'The Last Word with Lawrence O'Donnell' for Friday, August 26, 2011

Guest Host: Chris Hayes
Guests: Mark Potter, Bill Karins, Lester Holt, Mark Merritt, Maggie Haberman, Arthur Delaney, Nate Silver


CHRIS HAYES, GUEST HOST: People from North Carolina to New York City
are trying to minimize the damages from Hurricane Irene, and so too are the
politicians.

(BEGIN VIDEOTAPE)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Get the hell off the beach in
Asbury Park and get out.

CHRIS JANSING, NBC NEWS: Get out of the storm`s path now.

UNIDENTIFIED FEMALE: Sixty-five million Americans could feel the
wrath of Irene.

CHRISTIE: Do not waste anymore time working on your tan.

HAYES (voice-over): What happens next is up to Mother Nature.

UNIDENTIFIED MALE: This is still a very strong and intense storm.

UNIDENTIFIED MALE: And we are very fearful that it`s going to be a
very bad, life-threatening day.

UNIDENTIFIED MALE: Time is running out, but they can still get
ready.

HAYES: Politicians understandably are running for cover as well.

UNIDENTIFIED FEMALE: President Obama is cutting his vacation on
Martha`s Vineyard short by a day.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you are in the
projected path of the hurricane, you have to take precautions now.

MAYOR MICHAEL BLOOMBERG, NEW YORK: It`s heading basically, directly
for us.

CHRISTIE: Need some water? Are you comfortable?

GOV. BEV PERDUE (D), NORTH CAROLINA: This hurricane is real. It is
and headed our way.

UNIDENTIFIED MALE: I am certainly satisfied with the level of
preparation.

PERDUE: More than 3.5 million people are involved.

UNIDENTIFIED MALE: The most selfish act anybody can take is staying
put.

CHRISTIE: Bring stuff to care for your pets. I can`t believe as
governor I`m actually having to say this, but, you know, bring the kitty
litter and the litter box, you know? Bring the pooper scooper.

HAYES: But some Republicans still aren`t sold on this whole federal
disaster response thing.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: There is no magic
about FEMA.

UNIDENTIFIED MALE: FEMA is preparing for a federal response.

UNIDENTIFIED MALE: My job is going to be there to support the
governors.

PAUL: It should be like 1900. It should be like 1940, 1950, 1960.

UNIDENTIFIED MALE: In 1960, and this very spot that I`m standing
here in Lower Manhattan was underwater.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Those monies will be
offset to cost cutting else where.

PAUL: The government is not responsible for your safety. That`s why
we have the Second Amendment.

(END VIDEOTAPE)

HAYES: Good evening, from New York -- where for the first time in
history there is a mandatory evacuation order for a natural disaster.

If you`re still not convinced that Hurricane Irene is for real, check
out this new satellite image from NASA. This is the western hemisphere,
and this -- this is Hurricane Irene, which looks from that picture like it
could swallow the Eastern Seaboard. It`s a big storm. As we told you
yesterday, its reach extends 250 miles in every direction.

The Carolinas are starting to feel the affects of Irene. The
hurricane is expected to make landfall as a category 2 storm tomorrow
morning on North Carolina`s outer banks and then move north. Along the
East Coast, states and cities are taking unprecedented cautions and urging
people close to the water to get out before it`s too late.

Both New York City and Philadelphia announced full and unprecedented
shutdowns for their public transportation systems tomorrow. Amtrak
announced it will shut down service in the Northeast on Sunday. More than
5,000 flights have been cancelled so far. Sorry vacationers.

This afternoon, President Obama sent a clear message from Martha`s
Vineyard before departing for Washington where he will oversee the
hurricane response.

(BEGIN VIDEO CLIP)

OBAMA: I cannot stress this highly enough: if you are in the
projected path of this hurricane, you have to take precautions now. Don`t
wait. Don`t delay.

We all hope for the best, but we have to be prepared for the worst.
All of us have to take this storm seriously.

(END VIDEO CLIP)

HAYES: More than 2 million people have been ordered to evacuate,
including a quarter million in New York City.

(BEGIN VIDEO CLIP)

BLOOMBERG: We have never done a mandatory evacuation before, and we
wouldn`t be doing it now if we didn`t think the storm had the potential to
be very serious. Do not be fooled by the sun outside. That is the calm
before the storm. And you just can`t wait until gale force winds and
driving rains arrive. It will be too late then.

(END VIDEO CLIP)

HAYES: Slightly off the topic, but Ray Kelly has an amazing serious
frown over the corner of Mayor Bloomberg`s left there.

Irene has really started to bear down on North Carolina in the past
few hours and joining me now is Mark Potter for NBC. He is in Nags Head.

Mark, when did the weather start to turn?

MARK POTTER, NBC NEWS CORRESPONDENT: It started to turn about three
hours ago. It was a pretty calm day here, a cloudy day, yesterday, bright
and sunny. About three hours ago, we started to feel the first rain bans
coming in, and we`ve had several of the heavy bans now since then. The
winds have been coming up. The waves behind me have been kicking up.

We`re told by officials here that they are expecting gale force winds
here through the night, and then hurricane force winds tomorrow.

The biggest concern here, however, has to do with the storm surge,
the ocean water that`s being pushed ahead of the hurricane. And there is a
particular concern that they have that if the eye goes just to the west of
where we are now, you could have a double hit here from the surge. The
leading winds from the hurricane going counter clockwise pushing from the
southeast could actually be pushing water on to the eastern shoreline here
in the outer banks, and then as the hurricane goes to our west and goes
away, the last winds, the tailing winds coming from the northwest could
push water on to the western shore.

So, in effect, you could sort of have a sandwiching affect where the
water is coming together, potentially taking out roads and damaging the
pilings below houses and doing substantial damage here. And that`s why the
emergency managers here, Chris, are telling people -- have been telling
people to please get off the island. They say they`re pleased that the
tourists, they get 150,000 tourists off this island near the end of the
tourists season, and the business people hated to do that, but safety came
first, so they did. They left.

And now, they have been asking the residents to leave -- not all of
them are going. Many did, but some are staying behind. They made the
decision that they can ride the storm out. They`d rather stay in their
homes than leave on the roads and not be able to come back. So, that`s
their choice.

Emergency managers are not pleased about that, but they are accepting
the fact that that`s the way it is now, and that`s the way it`s going to be
for the storm.

HAYES: NBC`s Mark Potter in Nags Head, North Carolina -- Mark,
thanks so much. Appreciate it.

POTTER: Thanks.

HAYES: Let`s go to now to NBC meteorologist Bill Karins here at
MSNBC headquarters.

Bill, where is Irene headed now?

BILL KARINS, NBC METEOROLOGIST: Well, good evening.

A lot has changed in the last 24 hours, especially as we`re looking
at the storm in North Carolina, not so much further north.

The storm right now is over eastern North Carolina. That`s where
we`re seeing the outer bands. That`s where we`re seeing the winds starting
to pick up. The center of the storm, look at the black line here. We`re
watching that and tracking it to the north.

All of a sudden, we`re starting to get more of that north-northeast
turn. That`s why we`re going to spare Wilmington, North Carolina from a
direct hit. And that`s why the storm is heading up to the outer banks.

Now, the storm has lost punch. You can`t argue that. Twenty-four
hours ago, we are expecting category three to hit the outer banks. Now,
we`re calling for a category 1. So, the wind damage will not be as bad as
what was predicted as of yesterday -- that`s the good news.

But the storm is so huge it doesn`t make a difference because all of
the heavy rain is going to fall no matter what the strength is. And we`ve
already had the strong storm that`s pushing the water towards the coast,
and that`s not going to change. And we`re still going to get the storm
surge, we`re still going to get the heavy rain, and tropical storm force
winds will knock down trees and we`ll still see millions of power outages.

But do not expect to see houses blown with their roofs off, don`t
expect pictures like from Andrew or from Hurricane Katrina, or even Rita or
Ike in Houston. We`re not going to have a storm like that.

The legacy of the storm is going to be the heavy rain and the power
outages, about the time we`re all said and done. And the reason we`re
going to see so many power outages is because the area of orange, it`s the
tropical force wind field. It`s huge. It goes for almost 900 miles from
east to west and north to south, and that has to move all the way up the
coast to New England. Tat`s enough to knock the power out in many areas.

Hurricane warnings from Boston, down all the way down to Wilmington.
And here is the expected path. Landfall as we go from the overnight into
the early morning on Saturday, and then we track the storm from Maryland
and Delaware as a category 1, not a 2 anymore, so weaker. And then,
landfall somewhere near New York City come early Sunday morning.

Chris, I think the biggest points for everyone, it`s still going to
be a bad event, it`s not going to be, say, a catastrophe like Andrew or
Katrina, the power outages, people without maybe a week without power, will
probably be the legacy.

HAYES: NBC meteorologist Bill Karins -- thanks so much for laying
that out.

NBC`s Lester Holt is in New York City.

(BEGIN VIDEOTAPE)

LESTER HOLT, NBC NEWS CORRESPONDENT: Chris, there are 8 million of
us living in New York City and we`d like to think we have seen everything,
but when the mayor announced mandatory evacuations for part of the city
today, it got a lot of folks` attention. Come this time Sunday, this area
I`m in in Lower Manhattan might be actually under water. And there`s an
urgent new reality taking grip here in the Big Apple.

(voice-over): The naked city has never felt so exposed. Tens of
thousands of New Yorkers in low-lying neighborhoods now under orders to get
out.

UNIDENTIFIED FEMALE: I feel nervous. I feel like I don`t know
what`s going on. I don`t know really what`s going to happen. That`s
always a scary feeling.

HOLT: The city has produced a map showing the relative flood risks
in the five boroughs. For now, those closest to the coasts, Zone A, are
under an evacuation order. Today`s seniors at this Brooklyn hospital were
among the first to be relocated.

BLOOMBERG: I can`t stress it enough. Please, nature is a force more
powerful than any of us, and it really is better to be safe than sorry.

HOLT (on camera): This is Battery Park at the lower tip of Manhattan
sitting virtually at sea level. It`s less than a half mile from the
financial district. It would be the first area to be overwhelmed by a
storm surge.

(voice-over): Experts say the entire area could be buried in water,
even flooding the Holland tunnel that carries car traffic between Lower
Manhattan and New Jersey.

MOHAMMED KARAMOUZ, POLYTECHNIC INSTITUTE OF NYU: New York City is
perhaps the most vulnerable mega city in the world. If a major hurricane
comes to New York City, the tunnels are very vulnerable.

HOLT: Wind is the other big threat, of course. And today,
construction crews are making plans to secure the scores of towering cranes
that dot the skyline.

Here at the World Trade Center rebuilding site, Larry Davis there are
11 rigs in use.

LARRY DAVIS, DCM ERECTORS: If they are not secured, they could
collapse in the high winds. They are designed for 100 or 110-mile-per-hour
winds.

HOLT (on camera): The subways are the lifeblood of New York City,
carrying over 5 million passengers a day. That`s nearly twice the
population of Chicago, but the tracks are susceptible to flooding.

(voice-over): Like 2007, when rain falling at two inches an hour
from a tornado-related storm did this. Irene is expected to drop rain at
more than twice the rate. Today, with train service shutting down soon,
those New Yorkers not under evacuation orders are gaming out when and how
they`ll get out if and when the time comes.

BLOOMBERG: You got to start your preparations to leave right now.
And keep in mind, at the noon tomorrow, you`re not going to have the
advantage of mass transit to help you do that.

(on camera): Imagine the to-do list of being a official in the city
of 8 million facing a hurricane. Among the many concerned tourists, there
are tens of thousands of them in the city right now, the peak of the
tourist season. I talked to many of them who aren`t quite sure what they
are going to do especially as the airlines begin to pare down flights and
ultimately, the airlines will stop flying during the height of the storm.

Chris, we`ll send it back to you now on the studio.

(END VIDEOTAPE)

HAYES: Thanks so much. That was NBC`s Lester Holt.

Joining me now is Mark Merritt, a founding partner of Witt
Associates, with the Clinton FEMA Director James Lee Witt, went to Kobe,
Japan, after the earthquake in 1995, helped Japan create its own version of
FEMA.

Mark, if you were at the helm this evening in FEMA, what are the main
things you`re keeping your eye on that you want to be prepared for?

MARK MERRITT, WITT ASSOCIATES: I think one of the most important
things, and your correspondents earlier commented on it, this is not going
to be a wind event. Wind is only one of the risks that come with
hurricanes. Storm surge is going to have a huge impact on the coastal
communities because the storm is huge and it`s pushing a lot of water.

There`s also going to be a lot of rain. Not just in the coastal
communities but the inland communities as well. And you have tornados
spawned in hurricanes of this size.

If you remember back to 1999, Hurricane Floyd was similar to this and
we still had billions of dollars worth of damage and it wasn`t a major
hurricane. It`s because of all the significant flooding we have as far
west as western part of Piedmont in North Carolina.

HAYES: My understanding is that we`re just about high tide right
now, and there`s a lot of things -- as Bill was talking about, it`s
suggested of a massive storm surge, particularly relative to the size of
the storm and the wind speed, New York City, what are the possible problems
that cascade from a large storm surge in terms of the subway, in terms of
low-lying areas, the Battery Park City, in terms of flood walls in New
York.

What kind of height storm surge do you start to worry about serious
flooding?

MERRITT: Besides the obvious, loss of life -- and I`m hoping that
moist of the citizens of New York in those low-lying areas heeded Mayor
Bloomberg`s very good advice of evacuating because for a mayor to make a
call like that, you really have to understand how significant it is.

However, storm surge of four to six feet could have significant
impacts on the transportation networks. You can only imagine, you talked
about the tornado water event that slowed down traffic for a few days, and
that was fresh water. You can only imagine if those tunnels, the Holland
Tunnel, the Lincoln Tunnel, or the subway systems were flooded with
saltwater, not only would you have a short impact loss of transportation
that for a city that heavily depends upon public transportation, but you
are going to have a long-term lingering impacts of salt corrosion to the
metal components of that system.

HAYES: Irene right now is projected to touch or impact at least
seven states. Does FEMA have the capacity to deal with an affected area
that is that large?

MERRITT: I think they do have the capacity, but what`s more
important from the FEMA standpoint, because they are primarily a support
agency, is the state and locals. We always say that all disasters are
local. And so, the more prepared local and state`s capacity is, the less
FEMA requirement there will be.

So, if the evacuations were heeded and there`s less people to deal
with along the coast, it`s going to make the job for FEMA a lot easier.
But I`ve been in contact with some of my friends at FEMA and they have
mobilized all the resources from the federal government, not just FEMA but
Homeland Security, Coast Guard, Department of Defense, HHS, Red Cross,
everybody you can imagine has been mobilized all the way up from Florida,
all the way up to Maine.

So, the resources are there. It`s very difficult to deal with a
storm like this that`s paralleling the coast because you never know where
the true impact is going to be, but I believe they are as ready as they can
be.

HAYES: Mark Merritt, formerly with FEMA -- thank you so much for
your time tonight.

MERRITT: Thank you.

HAYES: Coming up, Ron Paul sees Irene coming and reiterates that
there`s no need in the country for an organization like FEMA. We`ll talk
the politics of that belief, up next.

And later, as the manhunt for Gadhafi continues inside Libya, a
diplomatic cable that we were never meant to see reveals a very different
John McCain in closed door talks with the Libyan regime.

(COMMERCIAL BREAK)

HAYES: Coming up, one thing you can`t call Republican presidential
candidate Ron Paul is a hypocrite. As Hurricane Irene gets closer, Paul
wants to turn back the disaster clock to 1900s.

And later, last night we talked about the failed program in Florida
to make sure welfare recipients aren`t wasting government assistance on
drugs. Now, another state is looking to drug-test welfare recipients and
the unemployed.

(COMMERCIAL BREAK)

HAYES: All right. I want to show you a poster that became a
billboard featuring a quote from a person viewers of this show should be
very familiar with. My quote is from the one and only Grover Norquist.
Quote, "My goal is to cut government in half in 25 years to get it down to
the size where we can drown it in the bathtub." That picture is New
Orleans after Katrina.

Government small enough to drown -- it articulates the real word
consequences of that kind of governance. And as we noted early in the
week, there are lots of Republicans that say the same thing, of course when
it`s their own district or state that will drown and then they will run to
the federal government for help.

Thankfully, in a sea of hypocrites, there is always the last honest
man unafraid to hold to his most extreme views in the most extreme
circumstances, Congressman Ron Paul.

(BEGIN VIDEO CLIP)

PAUL: I live on the Gulf Coast. We put up with hurricanes all the
time. I have Galveston in my district. And FEMA is only about 30 or 40
years, and I don`t know exactly how old. But the worst disaster we`ve ever
had was in my district in Galveston in 1900. Before FEMA, the local people
built the city and built a seawall and they survived without FEMA.

It should be like 1900. It should be like 1940, 1950, 1960. It`s
just people have lack of confidence in how free markets work, and how local
governments work, how neighbors should take care of themselves. It should
be coordinate voluntarily with the states.

(END VIDEO CLIP)

HAYES: Now, it`s true that FEMA is relatively new. It was created
in 1979 as a way of consolidating all the federal -- things the federal
government did for disaster relief into one agency. Ron Paul wants to
believe that local governments and neighbors don`t need outside
coordination in times of disaster. But precisely because disasters are
local, they reduced the capacity of local authorities to act, and that`s
the advantage of something like FEMA. It can come from the outside to
help.

And it isn`t as if the federal government was not helping before FEMA
existed. For example, if we are just talking about hurricanes to hit the
New York area, there have not been many, the Works Progress Administration,
the WPA, was vital during the hurricane of 1938 that hit Long Island and
swept up through New England.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In three days, an army of 110,000 WPA workers
have been shifted to storm and flood duty. Every little man with a pick on
this map represents 1,000 works of the WPA. Manpower turning from regular
public improvements and services into the breech in time of dire needs.
Where tracks were meant to carry trains, thousands of workers came by rail.
Shock troop of disasters someone has called them, because so many times in
recent years, they have a provided a human stimulus for a great task of
reconstruction.

(END VIDEO CLIP)

HAYES: I`m working on my news reel voice but I`m not going to be
able to do as well. The human stimulus for great tasks of reconstruction.

At a deeper level, securing citizens from the devastation of disaster
is one of the foundational projects of civilization. It`s a central
element of the social contract that doesn`t just bind citizens of a state
to others in that state. It binds people in the United States to other
people in the United States.

Paul`s comments are less about the role of government than what each
of us owe to each other across the expanse of a country that occupies much
of a continent.

Joining me now is Maggie Haberman of "Politico." Maggie is one of my
favorite political writers.

Great to have you here.

MAGGIE HABERMAN, POLITICO: Nice to be here.

HAYES: OK. So, this is sort of par for the course to Ron Paul,
right? He really is the last on this manner, which is why -- I actually --
when this tape came in, I was glad we got a chance to play it because what
I think you see in the Republican field, and tell me if you agree or not,
is that everybody wants to adopt Ron Paul sort of when it`s convenient, and
then abandon it when it isn`t.

HABERMAN: Sure. I think that people like the parts of Ron Paulism
that are not completely offensive to the general electorate and then they
leave the parts that are. I think, as you say, this is Ron Paul being true
to himself. This is absolutely in line with everything that he says.

It`s also an example of him not giving a single inch towards
electability, which is something that his supporters keep saying we should
all be paying attention to him, he can win. Look, he almost won the Ames
straw poll.

I would argue this is a pretty tough sell in the general election.

HAYES: But here`s the thing about Ron Paul. Even if he is no closer
to electability, he has wrenched, I think. There`s a very persuasive case
to be made that he has exerted a kind of gravitational pull over the course
of these runs on the entire field so that everyone-- when you saw Rick
Perry talking about Ben Bernanke printing money and that he`s going to
treat him pretty ugly?

HABERMAN: Indeed.

HAYES: Right.

HABERMAN: I think you are absolutely right. His supporters make
that point. I think it`s a valid point. I don`t think it`s just Ron Paul.
I think that the party was heading in a certain direction. I think he
epitomizes it. I think that he has helped pull it in a certain way.

I think, as you say, this is not a practical solution. I think that
when you go back to Katrina, as we discussed, you know, as you discussed
earlier, people wanted the federal government to come in. People wanted
the federal government to come and help.

The denouncement of the Bush administration was that they did not do
enough. So, this does become when it`s convenient. While what he is
saying is true in its most distilled form, it`s not necessarily right.

HAYES: Speaking of somebody who has to sort of actually think more
about the political consequences, Eric Cantor, his district was the
epicenter of Monday`s earthquake, he is now on the kick where they have to
offset any of the disaster spending -- has to be offset in cuts everywhere
else. How do you think that manages to sort of square this circle?

HABERMAN: It`s a very, very difficult situation that he is now. And
it is very, very hard to actually to do a practical reality on this.

How it squares is going to be, I think, with the usual sort of budget
magic that we see. I suspect he is going to be fighting, as you say, very
hard to make sure his district is perfectly preserved.

HAYES: And, finally, the president coming home from his vacation
which seem to like probably --

HABERMAN: That was quite interesting.

HAYES: Yes. Why did you think that it was quite interesting?

HABERMAN: Well, I thought it was interesting because he has
generally strayed from doing that kind of thing. This is the first time we
have seen him really get in there and say, you know what? This is
something I have to come back for. I think the visual of him up in
Martha`s Vineyard, and frankly, it was not practical. That is also in the
zone --

HAYES: Right, exactly.

HABERMAN: It`s going to be hit.

So -- but I think that it was a real indication that this repeated
looks at what he is doing and the claims that he is disconnected with
what`s happening with his country, and what is going on with what people
are experiencing are taking affect.

HAYES: You mean taking effect in the minds of the public or you mean
taking effect the minds of the people around him?

HABERMAN: I think both. I mean, I certainly took affect in the
minds of the public a while ago looking at his poll numbers and what they
indicate. I think his folks are starting to see that and respond.

HAYES: Maggie Haberman from the "Politico" -- thank you so much.
Stay dry this weekend.

HABERMAN: I will do my best. And you.

HAYES: (INAUDIBLE) I hope.

HABERMAN: That`s right.

HAYES: Coming up, the financial impact of Irene if it scores a
direct hit on the financial capital of the world, New York City. Some eye
popping dollar figures ahead.

And later, Gadhafi`s secret fan inside the U.S. government. That`s
not quite fair. As the world awaits for his capture, new information leaks
that Senator John McCain wanted to make him an even stronger dictator.

(COMMERCIAL BREAK)

HAYES: Last night, we told you about protesters in front of the
White House hoping to stop the proposed Keystone XL oil pipeline that would
carry oil from Canada`s tar sands to the Gulf of Mexico to be refined.
Today, the State Department released its environmental assessment which,
much to the chagrin of environmentalists, removes a major barrier to the
project. The report says the pipeline would have, quote, "no significant
impact," and suggested that the pipeline move forward for consideration.

Environmentalists point out that the study says that the process of
extracting the oil from the Alberta sands is massively carbon intensive,
and the pipeline runs the risk of devastating leaks. They also point out
that the State Department review does not take into account the climate
affect of the release of the massive store of carbon, should the tar sands
be fully tapped.

The State Department says its report is not for or against the
project. However, a State Department spokesperson said that whether the
pipeline is built or not, quote, "the oil sands is going to be developed."

Secretary of State Clinton says the final assessment will be issued
this month. The decision on building it ultimately lies with the
president.

Coming up, Florida governor Rick Scott has embarrassed himself with
his effort to try to prove welfare recipients waste tax dollars on drugs.
Now, another state wants to not only insult welfare recipients. It`s
lumping in the unemployed as well.

And Later, the latest on Hurricane Irene. Why a direct on New York
City is one of the perfect storms of financial disaster for this country.

(COMMERCIAL BREAK)

HAYES: In the Spotlight tonight, kicking the unemployed when they are
down. In Ohio, a Republican state senator is introducing a bill that would
require people seeking unemployment benefits and welfare to first take a
drug test, and, of course, also pay for the test. Legislation is being
driven by the apparently unkillable prejudice that the poor are shiftless,
drug addled lay abouts, scheming to get their hands on your precious,
precious, gooey tax dollars.

Here`s Ohio State Senator Tim Schaeffer (ph) explaining his thought
process.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How would we as taxpayers know that this isn`t
kind of the boogie man out there? It`s an idea that it`s a problem. But
we don`t have any concrete data to tell us that it really is a problem.
How do you know?

UNIDENTIFIED MALE: Well, we will have data once we implement the
system, and once we implement the testing. You know, if 100 percent of the
people who apply for public assistance come clean, come out clean, and
don`t have any drugs in the system, then fine, great. But my suspicion is
we will find some.

(END VIDEO CLIP)

HAYES: Yeah, that`s my suspicion, too, if you -- I don`t know -- drug
tested the state senators of the state of Ohio. If this sounds startlingly
familiar, it should, because just last night, we looked at the case of a
Florida Governor Rick Scott, who pushed through a similar policy that
required drug tests for welfare applicants. And the results?

(BEGIN VIDEO CLIP)

HAYES: So was the rate of Floridians applying for welfare who also
tested positive drug use at the national level of 8.7 percent? No. Was it
eight percent? Was it 7.5? Was it seven percent? Was it 6.5 percent or
six percent or 5.5 or five percent, like you might be thinking?

Was it 4.5 percent or four percent or even 3.5 percent? Was it three
percent? Wrong again.

The rate of Floridians applying for welfare who tested positive for
drug use is just -- drum roll -- two percent. Two percent, a full 6.7
percent lower than the probably actually too low government figure for the
national average.

(END VIDEO CLIP)

HAYES: The Florida and Ohio drug testing laws come at a time when
Republicans are launching a new attack on the working poor. In his
presidential announcement speech, Texas Governor Rick Perry expressed
outrage at 46.4 percent of households paid no federal income tax in 2011.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: We`re dismayed at the
injustice that nearly half of all Americans don`t even pay any income tax.

(END VIDEO CLIP)

HAYES: He is not -- just in case it wasn`t clear in that clip, he`s
not outraged at the injustice that nearly half of American households work,
but are paid so little that their take home pay barely covers basic
necessities. He is outraged because they are not paying more taxes.

Fifteen years ago this week, President Bill Clinton signed a bill
ending Welfare as we know it. Democrats hope that stroke of triangulation
would end the demonization of welfare queens and take the issue off the
table.

What we`re seeing instead is that the category of welfare queen has
simply expanded to now include the working poor, and those unlucky enough
to lose their jobs during the Great Recession.

Joining me now is Arthur Delaney, a reporter for "The Huffington
Post." Arthur, how are you doing tonight?

ARTHUR DELANEY, "THE HUFFINGTON POST: I`m good. Thanks for having
me, Chris.

HAYES: Well, thanks for coming on. You cover the unemployed I think
as thoroughly as anyone in the country. And I wanted to see if you thought
this new proposal in Ohio is part of a larger trend.

DELANEY: I would say it definitely is part of a larger trend. There
have been proposals to drug test the jobless kicking around the states for
a couple years. And at the federal level, Senator Orrin Hatch from Utah
also proposed drug testing to the unemployed.

It wasn`t something that was taken very seriously. And as you said,
there`s not really any data to suggest, as these lawmakers in Ohio are now
saying, that our taxpayer dollars are supporting the drug habits of drug
addicts.

HAYES: One of the interesting things I think about the specific
nature of unemployment and the unemployment crisis in this recession is the
massive number of the long-term unemployed, something you have written
about quite a bit at the "Huffington Post,"

What are the obstacles that those folks are facing and the prejudices
that they`re facing as they`re trying to get back in the labor force?

DELANEY: A new phenomenon that has just popped up in the last year is
companies actually discriminating against people because they don`t have
jobs, and saying in job ads that if you are unemployed, you won`t be
considered, or must be currently employed.

But this could backfire. This might not be a very smart strategy on
the part of political strategists, beating up on the unemployed with
legislation like this, because it`s not the same as welfare recipients.
The unemployed are not the same as poor people.

To qualify for welfare, you have -- you have to be poor. You have to
have income below a certain threshold. But we know that 70 percent of all
the money the government spends on the unemployed goes to families that
make more than two times the poverty threshold. So -- and these are people
who vote, which is another key difference between actual poor folks.

HAYES: But isn`t the problem the fact that you -- rather than having
a situation which the unemployed are -- represent a lot of people that are
cycling through unemployment at any given moment, increasingly, as the
recession stretches on, it`s a class of people that have been sort of
expelled from the labor market and can`t get back in. So they have this
short of -- their affect on politics is a minority affect?

DELANEY: Yeah, I agree. It`s actually -- it`s as if it`s an
intractable problem. There`s nothing out there that people think is
supposed to address this. The White House is reportedly trying to cook up
something that could help the long-term unemployment. But nobody knows how
serious it is or whether it would work.

We could be basically pushing out a couple million people permanently
from the workforce.

HAYES: Arthur Delaney writes for "the Huffington Post." Arthur, you
have a book coming out, if I`m not mistaken, an e-book about the
unemployment. What is it called?

DELANEY: It will be called "The People`s History of the Great
Recession," Chris.

HAYES: "People`s History of the Great Recession." You should look
for it where e-books are sold. Arthur, thanks a lot.

Coming up, Senator John McCain has repeatedly condemned Moammar
Gadhafi for, quote, having the blood of Americans on his hands. Then why
does a leaked intelligence cable say that McCain promised to help the
Libyan dictator acquire military assistance? That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GRETA VAN SUSTEREN, FOX NEWS ANCHOR: I know you are a strong
supporter for this military action by NATO. Why Libya? Why are we helping
them?

SEN. JOHN MCCAIN (R), ARIZONA: I think we are helping -- I know we
are helping them because Gadhafi is a person who is capable of carrying out
acts of terror. He has the blood of Americans on his hands as a result of
Pan Am 103. He is a person who over time would -- if he were able to
succeed, would clearly train terrorists and export terrorism.

(END VIDEO CLIP)

HAYES: My friends, that was Republican Senator John McCain on Monday
night. It`s not the first time he has said Gadhafi has "the blood of
Americans on his hands." In fact, he has said it on every major network.
He said it the night before on CBS. He said it on CNN back in July, ABC in
June. And he said it to NBC`s Matt Lauer back in March.

(BEGIN VIDEO CLIP)

MCCAIN: Look, the blood of Americans is on Gadhafi`s hands, because
we know that he was responsible for Pan Am 103. He should be removed from
power.

(END VIDEO CLIP)

HAYES: The bombing of Pan Am Flight 103 took place in December of
1988. Of the 259 people on board who died, most were American citizens.
The now ex-leader of Libya, Moammar Gadhafi, was allegedly the mastermind
of that attack. So John McCain is not wrong about the criminality or the
moral culpability of Gadhafi and his regime.

But it wasn`t just that McCain was going after Gadhafi. He was, of
course, as he is want to do, attacking President Obama for being
insufficiently committed to military action. McCain released a joint
statement with Senator Lindsay Graham after the Libyan rebels took control
of Tripoli, one of the most passive aggressive documents I have seen.

And it reads in part, "we regret that this success was so long in
coming due to the failure of the United States to employ the full weight of
our air power."

Here is McCain back in March criticizing the president after he
authorized the no fly zone.

(BEGIN VIDEO CLIP)

MCCAIN: Obviously, if we had taken this step a couple weeks ago, a no
fly zone would probably have been enough. Now a no fly zone is not enough.
There needs to be other efforts made. He waited too long. There`s no
doubt in my mind about it.

(END VIDEO CLIP)

HAYES: This is a bit of a theme with John McCain. In fact, if you
had to bet, what is John McCain`s position on foreign policy A, your
strongest bet would be stronger military action, need to stick it out and
send more troops, which makes you think John McCain`s world view is black
of white, one of heroes and villains.

And that`s why a story in "Politico" today is so gob-smacking. Twenty
one years after the Pan Am bombing Gadhafi was allegedly responsible for,
Senator McCain himself, along with Senators Graham, Lieberman and Collins,
and some officials, met with Gadhafi and his son and national security
adviser Mutasim (ph), under a tent in Tripoli.

According to a U.S. diplomatic cable, obtained by Wikileaks, the first
part of the meeting was just with Gadhafi`s son. Gadhafi`s son complained
that the U.S. had not adequately rewarded Libya for renouncing terrorism
and dropping it`s WMD program in 1993.

Gadhafi wanted help obtaining some non-lethal military supplies,
things like mobile hospitals and uniforms. He also wanted help obtaining
lethal military supplies. According to the cable, "he requested assistance
with upgrading Libya`s equipment, including helicopters. `We can get
equipment from Russia or China, but we want to get it from you as a symbol
of faith from the United States.`"

The equipment request included C-130 Hercules military aircraft.
Turns out in 1972, the United States sold eight C-140s to Libya, but
bilateral relations soon deteriorated. And a ban on arms sales prevented
the U.S. from actually delivering the warplanes.

Because relations had improved at the 2009 meeting, Senator McCain
assured Mutasim that the United States wanted to provide Libya with the
equipment it needs for its security. He stated that he understood Libya`s
request for guarding the rehabilitation of its eight C-130s, and pledged --
pledged to see what he could do to move things forward in Congress.

He encouraged Mutasim to keep in mind the long term perspective of
bilateral security engagement, and to remember that small obstacles will
emerge from time to time that can be overcome.

Soon, Colonel Gadhafi joined the meeting. The cable says Gadhafi was,
quote, "notably silent on the subject of obtaining military equipment, but
two of the U.S. senators were not.

Senators McCain and Graham conveyed the U.S. interest of continuing
the progress of the bilateral relationship, and pledged to try to resolve
the C-130 issue with Congress and Defense Secretary Gates.

Today "Politico" obtained a response to the story from McCain`s
communications director. Read in part, "at no point did Senator McCain
ever promise to help the Gadhafi regime secure U.S. military assistance.
Upon his return to Washington, there were no follow up discussions, and no
action taken by Senator McCain or his staff to provide the Gadhafi regime
with C-130s or any other military assistance."

All right, so what does this mean about the John McCain foreign policy
world view? At some level, OK, granted, yes, he just told Gadhafi what
Gadhafi wanted to hear. That said, what the cable reveals is that John
McCain knows that the universe of foreign policy isn`t the cartoonish,
jingoistic vision of heroes and villains and bombs and war that he is
constantly using as a political bludgeon against his political opponents.

Sometimes diplomacy is necessary in certain instances. In fact, he
knows it because he was there as an instrument of that diplomacy, with this
blood-thirsty monster, who he now touts the expulsion of.

John McCain understands in his private contact that the cartoon of
heroes and villains clashing and this picture of foreign policy that is all
about the moral blackmail of your opponents is false. Because like Donald
Rumsfeld before him, shaking hands with Saddam Hussein, here McCain is
across the table, politely listening to the pleas for more money and
military supplies from the same regime that he is calling blood thirsty.

But it`s politically expedient for John McCain to go out in the world
and pretend he doesn`t know that. John McCain is a bully against anyone
who refuses to buy into his cartoonish moral crusading. But, low and
behold, behind closed doors, he is operating just like everybody else.

(COMMERCIAL BREAK)

HAYES: The impact of Hurricane Irene, no matter where it makes land
along the eastern seaboard, could be costly. But if it comes anywhere near
New York, as it`s expected to, it could create a whole new level of
economic destruction.

New York not only has the largest population of any city in the
country, well over eight million, its total real estate is valued at around
800 billion dollars. Of course, it remains, for better and so often for
ill the financial capital of the world.

Nate Silver of the "New York Times`" 538 block crunched the numbers,
and based on past hurricanes, came up with some rather ominous conclusions.
In a worst case scenario, if a weak category two storm passes directly over
Manhattan, it could cause 35 billion dollars in damage in the northeast,
most of it in New York itself, with flooding in several parts of the city
and the subway system likely.

That number, 35 billion, is half of New York City`s annual budget, one
percent of the nation`s quarterly GDP. A far more likely scenario, as
we`re getting in data right now, one in which a weak category two with its
eye passing over Central Long Island, some 50 miles away from New York
City, could result in 10 billion dollars damage to New York and the region.

Joining me now is the author of that report, Nate Silver of "New York
Times`" 538 block. Nate, how are you doing?

NATE SILVER, "THE NEW YORK TIMES": Hi, Chris.

HAYES: Let`s nerd out for a second here. How did you build this
model?

SILVER: There aren`t that many storms that have come through the
northeast and New York in the past. But there are about 20 that actually
struck Long Island or Massachusetts as a tropical storm or worse. And they
had widely varying amounts of economic damage, from almost 50 billion in
today`s dollars from a 1938`s storm to, you know, just a trivial effect if
they kind of go out to sea and hit Nantucket.

So we`re saying which factors determine what is going cause the
damage? And of course, the two major things are how close the storm hits
to New York City, and how powerful the winds are. And it has an
exponential effect.

So, you know, a large tropical storm is much, much worse than a
smaller one. A category one is going to cause, you know, three times as
much damage as a tropical storm, and so forth. So you really see the
effect zooming up with every increase in wind speed and every distance it
comes closer to kind of Manhattan, Central Park proper.

HAYES: I have, like a lot of people, have been on -- like obsessively
on like, hurricane tracker sites today. You and I were just talking during
the break. You have been working on some stuff about prediction generally.
Why is it so hard to narrow the band of prediction for the path of a
hurricane?

SILVER: The miles are actually getting a lot better. Used to be they
would kind of totally guess and have no idea at all. And this storm has
stuck pretty close to its projected track so far. But, you know, it is
literally a chaotic system. Chaos theory comes from a guy who was trying
to study weather and realized how difficult it was, where one little thing
changes and, you know, your entire forecast has to be rewritten.

In this case, Irene has gone right along the projected track it was
supposed to. It`s been a little bit slower than expected, the wind speeds
have, which is good news. People thought it could strengthen over the
Carolinas and it hasn`t. So it will probably make landfall as a weak
category one or tropical storm in Long Island, and not on that one-two
boundary, which would be, frankly, quite a bit more dangerous.

HAYES: What`s the biggest source of expense if the storm comes
smashing into New York?

SILVER: So we talked about the two big things, which is where it hits
and how fast the wind speeds are. But there are other factors that are
also important. For example, how big the storm is. You have the eye of
the storm, which is fairly small. But, you know, all the way across the
storm is as big as the state of Tennessee, right?

You might not have a direct hit on Manhattan, but you would still have
quite a few issues potentially. And also how fast it`s moving. A slower
storm is actually worse. It means that it lingers for a longer time, so
you get more storm surge. You get more rainfall. It`s a dual threat for
flooding, right, both the storm surge and the rain. And that could
potentially still flood New York Subways as maybe one of the plausible --
not likely but plausible very bad scenarios. A lot of real estate in the
financial district, for instance, is on low lying territories. So there`s
still some -- some bad risk from the storm surge.

The wind will probably not be catastrophic -- I emphasize probably.
But you probably won`t see window panes shattering in Midtown Manhattan and
so forth. But the storm surge could still be a category two equivalent
storm surge, even if the storm is weaker, just because it`s so big and slow
and has so much water it`s kind of pushing from elsewhere on the eastern
seaboard.

HAYES: Finally, what was the most disruptive storm in the area? You
compared about 19 of them. What was the worst?

SILVER: It was the `38 hurricane, which caused about 45 billion. But
there`s also a storm called Agnus in 1972, which was only a tropical storm
when it hit, but directly hit Manhattan, went almost right up the Hudson
Valley. And that cost 20 billion dollars in damage, just because the
location was so perfect. So they are two factors here, you know, the wind
speed, but also how close will it hit to the areas that are most populous
and are the least prepared for a hurricane.

HAYES: Nate Silver is the founder of the 538 blog, which you can now
find on the "New York Times". Thanks so much. Stay dry this weekend.

SILVER: I will. Thank you, Chris.

HAYES: You can have THE LAST WORD at our blog, TheLastWord.MSNBC.
You can follow my Tweets @ChrisLHayes. And my new show debuts on MSNBC
this fall on weekend mornings.

"THE RACHEL MADDOW SHOW" is up next. Good evening, Rachel.

END

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