updated 11/17/2011 9:55:30 AM ET 2011-11-17T14:55:30

Guests: Jeff Anderson, Matthew Mangino, Sheila Jackson Lee, David Keith, Rep. Tim Ryan, Rep. John Garamendi, Michael Eric Dyson

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED
SHOW tonight live from Washington, D.C.

The judge who allowed Jerry Sandusky to walk the streets after being
charged with 40 counts of sexual abuse on children has been taken off the
case. Sandusky`s interview with NBC has motivated a victim who is now
willing to testify. Congress is now looking at federal standards.

This is THE ED SHOW -- let`s get to work.

(BEGIN VIDEOTAPE)

JERRY SANDUSKY, FORMER PENN STATE COACH: Well, in retrospect, I, you
know, I shouldn`t have showered with those kids.

SCHULTZ (voice-over): That interview could cost Jerry Sandusky big-
time. New developments from the victims, the judge who let Sandusky walk
and new questions tonight about Pennsylvania`s governor and Joe Paterno.
Congresswoman Sheila Jackson Lee wants new federal laws to stop abuse.
She`s here tonight.

And actor David Keith is a spokesman for the National Association to
Protect Children. He says Pennsylvania`s attorney general isn`t doing her
job. He`s here to explain.

REPORTER: Is the 1.6 million figure correct?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I don`t know. We`re back
to check.

REPORTER: It sounds like a whole lot more than just being a
historian.

SCHULTZ: Explosive new details on Freddie Mac and the Republican
front-runner. Newt Gingrich is spinning harder than ever.

GINGRICH: Well, look, I was speaker of the House and a strategic
adviser.

SCHULTZ: And Karl Rove loses his cool on the 99 percent protesters.

KARL ROVE, REPUBLICAN STRATEGIST: You can go ahead and stand in line
and have the courage to ask any damn question you want, or you can continue
to show that you are a buffoon.

SCHULTZ: We`ll show you the tape.

(END VIDEOTAPE)

SCHULTZ: Good evening, folks. Good to have you with us tonight.

Jerry Sandusky`s interview with NBC has brought unintended
consequences. The alleged victims are more determined than ever to pursue
charges against him.

A lawyer representing one of the victims has gone on record saying
"Mr. Sandusky suggested in some of his comments about the victims that
maybe people were backing off." "My client heard that and has dug in his
heels. He was absolutely more than ready to follow through with this. He
wants him to know that he fully intends to testify. He was severely
sexually assaulted by Mr. Sandusky."

It was Sandusky`s lawyer who had said he expected alleged victims to
come forward and say this never happened. Sandusky, himself, claimed his
innocence in the interview with Bob Costas the other night.

(BEGIN VIDEO CLIP)

BOB COSTAS, NBC NEWS: What are you willing to concede that you`ve
done that was wrong and you wish you had not done it?

SANDUSKY: Well, in retrospect, I, you know, I shouldn`t have showered
with those kids. And, so --

COSTAS: That`s it?

SANDUSKY: Yes, well, that`s what hits me the most.

COSTAS: Are you a pedophile?

SANDUSKY: No.

COSTAS: Are you sexually attracted to young boys, to underage boys?

SANDUSKY: Am I sexually attracted to underage boys?

COSTAS: Yes.

SANDUSKY: Sexually attracted, you know, I enjoy young people. I love
to be around them. I -- but no, I`m not sexually attracted to young boys.

(END VIDEO CLIP)

SCHULTZ: And the story continues. Today, the Pennsylvania court
system took action in the case. The judge who freed Sandusky on $100,000
bail has been removed from the case. Judge Leslie Dutchcot had numerous
ties to the Second Mile charity founded by Sandusky. Today, the
Pennsylvania court system appointed a different judge to preside over
Sandusky`s preliminary hearing.

The statement from the court read "Judge Robert E. Scott has no known
connections with Pennsylvania State University, the Second Mile charity nor
any officers or representatives from these entities."

Get your cell phones out, folks. I want to know what you think on
this issue tonight. Question is, did Sandusky and his lawyer make a
mistake by speaking out on television? Text "A" for yes, text "B" for no
to 622639. Our blog is there for you at Ed.MSNBC.com. We`ll bring you the
results later on.

We have three very strong interviews and experts on this tonight that
are very involved in the story. Joining me first by phone is Attorney Jeff
Anderson who specializes in child sexual abuse cases and is representing
some of Sandusky`s accusers.

Mr. Anderson, good to you with us tonight. The first question right
off the top has to be, what was the reaction of your client when Sandusky
came out and spoke to Bob Costas on television?

JEFF ANDERSON, ATTORNEY FOR SANDUSKY ACCUSER (via telephone): Well,
as soon as that was aired, there was an immediate from our clients and the
survivors, just fury and confusion and despair that he could, first, be
free, and second, deny the rape of so many kids for so many years.

SCHULTZ: Did you say unequivocally -- Mr. Anderson, can you say
tonight they definitely will testify against Sandusky in court?

ANDERSON: Oh, there`s no question about that, that these kinds of
denials have emboldened the survivors to not only come forward but to -- it
really emboldened them to do whatever they can to make sure that other kids
are not harmed the way they were. And as long as he is on the street and
in denial, other kids are at risk and as long as this institution and Penn
State continues the practices of the past in the future, other kids are at
risk.

So, absolutely --

SCHULTZ: The lawyer -- I want to --

(CROSSTALK)

SCHULTZ: OK. The lawyer for Sandusky said this today. I want you to
listen.

(BEGIN VIDEO CLIP)

JOE AMENDOLA, ATTORNEY FOR JERRY SANDUSKY: Two of the individuals we
believe are listed in that eight-person presentment, are now grown, in
their 20s. And Jerry tells me that they`re friends. In fact, two of them
he says had dinner with him and his wife as recently as this past summer.
So we have to sort all this out.

(END VIDEO CLIP)

SCHULTZ: Mr. Anderson, are any of the alleged victims that you`ve
spoken with considering themselves friends of Jerry Sandusky?

ANDERSON: Well, I`m not going to get into the details of the people
with whom I`ve spoken and who are survivors. But I will say that the
assertions made that there was some kind of friendship is nothing but just
deceits and denial. A rape and abuse is often done to the guise of trust
and sometimes friendship.

So, the characterization of this as a friendship is nothing short of
outrageous and cannot stand unanswered. The answer of the survivors is,
and I speak with and for them, here in Pennsylvania and across this country
at this time, that that kind of denial cannot stand.

SCHULTZ: OK.

ANDERSON: This is the rape of innocent children by a serial predator
who belongs behind bars.

SCHULTZ: All right.

ANDERSON: And the institution that protected them really needs to be
a part of stepping up and doing better.

SCHULTZ: Mr. Anderson, I appreciate your time tonight. Thanks for
confirming that story.

ANDERSON: You`re very welcome.

SCHULTZ: Now, let`s bring in Matthew Mangino, former district
attorney of Lawrence County, Pennsylvania.

Mr. Mangino, the change of the judge -- in changing judges, the
statement from the court system pointed out that the new judge has
absolutely no connections with the school, the charity, or any of its
representatives. What`s your reaction to this move today?

MATTHEW MANGINO, FMR. PA DISTRICT ATTORNEY: Well, I think it`s a wise
move, Ed. It appears that the Centre County courts had asked that an
outside magistrate be appointed. Centre County only has 150,000 people.
There are six magistrate judges and four trial judges there. It would be
difficult to find somebody who`s not an alum, not a donor, not a season
ticket holder, not a volunteer or lecturer at Penn State.

So, going outside of the county was the prudent thing to do.

SCHULTZ: I want to ask you about an e-mail that surfaced in which
Penn State assistant coach Mike McQueary said he did have discussions with
police about the incident back in 2002. But today State College police
chief Tom King told NBC news, "Absolutely not. We don`t have any records
of him coming to us."

What do you make of this?

MANGINO: Well, it`s surprising and I think that it makes Mike
McQueary`s testimony before the grand jury a little in question. It`s
clear from the grand jury presentment that there was a finding that there
was no contact by any official, by anybody, reporting this matter to the
police or to child protective services. This seems to be a conflict in the
testimony and I think it`s very important in terms of the case against Tim
Curley and Vice President Schultz, because the grand jury made a finding
that McQueary was credible and they were not.

Now, if you have a conflict in that testimony that was before the
grand jury and what`s being said in this e-mail, that runs right to the
issue of credibility and it could be a major blow to the case against
Curley and Schultz.

SCHULTZ: Mr. Mangino, thanks for your time tonight. I appreciate you
joining us here on THE ED SHOW.

MANGINO: Thank you.

SCHULTZ: Now to Congress. There are a lot of people who are talking
about this in the halls of Congress. One of them is the chairman of the
Children`s Congressional Congress, Sheila Jackson Lee from Texas.

And also, you`re on the House Judiciary Committee. So, this is a big
story for you and many of your colleagues.

What is Congress going to do, if anything?

REP. SHEILA JACKSON LEE (D), TEXAS: Ed, first of all, this is a
national disaster. I think the magnitude of this needs to be known and
needs to be understood.

Penn State is here. This is a national crisis. I believe that there
should be zero tolerance as it relates to a federal policy on sexual child
abuse. We know that we deal with child abuse.

All of these are indicting against society that you would put our
children in jeopardy. But sexual abuse is an act that usually takes
children two years to report. They`re so fearful.

And so, what we want to do is to slam the perpetrator, if they receive
any iota of federal funds, to cease and assist or spend their federal
funding. And institutions like Penn State, for example, receive them in
many ways research dollars, dollars that fund special programs, training
programs. We don`t want to penalize the students through Pell grants or
scholarships, but we want to say, enough is enough.

Now, we`re not just talking about academic institutions, state and
local governments, prosecutors` officers, police departments.

SCHULTZ: We need an overhaul. We need an overhaul of how we deal
with child sexual abuse in this country.

LEE: Absolutely.

SCHULTZ: What about the reporting? There`s allegations of a cover-
up. One could make the case based on what`s been reported. It puts Penn
State in a bad light.

What about addressing the reporting of alleged sexual abuse? Is
Congress planning on doing anything about that?

LEE: Absolutely. There are no federal standards.

SCHULTZ: Should there be?

LEE: I believe there should be. And one of our U.S. senators is
looking at it. I am looking at it as well. We hope to collaborate on that
issue.

We hope to collaborate on the unfortunate circumstances of the -- even
though it was a state issue -- of the issuance of $100,000 in bond. The
lack of a monitoring ankle bracelet when this individual is walking amongst
children, his house is in the midst of the neighborhood.

SCHULTZ: So, you would want a federal standard set up for bail in
dealing with cases like this and should have never gotten to this point?

LEE: A federal standard for reporting and certainly oversight,
piercing and looking over, if we find that state prosecution, state
authorities, are not as adequate as they should be. If I might quickly
say, here`s a very prime example.

Let me hold up this young lady`s face. This is Ashley out of Texas.
She killed herself on Monday as I was flying up to Washington, D.C., 18
years old. Said she had been sexually abused for all of her life. She
sent 144 Twitters before she died.

The crux of what she said was that when she spoke to the police
department in this area, in Texas, and Children`s Protective Service -- all
those receive federal funds -- she felt that they were not doing anything.
They were not interested. This has not been investigated.

But if these agencies are found in this case, for example, to have
shuffled their feet, then they would fall under this legislation, in terms
of any federal dollars that come in their direction.

SCHULTZ: So we may see a sea change in this country on how we handle
child sexual abuse? Now, I know obviously you`re very involved in it and
doing something about it, so is Senator Casey from Pennsylvania.

LEE: Absolutely.

SCHULTZ: But the conversation in Congress, we`re going to do
something.

LEE: People are appalled. There`s a quiet silence because there are
a lot of people that are in shock. Each day something is coming forward.
But, yes, everywhere we have gone, zero tolerance is really catching hold.

SCHULTZ: What about the Second Mile charity? What should happen with
this charity? Should there be restitution of some form? Would you be in
favor of maybe that charity even dissolving?

LEE: Restitution, number one, yes. Dissolving, absolutely. I feel
certainly that there were a lot of good people probably associated with
this charity.

SCHULTZ: But it`s time to shut it down?

LEE: It`s too much a mantra, a definition defined by coach Sandusky.
With that in mind, I don`t believe that they can continue winning the
confidence of the parents of at-risk boys.

Let me tell you how offended I am, because being involved with so many
children`s organizations, it is the trust that parents lend their children
to them, particularly the vulnerable population of the impoverished, single
moms, families who are divided. They send those children, those boys in
particular, let`s keep them off of the street.

That`s what this organization was all about. They violated the trust.

You can`t hear about something where children have been sexually
abused and you say it didn`t happen on your premises. They did not act.

I`m sorry, your days are numbered, and you really need to say good
night, thank you, and provide the restitution for these victims. Zero
tolerance, the victims should be our concern. Not even, Ed, the hearsay,
who said by the assistant coach. It should be the children.

SCHULTZ: Congresswoman Sheila Jackson Lee, thanks for joining us
tonight. Appreciate it so much.

LEE: Thank your having me.

SCHULTZ: Remember to answer tonight`s question at the bottom of the
screen. We want to know what you think. Share your thoughts on Twitter
@EdShow.

Every day in this country, children are being exploited online. What
can we do about it? Actor David Keith will explain. He`s involved.

And later, Newt Gingrich`s payday from Freddie Mac was a lot larger
than first reported. Even Jack Abramoff thinks this is a problem for Newt.
You`re watching THE ED SHOW. We`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: Coming up on THE ED SHOW:

The country is watching the Penn State case. My next guest will tell
us there are thousands of other Sanduskys out there, and the government
isn`t doing enough to protect children. Victims advocate and actor David
Keith is next.

Freddie Mac paid Newt Gingrich almost $2 million and Newt doesn`t
remember it? Now, Jack Abramoff is saying the Newtster won`t survive this
controversy.

Stay tuned. You`re watching THE ED SHOW on MSNBC. We`re right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BOB CASEY (D), PENNSYLVANIA: We should have a national standard,
really a national commitment, that every adult, not just on a college
campus, not just in school settings, but every adult charged with the
responsibility to report suspected child abuse to law enforcement. Not
just up the chain of command in an organization.

(END VIDEO CLIP)

SCHULTZ: That was Pennsylvania Senator Bob Casey speaking on the need
to protect our children from predators like Jerry Sandusky.

Every day in America, pornography featuring kids being sexually abused
is shared online. It is sickening and astonishing. It is unbelievable.
And it is a major problem in this country.

According to one children`s task force, the number is staggering --
20,000 child pornographers are identified daily. In many case, these
pornographers are also hands on offenders.

Fortunately, many law enforcement agencies across the country can keep
track of this type of Internet trafficking through a database called
Roundup.

So why are these people still on the street? It is the question of
the week in the wake of what`s happened at Penn State.

Let`s turn to David Keith, actor and campaign chairman for Protect,
the National Association to Protect Children.

Great to have you with us tonight, David. I appreciate your time.

DAVID KEITH, ACTOR: Thank you, Ed. Thanks for having me.

SCHULTZ: You bet.

What more should be done on a national level in your opinion? What do
you see out there in your organization, as strong as it`s been in advocacy
working against all of this? What more can we do?

KEITH: Well, the software that law enforcement now has that allows
them to monitor the file sharing of child pornographies, the sharing back
and forth of images is horrific, it`s sodomy of babies. Very seldom is it
just a naked child. Only about 1 percent of the time.

That software, that tracking software, now Roundup, it used to be Fair
Play, has identified hundreds of thousands of computer addresses in the
United States. And in Pennsylvania 22,000 computer addresses.

Now, conservatively 40 percent of the time that they get to the door
and go on a knock and talk, see if there`s a tricycle on the front porch,
there`s indeed a victimization. That`s about 10,000 Sanduskys in
Pennsylvania right now.

And Linda Kelly, the attorney general of Pennsylvania, has the
audacity to stand on the stage and point her finger at Penn State.

Yes, what they did is wrong. That`s only one guy. She`s sitting on
known leads.

We briefed Governor Tom Corbett when he was the attorney general in
2009. He knows the numbers. He knows they have the locations. They don`t
fund the Internet crimes against children task forces appropriately to the
problem.

Those children are sitting there waiting to be rescued and they don`t
have NCAA football to highlight their plight.

SCHULTZ: Let`s go back to your comment about Mr. Corbett who was the
attorney general, and you briefed him. He`s now the governor.

Has this been a total failure and breakdown of the system? And you
can equivocally say the state of Pennsylvania and this country is simply
not doing enough?

KEITH: It is maybe the greatest failure in the history of man kind.
In my opinion it is. We know where hundreds of thousands of children are
sitting being raped and filmed and traded online -- 96 percent of them in
their own homes, 96 percent. Stranger danger you hear about all the time,
very, very rare.

In Pennsylvania, Linda Kelly is pointing her finger at Penn State.
Tell her to go get the other 10,000 Sanduskys. She knows where they are.
Their law enforcement knows where they are.

Why aren`t they going to get it? Yes, it`s broken down. Protect,
drafted and passed the Protect Our Children Act with Joe Biden was passed
in 2008. Congress has yet to fund it.

SCHULTZ: What is the main hurdle that law enforcement agencies face
when it comes to taking action in situations like this?

KEITH: Well, resources, of course, money, because they won`t break
into the coffers and get the money. But the down deep reason, and this is
what really breaks my heart, is children don`t vote and don`t have any
money and politicians don`t pay much attention to them. They`re great
photo ops, but that`s about it. When it really comes to protecting our
children, we`re failing at every level.

SCHULTZ: David, what`s your response to what you`re hearing elected
officials in Congress say that they want to do something about this, they
want to change the reporting standards for alleged sexual abuse and also
tie it to federal funding. What do you make of that?

KEITH: I -- you know, I`ll believe it when I see it. I sat with
members of Congress for three years and had them in tears, sitting in the
office. Put their arm around me, thank you for what you`re doing, we
promise we`ll get it done.

When we got the act passed, but those same people are not funding the
Protect Our Children Act. It`s $400 million over 5 years broken out into
these 61 around the country that had to split, until we came around, $15
million 61 ways. They`re drowning in lack of resources. And the regular
cops, uniform cops, they can`t run these cases because they`re apples and
oranges. It`s not like going out on a drug dealer or bank robber.

You got to talk to the guy a certain way. You got to run the case a
certain way. They`re very fragile.

So much of it is done on -- is forensics, computer forensics, online
forensics and breaking down that computer properly without destroying the
evidence.

The one thing great about just getting the guys for trafficking in
child pornography is you never have to put a child on the stand. They go
away for good for the amount of images they have. It`s the best way to
catch the most bad guys.

SCHULTZ: And quickly, David -- David Keith with us, the National
Association to Protect Children. I think the obvious question here as we
conclude this, what action can parents take, what action can people at home
take?

KEITH: Well, we have that on our Website, Protect.org. But I want
the people of Pennsylvania and the rest of the people in this country to go
to a Web site that we just got up and running, it`s called lindakelly.org.
It shows the position she`s in, the position she`s taken, and what she`s
not doing.

Hammer that website. Lindakelly.org.

SCHULTZ: David Keith, thanks for your time. Thanks for your work. I
appreciate it so much.

Karl Rove loses it when he faces off against the 99 percenters. He
doesn`t think they have the right to protest. I got a pretty important
American document that Karl can read. That`s next.

And later, scary new evidence, it`s there, folks. The middle class in
this country is declining. You can`t deny the numbers. We`ll show you.

You`re watching THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And in "Psycho Talk" tonight, Bush`s brain Karl Rove, a
little testy, got hot under the collar when he takes on the 99 percenters.
You see, Rove was spouting GOP talking points during a speech at Johns
Hopkins University when some occupy Baltimore folks interrupted him.

(BEGIN VIDEO CLIP)

UNIDENTIFEID FEMALE: Karl Rove!

CROWD: Karl rove!

UNIDENTIFIED FEMALE: Is the architect

CROWD: Is the architect --

UNIDENTIFIED FEMALE: The architect of occupy Iraq.

CROWD: The architect of occupy Iraq.

ROVE: You can go ahead and stand in the line and have a courage to
ask a damn question you want, or you can continue to show that you are a
buffoon. Who gave you the right to occupy America? Nobody.

(END VIDEO CLIP)

SCHULTZ: Of course, the constitution gives them the right to occupy
America. The first amendment protects the right of the people peaceably to
assemble. I don`t expect Turd Blossom to know a lot about the
Constitution, since he helped Bush trample all over it for eight years, but
Rove had more to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We are the 99 percent.

ROVE: No, you`re not.

(CROSS TALK)

ROVE: No, you`re not. No, you`re not. No, you`re not.

You want to keep jumping up and yelling you`re the 99 percent. How
presumptuous and arrogant can you think you are? Stop acting like a
fascist and start acting like an America.

(END VIDEO CLIP)

SCHULTZ: So Karl Rove thinks the 99 percenters are un-American,
fascists and arrogant. Let me tell you what arrogant really is: lying
about weapons of mass destruction so you can start a war, telling the world
you`re either with us or against us, deciding not to pay for the war,
helping explode the national debt, all of that.

Finally, arrogant is landing on an aircraft carrier wearing a flight
suit and standing in front of a banner reading "Mission Accomplished,"
eight years before a different president actually accomplishes the mission.

Those are just a few examples I had. I could go on. But Karl Rove,
to call the 99 percent movement arrogant, is cowardly Psycho Talk.

Newt Gingrich`s big, fat check from Freddie Mac is eight times bigger
than first reported. Yowza. What did he report to the IRS? Congressman
Tim Ryan weighs in on Newt`s future.

Herman Cain says as president he wouldn`t attack Iran because there
are just too many mountains. Michael Eric Dyson will weigh in on that and
how this candidate is imploding.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: If you want to put people
in jail, I want to second what Michele said, you ought to start with Barney
Frank and Chris Dodd. And let`s look at the politicians who created the
environment, the politicians who profited from the environment, and the
politicians who put this country in trouble.

(END VIDEO CLIP)

SCHULTZ: Newt Gingrich wants politicians who profited from the
mortgage crisis to be held accountable. OK. He can start by looking in
the mirror. You see, when asked about being paid 300,000 dollars to work
with mortgage lender Freddie Mac, Gingrich told the cNBC debate audience he
was employed as a historian who told Freddie Mac what not to do.

Well, today, "Bloomberg News" reported Gingrich had a relationship
with Freddie Mac for eight years, which all started after he resigned from
Congress. The "Bloomberg Report" says Gingrich made between -- choke it
here, folks -- 1.6 and 1.8 million dollars in consulting fees, that
historical stuff, you know, with the lender.

He faced questions about his payday during a campaign stop in Iowa.

(BEGIN VIDEO CLIP)

GINGRICH: We offered strategic advice.

UNIDENTIFIED MALE: So you didn`t obtain personal income from that?

GINGRICH: Sure, but I don`t know the amounts.

UNIDENTIFIED MALE: Is the 1.6 million figure correct?

GINGRICH: I don`t know. We`re going back to check.

UNIDENTIFIED MALE: It sounds like a whole lot more than just being a
historian.

GINGRICH: I was Speaker of the House and a strategic adviser.

(END VIDEO CLIP)

SCHULTZ: Gingrich told reporters that he would release documents
showing how much he earned from Freddie Mac. Well, his afternoon his
campaign flip-flopped on that promise, releasing only a fact sheet about
his consulting work. Convicted felon Jack Abramoff knows a thing or two
about being a disgraced lobbyist. He says this revelation means the end of
Newt`s candidacy.

(BEGIN VIDEO CLIP)

JACK ABRAMOFF, CONVICTED FELON: I don`t know if he`ll survive this,
to be honest with you. This is a very big thing.

DAVID GREGORY, "MEET THE PRESS": Why?

ABRAMOFF: Because he`s doing -- he`s engaged in the exact kind of
corruption that America disdains.

(END VIDEO CLIP)

SCHULTZ: Let`s turn to congressman from Ohio, Tim Ryan. Great to
have you with us tonight. Is Abramoff right?

REP. TIM RYAN (D), OHIO: Are you going to make me agree with that?

SCHULTZ: Well, he`s paid his dues to society, if we can say that.
But see, I think this is a wake-up call to every member of Congress, that,
you know, life after serving may not be that of a lobbyist, because
everything you do follows you. And Newt`s living that right now.

Is Abramoff right? Could this really kill the candidacy of Newt
Gingrich?

RYAN: It seems like it will because it gets to the very heart of the
issues that he was talking about, this kind of duplicity. Now he was
trying to push it off on Senator Dodd and Barney Frank. But in actuality,
it sounds eerily similar to the folks on Wall Street.

We kind of knew what was going on. We were telling people not to do
it. Oh, by the way, we`ll take the millions dollars on the other side. I
think the American people are going to reject that.

SCHULTZ: Here`s Michele Bachmann today saying Gingrich was a shill
for Freddie Mac.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: Whether former
Speaker Gingrich made 300,000 dollars or whether he made two million
dollars, the point is that he took money to also influence senior
Republicans to be favorable toward Fannie and Freddie.

(END VIDEO CLIP)

SCHULTZ: What do you make of this?

RYAN: Well, I`m -- as a Democrat, I`m enjoying watching. You know,
it`s nice to watch these guys. I think this is part of the Republican
primary. No one can agree with the Tea Party 100 percent. So they all get
caught up in, one way or another, whether it`s on a position or some
historical evidence from their own personal background or personal
behavior. They get all flip-flopped.

That`s why you`ve seen this up and done from these different
candidates. Michele Bachmann, who`s probably at five or six percent in the
polls, now she`s attacking him. They`ll gang up on Newt. We`ll see who
the next guy or woman is to pop up.

SCHULTZ: Why would Gingrich try turn Freddie Mac into a bogeyman for
conservatives if he knew this was in his past?

RYAN: I have no idea. It`s all -- it can be anybody`s fault but the
free market, or but an unregulated Wall Street. If there`s some kind of
government agency or quasi government agency or anything to do with the
government, they always seem to get the blame.

But again, it gets back to a little bit of this duplicity, where
you`re going to criticize that internally where no one hears you, but take
money on the other side. That`s just not going to fly these days.

SCHULTZ: Here`s how Fox news is spinning the story today with Frank
Luntz.

(BEGIN VIDEO CLIP)

FRANK LUNTZ, FOX NEWS POLLSTER: Gingrich has no idea what he`s in
for, because he`s been the candidate who`s been the toughest on the media,
specifically targeting them. And the press doesn`t like it. If someone
gets attacked from "the New York Times," the "Washington Post" usually
stands up for them. The same thing with the cable networks.

so Newt can expect some really, really tough grilling.

(END VIDEO CLIP)

SCHULTZ: We also should point out that Frank Luntz was reportedly
hired by Freddie Mac in 2005 as well. Can Newt survive this by saying the
press is just out to get him? You know that`s coming.

RYAN: Yeah. No, that`s not going to work. He`s going to get --

SCHULTZ: Well, what`s it say about Freddie Mac? I mean, tells me
pretty savvy business operation. They go out and they put the former
Speaker of the House on the payroll, trying to swing Republicans that, you
know, we`re doing some pretty good stuff.

It wasn`t too long ago that Republicans were saying Freddie Mac has
been very vital to our economy. Then they made them the bogeyman. Now
this with Newt has come out. This is a Democratic playground right now for
fodder, isn`t it?

RYAN: Yeah, no, it`s great, because they can`t seem to get their
footing. None of the candidates can seem to get their footing. For
example, we have positive things starting to happen in Ohio, for example.
We`ve had Chrysler, they`re going to add 1,100 new jobs -- up to 1,100 new
jobs in Toledo because of the auto bailout.

Some Chinese tariffs that were put on, that Obama put on -- real
substantive things that led to job creation in states like Ohio, which are
swing states, are substantive, affecting the lives of human beings in Ohio,
where these guys are sitting here muddling around about Fannie and Freddie,
trying to blame each other for all this stuff. It`s just not going to
work.

They`re getting their footing while positive things are starting to
happen in states like -- swing states like Ohio.

SCHULTZ: Great work in Ohio, congressman.

RYAN: Thank you.

SCHULTZ: Always good to --

RYAN: And thank you on behalf of everybody from Ohio for all you did
to help us.

SCHULTZ: Well, you know, just in the aftermath, to this day, I cannot
believe the political miscalculation that John Kasich had with the workers
of Ohio. How could anybody be so disconnected? I mean, we hear it all
over the country. The middle class is being decimated and the Democrats in
your state get it. They don`t.

RYAN: The coalition united now in Ohio is unlike we`ve ever seen
before. Police, fire, teachers, building trades, auto workers, mine
workers all across the state, all united, knowing who the enemy was.

Now, Karl Rove and Lynne Cheney, who funded this Issue 2 campaign, are
going to be the same people who will be in funding the campaign next year.
And they`ll remember who was on their team.

SCHULTZ: Tim Ryan, Ohio, good to have you with us tonight. Thanks so
much.

Income segregation in America is destroying the middle class. And
it`s effecting kids` chances of success. But Republican policies would
only make it worse. California Congressman John Garamendi joins us to talk
about the latest survey.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. I`m sure in conversation
you`ve heard the story you can`t make this stuff up. Today, we have more
evidence the middle class in America is disappearing. It`s a fact.

New study out, Stanford University, shows a shocking trend. In 1970,
65 percent of families lived in middle income neighborhoods. But by 2007,
only 44 percent of people lived in middle class areas.

Now on the other hand, today, 31 percent of people live in either very
poor or very wealthy neighborhoods. Forty years ago, my friends -- 40
years ago, half as many families lived in areas of poverty or affluence.
So here we are again, the Big Eddie chart.

This chart shows the growing income gap between the top one percent
and the middle class and the wage earners of this country. Now, you tell
me how we`re going to turn this economy around if this chart continues to
go in this direction.

This report has more evidence showing the income gap growing. The
different income levels are becoming increasingly segregated. And
Republicans want to keep the trend going by slashing social programs,
cutting taxes for the wealthy. You see, the wealthy in this country, well,
they just don`t have enough money. That`s the Republican plan.

You want to know why people are out in the streets? This is why
they`re out in the streets. This survey gives us a snapshot in time,
exactly where this country has been and where we are going. And the
question is, do we have the political will to do something about it?

Now, I`ve been out and about all over the country, a lot of different
cities over the last 60 days. In Portland, in Denver, in Minneapolis, in
Madison, in Toledo, in Columbus, Ohio, the people get it. And they want
fairness. And they understand what the 99 percenters are saying.

Joining me now is Congressman John Garamendi of California.
Congressman, great to have you with us.

REP. JOHN GARAMENDI (D), CALIFORNIA: Ed, it`s good to be with you.

SCHULTZ: The numbers don`t lie. How do we turn this around?

GARAMENDI: We`re going to have to create jobs. We`re going to have
to create those good middle class jobs that have disappeared. You take a
look at the manufacturing sector in America. It`s lost 40, 45 percent; 20
million jobs 20 years ago; just over 11 million now.

So we`ve got to turn that around. We can. We have all the tools. We
just have to employ those tools, which means Congress has to act. We`ve
got to get the laws and the policies in place. Fail to do that, that`s
going to get worse.

SCHULTZ: Well, the middle class Americans have the disposable income.
And if you see that, a number that`s being depleted year after year, how`s
the economy going to turn around, if families, majority-wise, don`t have
disposable income?

GARAMENDI: They won`t. It won`t. It will continue to go downward
and will continue to be a second-rate country. But we can turn it around.
But the policies are being written in Washington right now. You take a
look at the super committee. What the super committee Republicans are
proposing is to make that chart worse. Because they want to give more tax
breaks to the super wealthy.

They`re covering it up in many, many ways. And at the same time,
charge the middle class and low income more money for their health care,
more money for their education. It goes on and on. It is dead wrong.

SCHULTZ: I want to mention some of the effects of the grows income
segregation that`s taking place in America. The gap in standardized test
scores between poor and rich kids is 40 percent bigger today than it was in
1970. This is about resources. The gap between poor and -- rich and poor
kids in college graduation is up more than 50 percent since the early
1990s.

So the high income -- the number of high income college grads has
risen from about 33 percent in the early 1990s to now 50 percent today.
For low-income kids, it`s only risen from five to 10 percent. So this --
this is really the conservative social change that they have been working
for.

GARAMENDI: Well, the wealth is going to fewer and fewer. Those
people are able to pay for a good education. They`re living in good
places, in schools, and they can go to the best colleges. The poor,
they`re going downward. They`re going into those schools that are not
performing.

They`re being pushed out. And you take a look at the tuition for
education across the United States. It`s gone through the roof. And who
can afford that? The rich. Can the middle class? They`re getting pushed
down. They can`t afford it.

We have to change that. And you can`t just do it with loans. You`ve
got to do it with tax policy, so that those who have enjoyed extraordinary
wealth over the last 10 to 15 years, it`s time for them to pay their fair
share. And yet the Republicans are going to exactly the opposite way.

They want to reduce the amount of taxes that the super wealthy,
millionaires -- a million dollar income. Good heavens. Enough already.

SCHULTZ: John Garamendi, great to have you with us. Congressman from
California, here on THE ED SHOW. Thanks so much.

So why couldn`t Herman Cain answer a simple question about Libya? The
pizza man says presidents aren`t supposed to know anything about foreign
policy. Really? Michael Eric Dyson will weigh in on that one and the
Republican field imploding.

(COMMERCIAL BREAK)

SCHULTZ: Text survey tonight on THE ED SHOW, I asked, did Jerry
Sandusky and his lawyer make a mistake by speaking out on television?
Ninety five percent of you said yes; five percent of you said no.

Herman Cain says he wouldn`t favor a military strike against Iran, but
his reason behind it will really surprise you. Michael Eric Dyson joins me
for the conversation next. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So you agree with President Obama on Libya, or
not?

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: OK. Libya.

(END VIDEO CLIP)

SCHULTZ: I tell you what, it`s one for the archives, isn`t it? That
was pizza man Herman Cain`s recipe for success in Libya. Cain sat down
with a group of reporters and writers from "the Milwaukee Journal
Sentinel," the editorial board, to discuss a wide range of issues, foreign
policy on the table.

The paper`s Washington bureau chief, Craig Gilbert, he was in the
room.

(BEGIN VIDEO CLIP)

CRAIG GILBERT, "MILWAUKEE JOURNAL SENTINEL": It was weird and it was
painful. I think you knew immediately that this was a bad moment that was
being captured on videotape. We all know he`s had trouble answering
questions on foreign policy. But Libya is a subject that has come up again
and again, and come at debates. And he just was at a loss.

(END VIDEO CLIP)

SCHULTZ: The hits just keep on coming. Just a few months ago, the
pizza man said that he was open to the idea of bombing the country of Iran.
Now he says that strategy wouldn`t work not because it wouldn`t prevent
Iran from getting a nuclear weapon, but because Iran just has too many
mountains.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Would you favor a military strike against Iran to
stop that country from developing a nuclear capability?

CAIN: That`s not a practical top-tier alternative. And here`s why:
if you look at the topography of Iran, where are you going to strike? It`s
very mountainous. That`s what makes it very difficult.

(END VIDEO CLIP)

SCHULTZ: Following that interview, Mr. Cain defended his answers.
"I`m not supposed to know anything about foreign policy. Just thought I`d
throw that out. I want to talk to commanders on the ground, because you
run for president, you need to have the answer. No, you don`t. No, you
don`t. That`s just good decision making."

Joining me now is Michael Eric Dyson, MSNBC political analyst,
professor at Georgetown University and author of the book "Can You Hear Me
Now?"

Wow, can you hear that? We`re talking about the Republican brand.
Over the decades, they have been the party that has prided themselves on
having all the answers when it comes to foreign policies. What`s this all
about?

PROF. MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY: If President Obama
was leading from behind, then obviously Herman Cain is leading with no
mind. He has no idea about terrain, topography. Mountains as the basis
for not bombing Iran, not disincentivizing their procurement of nuclear
weapons, not creating a Holocaust that will be hard to stem?

It`s stunning, Ed, that a guy like this could, in the name of Ronald
Reagan, developing peace through strength, put forth the notion that I`m
not supposed to know anything about foreign policy; I`m just supposed to
ask the generals on the ground. That`s crazy.

SCHULTZ: Is he getting to the point where he just can`t be taken
serious anymore? The other day, he said that he was going to make Henry
Kissinger his secretary of state if he was elected. And then, of course,
he said he was just kidding.

DYSON: Yes, he`s kidding too much. He`s kidding about this. He`s
kidding about that. He`s kidding about the fences being electrified. It`s
very hard to take him seriously. If you`re going to run "Godfather," don`t
do the pizza stuff. At least look at the film and figure out what your
foreign policy and domestic policy should be.

SCHULTZ: Judson Phillips, a Tea Party leader, who was a Cain
supporter, says now can`t do it anymore. It`s just -- he`s off the rail.

DYSON: His own guys are falling away. I was on, you know, earlier on
MSNBC with Judson Phillips and he said, look, I like him personally, but I
can`t go along with this kind of policy. And I can`t go along with his
decision making. That`s what he really finds --

SCHULTZ: So what does this do to Iowa coming up? In the last poll,
he was just a percentage point ahead.

DYSON: Yes, I think he continues to plummet. I think that, you know,
Rick Perry, by contrast, makes him look good. But in the overall field, I
think Romney wins by default. And the more Romney keeps on message and
Cain keeps acting silly and making just crazy remarks, I think that only
strengthens the default candidacy of Romney.

SCHULTZ: Here`s the breaking news from NBC. Tomorrow, Herman Cain
will sit down with the editorial board of the "New Hampshire Leader." No
cameras will be present. I would say that`s a pretty good move.

DYSON: That`s a very good move. The pizza without all of the
trimmings is what Mr. Cain is in for now.

SCHULTZ: Here`s what Barney Frank had to say about the Republican
race earlier. Let`s play this. Here it is.

(BEGIN VIDEO CLIP)

REP. BARNEY FRANK (D), MASSACHUSETTS: I`m reminded of the great
fighter Joe Lewis, who was so good they had trouble finding opponents for
him. In Romney`s case, he`s kind of mediocre. But they still have trouble
finding opponents for him. They called it the bum of the month club.

(END VIDEO CLIP)

DYSON: There it is. He is the bum of the month. I hate to say it.
No disrespect to Mr. Cain, but you`re making illiterate -- politically
illiterate comments. You don`t even look at foreign policy. How can we
take you seriously?

SCHULTZ: Michael Eric Dyson, always a pleasure. Good to have you
with us. This wasn`t meant to be a comedy segment, but the material led us
down that road a little bit.

That`s THE ED SHOW. I`m Ed Schultz. You can listen to my radio show
on Sirius XM radio, channel 127, Monday through Friday, noon to 3:00 p.m.
Follow me on Twitter @EdShow and @WeGotEd.

"THE RACHEL MADDOW SHOW" starts right now. Good evening, Rachel.

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

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