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'The Last Word with Lawrence O'Donnell' for Monday, October 24, 2011

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Guests: Steve Schmidt, Jonathan Capehart, Jared Bernstein, Steve Wozniak, Emily Sirota

LAWRENCE O`DONNELL, HOST: Good news for President Obama, Republican
presidential candidates value Donald Trump`s advice more than Karl Rove`s.

And we`ve got breaking news from Rick Perry`s campaign tonight.

(BEGIN VIDEOTAPE)

CHRIS JANSING, NBC NEWS: Believe it or not, the birthers are back.

ANDREA MITCHELL, NBC NEWS: Rick Perry and the birther crisis.

CHRIS MATTHEWS, "HARDBALL" HOST: Birtherism reborn.

O`DONNELL (voice-over): Donald Trump sells Rick Perry the Brooklyn
Bridge.

DANA MILBANK, THE WASHINGTON POST: Rick Perry a very visible
Republican again flirting with the birther movement.

MITCHELL: He was asked, do you believe that President Barack Obama --

MARTIN BASHIR, MSNBC ANCHOR: -- was born in the United States?

UNIDENTIFIED FEMALE: You don`t believe what`s been released? I don`t
know.

BASHIR: I had dinner with Donald Trump the other night.

UNIDENTIFIED MALE: I had dinner with Donald Trump the other night.

MITCHELL: He doesn`t think it`s real.

UNIDENTIFIED FEMALE: Perry: I have no reason to think otherwise.

MITCHELL: That`s not a definitive yes I believe.

BASHIR: It`s a distractive issue.

KARL ROVE, REPUBLICAN STRATEGIST: He is eligible to serve.

O`DONNELL: Karl Rove is worried.

ROVE: These kinds of things do not help.

UNIDENTIFIED MALE: I think Rick Perry may be trying to be too cute.

MATTHEWS: Donald Trump.

ROVE: You associate yourself with a nutty view that and you damage
yourself.

MATTHEWS: Donald Trump.

ROVE: Because it starts to marginalize you.

MATTHEWS: Donald Trump.

ROVE: Don`t associate yourself with sort of this nutty fringe group.

JON ALTER, MSNBC ANALYST: Trump is a vulgar clown.

O`DONNELL: Rove is even more worried about becky, becky, becky stan.

ROVE: Cain has had a number of misstatements. It`s not just
abortion.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Ubecky, becky, becky, becky,
stan, stan.

ROVE: He didn`t understand what the right of return was, the
Palestinian demand for the right of return.

CAIN: I have no idea.

ROVE: And he didn`t understand what neoconservatives were.

Apples and oranges.

CAIN: Apples and oranges.

ROVE: He`s not be up to this task.

CAIN: Black Walnut.

ROVE: That`s really there (ph) for a president candidate --

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m happy to be part of that
process.

ANN COULTER: Well, if you don`t run Chris Christie, Romney will be
the nominee and we`ll lose.

(APPLAUSE)

(END VIDEOTAPE)

O`DONNELL: President Obama is on a West Coast campaign fund-raising
swing tonight. The president`s friends and supporters in Las Vegas and
Hollywood are making sure that he will continue to raise more money than
all of the Republican presidential candidates combined as he prepares to
face the eventual nominee who will emerge from a Republican primary process
more confused and messy than we have ever seen.

The Republican candidates are busy ignoring or attacking the
mastermind of the last two Republican electoral victories, Bush`s brain,
Karl Rove. This morning, Rove attacked Rick Perry for saying he doesn`t
know if President Obama was born in the United States. Then, Rove went
after Herman Cain for a white board`s worth of recent misfires.

And later in the day, Herman Cain decided to respond to Rove, telling
Byron York of "The Washington Examiner," "I believe it is a deliberate
attempt to damage me because I am not, quote unquote, the establishment
choice. It makes no sense unless it`s a deliberate attempt on his part to
try to push me down so that the candidate he wants rises to the top. I
believe he wants Romney to get it."

Rove then responded to Cain`s response saying: "I want the strongest
nominee to emerge from the process. I have no personal favorite. Every
candidate is entitled to a few mulligans. Because of his energy and
passion, he gets more than the normal number of mulligans. But he`s
running out of them."

Joining me now, former senior adviser to the McCain/Palin campaign and
current MSNBC political analyst, Steve Schmidt. Also, MSNBC contributor
and opinion writer for "The Washington Post," Jonathan Capehart.

Thank you both for joining me tonight.

JONATHAN CAPEHART, MSNBC CONTRIBUTOR: Hi, Lawrence.

O`DONNELL: Steve, come on, Herman Cain is right about this. Here is
Rove hitting Rick Perry, all legitimate hits, and hitting Herman Cain.
What does that mean? Rove likes Ron Paul or Michele Bachmann?

It`s very clear that Karl Rove is trying to circle the wagons around
Mitt Romney as an inevitable nominee, isn`t it?

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: Well, first off, Lawrence,
Karl Rove is exactly right on this. And he`s right on both counts on this.

You know, unpreparedness for the presidency is not a virtue in a
Republican candidate, trying to unseat a very tough, very talented
politician in President Obama. Herman Cain has shown himself to be very
unprepared over the last week and I think it`s absolutely fair for Karl to
point it out.

And he`s also exactly right to point out Rick Perry`s flirtation with
the fringe. This birther issue is absolute looniness. It`s nonsense talk.
And it`s almost unbelievable that the incumbent governor of the state of
Texas who served there for 12 years is flirting with it, in the midst of a
serious presidential race.

And it is deeply, deeply, deeply worrying to Republicans in Washington
and all across the country who want to put a candidate on the field who has
a shot to beat the president.

O`DONNELL: All right. We`ve got to go to our Trump correspondent,
our senior Trump correspondent Jonathan Capehart. As soon as the word
Donald Trump comes up here, we go to Jonathan.

Trump`s spokesman released a statement about this whole Perry thing
that came out over the weekend by saying, despite releasing -- this is
Trump`s statement, "Despite releasing what is alleged to be his birth
certificate, serious questions remain. No independent evidence has been
disclosed to Mr. Trump or the American people as to its authenticity. Is
it authentic? I don`t know. But I am proud of the fact that I was able to
get him to do something that nobody else was able to get him to do --
release the certificate while the issue remains unresolved, more important
issues need to take center stage."

Jonathan, this was all provoked by Rick Perry in "Parade" magazine
this weekend saying he`s not sure if it`s the president`s birth
certificate, because he had dinner with Donald Trump and Donald Trump was
very, very convincing that this is absolutely not the president`s birth
certificate.

CAPEHART: Well, look, in all of my conversations with Mr. Trump, this
will come up and he will say that he`s -- as he said in the statement --
very, very proud that he was able to get the president to do what no one
else was able to do, and it`s an issue that basically he and I have come to
agree to disagree over. He still is somehow convinced that the president
is not telling the truth about his birth certificate and where he was born.

And clearly all the evidence is out there for anyone who wants to read
it, anyone who wants to understand it, anyone who wants to believe it, that
the president of the United States is indeed an American citizen, was
indeed born in the United States, in Hawaii, and is legitimately sitting in
the Oval Office as president of the United States.

O`DONNELL: Jonathan, has Trump told you what his private detectives
found when he sent them to Hawaii? Remember that crazy lie Donald told
about, I`m sending private detectives to Hawaii to check this out, and I,
of course, told my audience, he`s too cheap to do that. He sent no one.

Not one word has emerged from what the private detectives have found -
- unless I missed something.

CAPEHART: No. Nothing has been said about the private detectives. I
haven`t asked him about that question, but you and I both know that Mr.
Trump would tell me immediately if I were to ask him what those detectives
said.

You know one over thing, Lawrence, I wanted to add on to something
that Steve said with regard to Karl Rove. I don`t think he`s trying to
circle the wagons around Mitt Romney to ensure that he gets the nomination.
I think he`s trying to circle the wagons around the Republican Party as a
legitimate party, political party in the United States. If the birthers
and the fringe take over t the party, like literally take over the party,
we`re going to see the GOP crumble.

And when you`ve got a state like South Carolina where in a recent poll
last month, one in three Republican primary voters don`t believe that the
president is indeed a citizen of the United States, there`s serious trouble
here and Karl Rove is ringing the alarm bells.

O`DONNELL: Steve, Karl Rove helped win the presidency back in 2000 by
narrowing the differences between the Democratic nominee and the Republican
nominee. The Democratic nominee had a prescription, a Medicare
prescription benefit drug idea -- and the Republican nominee, Bush, had one
and they simply argued about which one is better. It wasn`t that Bush was
saying no, we should not expand that entitlement.

And so, it seems that Rove`s history here is -- as a presidential
campaign operative is not one of trying to find how much can we separate
ourselves from Democrats, but where can we actually pull in some of their
voters? There doesn`t seem to be any Republican strategy among any of the
potential nominees about how do you reach into the middle for the voters or
how do you pull some Democratic voters away from President Obama.

SCHMIDT: Well, I know one thing, Lawrence, that all of this
flirtation with birtherism and these loony issues is totally repellent to
voters who identify themselves as being in the middle of the spectrum. The
2000 race -- and I was involved in the president`s 2004 campaign, but you
know, the 2000 race was an election that took place in the time of peace
and prosperity, where the lines between the parties was blurred and the
main focus was on issues like prescription drug benefit, education reform.

We are in the middle of a global financial crisis. The country is
winding down two wars in Iraq and Afghanistan and we still face a threat
from terrorist forces overseas. And you have a whole body of presidential
candidates who aren`t just showing that they`re unprepared which they are,
with aplomb, but they`re flirting with the most extreme elements in
American politics. And it`s bad for the Republican Party.

I agree with Jonathan completely on this. I mean, one of the great
services of, you know, Bill Buckley was his distancing of the conservative
movement and pushing out of the fringe. It helped the conservative
movement and the Republican Party become a majority party in this country.

And this is just terrible news and it`s about time that senior
Republicans start to push back on the crazy talk, because it`s going to
have a very detrimental effect in an election where Republicans have every
possibility to win the presidency, to win the United States Senate and
maintain a majority in the House. But it won`t happen if this type of
crazy talk is indulged by serious people in the party.

O`DONNELL: Steve, has harmful has Donald Trump been to Republican
politics this year?

SCHMIDT: It`s amazing that Republican candidates who are running to
be commander in chief in the armed forces of the United States feel like
they have to go kowtow before Donald Trump, or frankly, that they have to
kowtow to the front of any of the talk radio hosts.

At the end of the day, I think the American people and Republicans in
particular are looking for candidates that have a level of fearlessness.
Go out, tell the American people what your vision is. Explain it to them.
Be passionate about it.

But show preparedness and don`t be afraid of the extreme elements in
your own party because if you stand up to them, you`re going to get a lot
of credit in the middle of the electorate in a way that helps you win
general elections.

O`DONNELL: Steve, the latest news in the Perry campaign tonight is
that they have now released through a "Wall Street Journal" op-ed piece
basically, Rick Perry`s flat tax proposal. So, here`s another flat tax
proposal on top of Herman Cain`s 9-9-9 plan, which has been falling apart
upon examination of the details.

This is a flat tax proposal. We`re going to run the numbers in the
next segment. But it`s roughly 20 percent flat tax across the board, which
will dramatically increase taxation on most Americans.

It seems this is exactly the kind of tax proposal that President Obama
would want to write for every Republican candidate, that they could get on
board with this.

Romney had a difficult history with this. He has, in the past,
sharply campaigned against it and recently said, "Oh, I love the flat tax."

How is the flat tax going to shake out as the Republican campaign goes
forward?

SCHMIDT: Look, I think at the end of the day the American people will
not support a regression tax. That being said, I think the American people
understand that the American tax code is as uncompetitive as it could
possibly, you know, be. You were designing a tax code to be uncompetitive,
this is what you would come up with.

And I think the part of the process is there is an issue that is now
being incubated and I think as we move into the general election, I think
both the Republican nominee and the president will be talking about
fundamental tax reform, simplifying the tax code to make it as an
instrument -- something that can help American businesses and the economy
in terms of competitiveness. And I think that`s going to happen.

So, I don`t think these proposals are ever going to be put into law,
but I do think they`re going to drive a debate that ultimately I think is
going to lead to some level of tax simplification in the country because
it`s good for the economy for that to happen.

O`DONNELL: Steve Schmidt and Jonathan Capehart, I want to thank you
both very much for joining me tonight.

CAPEHART: Thanks, Lawrence.

O`DONNELL: Coming up, we have breaking news coverage of Rick Perry`s
new flat tax proposal. Jared Bernstein will join me to run the numbers.

And later in the spotlight, a LAST WORD exclusive, Apple cofounder
Steve Wozniak talks about Steve Jobs. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Coming up, a LAST WORD exclusive. We`re going to have
Steve Wozniak, cofounder of Apple, talking about Steve Jobs.

But first, we do have breaking news from the Rick Perry campaign. His
new flat tax proposal, which is an astonishing give away to the rich, even
more in many ways than the 9-9-9 plan. Jared Bernstein will join me next.

(COMMERCIAL BREAK)

O`DONNELL: We`re back with the breaking news report on Rick Perry`s
flat tax proposal which he`s just released through an op-ed piece in "The
Wall Street Journal."

Among the highlights, a choice between your current tax rate or a flat
tax rate of 20 percent, a reduction in the corporate rate to 20 percent,
and an opt-out of Social Security for younger workers.

Joining me now by phone is MSNBC analyst Jared Bernstein, former chief
economist to Vice President Biden.

Thanks for joining me tonight, Jared.

JARED BERNSTEIN, MSNBC ANALYST (via telephone): My pleasure. Thanks
for inviting me.

O`DONNELL: Jared, I`m speed-reading through this op-ed piece here in
"The Journal" and what I`m seeing is you would have a choice between a new
flat tax rate of 20 percent or your current income tax rate. The new flat
tax preserves mortgage interest, charitable deductions, state and local tax
exemptions for families earning less than $500,000 annually. And it
increases the standard deduction.

Now, that is different from Herman Cain`s plan in it allows deductions
beyond just charitable, the mortgage deduction, very important for most
people who take it is preserved. But it looks like if you give people an
option of paying their current rate or paying 20 percent, it`s very clear
that only the highest income taxpayers will take that option of paying 20
percent.

BERNSTEIN: Right. I mean, what you have done here -- it`s
interesting he, kind of, slops out Herman Cain`s numbers for three
syllables. He calls plan "cut, balance and grow."

In fact, it`s a very complicated idea. You have done here now is
create a parallel tax system. Everybody who can afford to do so is going
to figure out their taxes twice and pay the lower rate. Now, a very
important difference in the current system and what the candidate Perry is
offering here is eliminating taxes on dividends and on capital gains that
you hold for a while, long-term capital gain.

That means he`s going to land us right back in the place that
candidate Cain did. If you`re going to be revenue-neutral here, and he
doesn`t explicitly say that, but we should -- I think we`re safe to assume
that he`s talking about a revenue neutral plan. That means somebody is
going to pay less, somebody is going to pay more. Once you start excepting
like that, you`re shifting the burden on the middle and lower income
households.

O`DONNELL: Jared, he`s allowing younger workers -- I`m not sure what
the age definition is of younger workers -- to opt out of Social Security,
which is the surest way you could possibly come up with of eventually
abolishing Social Security.

BERNSTEIN: No question about it, Lawrence. He also eliminates taxes
on Social Security benefits that some folks currently pay. We can debate
the efficacy of those ideas.

But in both cases what those do is undermine the financing to the
system further. You hear Republicans talk a lot about how we have to shore
up Social Security. In case like this, what he`s really talking about is a
back door way to privatization. If young workers can opt out of this
system, that absolutely unquestionably fully undermines this
intergenerational contract known as Social Security.

O`DONNELL: You know, this is one of the reasons I have stayed on
Herman Cain`s 9-9-9 plan, because it is a flat tax plan with a sales tax
thrown in. And these flat tax plans all behave the same way. They are
hugely beneficial to the rich, hugely beneficial to the high-income
earners, and extremely harmful below that.

There`s a big job killer provision in here, Jared, that I found which
is the way he treats what they call the repatriation of foreign profits.
He wants to drop that taxation down to something minimal, which is a way of
encouraging companies to earn more profit overseas which means they will
move more jobs overseas in order to earn that profit overseas.

BERNSTEIN: This is a neatly wrapped up package with a ribbon on it
for multinational firms, basically taking the incentives to already go
across borders and create investment and jobs there as opposed to here and
putting it on steroids. Not only does he reduce the corporate rate to 20
percent, so that`s a very large reduction, but he has a temporary reduction
for this tax repatriation idea that takes it under 5 percent.

Now, we tried this before in 2004 and what we`ve found is
multinationals who had been deferring their earnings, holding them overseas
as they`re able to do instead of bringing them back at the statutory rate,
they bring them back at this low rate. And, in fact, they didn`t create
the investment in the jobs. They pay out the dividends and increase their
share prices.

So, once again, I mean, the thing -- by the way, then he switches to
something called the territorial system which I won`t go into right now,
but is worth exploring further at some point. But let it be said that each
one of those ideas, the big cut in the corporate rate, the repatriation and
moving to territorial, are all big incentives for multinational
corporations to do much more investment and job creation overseas than they
do here.

O`DONNELL: If President Obama is lucky, Mitt Romney will be forced to
embrace some form of flat tax which I think combined with the Republican
Party`s history on the Ryan plan votes on Medicare would be a lethal
package for Republican nominee to try to carry into the general election
against the president.

BERNSTEIN: Look, I think the president is going to be very clear on
the shortcomings that we have discussed so far. Basically, what this plan
does is pretty much put you back on the sort of trickle down tax cuts at
the very top, the basic road map that got us to where we are today. And I
don`t think it`s going to resonate with most people when they get a closer
look.

O`DONNELL: Jared Bernstein, thanks for joining me on tonight on this
breaking news tax story.

BERNSTEIN: My pleasure, Lawrence.

O`DONNELL: Rick Perry is not just an advocate of a flat tax. He`s
also a champion of socialism, Republican socialism. That`s in tonight`s
"Rewrite."

And later, we`ll have a LAST WORD with Apple`s other Steve, Steve
Wozniak. He`ll join me.

(COMMERCIAL BREAK)

O`DONNELL: In tonight`s profile in greed on day 38 of the "Occupy
Wall Street" protests, Goldman Sachs CEO Lloyd Blankfein. Blankfein made
hundreds of millions of dollars working his way up to CEO in 2006.
According to "Forbes," as CEO, Blankfein has earned $137 million in
compensation to date.

Public information on Wall Street compensation packages is rarely
complete. And so, you should consider these figures minimums. Blankfein`s
stock is reportedly worth $337 million.

Last year, Goldman Sachs paid out more than that, $550 million to be
precise, to settle a civil fraud lawsuit filed by the SEC which found that
Goldman misled investors into buying its abacus 2007 mortgage-backed
security by not telling them that it was actually designed to fail.

This year, under Blankfein`s leadership, Goldman Sachs posted a
quarterly loss for only the second time since 1999, to the tune of $428
million. Despite that poor performance, the company has decided to spend
more, not less -- more of its revenue on bonuses this year.

So, get caught leading your company in the deceptive scheme and then
pay yourself more money. And then lose money at your company for the first
time in more than 10 years and pay yourself more money. Such are the ways
of Wall Street where greed is -- always has been and absolutely will be --
king.

Still to come in this hour, a LAST WORD exclusive with Apple cofounder
Steve Wozniak. He`ll discuss the lasting legacy of Steve Jobs. That`s
next.

And I`ll look at one of the wildest races in the country this election
cycle, filled with big money and political intrigue. And you will never
guess where it is. That`s coming up.

(COMMERCIAL BREAK)

(END VIDEO CLIP)

TIM COOK, APPLE CEO: Steve made our world a better place. And he
left his fingerprints all over society, all over the world. He also leaves
behind a company that only he could have built and a spirit that will be
the foundation of this company forever.

(END VIDEO CLIP)

O`DONNELL: And in the Spotlight tonight, the release today of Walter
Isaacson`s biography on Steve Jobs has given us extraordinary new insight
into the mysterious visionary who helped transform the way we live today.
The book tells the now familiar story of how the Apple Computer Company was
founded by Steve Jobs and Steve Wozniak and began production in Steve Jobs`
parents garage in Palo Alto, California.

It was the introduction of the Apple II that solidified Steve Jobs`
and Steve Wozniak`s pioneering position in the history of personal
computing. "More than any other machine, Apple II launched the personal
computer industry. Wozniak deserves the historic credit of its awe-
inspiring circuit board and related operating software, which was one of
the era`s great feats of solo invention.

"But Jobs was the one who integrated Wozniak`s boards into a friendly
package, from the power supply to the sleek case. He also created the
company that sprang up around Wozniak`s machines. As Regis McKenna later
said, `Woz designed a great machine, but it would be sitting in hobby shops
today were it not for Steve Jobs.`

"Nevertheless, most people considered the Apple II to be Wozniak`s
creation."

Joining me now Steve Wozniak, co-founder of Apple and chief scientist
for Fusion IO. Steve, thank you very much for joining me tonight.

STEVE WOZNIAK, APPLE COMPUTER CO-FOUNDER: Thank you, Lawrence. Very
good introduction. Oh, my gosh, those were the most exciting times in our
life. That was about the sixth time actually that I designed a cute little
board and Steve found a way to turn it into money.

That was like the way we worked together, kind of like a
Lennon/McCartney. Heck, if you want to get the full story, get my book
too.

O`DONNELL: What is your book, Steve? Let`s get that plugged.

WOZNIAK: Mine is "iWoz." But I`m so thankful that Steve got this
book written. And listening to the interview on "60 Minutes" last night
with Walter Isaacson, I was so torn by how honest it is, how genuine.

That`s what I look for in life. I don`t like it when people kind of
shade things over and fake you out, and do a lot of like deceptive words
and act so perfect. So I was just delighted. When I heard Steve`s voice
on some of his tapes, it was like the inner sense -- the beautiful sense
that I love so much in Steve.

If we had never had Apple Computer, if Steve hadn`t come back and just
turned the world around with the iPod and the follow on iProducts, I still
would be very, very sorry, wish he was still here, wish we could go out and
be friends and have a pizza and chat over old times and tell jokes.

So it`s very difficult. You know, he`s young. So a lot of -- lot of
his friends from childhood are still alive and missing him dearly, you
know, for more reasons than just Apple even.

O`DONNELL: Steve, we learned last night that -- and Walter has said
that Steve Jobs knew that there was going to be some real negative
information about him, certainly things that some people would interpret
extremely negatively. And in his choice of Walter Isaacson, he was
choosing a very serious journalist who does not leave stones unturned.

So it seems as though it was his desire to get the kind of book you
would want to read, the kind of book that had the real flesh on the bones
of this story.

WOZNIAK: Absolutely. It tells something about his own credibility,
the truth that was within. You know, the sincerity in Steve Jobs, you
know? I listened to him and his reasons for pursuing things.

He didn`t want to be one of those high up, become very strange because
you got rich type people. You know, he wanted to live a lot of the normal
life too. I felt so much for that. I go even further in that extent.

O`DONNELL: Steve, I wanted to ask you a question that came in to me
today from Twitter. I`m not sure whether it came in over an iPhone. It
probably did come over some Apple device. It`s from Kelly805. The
question is "when was the last time Woz talked to Steve Jobs and about
what?"

WOZNIAK: A few months ago. And he had called up because he had
somehow heard me tell -- I had told a reporter that oh, I might want to
come back to Apple. I told him, oh, no, the reporter just sort of sucked
that out after about six questions.

He said, would you want to? I said no, no, it`s not on my mind. If I
thought that I could help Apple and really run Apple, I would absolutely
want to come back and be of assistance to Apple. But that wasn`t it.

Steve also mentioned in that call -- he said that he was going to die
soon. I thought it was metaphorically. Like we all live shorter life than
we would like. And it was sad. I didn`t ask questions. Didn`t know that
-- I was stunned as much as anyone the day that he died and I got the word.

O`DONNELL: Steve, you know, I also e-mailed my friend Walter Isaacson
today to say, what should I ask Steve Wozniak tonight. And he says ask
about the Blue Box and Breakout. That`s what he said in e-mail back to me.

The Blue Box was something that you guys created before Apple. And I
get the impression that the Blue Box was the road to Apple.

WOZNIAK: Well, it was actually a start of a long history where Steve
and I had just met recently before that, building a computer that I had
designed of my own. And then I designed this little blue box that could
make free phone calls over the world by just putting tones into American
telephones.

Steve liked it. Steve said we could sell it. He found a way to
actually sell these things. But then from then, I built a Pong game for
myself. Steve came back from Oregon. He saw it. He went down to Atari
and got a job there because he loved Atari after he saw that.

Then he came to me and he said, hey, Nolan Bush now, the owner of
Atari, wants this one player Pong game called "Breakout." "Breakout" is a
hit game today. I said, I would do any thing to be able to design a game
that kids are going to play. I love kids.

Steve said you have to do it in four days. They want software then.
You don`t do them in four days. It`s six months. I said I don`t think I
can do it. I was the hot shot designer of all time.

But sat down. We worked day and night. We both got the sleeping
sickness, mononucleosis. And we delivered a working Pong came four days
late to Atari. And that helped Steve, you know, buy into a farm with some
friends up in Oregon.

O`DONNELL: Steve, you and Steve Jobs made a lot of money at this.
But what I`m hearing from you -- I don`t hear you saying, oh, boy, that`s a
great idea. I can make a lot of money from this. I hear you saying, oh
I`d love to design a game that kids would really love.

It -- I`m getting the feeling that you at least were going into this
just out of your own enthusiasm for what these ideas were, and pursuing
these ideas. And you didn`t start out looking for money in the creative
things you were coming up with.

WOZNIAK: Yeah, both Steve and I had spoken a lot about like things
like his Zen Buddhism and the religions of the day, and thoughts about what
was right and wrong in the world. And we`re coming up in the counter-
culture Vietnam War days. So both of us had sides that were similar in
that respect.

I designed all these things just wanting to have my own little
products in my own life, or show them to friends, have neat things. And
Steve always came by and he thought -- he just wanted to make products that
somehow were important to the world. He wanted to turn them into
companies. He wanted to turn them into companies tying to products that
millions of people would buy some day.

He wanted to be one of those people that`s known for changing in the
world. So both of us were very pure and not really seeking money. You
don`t measure your success by money for either one of us.

O`DONNELL: Steve Wozniak, co-founder of Apple, I can`t thank you
enough for joining us tonight. And I cannot thank you enough for joining
with Steve Jobs and bringing us these wonderful changes to our lives that
we use every day. I really have to thank you very much for that.

WOZNIAK: Well, I certainly hope we have another Steve Jobs somewhere
in the future. Maybe 100 years from now.

O`DONNELL: We`re going to need plenty more Steve Wozniaks too. Thank
you very much, Steve.

WOZNIAK: Thanks. Good talking to you Lawrence.

O`DONNELL: A program note, this Wednesday at 10:00 p.m. on THE LAST
WORD, the author of Steve Jobs` biography, Walter Isaacson, will be my
guest.

Still ahead in this hour, Rick Perry and his love of socialism.
That`s Texas style socialism. That`s ahead in the Rewrite.

And later big money is pouring into one of the strangest elections in
the country. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: All right. I got a little personal business to conduct
right here. I`m going to try to do a booking for the show right here,
right now, on live TV. When Texas mega church pastor John Hagee --
remember him -- he appeared at Rick Perry`s prayer rally in Houston this
summer.

When he did that, I quoted some of his past comments that could cause
political trouble for Rick Perry. You can watch that segment online at our
blog, at TheLastWord.MSNBC.com. I don`t want to say any of the things I
said then because I`m trying to get Pastor Hagee to come on the show.

Pastor Hagee didn`t really like what I had to say. And he wrote
letters of protest to this network, something he`s done before about other
references to him on other shows at this network. And I have invited
Pastor Hagee to join me on this show to clarify any of his past statements,
to talk about anything he wants to talk about.

I`m happy to give him more than equal time to respond to anything I
have said or anybody else has said about him on this network. But he`s
refused so far to come on the show.

And I have also invited his spokesman on the show, but the spokesman
also refused. Pastor Hagee has a standing invitation to come on this show,
at his convenience. Now, as regular viewers of the show know, religion is
right up there with tax policy as one of my very favorite subjects. And
there is no one I would now want to discuss religion with more than Pastor
Hagee, except maybe Rick Perry.

(COMMERCIAL BREAK)

O`DONNELL: In tonight` Rewrite, another episode of "We`re All
Socialists Now." Do we have the music for that yet? "We`re All Socialists
Now." Someone should come up with that.

The love part of America`s love/hate relationship with socialism began
in 1922 with the Grain Futures Act, the federal government`s first venture
into agriculture socialism, you know, the kind where the government
guarantees certain farmers certain price levels for their products, or
offers tax subsidies for certain wildly inefficient agricultural activities
like Ethanol production.

These are purely socialistic ideas that have the full support of some
of the most Republican precincts in the country, places like Kansas that
never deliver Democrats to the United States Senate, but fully expect the
Republicans they send to the Senate to deliver socialism to Kansas. And
they do.

Red states just can`t get enough of federal agriculture socialism. I
mean, literally it`s not enough agricultural socialism for them so they
have state programs to provide even more agriculture socialism.

Republican Rick Perry`s first statewide elected office in Texas was
agriculture socialism commissioner. In that job, Perry took the stupidest
kind of American socialism, agriculture socialism, and made it even
stupider. Perry fulfilled his socialistic campaign promise to make
government guaranteed loans to agribusiness start-ups that would process
the state`s agricultural products.

Leland Copeland, writing in this Sunday`s "Austin American Statesman,"
tells the full story of how that turned out for Texas taxpayers. Thirty
percent of the loans that Rick Perry made turned out to be bad loans, never
repaid. While Rick Perry was running the program, Perry repeatedly told
this lie: quote, "this has not cost Texans money."

In fact, the program cost Texans -- Texas taxpayers 15 million dollars
in bad loans. And then Governor Perry, once he became governor, had the
pleasure in 2009 of signing his own government bailout of the failed loan
program he ran when he was agriculture socialism commissioner.

An auditor found that Perry had guaranteed loans to applicants with a
negative net worth. Have you ever tried to get a loan with a negative net
worth? These are applicants who couldn`t possibly have paid back those
loans. The auditor found that Perry had violated the program`s lending
guidelines.

Perry`s successor, Susan Colmes, also a Republican, found the program
in such hopeless condition that she simply stopped making agriculture
socialism loans.

Now, good socialists like me like good socialism, programs that work
as designed, that we simply couldn`t live without, like unemployment
insurance, Social Security, Medicare. But bad socialists like Rick Perry
like bad socialism, like agriculture socialism and his failed agriculture
loan program.

Now that we`re all socialists, the hate part of America`s love/hate
relationship with socialism is simply hatred of the word socialism.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Rick Perry, a new leader from agriculture for
Texas.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O`DONNELL: Finally tonight, the wildest and weirdest race of 20011.
Wildest is the superlative used by "The Nation" magazine to describe the
race for District One School Board in Denver. The campaign for the
district one school board seat, one of the three open school board seats in
Denver this year, is on. It`s on its way to being a quarter of a million
dollar race.

If it has become a partisan proxy in the war on Democrats and
Republicans going on in this country, it has filtered all the way down into
a school board race. This is school board candidate Emily Sirota at her
campaign announcement in August, in a gazebo with some pizza and soda and a
few dozen people.

Emily Sirota is a mother of a 10-month-old boy. She worked on
education policy as a former aide to Montana Governor Brian Schweitzer.
She raised 57,000 dollars, including 22,000 from the Denver Teacher`s
Union.

Her opponent, Ann Roe, has out raised her three to one, raising a
record 176,000 dollars for her district one school board campaign. The
"Colorado Statesman" filed this report recently on the influx of money into
the Denver School Board election: "many of the contributions this year come
from the oil and gas industry and from investment bankers. Henry Gordon,
president of Strada Capital and Strada Resources, a business that
investment in oil and gas consulting service in Denver candidly admitted to
the Statesman that he was not familiar with the particular candidates when
he was asked to contribute 75,000 dollars. Gordon complied."

It`s worth noting that Henry Gordon doesn`t live in Denver. But as
"The Nation" reports, the big money interests are taking advantage of a
loophole in Colorado election law which imposes donation limits on every
Colorado race, from contest for local posts to statewide positions, except
local school board campaigns.

Joining me now is Emily Sirota, candidate for the Denver School Board
District One. Thanks for joining me tonight, Emily.

EMILY SIROTA, DENVER SCHOOL BOARD DISTRICT ONE CANDIDATE: Thank you
for having me.

O`DONNELL: Emily, you have raised what seems to me to be a very, very
large amount of money for a race like this.

SIROTA: You would think so. You would think so. Except in this out
of control atmosphere, where folks are able to write 26,000 dollars checks,
25,000 dollars checks, 11,000, 10,000. Those are the kind of campaign
contributions my opponent is getting.

O`DONNELL: What did you think you were getting into when you sliced
some pizza and said, OK, I`m running. How much money did you think you
were going to have to raise and spend for this?

SIROTA: You know, it has been escalating over the last couple of
election cycles here in Denver. I didn`t think it was going to escalate in
such a way. I thought, you know, I was going to have to ask for money from
some friends and family and community members. And it would be a lot of
knocking on doors and talking to folks around the district.

I had no idea this kind of money was going to be dumped into Denver.

O`DONNELL: Now, is this a matter that something the Republican party
has taken seriously and been very good at, which is looking all the way
down the ballot to develop a farm team, that the way you get, in their
view, a United States senator is first you have to get a school board
member somewhere, who then becomes maybe a state senator or a state
representative, and then that person runs, Barack Obama style, for the
United States Senate, becomes a United States senator.

The republicans have always played a very long game in developing
their candidates from the lowest level offices all the way up to the top.
Is that what`s going on here?

SIROTA: Well, I suspect there probably is a little bit of that going
on. We also have seen, you know, special interests playing a role here.
Some of these huge donors, not only to my opponent`s campaign, but she`s
running as part of a slate of candidates in this school board election --
so those big donors have given to everyone in that slate.

Some of those donors are connected to interests that have to do with
increasing access to vouchers and the privatization of our public schools.
So I think there`s some of that at play as well.

O`DONNELL: So is there -- what is at stake? Could you expand a
little bit on what`s at stake for the big donors on the other side -- to
the other candidate? What`s at stake for them in this election?

SIROTA: You know, they have been rather coy about it. You know, some
of them talk about we have to continue down this path; we can`t alter from
the course we`re on.

But, you know, I am running for school board because I have a little
boy who will be heading into our public schools very soon. And the
progress that we have made just it`s not good enough. We need to bring --
I`m running because I think it`s important to bring the focus back to our
neighborhoods and our communities, and making sure that all kids, no matter
where they live in Denver, they have access to great schools in their
neighborhoods.

And that`s not the case right now. And that is not the path our
school system is headed down right now. There are privatization interests
who would like to see parents drive their kids halfway across town to find
a good school. And I think we can do better.

O`DONNELL: Emily, what does this flood of money into a race like this
do to people like yourself who consider getting in, who consider, as you do
-- I have a child, I want to get into this, I care about it, from that
perspective. You discover there`s going to be this big flood of money. Is
that inhibiting candidates making that decision?

SIROTA: Absolutely. I think it`s very intimidating to, you know,
honest folks out there who could really make a difference in our education
policy and public policy across the board. But these days now, you have to
be a good telemarketer, instead of somebody who actually understands policy
and can work with communities to improve our education system.

O`DONNELL: Emily Sirota, thank you very much for joining us tonight.

SIROTA: Thank you for having me.

O`DONNELL: You can have THE LAST WORD online at our blog,
TheLastWord.MSNBC.com. You can follow my tweets @Lawrence. "THE ED SHOW"
is up next.

END

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