updated 7/19/2011 12:12:21 PM ET 2011-07-19T16:12:21

Guests: Elizabeth Warren, John Stanton, David Carr

RACHEL MADDOW, HOST: Good evening, Lawrence. Thanks very much.
And thanks to you at home for joining us for the next hour.

This spring, Republicans in the House and Senate voted to kill Medicare, they voted for the Paul Ryan House budget that would get rid of Medicare by privatizing it, by turning it into a coupon program. That vote was almost unanimous among Republicans in the House. Only four Republicans voted against it, 235 voted for it.
In the Senate, five Republicans voted against it and 40 senators voted for it.

And that nearly unanimous Republican endorsement of killing Medicare, that vote for the Paul Ryan budget led directly to the loss of a safe Republican congressional seat in a special election in Upstate New York. That was back in May.
The Democrats in charge of taking back the House for their party in 2012 rather gleefully announced that to take back the House they did have a three-part strategy, and their three part strategy was: Medicare, Medicare, and Medicare.
If every swing state and swing district Republican who have voted to kill Medicare plan started to sweat over their fate in the next election, even those worried Republicans all spared a thought for this poor sap in Nevada. His name is Dean Heller, and because of the quirk in the timing of when John Ensign in disgrace over his sex scandal and when the Nevada governor appointed Dean Heller to fill Ensign‘s seat, because of that quirk, Dean Heller is the only poor sap on earth who had to vote to kill Medicare twice.
While he was still in the House, he voted for the plan to kill Medicare. Then he got elevated to the Senate just in time to vote again, this time as a senator, for the same thing again—voting not once, but twice to kill Medicare. And he represents a swing state.
And this is what Dean Heller‘s life is like now.
(BEGIN VIDEO CLIP)
NARRATOR: This spring, Congressman Dean Heller voted to end Medicare. Then, Heller was appointed to the Senate where he voted to leave Nevada seniors to the mercy of the private insurance companies. Now, we get to vote on Heller‘s replacement in the House of Representatives.
And for Nevadans, it comes down to one issue, will candidates vote like Dean Heller, because if they plan to vote to end Medicare and double seniors costs like Heller, why would they deserve our vote?
(END VIDEO CLIP)
MADDOW: Whether or not you are a sucker for a walking baseline in any ad, I confess, voting for the Paul Ryan kill Medicare budget is so politically potent—what you just saw there is that vote being wielded as a cudgel against people who didn‘t even necessarily vote for it themselves but who might be sort of like the people who did vote for it.
This kill Medicare vote that the Republicans took this spring, this is what‘s known in politics as a humdinger, Democrats think those votes in the spring of this year are still going to be driving votes in November of next year. That is how Democrats feel about the Republicans/Paul Ryan kill Medicare budget.
But the Republican leadership in Congress, looking at that same data apparently looks at that kill Medicare vote from this spring and thinks we did not go far enough.
The Paul Ryan kill Medicare budget would have capped spending at below 20 percent of GDP. To get to cuts that dramatic, Republicans did something as dramatic as killing Medicare and a lot more besides. Now, Republicans are saying they won‘t vote to raise the debt ceiling unless spending is capped at even less than that 20 percent. They now want to cap spending at 18 percent of GDP. In real dollars, that‘s about $300 billion smaller than the Paul Ryan kill Medicare budget.
So, Republicans had a chance to vote on a budget that made cuts like that back in April. Back in April, they considered an 18 percent spending cap, and even Republicans considering their own proposal to do that, earlier this year, even Republicans thought it was too radical. More Republicans voted against that than vote for it.
But now, they are insisting that they must vote on that thing again. They want to do it now. They want to act out that little pageant of symbolic voting before they will agree to take a vote on the debt ceiling. That‘s where the fight is right now on whether or not we are going to default on our debt, Republicans in Congress insisting on voting on something that‘s more draconian that their kill Medicare budget, something so draconian they themselves already voted it down earlier this year.
If by some miracle that idea ever passes, which it won‘t, President Obama said today he would go ahead and veto it.
On Friday, the Progressive Change Campaign Committee brought signatures from about 200,000 Obama donors, volunteers, and supporters to President Obama‘s campaign headquarters in Chicago. These are not just 200,000 random Americans, these are 200,000 people who say they knocked on doors and walked precincts and raised money and gave money, and helped the last time that Barack Obama ran for president in 2008.
It brought with them on Friday a warning, a message to the president, to not follow the Republicans down the rabbit hole on these budget fights.
(BEGIN VIDEO CLIPS)
UNIDENTIFIED MALE: What this is about is about letting the president know how desperately we want to support his campaign, how much we want to be volunteering and being right in the fox hole with him again but we simply cannot if he supports cuts to Medicare and Medicaid, and Social Security benefits.
UNIDENTIFIED FEMALE: I‘m 59 years old. And my heart beats deeply now. When I heard he‘s willing to cut Medicare, Medicaid, and Social Security, he signaled to me that my future is weak.
UNIDENTIFIED FEMALE: I cannot put my time and money towards that campaign if those programs are cuts.
UNIDENTIFIED FEMALE: No, I won‘t. Not if he cuts Medicare and Social Security. I‘m 61. I‘m looking at a retirement in a few years. If this is just a give away on the table like everything else has been, he has lost my support completely.
(END VIDEO CLIPS)
MADDOW: As we run out of time on the issue of raising the debt ceiling, Republicans in Congress are telling the president that he has a choice for the economy, forgive the war metaphor, but essentially what they are saying either blow up the economy with a cruise missile or they can blow up the economy with a dirty bomb. Either we‘ll take a direct hit because we‘ll default on our debt and will incinerate 10 percent of GDP in the first month of default and we will never ever get that back and we‘ll definitely be back in recession and likely into a depression—sounds fun.
Or the dirty bomb, the proposal they themselves rejected as too insane for even their own vote just months ago—their proposal to cut spending hundreds of billions of dollars below even their kill Medicare budget—their kill Medicare budget which horrified even Jack Kemp‘s old blood red district in Upstate New York enough to turn that blood red district blue.
The president‘s own campaign volunteers now telling him to reject the framing that Republicans have insisted on, not take the Republican bait to go after Social Security and Medicare.
And in the mix of all of this, in the mix of what‘s going on on the right and what is going on on the left, yesterday in Washington, on a Sunday, the president announced the new head of the Consumer Financial Protection Bureau. It will not be Elizabeth Warren, the popular champion of the agency who was frankly better than anybody else in the administration about communicating with people on economic issues of all stripes.
Instead, it will be Elizabeth Warren‘s deputy, a crusading former Ohio attorney general praised today by Elizabeth Warren herself, saying that he has a strong track record of fighting for families, praised today by his home state senator, Sherrod Brown, who said there‘s no question of his qualifications, and praised today even by the current attorney general of Ohio, a Republican, the man who beat him in an election last year, who says that he will do a good job.
The Consumer Protection Agency officially opens for business on Thursday. Republicans have long said now that they would oppose not only Elizabeth Warren running that agency, but they would anybody running that agency, because they don‘t want that agency to exist, because they think consumer financial protection is some sort of nefarious anti-banking scheme and they are with the bankers.
So, this is going to be a fight. This is always going to be a fight, but now we know, thanks to how far the Republicans are pushing things in Washington right now, now we know that this is going to be a fight on a high wire over an abyss.
Elizabeth Warren writing today on the White House blog, quote, “We got this agency by fighting, we stood it up by fighting, and if it takes more fighting to keep it strong and independent, then we can do it.”
Joining us tonight for “The Interview” is Elizabeth Warren, the attorney and Harvard law professor who is recognized as the principal architect of the Consumer Financial Protection Bureau, which is scheduled to start operations this Thursday. She‘s been serving as an assistant to the president and special advisory to the president in advance to that start date.
Professor Warren, thank you so much for your time.
ELIZABETH WARREN, HARVARD LAW PROFESSOR: Thank you. It‘s a pleasure to be here.
MADDOW: This is a landmark week for you. The agency you championed comes into existence, with a slew of enemies already in Washington, which you wrote about today.
How do you feel about this first week and the chances for this agency‘s survival?
You know, I actually feel great, and I‘ll tell you why I feel great. I feel great because the agency is strong, because we have attracted tremendous people to come here and work, because there are people around the country who follow what we do and who are behind it, because we‘re really going to make this work. And look, if it takes a fight, we‘ve fought before, we‘ll keep fighting.
Because at the end of the day, we are fighting for America. We are fighting for middle class families who just want a fighting chance when they go into the marketplace. They just want to be treated honestly and fairly. They don‘t want to be cheated.
This agency is there to be a cop on the beat to make sure there‘s some basic fairness in the system. That‘s all it‘s about.
Given the Republican criticism of the agency and this really palpable fear in Washington over you as a potential nominee here and what this agency is going to do—let me just ask you for some specifics. One of the things you described today in the piece you wrote for the White House blog is that you set up an Office of Servicemember Affairs, reaching out to military families and working on problems they face.
What is that need there that you are trying to meet? What is the agency doing to meet that need?
WARREN: Oh, you know, this has been one of the very first parts we filled in in the agency as we‘re trying to build all the pieces out. And that is that Holly Petraeus came into me the second week I was on the job and trying to set this agency up and started talking about what‘s happening to military families.
And, look, I knew some of it, but boy, I didn‘t know it firsthand the way that Holly Petraeus knew it—about how new service members are targeted by those who figured out they can just peel their money away, about what‘s happening to service members when they are overseas and how they are not getting the full protection of the law that they are entitled to, about how the number one reason in America for losing your security clearance is a problem with a creditor.
Holly said there‘s a lot you can do with this agency and I really want to see you do it. I had a couple of conversations with her and I though, shoot, I think we‘ve just seen the person who should stand up this office and that‘s what she‘s been doing. We‘ve gone out to military bases around the country. I‘ve gone with her to a couple of them. She‘s gone on her own to several—really starting the conversation with military families about what‘s happening to them and what we can do to be helpful.
If you go to our blog, let me do a commercial, www.consumerfinance.gov. There are a lot of pieces on it right now, but one is there for military families and they got an ongoing conversation with Holly and the staff she‘s building.
We just met last week with the judge advocates general of the different military branches and are working out with the Department of Defense how we can work in concert to be stronger to be there for military families.
Look, there are major financial institutions that have admitted that they didn‘t follow the law, that they foreclosed illegally against military members and their families when those members were deployed in Iraq and Afghanistan and other places outside the United States. We‘ve jumped in on that and asked for what procedures they are using to make sure they are going to be in compliance with the law. And starting this Thursday, we get to start putting our cops on the beat.
We‘re here for military families, but, you know, that‘s just a microcosm of what‘s happening in all of America. That‘s what this agency is for. That‘s what we‘re doing.
MADDOW: Hearing you talk about that with such passion, and I know this is what you‘ve been doing for all this time—I have to ask you if you wish you had been appointed by the president to be running the agency, and if now that you are leaving Washington, heading home to Massachusetts, if you feel you‘ve developed a Washington allergy or if you‘d like to get back in there?
WARREN: Well, let me start with the first part, because I really think we all have to remember this. We would not have a consumer agency if it were not for President Obama. Two years ago, right about now, he looked out and said the consumer agency, that‘s what I want to put in financial regulatory reform.
Over the next year, while everybody fought back and forth over the regular reform bill, there were a lot of offers on the table to get something else if you‘d kill the consumer agency or if you‘d weaken it. He consistently said no.
And a year ago right now, this week, he signed into law a bill that made this consumer agency exist and as strong and independent way.
Now, since then, what‘s happened is there are folks on Capitol Hill, Republicans in the Senate and the House, they voted against the bill to begin with—to they voted against the agency to begin with. They‘ve introduced bills to try to cut our funding. They‘ve introduced bills to try to make us less independent. They‘ve introduced bills to try to make it so we‘ve got a gummed up structure so we won‘t be able to get anything done. And they have introduced bills to flat out repeal us.
I want to be clear, the reason I cannot run this agency is because of those people. They‘ve made it perfectly clear they are not going to let this agency go forward if I‘m there—fine. I can step away from this. What I care about is this agency.
The president has now made his nomination. He‘s a good man, Richard Cordray is—and I think it‘s time to take the fight straight to the Republicans. We need a director in place, that is the law, and we are not, not, not going to let the minority come in and dictate the terms of this agency, rip its arms and legs off before it‘s able to help a single family.
MADDOW: When you talk about taking it straight to the Republicans, do you want to be part of that fight in the future?
WARREN: You know, I‘m going to be part of that fight one way or another, Rachel. Let me just be clear about this.
I have really done three things in my life, I have taught school, because that‘s what I do. I‘ve done research around what happens to middle class families and tried to understand that. And I have thrown rocks at people that I think are in the wrong. I‘ve done it before, I‘ve continued to do it, and I‘m going to do it in the future.
MADDOW: Elizabeth Warren, consumer advocate and Harvard law professor
thank you for taking time on this night of all nights, especially, to talk to us about this. Best of luck, I hope we‘ll stay in touch.

WARREN: Thank you.
MADDOW: You should know, if you don‘t already, that there is an effort underway by liberals and Massachusetts Democrats to make Elizabeth Warren convinced that she ought to run for Senate against Scott Brown. Just so you know. That‘s just happening. I‘m just reporting, you decide.
As we steam headlong toward on purpose default of the nation‘s debt, and a potential downgrade of the nation‘s credit score, today in Washington, things did not just get not better, things got weird. Things got surreal even. Instead of running around like they have been doing, today was like freeze tag. It all stopped dead in its tracks.
I think we figure out who was it in this game of freeze tag who made everything get so weird today in Washington. That‘s next.
(COMMERCIAL BREAK)
MADDOW: Here‘s how Citigroup describes it, “Asking what the U.S.
economy might look like after a possible U.S. Treasury default is akin to
asking ‘what will you do after you commit suicide.‘”
Here‘s how the treasury secretary put in a meeting with Senate Democrats. “If this country defaults on its obligations, it will be much worse than the Great Depression. It will make the massive financial crisis of 2008 look mild. It will make what we just went through look like a quaint little crisis.”
When Moody‘s said that it‘s considering downgrading our nation‘s credit scores so it won‘t be a AAA anymore, their threat was not to downgrade the nation once we default on our debt on August 2nd, their threat was to downgrade us now, now, mid-July, because we have gotten this close to default, because Congress is willing to put the full, faith, and create of the United States in this much danger, because of something they could resolve with a vote if they wanted to.
And if we do actually default on purpose, not only does the government effectively shut down, not only does Social Security checks very likely stop going out to the people, for example, who live off that check, not only do $50 to $100 billion likely just disappear for anybody who holds Treasury bills, bye, bye, 401(k), not only does the stock market tank, but interest rates, which are the only good thing in the economy right now, the only point of flexibility in the economy that‘s limping around, interest rates which are near zero now—if we default, you know what happens to them?
Hoink, which means, you take a direct hit on your mortgage, on your credit card bills, on your car loan, on your student loan, on your home equity loan. On any loan you got. This will have a personal affect on you. As tough as it gets to you for an individual human, it will get tough in all the same ways for businesses, particularly for small businesses, too. You‘re not going to be able to get loans, and your teams are going to get worse, same things for businesses.
And as we‘ll all throw our hands in the air and scream as we watch indicators like this again, the whole U.S. economy will grind to a halt alongside the government. That‘s what we are coming up on now.
And with that baring down on us now—I mean, right now, the debt ceiling has to be raised now. We don‘t necessarily have until August 2nd. Some of this stuff may start to happen anyway. And with that baring down on us now, House Republicans today in Washington decided that some of the stuff they were going to work on towards getting this whole issue settled, they are going to put it off until next week. They‘d like to maybe consider a constitutional amendment?
Remember that constitutional amendment idea that didn‘t go anywhere back in the ‘90s? Maybe we should kick that around again, maybe this is a good time to try a few symbolic votes, try to get some messaging done. We‘ve got time.
In what could not be a more urgent crisis environment, a crisis created entirely by Republicans refusing to do something they did five times while George W. Bush was president, in a Congress-created crisis that is now truly urgent, Republicans now say—they‘d like to slow things down. What train barreling down at us? They are going to schedule some votes for maybe—I don‘t know, you business on the 16th of never at a quarter past yes, right?
Joining us now, John Stanton, Washington reporter of “Roll Call” newspaper.
John, it‘s good to see. Thanks for being here.
JOHN STANTON, ROLL CALL: It‘s good to be here.
MADDOW: What‘s going on right now among Republicans? There does not seem to be a sense of urgency there. Do you think that‘s a negotiating tactic? Or you have any other sense of where the Republicans might be coming from?
STANTON: Yes, I think it‘s a negotiating tactic sort of within their own conference frankly. I think that the leadership has a sense of urgency privately right now. They had, you know, seemed like they had it sort of out there in public a week ago and they backed away from that. They are now supporting this “cut, cap, and balance” bill the conservatives want and a balanced amendment.
And this is more really a negotiating tactic with their own conservatives. They‘re trying to convince them that they are serious about trying to pass these bills so that when they do fail, because they aren‘t enough Democratic votes, they will then need to go back to them and say we have to do the McConnell plan or some other debt limit raising kind of legislation and they need them to buy into it.
And right now, they just don‘t have that support within their own conference. That is the dynamic I sort of thought was going on, and that‘s why my hair spontaneous come busted today—this is now a wig—when I saw they were putting off the vote until next week because if the whole idea is to get these votes out of the way, fail on them and then start negotiating again with their base, we‘re out of time if this isn‘t even going to start until next week.
Well, they are in a bit of a tricky spot quite frankly because their base thinks what they are trying to do is what you said, have these votes, which is have these votes, show that they can‘t pass these things, and then move on to something else that they can do. And to get their base to do the second step, they need them to not believe the first step is what‘s happening, they need them to believe they want to do these things and they have some chance to doing it.
And so, this week they decided to postpone the vote at least, you know, for now in the hopes, I guess, technically of finding some Democratic votes. The problem is that there are no Democratic votes out there for them. The way they have this balanced budget amendment structure, there‘s no way they‘re going to get the 50 or 60 Democrats they are going to need to pass it.
They just—the votes aren‘t there right now. And leadership knows this, but the rank and file is not—is not convinced and, you know, they are not particularly convinced that the debt limit is a huge problem. They think we can hit it and pay Social Security and pay our interest and not have any kind of a major impact on the economy.
MADDOW: Well, that last point, I think, is maybe the most worrying, this idea that it‘s not posturing or strategy or trying to get the best deal, but there are some number of Republicans for whom there really isn‘t any urgency because they are sort of in denial about what the debt ceiling means. Is—how significant is that number of Republicans who feel that way?
STANTON: It‘s significant, and it‘s growing, which is concerning some Republicans frankly. You know, there are those within the leadership that will look at that and they are a little alarmed, frankly. You know, last week, they had one of George H.W. Bush‘s top economic advisors come in and address the conference to try to convince them of the seriousness of the issue and consequences of it, and members leaving that said they didn‘t believe him partly because George H.W. Bush raised taxes.
But probably they feel that this something that the Obama administration and economists on the left are pushing, and the number is growing. I think leadership thought that number was going to come down as we got closer to August 2nd, that more people would feel the sense of urgency, the need to do something. It‘s been sort of the opposite for them, which I think is complicating things a lot more than they expected.
John Stanton, Washington writer for “Roll Call,” who‘s reporting on this I have found really helpful for understanding what‘s going on—thanks a lot, John. We appreciate it.
STANTON: Any time.
MADDOW: Finding out the number of default denialists in the Republican Party is actually increasing, it‘s kind of like you always knew somebody was sort of an end timer, like the end is nigh, right? There‘s only a few days left.
It‘s one thing to know somebody has an apocalyptic mindset, it‘s another thing to find out that that person has been in charge of your retirement account or that person has been charged of your savings account for your whole life and you didn‘t know. It‘s just terrifying.
All right. You ever been in the grocery store and seen the ads they put on the floor now? So, even if you are staring at your feet, like I do avoid over-lit visual sensory overload in the grocery store, you are still looking at ads because the ads are on the floor. It turns out there‘s a connection between the ads on the floor of the grocery store and the really shaky looking future of the guy who owns FOX News. That‘s next.
(COMMERCIAL BREAK)
MADDOW: This week is the one-year anniversary of the capping of the Deepwater Horizon oil well in the Gulf of Mexico. All that is still not cleaned up, by the way. Oil continues to wash ashore and the latest Coast Guard survey in Louisiana taken this month showed five miles of beaches and eight miles of Louisiana marshes heavily oiled.
For the anniversary of capping that well, though, BP has decided to celebrate with a new oil spill in Alaska, a ruptured pipeline at Lisburne field in Prudhoe Bay on Saturday spewed between 2,000 and 4,000 gallons of what was described as a mixture of methanol and oily water onto the Alaskan tundra.
I wonder how they‘ll celebrate the two-year anniversary.
(COMMERCIAL BREAK)
MADDOW: Have you ever found yourself walking down the aisle of your local grocery store and then you get stopped in your tracks by something like this?
Ahh! Not actually some poor guy who has managed to get him pinned underneath the very heavy rack of the medicine aisle. Now, this is a sort of cool originally advertisement placed on the floor.
This is ad placed in this case by a pain killer. It‘s designed to capture eye and make you want to buy their product. No matter it where it hurts, this painkiller thingy targets your pain. OK, look up, look up, now buy that particular painkiller right here in the aisle.
This is called floor ads for obvious reasons. Floor ads are big business across this country because—come on, if you‘re a company who sells stuff in supermarkets, wouldn‘t you want a big, shiny floor ad featuring your product on the floor like this one?
A few years ago, one of the biggest floor ad companies in the entire country, a company called Floorgraphics mysteriously losing some of its top clients. Floorgraphics was not losing its clients because people didn‘t want floor ads anymore. I mean, come on, who wouldn‘t want floor ads?
They started losing their clients because a rival company in the industry was starting to steal their clients. Floorgraphics was just a small firm based in New Jersey, but a really big player had entered the floor ad arena—a big player with an even bigger corporate parent, a company you may have heard of. News Corp decided that it wanted to get into the floor ad game.
News Corp had a U.S.-based company called News America Marketing that was already involved in the supermarket advertising business but really wanted in on the awesome floor ads. The only problem for the big Rupert Murdoch-owned News America was that this small New Jersey company, Floorgraphics, was dominating this market. You say problem, News Corp says opportunity.
News Corp set its sights on taking this little company down. They had the right guy to do it. The head of News America at the time was a man named Paul Carlucci. According to a “Fortune” magazine profile, quote, “Carlucci one tried to motivated his sales force by playing a scene from the film ‘The Untouchables‘ in which Al Capone crushes a rival‘s skull with a baseball bat.”
Who better to take down this puny little New Jersey company than the baseball bat crusher guy? Rupert Murdoch‘s News America began to play hardball with Floorgraphics, so much so that in 2006, Floorgraphics finally had enough. They filed an unfair business practices lawsuit against News America.
Floorgraphics said, “News America has engaged in illegal computer espionage by breaking into our password-protected computer system and obtaining proprietary information.”
Computer espionage, hacking? Where else I heard this before?
This complaint filed in New Jersey federal court in 2006 accuses Rupert Murdoch‘s American Supermarkets Services Company of repeatedly and systemically hacking into their computer database. “On at least 11 separate occasions, News America intentionally, knowingly, and without authorization breached our secure computer system and repeatedly accessed, viewed, took, and obtained our most sensitive and private information.”
How did they know it was News Corp that was responsible? Quote, “Our investigation traced the unauthorized access to a computer with an IP address registered at the time to News America.”
So, was Rupert Murdoch‘s News Corp guilty of hacking into a competitor‘s computer system and then stealing all of their sensitive material? Don‘t know. After just a few days of testimony in the trial, News Corp settled the case out of court reportedly for about 29 million bucks. Shortly after settling, News Corp then bought the company that had accused it of hacking.
Little fish meet big fish, chomp.
About 12 hours from right now, Rupert Murdoch and his son James Murdoch will be testifying before the British parliament about the phone hacking scandal that is now threatening to take down at least some of the Murdoch media empire ahead of what is expected to be must-see TV live here on MSNBC naturally—News Corp has provided a statement to NBC News which essentially sets up the Murdoch defense.
It reads in part, quote, “We reject the notion that the issues at News International are somehow indicative of our culture.”
This was an isolated incident. This hacking stuff, this is not we at News Corp do business. It was one little paper. The rest of us don‘t even recognize that paper.
That argument is key to Rupert Murdoch surviving this scandal. This is a “News of the World” problem, they‘re going to say, not a Murdoch Inc. problem.
The only problem with that defense, well, hello there, Mr. Floor Ad Guy, spare a Motrin for Mr. Murdoch?
As David Carr, the excellent media reporter for “The New York Times” wrote today, the way that News Corp cleaned up this alleged hacking U.S. scandal—U.S. hacking scandal with the floor company, essentially paying large sums of money to sweep the whole thing under the rug, that has sort of been the way they‘ve been operating in the U.S. for awhile now.
Mr. Carr reporting that News Corporation has paid out about $655 million to make embarrassing charges of corporate espionage and anti-competitive behavior go away.
Amazing what money can do.
And if you are wondering, as you should be, whatever happened to that News Corp executive who motivated his staff by playing the Al Capone skull crushing with the baseball movie scene, whatever happened to good-old skull crushing Paul Carlucci—he got promoted. He‘s now publisher of Rupert Murdoch‘s own “New York Post.” Tada!
Joining us now is David Carr, media columnist for “The New York Times.” His column this morning brought up News Corp‘s extreme business tactics in the U.S.
Mr. Carr, thanks very much for being here.
DAVID CARR, THE NEW YORK TIMES: Pleasure to be with you, Rachel.
There is reporting from “Bloomberg News” tonight that News Corp directors are contemplating replacing Murdoch as CEO of the company, elevating the company‘s chief operation officer, Chase Carey, to the top position. CNBC is reporting that no such meeting took place.
Do you place much stock in these reports, and how big of deal would it be?
CARR: Well, it would be a massive deal. It‘s hard to imagine a News Corp without Rupert Murdoch. Those of us who covered the beat have the kind of Stockholm syndrome where we lived with Mr. Murdoch so long we can‘t imagine life without him.
I do not think “Bloomberg” was suggesting that everything depends on his testimony tomorrow. Tomorrow depends on him retreating and apologizing -- two things he‘s not very good at. So, I think we can assume it‘s not going to be a great day for Rupert Murdoch, but the idea that they are going to pivot from that and immediately replace him with Chase Carey, I‘m not buying that.
MADDOW: In terms of his—I guess in terms of the scoop of his culpability, is it key to isolate this as a News International, or even a “News of the World” problem if these types of business practices can be shown to extend throughout the empire? Is that the key to the extent of his culpability?
CARR: I think that from business perspective, it‘s OK that Britain is on fire. I mean, that‘s the heart of many of his own interests in terms of the papers and where a lot of his talent is. But in the business sense, it‘s not that big of a deal.
If the flames leap ashore and head across to America, in a sense it already has, Les Hinton, publisher of “The Wall Street Journal” is out. The market cap of News Corp is down. There are stories like the one I worked on and others bringing butter broader issues of culture into question.
It‘s really important that they somehow contained it. But every ledge that they had built, OK, here‘s Rebekah Brooks, here‘s Les Hinton, the beast just keeps eating the story will not quit.
MADDOW: Does the size of the story, and therefore, the height of the flames and therefore their chance to bridge other continents depend on how much damage this does to David Cameron and the British government, to have the head of Scotland Yard and the number two cop at Scotland Yard and the communications director at Downing Street for Cameron himself all either resigned or arrested at this point—it seems like the political fallout in Britain is still really continuing.
CARR: I think it‘s all of the pieces that makes the story so darn interesting, that it‘s tough to look away. “The Wall Street Journal” editorial today suggesting people like you, people like me, were far too interested in this and we‘re engaging and kind of Schadenfreude by taking joy in the pain and misery of Mr. Murdoch and the people that work there.
At the same time, if you looked at the front page of “The Wall Street Journal,” splash, big story, three more stories inside. You have an editorial you‘re ganging up on us, well, hey, your own paper, the biggest, most important business paper in the world, sought it fit to publish four hard-hitting stories about it.
MADDOW: Right after you cut the Schadenfreude with a chainsaw line, which I thought was a great line—
CARR: Not bad
MADDOW: -- while being insulted by it, I admired the insulter, right in—within the same paragraph, we get, they want—they, to us baddies ad the rest of the media—they want their readers to believe based on no evidence that tabloid excesses of one publications somehow tarnished thousands of other News Corp journalists across the world, making the case immediately that the isolate-ability of the crime is key to its importance.
CARR: I think it‘s important for people to think of News Corp as a free floating nation state that operates by its own rules, that roams off corners wherever it can. It takes regulatory and tax advantage of whatever jurisdiction it operates in. For the most part, those of us who cover the story have admired their aggression and their ability to win over and over.
It was assumed that they collagist up to the line not just outside the line. I thin part of what‘s going on is that illusion of sort of invincibility that Mr. Murdoch will get whatever he wants, “The Times of London,‘ whether it‘s “The Wall Street Journal,” has been blown away. And there‘s a kind of—at least in Britain, a kind of British thing underway where, you know, nobody would ever say anything about this guy, and the parliament tomorrow, you can bet people are going to be screaming at the top of their lungs. It‘s going to be a rugged day for both Murdochs tomorrow.
MADDOW: David Carr, media columnist for “The New York Times”—it‘s nice to have you here. Thank for coming in.
CARR: It‘s my pleasure.
MADDOW: Thanks.
Coming up on “THE ED SHOW” tonight, Ed talks with Senator Sheldon Whitehouse who apparently understands what political advantage is. Senator Whitehouse just introduced a resolution to take budget cuts to Medicare and Social Security off the table in these negotiations happening in Washington.
And, here, “Best New Thing in the World today,” still to come—most unexpected use of “Jeopardy,” the game show, in big confrontational Washington partisan politics.
All ahead.
(COMMERCIAL BREAK)
MADDOW: When people run for office now, in addition to making regular campaign videos, regular ads—they also have a tendency to make little movies about themselves that they post online. Tim Pawlenty has been the most over-the-top with it this year in Republican presidential politics, trying to cast himself as not the boring, but nice guy from the Upper Midwest, but instead as Tim Pawlenty, movie star.
(BEGIN VIDEO CLIP)
TIM PAWLENTY ®, PRESIDENTIAL CANDIDATE: This is the United States of America. It takes extraordinary effort, it takes extraordinary commitment, it takes extraordinary strength. The Valley Forge wasn‘t easy. Landing on the moon wasn‘t easy. Settling the West wasn‘t easy.
(EN VIDEO CLIP)
MADDOW: Oh, it‘s very exciting! Settling the West wasn‘t easy!
Time Pawlenty—this is kind of the trend in political videos.
I, politician struggling with poor recognition, I am secretly an American hero. Discover me.
I love this stuff, even when the candidates ugh me out a little bit, I love these “I am a hero” videos.
But you don‘t have to go very far back in time to find a kinder and gentler era in “I‘m running for office” filmmaking. Compared with Tim Pawlenty in all but a cape and tights this work, Bill Clinton‘s man from hope video from 1992, that one seemed totally over-the-top emotionally at the time. But now when you look back at it, in contrast of what you see now, it‘s almost like a documentary.
(BEGIN VIDEO CLIP)
WILLIAM J. CLINTON, FORMER U.S. PRESIDENT: I was born in a little town called Hope, Arkansas.
(END VIDEO CLIP)
MADDOW: Perhaps the all-time lowest key of all low-key campaign videos is this next one from the 2008 Ohio attorney general‘s race in a seven-minute video, a seven-minute movie about the candidate, it features more than a solid minute of footage from a TV game show, “Jeopardy.”
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: In 1762, Ben Franklin was given an honorary degree
by this English University. Richard?

RICHARD CORDRAY: What is Oxford?
UNIDENTIFIED MALE: Oxford is right, also for $200 more.
I suppose it was appropriate that Richard Cordray would come up with a correct response on the last clue we had regarding Oxford University, because this man received a B.A. at Oxford, is that right?
CORDRAY: That‘s right. Thank you, Alex.
UNIDENTIFIED MALE: You‘re there on a scholarship program?
CORDRAY: Yes, from the British government. It‘s called the Marshall Scholarship Program.
(END VIDEO CLIP)
MADDOW: After electrifying the people of Ohio with that in a campaign video featuring his jeopardy skills and the little human interest interview part, did that Marshall scholar go on to get elected attorney general of the great state of Ohio? Yes, he did. Richard Cordray, after his star-turned on “Jeopardy,” five-time champ, who went on to be treasurer of Ohio and attorney general of Ohio and he earned a reputation as attorney general for going after banks and predatory mortgage lenders with some obvious relish.
And now, Richard Cordray has been named to head up the Consumer Financial Protection Agency, the agency that is supposed to make sure banks write mortgages in a way that is fair and understandable. And that credit card companies send you rules and regulations in plain language so you can understand them—even you as an ordinary American, we‘re all supposed to be allowed to understand our financial products now.
The idea that America ought to have a thing like that was, of course, championed and developed by our guest earlier this hour, Elizabeth Warren. Elizabeth Warren brought Richard Cordray from Ohio to Washington, D.C. to run the enforcement division of the new Consumer Financial Protection Agency. President Obama today made the case for Richard Cordray running the whole enchilada.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Back in the ‘80s, Richard was a also five-time Jeopardy champion and a semifinalist in the Tournament of Champions. Not too shabby. That‘s why all his confirmation -- all his answers at his confirmation hearing will be in the form of a question. That‘s a joke.
(END VIDEO CLIP)
MADDOW: It‘s never good when you have to say it, but that will be only the first sort of funny thing about the process from here on out. Forty-four Republican senators—get this -- 44 Republican senators have already said they will block the appointment of anyone appointed to run the new agency because, frankly, honestly, they don‘t want a new agency looking after consumers‘ interests in financial matters.
But, now, we have got a nominee which means the president is calling the Republican‘s bluff on this one, and Elizabeth Warren—as you heard earlier this hour—said she is psyched about this nomination and the only thing we know about this nominee that is not a good thing at this point, the only thing we know that this nominee is bad at so far is this.
(BEGIN VIDEO CLIP)
CORDRAY: How about $400, please, Alex.
UNIDENTIFIED MALE: Alrighty. Here the clue first. Group which tops the country charts with the following song about a truck driver. Listen.
(MUSIC)
CORDRAY: Who are the bandits?
UNIDENTIFIED MALE: No. I sensed you were calling a blank on that one. A popular group in country music, Alabama.
(END VIDEO CLIP)
MADDOW: The Bandits? Because now he gets to go out—Richard Cordray,. five-time Jeopardy champion, first time presidential nominee for the Consumer Financial Protection Agency, the Republicans do not want to exist. I will take exciting partisan Washington standoffs for a trillion dollars please, Alex.
(COMMERCIAL BREAK)
MADDOW: Over the past week, our “Best New Thing in the World” today has repeatedly involved the amazing nail-biting, this is why people love sports sport. That was team USA‘s thrilling brink of elimination run through the World Cup of soccer this past week.
There was the moment in the quarterfinals against Brazil—Brazil is
in yellow here—when forward Abby Wambach tied the game with a header in
extra overtime, giving the U.S. the chance they needed to go on and win in
penalty kicks. So exciting, an all-time classic moment in American sports
very exciting.

Then there was the incredible semifinal against France. France is in blue here, where the U.S. scored three times, securing their place in the final and giving the normally empty sports world on the day after the all-star game, a reason to live, a reason to thrive even.
It all led to yesterday‘s women‘s World Cup final. Pure pins and needles, edge of your La-Z-Boy action from start to finish. Team USA played incredibly. In the end, they could not close the deal.
Ultimately, the sports miracle belonged to team Japan. They are the ones in blue here. Team Japan won the World Cup on penalty kicks.
Disappointing as that was for team USA, it has to be said sort of a great moment for team Japan and for their country. The team itself and their coaches saying they took strength and inspiration from their country‘s perseverance after March‘s devastating earthquake and tsunami.
One of the players on the team had worked at the approximate Fukushima nuclear plant from 2005 to 2009. I know.
Last night‘s victory, Japan‘s first ever soccer World Cup win made the country of Japan very happy, and, frankly, it is good to see them happy given what they‘ve gone through the past few months.
Team USA played brilliantly all through the competition until the end. It was amazing. They‘re now back on U.S. soil where they really do deserve a welcome as sports heroes.
And as for “The Best New Thing in the World Today”—real live members of team USA are going to be on this show tomorrow night! We just got confirmation late this afternoon. I‘m so psyched I‘m going to die.
That does it for us tonight.
Now, it‘s time for “THE ED SHOW.” Have a great night.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
END
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