updated 11/1/2011 11:36:23 AM ET 2011-11-01T15:36:23

Guests: Steve Schmidt, Lou Dubose, Amy Klobuchar

ED SCHULTZ, "THE ED SHOW" HOST: Rachel, I think you will enjoy the
barbecue. In fact, it`s the sauce. I guarantee you`re going to enjoy it.

RACHEL MADDOW, HOST: I already made it through half the barbecue, Ed.
I hate to break it to you. I was going to take it home and be a civilized
person. But I just sat there at my desk like a cave man shoveling it in.

SCHULTZ: They would not let me leave unless I had a batch of that
stuff. You`ve got to give this to Rachel! I said, OK, I`ll do it. I`ll
do it.

MADDOW: It is in good hands. It`s great stuff. Thank you, Ed. I
really appreciate it, man.

SCHULTZ: You bet.

MADDOW: And thanks to you at home for staying with us.

Today is not just barbecue from Ed day here at THE RACHEL MADDOW SHOW.
It`s not just Halloween. Today is also a day that has been unexpectedly
packed with political news.

There`s a ton to talk about with what happened to Republican front-
runner Herman Cain today. We`ll be getting to that in just a moment.

There was actually something to talk about even with Newt Gingrich`s
campaign today and it`s not just about Newt Gingrich trying to get his
hands on your money this time. Oh, wait, actually the Newt story is just
about him trying to get his hands on your money again. But there is new
Newt news about that today.

Today was a big, a big political news day for what is the most
important presidential politics news of the day in the sense that I think
is the most devastating to a specific campaign is this footage -- a footage
that came in over the weekend of Texas Governor Rick Perry, an appearance
that Rick Perry made in New Hampshire on Friday.

Now, this is sort of a sensitive issue to talk about because there is
not an empirical means by which I can explain why this footage may be the
end of Rick Perry`s campaign this year. There isn`t something quantitative
I can point out here. This does not count as a gaffe or something that he
misspoke about and will have to clarify.

But looking at this footage, I would argue that Rick Perry can really
no longer be considered a serious contender for president after this. This
is one of these things where there`s not really a way to explain it -- but
once you see this tape, you`ll never look at this guy the same way again.
The tape just sort of speaks for itself. Anything that I can tell you,
anything that I can say about how this changes Rick Perry`s chances will
not help to explain this. You just have to see it for yourself.

So here it is. This was Rick Perry on Friday night in New Hampshire.

(BEGIN VIDEO CLIPS)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: This is such a cool
state. I mean, come on, live free or die? I mean, you know, you got to
love that, right? I come from a state, you know, where they had this
little place called the Alamo and declared victory or death. You know,
we`re kind of into those slogans, man. It`s like, live free or die,
victory or death. Bring it.

Gold is good. If you`ve got any in the backyard, because, you know,
if they print anymore money over there in Washington, the gold`s going to
be good.

This week I announced a tax plan. We were up in -- or down in, I
should say, South Carolina, and we laid out a tax plan. You can stay in
the old system that`s out there and the ones that want to stay in the old
system pay the lawyers, pay the accountants, all that money that`s gone, or
-- that! Twenty percent flat tax, put it on there, take your deductions
off, send it in.

The good news is that little plan that I just shared with you doesn`t
force the Granite State to expand your tax footprint. If you know what I
mean. Like 9 percent expansion.

I love Herman. Is he the best? I mean -- I have fun with him. He is
a great, interesting guy. And thank you, Herman, for helping pay for the
event tonight.

I grew up on a farm. I grew up -- I grew up on a farm. I tell
people, so far out in the country that everybody had their own tom cat.
Some of you are not going to get that. But that is a long way away from
any neighbors.

I know a lawyer, Wizoric (ph). Always have fun with your name,
brother. We must make President Obama a one-term president. We must.

Nothing I will -- I look forward to the day when I can salute to the
south to Mr. Chaves and say, no thank you, we to not need any of your oil.
We are doing it ourselves in America with domestic energy.

The coolest thing happened. I roll in here and I get to meet a real
life angel in the form of Christopher Duffley. And then I get to meet a
real life hero in Catherine Adair. I mean, my -- today has been awesome,
girl. This has really been a great day.

(END VIDEO CLIPS)

MADDOW: That was the speech that Rick Perry gave on Friday night in
Manchester, New Hampshire, to conservative group called Cornerstone.

Obviously, the governor was delighted to be there. I mean,
exuberantly over the top delighted to be there. But he became even more
delighted to be there, his expression of excitement and delight for being
there only increased once the speech was over. It is hard to believe, but
it`s true.

Here`s one more moment that happened right after the speech. Keep an
eye on Mr. Perry on the right here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We`re going to actually get you out of here right
at 9:00, so last thing, first of all, governor Perry, you can`t believe New
Hampshire without getting a couple of things, essentials from New
Hampshire. First thing is, we call this -- in New Hampshire we call it
liquid gold, but you`ll put it on your pancakes and waffles and whatever
other Southern food you eat down in Texas. But this is pure maple syrup
from the state of New Hampshire.

(END VIDEO CLIP)

MADDOW: Sorry, that was -- I`m sorry. I will not do that again.
That was unnecessary and unprofessional. I will not do that. I`ll put
that they way. Sorry. Sorry.

It is hard to talk about what just happened to Rick Perry`s campaign
at that speech in New Hampshire. I think his campaign`s hope here is that
other candidates` scandals that broke in the last couple days might
overshadow this speech, stuff like the Herman stuff we`ll be talking about
later on this hour because there`s really no way to explain this away. I
mean, it`s possible that Rick Perry was having a medical issue of some
kind. Maybe he was having, like, a bad drug reaction. Sometimes in cases
like this, a campaign might say that the candidate was overtired or
something.

Maybe they will have some sort of physical explanation for him
behaving this way, but if they do try to give some physical explanation for
Governor Perry`s performance, that, of course, will raise fitness issues in
terms of whether or not he`s actually cut out to handle the riggers of the
presidency.

Mostly, you have to think that they just want this to go away, that
they want people to not see this speech because something that lets people
know this guy is not the politician character he has been playing on
television, that is an esoteric and non-quantitative thing, but it can be
devastating. There`s no perfect analogy for a performance like this, but
it`s sort of like the "Dean scream" moment that derailed Howard Dean`s
presidential campaign after the Iowa caucuses in 2004.

(BEGIN VIDEO CLIP)

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: Not only are we going
to New Hampshire, Tom Harkin, we`re going to South Carolina and Oklahoma
and Arizona and North Dakota and New Mexico. We`re going to California and
Texas and New York and we`re going to South Dakota and Oregon and
Washington and Michigan. And then we`re going to Washington, D.C., to take
back the White House. Yeah!

(END VIDEO CLIP)

MADDOW: Yeah! Again, that is an imperfect analogy to what just
happened to Rick Perry in New Hampshire, because in the case of the Dean
scream, the scream thing was one second -- one second or less. It seemed
to mostly have been the product of a weirdly placed microphone and a very
loud crowd, but it was a moment that was then sort of inappropriately de-
contextualized in a way to make Howard Dean seem crazy in some larger way
or at least to make him seem funny, to make him an object of ridicule in
the campaign.

In the case of Rick Perry, this was not one out of context second.
This was 25 minutes. I mean, take your pick of any of these moments. Any
one of these moments is a "Dean scream" -- and there were 25 straight
minutes of it.

And what is truly interesting about this truly fascinating Rick Perry
appearance is that he seems like he thinks he nailed it. You know, you
don`t get the sense that he realizes he`s a little over the top here, that
he`s a little out of control or that he is breaking character with the way
he`s been presenting himself as a candidate. Or that this is something
that`s going to be rocketing around the Internet under headlines
questioning whether or not he was drunk.

I mean, Rick Perry is on top of the world. Look at him. Here. He is
elated. He thinks he is a great orator and he`s just nailed it. He has
just nailed this perfect speech.

In the 1968 presidential election, the Republican Party picked Richard
Nixon to be their nominee. But Richard Nixon was not the Republican front-
runner from the outset in the campaign. The early front-runner from the
nomination in the lead-up to the campaign was actually Mitt Romney`s dad,
George Romney, former governor of Michigan.

Look, same hair as mitt. Same chin as mitt. Actually it`s a little
uncanny. He just looks like the same person.

George Romney was leading in the polls early on in the Republican race
in `68, but he was not necessarily known as a great campaigner. And in the
middle of 1967, George Romney said something weird. He said something
weird about being brainwashed.

George Romney wanted to campaign against the Vietnam War, but father
like son, he had changed his mind on that important issue. He had earlier
been a supporter of the war. Now, he was against it. When he explained
his change in positions, Mitt`s dad, George Romney, said, that he had only
supported the war before because he had been brainwashed. Brainwashed was
the word he used -- brainwashed by American military officers and American
officials when he had visited the war zone.

Brainwashed? Remember, this was 1967, summer of love. Jimi Hendrix
releases "Are You Experienced," Jefferson Airplane, "Surrealistic Pillow."
The Doors released "Strange Days." This is not "Hard Days Night` Beatles.
This is "Sergeant Peppers Lonely Hearts Club" band Beatles and on the way
to "Yellow Submarine."

So, yes, dude said he went to Vietnam and got brainwashed by the man
and that`s sort of the end of George Romney for president. That impression
sinks in. Richard Nixon gets nominated by the Republican Party and George
Romney goes down in history as that brainwashed guy, Mitt Romney`s dad.

So, yes, Herman Cain has a campaign funding scandal right now and
sexual harassment scandal and still doesn`t understand abortion scandal.

And Newt Gingrich is trying to mount a comeback in his own
inexplicable and inadvertently hilarious way and there`s other stuff going
on in the Republican presidential campaign. We`re going to be talking
about all that tonight.

But this I think, this is the most important thing in the race right
now. Because Rick Perry of all the non-Romney candidates, Rick Perry is
the one, or at least was the one who had the best chance of being the
Republican nominee. Rick Perry is the one who had the best chance of
beating Mitt Romney.

But as of this weekend, what we have been used to seeing, the pose
that the campaign has drawn for us, Rick Perry posing for Mt. Rushmore has
now instead become Rick Perry cuddling with syrup.

Sorry. It is now an intangible but inescapable truth that Rick Perry
will never be looked at the same way again. And this race will never be
the same again either.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CAIN: This is such a cool state. I mean, come on, live free or die.
I mean, you know, you got to love that, right?

I come from a state, you know, where they had this little place called
the Alamo and they declared victory or death. You know, we`re kind of into
those slogans, man. It`s like live free or die, victory or death. Bring
it.

(END VIDEO CLIP)

MADDOW: Bring it. Joining us now is Lou Dubose, editor of the
"Washington Spectator." Lou is the former editor of the "Texas Observer"
and he`s covered Governor Perry since the mid-1980s.

Lou, my friend, it`s nice to see you. Thanks for being here.

LOU DUBOSE, WASHINGTON SPECTATOR: It`s good to see you, Rachel. And
I`m doing my best to hold it together.

MADDOW: Well, I`m having a hard time explaining what is important
about this Rick Perry performance. I mean, this is a man who was showing a
very different face to the world than the one he has cultivated for his
political image. Is that the right way to put this?

DUBOSE: Absolutely. I mean, this ain`t Rick Perry. You know, I`ve
only seen something similar to this one time and that was at CPAC, the
Conservative Political Action Conference this February, when he did a
bizarrely manneristic speech and no one paid much attention. But it was a
20-minute speech. He was supposedly on for 12 and did 20 and did many of
the same things.

But this is -- it`s disturbing, both disturbing and amusing to watch
and it is utterly unpresidential.

MADDOW: Well, is it gubernatorial, though? Have you -- does he do
this in Texas? I mean, he`s been governor for 10 years. He`s been in
politics for longer than that. He`s just showing this side of himself now?

DUBOSE: That`s what`s kind of creepy about it. No, it`s un-
gubernatorial, even by Texas standards. I mean, this is not -- this is not
being intentionally theatrical.

This seems to be a man who has found another self within and, you
know, I`ve seen -- I`ve followed him since he was a Democratic legislator
in Texas in 1985 -- never seen anything quite like this. And it`s, you
know, again, painful and amusing to watch and it goes on for half an hour.

MADDOW: Do you think, I mean, I do not want to cast dispersions where
they are not deserved, but the way that this became political news this
weekend was people asking if he seemed intoxicated, if there might be
something going on here that was physical. I mean, he`s had back surgery
recently. That, I mean, I don`t know that comes with any sort of
medication. Certainly, the campaign is denying there`s anything like that
going on.

But because it is so out of character, does it raise those issues for
you, or do you think that`s -- do you think there`s no reason to go there?

DUBOSE: I think that`s fair enough. I mean, when it is so utterly
out of character with the man, as you said earlier, the man who looks like
he`s, you know, carve in -- ready to be carved in Mt. Rushmore, is suddenly
a cartoon. And, you know, the blogosphere is all about the drunk moment.

I wondered what -- I wondered at CPAC in February what he was about.
I went back and made a point of following up and seeing his -- and going to
see his State of the State speech a month later. And he was old Rick
Perry, real Rick Perry. You know, he was kind of pompous and boring in
Texas grandiose. But it was Rick Perry.

This is -- this is inexplicable. And I think, you know, you think if
his campaign could end by shedding a few tears in Manchester, New
Hampshire, you know, you wonder what this does to Rick Perry`s candidacy.
It was not the way for him to go.

MADDOW: Is it possible that he is getting campaign adviser direction
to -- I can`t -- I shouldn`t even ask you. I cannot imagine somebody
saying, go ahead and do this. Is there anything for which we can
extrapolate from his Texas experience? I mean, has he ever run as a
candidate who`s getting 6 percent in the polls? Could this be sort of a
product of desperation?

DUBOSE: Well, that`s a good question. Rick Perry has never run
behind except the one time, his first statewide race when he challenged Jim
Hightower for ag commissioner and he played the race card with the Jesse
Jackson ad because Jim Hightower had endorsed Jesse Jackson.

But he`s always run ahead. And I can see -- you can see, perhaps,
desperation and maybe too much advice from his campaign staff. But can you
imagine anyone advising him to do what he did today? It`s really
inexplicable.

MADDOW: Lou Dubose, editor of --

DUBOSE: A whomperjawed.

MADDOW: A whomperjawed.

Lou Dubose, editor of the "Washington Spectator" -- Lou, I have not
seen you in too long. It`s good to see you. I hope you`ll come back soon.

DUBOSE: I hope so, too, Rachel. Thank you very much.

MADDOW: Thank you.

All right. For everybody else, it may be Halloween. But for Mitt
Romney, frankly, today is Christmas. If the syrup kettle heard around the
world was not enough of a political present for Mitt Romney today, then
there was Herman Cain`s day, including the singing.

What a weird freaking day in the news today. More ahead.

(COMMERCIAL BREAK)

MADDOW: The Reverend Al Sharpton did something so awesome on his
MSNBC today show, it stopped me in my tracks. He did this to make a point
about the diametrically opposed positions Mitt Romney has taken on every
major political issue he`s ever taken stands on.

The Reverend Al show figured out how to have -- look at this -- how to
have Reverend Al arguing with Reverend Al on screen. The two of them, it`s
not an impersonator. It`s him. Arguing about what Mitt Romney believes.
It was brilliant. I have no idea how they did it and it was a totally
clarifying useful way to explain a subject that often otherwise gets all
muddled.

Reverend Al, your staff, that was freaking amazing. The thing is,
doing something like that on TV takes ambition. You have to dream it up,
figure out how to do it then you have to have the stones to go for it. And
once you go for it, it`s either going to be amazing, like Reverend Al was
today, or it`s going to flop. Like, yes, never mind.

Ambition is a form of bravery. And bravery means there is risk --
risk of something happening like that ridiculous horse racing skit. From
2009 that still keeps me up at night.

One of the worst/best ambitious things we`ve ever done on this show
was how we tried to cover the Anna Chapman Russian spy story a while back.
Lack of actual video elements to accompany that story led us to desperate
measures on television.

(BEGIN VIDEO CLIPS)

MADDOW: To illustrate spy craft of which the spies like us are
accused, we enlisted two notorious THE RACHEL MADDOW SHOW players. Again,
despite the appearance of actual attempted espionage, remember, these are
dramatizations of real events -- beginning with the secret sign language of
signs and countersigns. Here are our players re-enacting almost word for
word what the government claims the Russians said to each other to identify
themselves as spies.

UNIDENTIFIED MALE: Excuse me. Haven`t we met last summer in
California?

UNIDENTIFIED MALE: No. I think it was the Hamptons.

(END VIDEO CLIPS)

MADDOW: That`s all we could do when the story broke because we only
had the written criminal complaints to go by. But now, on Halloween, we
have got the rest of the story, courtesy of the FBI. And it turns out it
is amazing. That is the "Best New Thing in the World Today" -- which is
coming up at the end of the show.

(COMMERCIAL BREAK)

MADDOW: Yes, so it looks like it`s going to be Romney. It`s not
going to be Michele Bachmann. That really didn`t last long. It`s not
going to be Jon Huntsman, although the Huntsman campaign did put out the
best yet Mitt Romney is a flip-flopper ad today. But despite that, it`s
not going to be Jon Huntsman because Republican voters apparently just
greatly disliked Jon Huntsman.

It`s not going to be the man on dog senator from Pennsylvania. It is
not going to be Ron Paul, again -- although you sort of get the sense
that`s maybe OK with Ron Paul.

It`s not going to be Gary Johnson. It`s not going to be Buddy Roemer,
although Buddy Roemer probably has the most substantive and maybe the most
interesting platform of any of these guys.

It`s not going to be Rick Perry. I really think it`s not after that -
- yes, after the speech in New Hampshire over the weekend. That just
appears to be over. He can become the Anita Bryant of syrup, but he`s not
going to be the Republican presidential nominee.

It is not going to be Newt Gingrich, although the Gingrich campaign is
really psyched for the Gingrich boom-let stories they`re seeding throughout
the Beltway media these days. The problem is that even though they are
turning out to be good at spinning stuff, they still haven`t been able to
figure out how to capitalize on their own spin. Newt Gingrich after the
newt boomlet stories all weekend, his big campaign event today was in
Norway, where he gave a video address. Obviously not going for a lot of
votes in Norway, but he`s still probably trying to raise money there?
Actually I don`t know.

Today, the other thing we got from Newt Gingrich`s campaign was a
notice that people who did want to donate to the campaign, they should be
patient because the Gingrich campaign has been unable to accept Visa cards.

So, even when they are trying, they are not connecting. That, of
course, though, leaves Herman Cain.

And apparently, no, it`s not going to be Herman Cain either. Although
Mr. Cain has had high and relatively sustained poll numbers, the suspicion
that his candidacy would wilt under the spotlight brought on by front-
runner status is getting its real test now. This weekend, Politico.com
published anonymous source allegations that during his time at the National
Restaurant Association, the association paid settlements in the five-figure
range to two different women who complained about inappropriate sexual
suggestions from Mr. Cain.

Even the most experienced and professional political campaign can have
a hard time keeping the lid on a revelation like that. But with the Herman
Cain campaign, it`s like they not only couldn`t keep the lid on, but what
was in the pot was popcorn and they just took the lid off and it`s just
blowing up all over the kitchen all day long. It never stops.

(BEGIN VIDEO CLIPS)

JONATHAN MARTIN, POLITICO: Have you ever been accused --

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I`m trying to --

MARTIN: -- accused of sexual harassment? Have you? Have you, sir?

UNIDENTIFIED MALE: That was the last question. Thanks.

MARTIN: Please answer yes or no.

CAIN: Have you ever been accused of sexual harassment?

MARK BLOCK, CAIN CHIEF OF STAFF: Herman Cain has never sexually
harassed anybody, period, end of story.

CAIN: I have never sexually harassed anyone.

GERALDO RIVERA, FOX NEWS: Was there or was there not a cash
settlement to two female employees of the National Restaurant Association?

J.D. GORDON, HERMAN CAIN CAMPAIGN: All I can tell you is that this is
a typical attack on a conservative that`s doing well.

CAIN: While at the restaurant association, I was accused of sexual
harassment -- falsely accused, I might add. I was falsely accused of
sexual harassment.

RIVERA: Are you denying that there was a cash settlement to two
female employees of the National Restaurant Association, yes or no?

GORDON: I would say you`d have to get that from the National
Restaurant Association.

CAIN: Amazing grace will always be my song of praise.

As far as a settlement, I am unaware of any sort of settlement.

I know there was an agreement, whether it was a settlement, agreement,
or whether it was termination, I don`t remember what it was called. I know
that the restaurant association had an agreement with this lady.

(END VIDEO CLIPS)

MADDOW: You know, lost in the hullabaloo around the sexual harassment
allegations and the campaign frankly making it worse by appearing to
contradict themselves, and un-denying their denials today, lost in all that
is another Herman Cain allegation today, an allegation around where there
is not anonymous sourcing or ambiguity about those facts and those facts
are damning.

"The Milwaukee Journal Sentinel" reporting that it appears, from the
looks of financial records that the way the Herman Cain campaign was funded
is that some anonymous donor or donors just gave money to Herman Cain`s
campaign manager and they used that money to run the campaign. Not as a
PAC or super PAC or even a campaign committee or any other legal way by
which you can fund a campaign. It was, it appears, just anonymous money
directly setting up and running Cain for president.

You can do almost anything with money and politics right now, but you
really can`t do that. Everybody`s asking Herman Cain about the sexual
harassment allegations today and the campaign has had as many different
responses as there have been questions. We only came across one reporter
this afternoon who had asked Mr. Cain about the whole other scandal -- the
your "whole campaign might be illegal" scandal.

It was a daytime anchor at the FOX News Channel named Jenna Lee.
Kudos to her asking the question. That said, there wasn`t much of a
follow-up since Herman Cain`s response after she described the allegations
in detail was, I`m not aware of this report. He said he said that`s the
first time he heard of it right then on TV.

So, yes, this is one of those days if you`re Mitt Romney, you`re
probably looking around and thinking, all right, whatever else is going on
my life, this I`ve got.

Joining us now is Steve Schmidt, who ran the McCain-Palin in 2008, who
is now an MSNBC contributor.

Steve, thanks for being here.

STEVE SCHMIDT, MSNBC CONTRIBUTOR: Great to be here.

MADDOW: When I heard that response from Herman Cain today on that
very substantive allegation about his campaign, him saying "I don`t know
anything about that" -- I wanted to ask you how much time you have in a
campaign to come up with an answer to a scandal you didn`t see coming.

SCHMIDT: You don`t have a lot of time, but you never have the
candidate go out on television and be caught cold with those facts like
that. I mean, there`s just no excuse for that. And that is the far more
serious story out of the two, because those are felony federal campaign
finance violations, if, in fact, the substance of that story is true. And
that`s a big problem for him.

MADDOW: In terms of the sexual harassment discussion today, it was
really a discussion because everybody kept asking about it. The story
snowballed from the initial "Politico" report into an evolving cascade of
denials and then contradictions of the earlier denials. I`m assuming this
is pretty simple, that you need one story, it should be the truth and you
should stick to it. But how would you assess their response to that today?

SCHMIDT: Well, the response has not been good. It`s a serious
allegation. I don`t need to make light of it all.

But, you know, the response seems like a "Saturday Night Live" skit
more than anything else. I mean, the answers are all over the place.
They`ve contradicted themselves seven or eight times.

And I do think -- I mean, I think the one thing that all these
Republican campaigns agree about is the fact that Herman Cain`s campaign is
going to unravel, going to unravel pretty quickly. Even tonight, he`s at
the top of the polls but I think everybody expects him to drop and drop
rather precipitously.

MADDOW: Why will Republican voters turn against him? Everybody
thought Herman Cain`s poll numbers were going to sink before they have
sunk. They`ve been more resilient than we`ve expected.

Is there a possibility that his sort of cavalier I don`t know what
you`re talking about, I don`t need to make sense response for this stuff
does have some appeal? Otherwise, I don`t really see how he got to the top
of the polls.

SCHMIDT: Look, I think it is tried and true on the Republican side.
When there is a bad story out there, you go after the media and there`s
huge resonance, you know, with Republican primary voters, you know, across
the country with that. I think the problem, though, for Herman Cain,
though, is this -- he`s demonstrated with the national security answers,
with his answers on the question of life, his answers on any one of a
number of things is he`s not shown preparedness. He`s not shown readiness.

And I think, at the end of the day, Republicans want somebody who can
defeat the president in November. And if you -- any fair reading of his
campaign, this is someone who`s making it up as he goes along every day,
someone who`s not particularly prepared d to be president. And someone
importantly for the context of a campaign is not play prepared to run a
winning race.

MADDOW: But why has he had such high poll numbers so far? He`s been
demonstrating that lack of preparedness for a long time now and because he
is an entertaining guy, both to talk about and to cover, his gaffes have
gotten a lot of attention. It`s not like he`s been hiding his light under
a bushel.

SCHMIDT: This is a very long process. In fact, it lasts for years.
I think he`s demonstrated if you`re a really talented motivational speaker
with a good singing voice, a couple of carefully marketed ideas, you can go
pretty far -- at least in the early stages of the primary contest.

But as we move into the stage now where people are going to start to
vote, you look at New Hampshire, which I think is going to set the tone for
the remainder of the race, I think he has a very difficult time maintaining
momentum that he has. And I think that should he somehow implausibly and
probably become the Republican nominee, you know, the person who would be
really happy about that is the president -- almost as happy as Mitt Romney
is tonight.

MADDOW: I think Mitt Romney is super psyched as Rick Perry might put
it. I didn`t any Rick Perry would put it as super psyched until I saw the
speech on Friday in New Hampshire.

I don`t exactly know how to explain, how to put into words what that
speech did to his chances as a nominee. But you`ve seen enough of the
speech, I imagine you`ve at least seen clips of the speech. What`s your
reaction to it?

SCHMIDT: The speech does not make him look prepared to be president.
I don`t think that any fair viewing of that speech leaves a person saying,
all right, you know, I`m really comfortable with him being commander-in-
chief of the nation`s armed forces when we are engaged in two wars and
military actions in other countries. It was bizarre at times.

I don`t know how many other performances there have been like that. I
don`t know how many more there are going to be in the future. But he
didn`t comport himself like a president is supposed to comport himself.
And that matters in a state like New Hampshire which has seen a lot of
presidents come up there and campaign -- people who have successfully been
elected president ultimately, incumbent presidents returning to campaign.

And I think that the viewers in that audience just had to sit back and
say, hey, what`s going on here? It was just, you know, it was out there.

MADDOW: Am I right that, as you say, comportment issues like that,
just your impression of what this person is like as a person, that that can
actually be less reversible than any damage caused by a gaffe?

SCHMIDT: Absolutely. I think that these are very demanding, these
campaigns. Mistakes are made. They`re made all the time.

You know, but his comportment there, his bearing, his command
presence, it didn`t add up. I mean, it`s remarkable to consider that not
long ago when he was going into that first debate, he was the Republican
front-runner -- everybody was sitting on the shows talking about the fact
that he was totally in control of his own destiny, if he came out, he had
good performances. He was likely to be the Republican nominee.

He`s fallen to Michele Bachmann territory, solely on the function of
his performances out there, by his own hand. And certainly, you know, his
speech up in New Hampshire, I don`t think helps him in New Hampshire.
Doesn`t help him nationally. And I think that these debates ahead are
going to continue to be a tough road for him because the expectations are
now so out of whack for him. Everybody is just looking for him to do
poorly in it and I think it`s tough to overcome that.

MADDOW: I think you are right and I think that`s what`s interest is
to see it is the politics of personal destruction, but it`s being waged
against themselves.

SCHMIDT: Absolutely.

MADDOW: Steve Schmidt, who was a former senior campaign strategist
for McCain/Palin campaign and former deputy assistant for President George
W. Bush -- Steve, I`m always happy to talk to you about this stuff.
Thanks, man.

SCHMIDT: Great. Thank you, Rachel.

MADDOW: Minnesota Senator Amy Klobuchar will join us next for the
interview. It`s just ahead.

(COMMERCIAL BREAK)

MADDOW: Ghost stories from the FBI -- "Best New Thing in the World"
tonight.

(COMMERCIAL BREAK)

MADDOW: Here`s the hypothetical. The bad news is you`ve been
diagnosed with cancer. The good news is there`s a drug that may be able to
help you. It`s called cytarabine which sells for about 12 bucks per vial.

Now, the bad news about your drug is that there is a shortage of your
drug. So, even though cytarabine is only supposed to retail for 12 bucks a
vial, it`s being sold now for this price, $990 a vial.

Now, if you`re doing the math at home -- yes, that is more than an
8,000 percent markup. The drug distributors were justifying the markup
because there was a shortage of this cancer drug.

The market for any number of reasons was just not producing enough of
that drug for the people with cancer who needed it. Now, I know it`s
upsetting to hear sometimes the free market doesn`t work like a charm.
But, hey, all season long, everybody who hates the Yankees was treated this
year to the beautiful sight of those empty seats behind the Yankees` home
plate during games. Sometimes the market doesn`t work -- at least by the
time you need it to.

Even if you believe the market will eventually sort it out, some year,
people with life threatening illnesses who need drugs that are in shortage
can`t wait for your freshman microeconomics textbook to come true.
According to the Food and Drug Administration, there were nearly 200 drugs
for serious illnesses, things like breast cancer, and childhood leukemia,
and infections -- 200 drugs for which there were shortages in the United
States last year.

"The New York Times" reporting today that the shortage is even
stopping testing -- shortages were even stopping testing of some
experimental new drugs against the old ones, against the established drugs
to see if they`re better, and nobody can get the established drugs because
there are shortages.

Democratic Congressman Elijah Cummings has taken a particular interest
in the subject. He`s the one who exposed the $990 vial of $12 stuff
scandal. But this is one of the issues for which there`s been some pretty
-- there`s been some level, at least, of bipartisan agreement.

Since February, legislation`s been pending in Congress to help the FDA
eliminate drug shortages. It has bipartisan support and naturally in this
Congress, having bipartisan support means it can`t be acted on. Even
though everybody pretty much agrees on at least the first steps of what
ought to be done.

So, today, President Obama went ahead and acted on his own. He signed
the 96th executive order of his presidency.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Congress has been
trying since February to do something about this. It has not yet been able
to get it done. We can`t wait for action on the Hill. We`ve got to go
ahead and move forward.

We`ll still be calling on Congress to pass a bipartisan bill that will
provide additional tools to the FDA and others that can make a difference.
But until they act, we will go ahead and move.

(END VIDEO CLIP)

MADDOW: At the White House statement today online explaining the
president`s actions to stop drug shortages. The White House also notes
that the president has been acting without Congress, around Congress, if
you will, on a whole list of items -- on student loans, on employment for
Iraq and Afghanistan veterans, on getting people lower interest rates on
their home mortgages. That`s a statement of the administration`s
priorities, of course, but it`s also rather an indictment of Congress.

What can get through this Congress in terms of policy? What is
possible?

One Democratic senator put herself forward today to say that fixing
roads and bridges ought to get through this Congress. Senator Amy
Klobuchar of Minnesota today introducing jobs legislation for $50 billion
worth of infrastructure building and repair. As her hometown paper noted
this weekend, we ought to see a bill by Senator Klobuchar almost by
definition as a passable bill. More than three quarters of the bills she
has co-sponsored this year have had Republicans onboard with them as well.

So, does that mean this could actually pass?

Joining us tonight for the interview is Senator Amy Klobuchar of the
great state of Minnesota.

Senator, thank you for being with us.

SEN. AMY KLOBUCHAR (D), MINNESOTA: Well, thank you so much, Rachel,
and thank you for bringing up the drug shortage issue. It hasn`t gotten
enough coverage. I`m actually carrying that bill in the Senate, which has
bipartisan support as noted.

And that drug you mentioned, that was a drug that was denied for a
little 4-year-old boy. He could not get that drug. He had leukemia,
balding -- biggest smile in the world. It was finally located at the last
minute. His parents were planning to go to Canada to get him the
treatment, not just the drug.

That`s what we`re dealing with here. So, I`m very glad the president
did this today -- but the legislation is necessary because it`s actually
going to require the manufacturers to let the FDA know when they see
shortages because this shouldn`t be on the backs of patients and
pharmacists to spend hours calling around for the medication.

So, I`m glad you brought that up. It`s another example of something
we should be able to get done. It has bipartisan support. The other, of
course, is infrastructure. And --

MADDOW: Well, the -- let me stop you there on that issue, because the
president making the action that he made today, doing this by executive
order, also encouraging the movement of your bill in Congress. It`s a
little bit of an indictment of the Congress, something that has as much
bipartisan -- can`t get through.

I mean, do you feel the complicit indictment that Congress is holding
stuff is holding stuff that should not be held, is it a fair indictment?

KLOBUCHAR: Since August, since the people spoke out. Everyone heard
it when they were home. There has been some progress. The patent reform
bill America Invents Act passed. A number of other of things got through
with -- that we had to get done with the extension of the FAA.

But some of these things that could save lives and move the economy
forward are still sitting out and certainly infrastructure is one of them.
This bill contains the infrastructure bank -- something that has garnered
broad bipartisan support, leveraging public and private money so that we
can build the infrastructure we need, whether it`s a waste water treatment
planter, a pork processing plant in a town in southern Minnesota, or
whether it is about major highways and bridges, which is the bulk of the
money that would be with going to those as well as rail across our country.

I think I have seen you next to the Hoover Dam, Rachel, in some ads on
your network and I think you get that this is about bold projects that you
can`t do it alone in the private sector, that there are some reasons you
get government involved and you look at what made the country great whether
it is the Cross Continental Railroad or the highway system under
Eisenhower.

If we are going to move to the type of export economy where we`re
actually making stuff again, inventing things, exporting to the world, we
need an air traffic control system that works. We need the roads. We need
the bridges. And no one knows that better than our state when you think of
the bridge collapsing in the middle of the summers` day, in the middle of
the Mississippi River.

And as I said that day that shouldn`t have happened in America. But
that happened six blocks from my house. Dozens of people killed and dozen
of cars submerged in water. And when you see something like that, it hits
you at your core and you realize we cannot continue like this.

We cannot just pretend it`s not happening. We have to move forward
and we have to get it done.

MADDOW: Thinking of the feasibility of getting this done --
obviously, the president has been stumping on the issue of infrastructure.
In the past, it was not particularly partisan issue. I wonder if in
Minnesota, in part because of the tragedy in 2007, I wonder if Minnesota
has a more old-school approach to the issue politically if because of that
tragedy. Maybe in Minnesota, you guys are talking about this in a less
partisan way in a way that might be a model for Congress.

KLOBUCHAR: Well, actually, in the wake of that tragedy, we did put
some more money aside, the legislature did at that time. There was more
put aside for infrastructure and we are continuing to move forward on
projects. But you still look at the national numbers, Rachel, 25 percent
of the nation`s 600,000 bridges are found to be obsolete or structurally
deficient. The American Academy of Civil Engineers has given our nation a
near failing grade when it comes to infrastructure.

We know we have to move forward. We`ve got -- construction workers
have one of the highest rates of unemployment in the country, and then you
got people waiting in traffic 4.8 billion hours a year. That`s no way to
run a railroad.

And so, that`s why you do find bipartisan support for these kinds of
bills. We may not be able to pass it this week, but I`m hopeful by the end
of the year, as part of a larger package, we can move forward on
infrastructure.

MADDOW: Democratic Amy Klobuchar from the great state of Minnesota,
thanks so much for being here.

KLOBUCHAR: Happy Halloween, Rachel.

MADDOW: Happy Halloween.

Do we keep running in to each other on Halloween? Does this keep
happening?

KLOBUCHAR: Yes. We have a reprisal and you know there are a lot of
ghosts and goblins running around Washington, but not a witch on a broom.
That was the last election.

MADDOW: Very good. Thank you, Senator. It`s great to see you.

KLOBUCHAR: Thank you. See you.

MADDOW: All right. Right after this show, on "THE LAST WORD" with
Lawrence O`Donnell, Rick Perry`s flirtation with birtherism as if Rick
Perry didn`t have enough to explain today already.

And we`ve got a Halloween "Best Thing in the World Today" coming up
courtesy of the FBI.

(COMMERCIAL BREAK)

MADDOW: Boo! Happy Halloween.

"Best New Thing in the World Today" -- ghost stories from the FBI.
Today in response to a Freedom of Information Act Request, the FBI released
documents and photos, and video from its 10-year investigation of a Russian
spy ring. Yes, the operation was actually code named "Ghost Stories" and
yes, they released the ghost stories stuff on Halloween.

This was 11 Russian spies, 10 spies plus their handler, expected to
infiltrate American society and try to make friends in U.S. policy making
circles. After these guys were caught a little over a year ago and shipped
back to Russia in a prisoner transfer out of a John le Carre novel, the
details that came out about their time in America were kind of amazing,
like Anna Chapman, now a D-list Russian celebrity back home. But as a spy
in New York City, she was the genius who listed her address on a cell phone
contract as 99 Fake Street.

Also brush passes whereby the spies handed off contraband to each
other. We`ve got details of those dead drops where money was buried and
uncovered. With these descriptions but without pictures to guide us when
this scandal first broke, we on this show took our own stab at what this
spy stuff might have looked like.

Here`s our version of a brush pass as described in the criminal
complaint.

(BEGIN VIDEO CLIP)

MADDOW: Russian government official number three was holding a
shopping bag. As Russian government official number three descended from
the train platform, Richard Murphy, the defendant, walked up the same
stairs, as Russian government official number three and Murphy passed one
another on the stairs, Murphy held out his backpack and Russian number
three placed the shopping bag he had been holding into Murphy`s backpack.
Murphy then continued up the stairs and Russian government official number
three continued down the stairs and walked away.

(END VIDEO CLIP)

MADDOW: That is how we acted it out. But, now, today, "Best New
Thing in the World," thanks to the FBI, is that we got the real thing, the
real video of the real spies. There`s Russian official number three.
There he is in the baseball cap going down the stairs and there`s spy
Richard Murphy in the Gilligan hat coming up, and there goes the money into
the backpack -- not very subtle. Kind of like our version.

We also reenacted a scene in which the FBI dug up a package that one
of the spies had buried, marking the spot with a beer bottle. The FBI dug
it up, look at it, photographed it and then reburied it to see what would
happen. Two years later, one of the spies dug that package up.

Here`s our version of that story with Kent Jones.

Today, the FBI released pictures of the hiding spot as well as video
of the real spy digging up the package. That is really it happening. I
like our version better.

And, really, you know what? Our over the top on purpose Russian spy
acting was not all that far off in general. These guys were -- look at
`em, pretty obvious. Getting video confirmation from the FBI on Halloween
from an operation called "Ghost Stories" -- "Best New Thing in the World
Today."

Have a great Halloween night. Save me the Junior Mints.

"THE LAST WORD" with Lawrence O`Donnell starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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