no deal.  No deal to raise the debt ceiling like Congress has done dozens and dozens of times before.

If there continues to be no deal, and NBC‘s Chuck Todd tonight tweeted that the two sides look further apart than ever, then on or about August 2nd, on or about three weeks from now, the U.S. government will start to shut down.

One weird result of Congress failing to act here is that it will give the executive branch huge new unilateral powers.  The Treasury Department will just have to start picking and choosing which of the nation‘s bills to pay.  Do soldiers get their paychecks or maybe Social Security checks will have to wait?  What about air traffic control, do we shut down air travel in the U.S.?

How soon do we default on people who bought U.S. treasury bills based on the good faith and credit from as to repay them?

The Treasury Department will get to decide, and not all of that stuff will be able to be done.

A new report from the Bipartisan Policy Center estimates once the debt ceiling is hit the government will only be able to pay 55 percent or 60 percent of its bills.  The knock-on effect of the economy in August alone will be about $134 billion lost.  Ten percent of GDP wiped off the map.

The economy is awful right now, but we are not in recession.  If we hit the debt ceiling in month one, 10 percent of the economy gets shot to high heaven, which puts us back in recession.

Joining us now live from Philadelphia is Mayor Michael Nutter, who joined other mayors in a conference call today with President Obama.

Mr. Mayor, thank you very much for joining us.

MAYOR MICHAEL NUTTER (D), PHILADELPHIA:  Thank you, Rachel.  Thanks for having me on.

MADDOW:  After talking with the president today, how hopeful are you that we can avert this disaster?

NUTTER:  Well, I‘m certainly hopeful and one thing I know is that President Obama is very focused on this issue as he has been for some time.

The president laid out to us that: one, we have to get our fiscal house in order.  Two, we must reduce the deficit.  Three, we must take a balanced approach and make sure that the wealthy are paying their fair share and close corporate loopholes, and four we continue to stay focused on putting Americans back to work.

The president has been consistent in that, he has been strong in that and straightforward and honest with the American public about what needs to happen.  As I listen to your intro, it is clear that without taking action on raising the debt limit, that would be possibly the most irresponsible action or non-action in the history of the United States of America.  It would be a catastrophic event of enormous economic proportions, not just for our country, but questions the full faith and credit of the United States of America and would possibly send many economies around the world into crisis as well.

So, this issue must be addressed and then how it‘s addressed, of course, is that as much important as getting it done as well.

MADDOW:  There‘s no intrinsic relationship between negotiations over long-term debt and deficit issues and the debt ceiling vote.  The debt ceiling vote has been handled as a matter of congressional housekeeping for most of the last generation.

Is there any sense—did you get any sense from the president or do you believe the president could be pushed to a position where he unilaterally acts to raise the debt ceiling because the Congress won‘t do it?

NUTTER:  The president didn‘t mention that.  I think he‘s still hopeful.  And I know, for a fact, he laid out to us he still wants to get the big deal done.  Mayor Antonio Villaraigosa and I and many other mayors were on that call.

The president was clear.  Again, he was focused.  But he wants to get a big deal done.   And this is America.  We can do big things.

You talk earlier about the space shuttle.  I mean, we don‘t send people up on the space shuttle and not bring them back.  We complete the job.  And that‘s what needs to happen in this regard.

And consequences, as I mentioned earlier, would be devastating.  And then, should the debt limit be raised, which, of course, it needs to be—how it gets done, the proposals for some of the cuts would be devastating to cities like Philadelphia and many others across the United States of America.

There‘s a fairness issue here and you cannot balance the government‘s budget on the backs of senior citizens, middle class, folks, students and many, many others.  And we have taken cuts and cuts and cuts, you can‘t just cut your way out of the enormity of the deficit that we are facing right now.  Revenues have to be on the table.

MADDOW:  In terms of the interest of Philadelphia and your planning, is the president encouraging you to take any measures in Philadelphia just in case this sort of economic Armageddon scenario does happen?  Do you have a sense of what the consequences would be for Philadelphia if it does?

NUTTER:  Well, sure.  I mean, the president, again, remains certainly optimistic.  But from what I do here on the ground, we always have to be mindful of the “what if” question.  So, we‘ll be looking at the question of if we were not to receive the various checks that we get from the federal government, as the president laid out, they would have to stop or limit or defer payments to military family.

I mean, could you imagine?  We‘re in a middle of variety of conflicts, families have already their loved ones somewhere in the United States and around the world; they are worried about them.  And now, they have to worry about whether or not they‘re going to get their checks.

Or some senior citizen with Social Security challenges, just making it by, in the aftermath of the worst recession since the Great Depression, were now potentially seeing the great retreat by the federal government, away from cities and away from Americans—all on behalf of this Republican philosophy that we have to keep in place a variety of tax cuts for oil and gas executives, profits at all-time high, hedge fund managers and corporate jet owners.

Are we serious here in the United States of America?  Corporate jet owners?  I have a 9-plus percentage rate of unemployment in Philadelphia.  And when people in Philly are talking about the debt limit, that‘s usually an unemployed person who is at their debt limit, trying to figure out how they‘re going to pay their bills because they need a job.  And that‘s what the focus really needs to be.

Somehow in Washington, they think that they can just talk all day and all night long to Congress, the president is trying to govern.  They want to play politics, and real people in America, in cities like Philly, and L.A., and Chicago, and Atlanta, Detroit, Boston, you name a city—folks are truly suffering.

And we don‘t have time for this kind of brinksmanship, gamesmanship.  They are trying to score points.  And the president is trying to run the country.

MADDOW:  Philadelphia Mayor Michael Nutter—thank you for your time tonight, sir.  I know you have a lot on your plate.  Thank you.

NUTTER:  Thank you, Rachel.

MADDOW:  Before becoming a broadcaster, my friend Ed Schultz was a college football star in Minnesota.  So, who better to referee the verbal scrimmage between presidential Minnesota hopefuls Tim Pawlenty and Michele Bachmann?  That is coming up right after the show, in “THE ED SHOW.”

And, here, “Best New Thing in the World Today,” I can report that the executive producer of this show spent time watching today‘s “Best New Thing” and was moved to tears at his desk.  It says a lot about “The Best New Thing” and him.

That‘s next.

(COMMERCIAL BREAK)

MADDOW:  OK.  So, the U.S. is in black, Brazil is in yellow.  First score is Brazil accidentally scoring on itself.

Then an American player gets a red card for this.  Red card means she‘s out of the game, and the U.S. has to play with one less player than the Brazilians.  OK, definitely a foul.  But a red card?  Seriously?

Then, Brazil‘s penalty kick.  Miraculously—watch.  Uh, stopped by the U.S. goaltender with the super hero name of Hope Solo.  Amazing!

Even more amazing is that the referee said that did not count, because of some other penalty they called on the American that nobody understands.  What?

After the U.S. goalie had that amazing save, Brazil got a do-over, and the second time they scored  And then, the same Brazilian player then scored again.  And even though the player who passed her the ball for this score was off side when she made the pass, the referees didn‘t call for him offsides and Brazil is now leading 2-1.

And then, a thing of beauty, a thing of beauty even if you don‘t care about this sport, even if you don‘t even understand this sport.  This is universal.  This is great.  Watch, watch.

(VIDEO CLIP PLAYS)

MADDOW:  Abby Wambach kept the American women in it, tying the match at two before the USA beat Brazil in penalty kick.

When Hope Solo, an unbelievable save.  And the U.S. wins, one of the old time great U.S. soccer victories ever!

Now, the American women move in to the World Cup semifinals.  They will play against France on Wednesday.

OK.  That is what happened yesterday.  That is not “The Best New Thing in the World Today.”  “The Best New Thing in the World Today” was seen how America reacted as we watched that game.  Watch this!

(BEGIN VIDEO CLIPS)

(CHEERS)

UNIDENTIFIED FEMALE:  How did they make that?  How did they make that? 

How did they make that?

UNIDENTIFIED MALE:   Yes!  Go baby!  Yes, USA!  Yes!

UNIDENTIFIED MALE:  Goal!  Goal!  Goal!  Oh, my God, they scored!  Oh, my God!

(CHEERS)

UNIDENTIFIED MALE:  Yes!

UNIDENTIFIED FEMALE:  Yes!  Yes!

(CHEERS)

UNIDENTIFIED FEMALE:  Yes!  Yes!

(CHEERS)

(END VIDEO CLIPS)

MADDOW:  Is there anything more awesome than that.  I have a control room caution.  Control room, can we play the goal again that resulted in that?  Can we—OK.  Can we please play that again?

(VIDEO CLIP PLAYS)

MADDOW:  Even if you don‘t care about soccer, even if you have never watched another soccer game in your life, there was something about the artistic quality of that cross pass that speaks.  That speaks to where we are at.

I will say, one of the things that is great about the video that we showed of people reacting to the Women‘s World Cup, that video shown—was put together by a man named Robbie Donahoe (ph).  We have link to it at MaddowBlog.com today if you want to see it.

One of the things that is surprisingly satisfying, I don‘t, maybe in a feminist context about this, is to see all these dudes super psyched for the Women‘s World Cup victory.  In women‘s sports, it is so often caricatured that the only people who care about women‘s sports are women.  And so, the economics of women sports are often, I think caricatured as being untenable because women aren‘t as in to sports as men are, and you can‘t possibly expect men to cheer for women.

And so, even though this is just some guy‘s YouTube video, collecting people‘s reaction to the Women‘s World Cup victory, let this maybe the thing that sets to rest forever the idea that dudes don‘t like women playing sports really, really well—really cool.

This is the Women‘s World Cup.  It is unfolding in Germany.  This was played in Dresden.  As I said, the next round for the U.S. woman will be U.S. versus France, which is going to be happening on Wednesday.

And so, if there is no RACHEL MADDOW SHOW on Wednesday, it‘s because the whole staff spent all of Wednesday watching that match, instead of actually doing our work, which was fairly close to the way it worked yesterday, too.

All right.  That does it for us tonight.  Thank you very much for joining us.

Now, here on MSNBC, it is time for “THE ED SHOW.”  Have a good night.

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