updated 1/12/2012 11:13:24 AM ET 2012-01-12T16:13:24

Guests: Rick Tyler, Katrina Vanden Heuvel, Jonathan Alter, Richard Wolffe, Ezra Klein, Jonathan Alter, Richard Wolffe

ED SCHULTZ, HOST: Good evening, Americans, and welcome to THE ED
SHOW, tonight from New York.

Mitt Romney has taken a victory lap, but his opponents are calling him
a vulture capitalist. Rick Perry, why don`t you go get your own material?
I was the one that coined that term.

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

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: You know, I think it`s about
envy, I think it`s about class warfare.

SCHULTZ (voice-over): The king of Bain is lashing out at the
bipartisan critics of vulture capitalism.

NARRATOR: Romney and Bain`s cash rampage would ultimately slash jobs
in nearly every state in the country.

SCHULTZ: Today, a pro-Gingrich super PAC is out with their anti-
Romney movie. The man behind the film is here tonight.

The chaos in Carolina has begun.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: We need to have more
venture capitalism going on in America and less vulture capitalism.

SCHULTZ: All the latest from the Palmetto State with Grio editor,
Joy-Ann Reid, "Bloomberg View`s" Jonathan Alter, and MSNBC political
analyst Richard Wolffe.

The first lady is pushing back on critics depicting her as an angry
black woman.

MICHELLE OBAMA, U.S. FIRST LADY: I just try to be me and my hope that
is overtime, people get to know me.

SCHULTZ: And Mitt Romney`s tax plan will raise taxes on the poor, but
his man in New Hampshire got angry with me when I pointed it out.

JOHN SUNUNU (R), FORMER NEW HAMPSHIRE GOVERNOR: There is a technical
term for that. It`s a crock of crap.

SCHULTZ: Tonight, Ezra Klein of "The Washington Post" will set
Governor Sununu straight.

(END VIDEOTAPE)

SCHULTZ: Good evening, folks. And thanks for watching tonight.

Oh, we got a frat fight that`s breaking out in the Republican Party,
don`t we? One day after Mitt Romney won the New Hampshire primary, a pro-
Newt Gingrich super PAC called Winning Our Future released a 28-minute
documentary called "When Mitt Romney Came to Town."

(BEGIN VIDEO CLIP)

NARRATOR: Romney and Bain sale to the Canadian has netted 230 percent
profit for Romney and his investors. The deal left behind a trail of
wreckage.

ROMNEY: I`m convinced if you want to create jobs, it helps to have a
job. I`ve had jobs. I`ll use that experience to help America.

UNIDENTIFIED FEMALE: They never get enough. They no matter how much
they -- no matter how much they already had, they should never get enough
money.

NARRATOR: Mitt Romney and Bain saw 900 percent return on their
investment. Romney and Bain`s profits at the expense of 15,000 jobs was
described by the "Boston Herald" as disgusting.

(END VIDEO CLIP)

SCHULTZ: I should mention, our parent company NBC Universal is the
co-owner of the Weather Channel with Bain Capital.

The movie that is being turned into television ads airing in South
Carolina and they have an impact. South Carolina`s Tea Party Senator Jim
DeMint says Romney will probably win the state. But when Romney gets to
South Carolina he`s going to be seeing more TV ads attacking him than he
has ever seen before.

Billionaire casino owner Sheldon Adelson donated $5 million to the
pro-Gingrich super PAC. Gingrich`s campaign is also paying for ads
attacking Romney`s stance on abortion.

(BEGIN VIDEO CLIP)

NARRATOR: Romney appointed a pro-abortion judge, expanded access to
abortion pills, put Planned Parenthood on a state medical board, but failed
to put a pro-life group on the same board. And Romney signed a government-
mandated health care with taxpayer-funded abortions.

(END VIDEO CLIP)

SCHULTZ: Oh, it`s getting good, ain`t it?

Gingrich is not backing off his attacks on Romney either. He
clarified his position on capitalism to NBC`s Chuck Todd, but pulled no
punches while portraying Romney as a corporate raider.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I`m in middle class. My
dad was an Army officer. I grew up in middle class background. I have
middle class values.

And I find powerful, rich people rigging games very distasteful.

(END VIDEO CLIP)

SCHULTZ: Turn on the lights, the party is not over, it`s just getting
started.

You know what? I just cannot get away from this graph, can I? Here`s
why Gingrich attacks are very effective by calling Mitt Romney a vulture
capitalist. Gingrich is putting a face on the red line that we show you on
this program all the time.

We should start calling this I guess -- well, the vulture chart.
There they are right there.

Have you ever seen vultures eat? Seriously. I mean, they are the
meanest son of a gun in the wild. I mean, when they see a carcass and want
to go eat on it, they just eat and they hang around and they don`t leave
until they are finished, and they get everything they possibly want, and
then they leave. Sound familiar? And they feed on these folks down here
on the blue line.

Republicans are worried about Gingrich and other candidates attacking
Romney over vulture capitalism because basically it`s the truth. You will
never convince me, Americans, that Mitt Romney was the head of Bain Capital
because he wanted to create as many jobs as he possibly could -- like the
president of the United States.

I believe that every time Mitt Romney went into a company, he had one
thing in mind and that was making a boatload of money and he didn`t care
who he ran over. It`s a culture. We have seen this on the campaign trail.

He likes to fire people. Where does that come from? That`s who he
is.

When you talk about the truth, behind Republican policies --
Republicans, you know what they do? They get nervous because they know
it`s the truth. They don`t want anybody knowing that this is one of their
virtues.

Romney is so nervous, he has gone so far to compare his time at Bain
Capital to the automobile industry loan under the Obama administration.

(BEGIN VIDEO CLIP)

ROMNEY: In a general election, I`ll be pointing out that the
president took the reins of General Motors, Chrysler, closed factories,
closed dealerships, laid off thousands of thousands of workers to try to
save the business.

(END VIDEO CLIP)

SCHULTZ: You got to be kidding me, Mitt. You`re comparing what you
did at Bain Capital to the operation of the president of the United States
when he is trying to save jobs and save an industry? Don`t you remember
those guys from the automobile industry flying to Washington in their jets
and the media jumped all over them and Obama told them to go back to
Detroit and get their act together and show up with a game plan that is
going to work in a new industry standard?

And I do believe, Mitt, that the unions took a haircut. They dropped
wages. They dropped health care. They dropped pension. They took cuts
across the board, because they wanted to make the industry work.

And you know what? President Barack Obama did not profit on that the
way you profited on bankrupting companies.

Mitt Romney doesn`t get it. He doesn`t get it because actually he
believes that the American people are just jealous of rich people.

Listen to what he told Matt Lauer this morning.

(BEGIN VIDEO CLIP)

MATT LAUER, NBC NEWS: Anyone with questions about the distribution of
wealth and power in this country is envious -- is this about jealousy or is
it fairness?

ROMNEY: I think it`s about envy. I think it`s about class warfare.

LAUER: Are there no fair questions about distribution of wealth
without being seen as envy, though?

ROMNEY: You know, I think it`s fine to talk about those things in
quiet rooms and discussions about tax policy and the like.

(END VIDEO CLIP)

SCHULTZ: In quiet rooms? You folks down here on the blue line, be
quiet, go behind closed doors, don`t say anything about those vultures up
on top who have seen their income go up over the last 30 years, some 340
percent. Don`t do that.

Of course, Mitt, he likes quiet rooms and closed doors. Hell, he
doesn`t even want to show you his tax returns. You know what? Sixty-six
percent of this country says that there is a strong conflict between the
rich and the poor in this country according to the Pew Research Center.

But Mitt Romney doesn`t want to talk about it. Mitt Romney says that
they are filled with envy, really? OK. What`s a fair question for the
people down here in the middle chase that haven`t seen their wages go very
much over the last 30 years? Is there any fair discussion for the working
folk of America?

Mitt Romney also says people should only talk about income disparity
in quiet rooms. Over the past three decades, income inequality has gotten
worse, for the American worker and Mitt Romney, he doesn`t want to talk
about it.

Does that sound like a guy who wants to lead? He doesn`t get it. And
he wants to be your president.

No wonder the conservatives don`t like this guy, because what he is
doing, he`s showing the country exactly who he is. Do you realize what is
happening here? The right wing talkers of America, they think that Mitt
Romney is not conservative enough.

But this venture capitalism and this vulture capitalism, which it`s
turning into because of people like Romney, they`re out defending that on
right wing radio. I mean, it pains them to stick up for Mitt Romney.

Get your cell phones out. I want to know what you think. Tonight`s
question: does our country need a vulture capitalist in charge of the
economy? Text A for yes, text B for no, to 622639, go to our blog at
Ed.MSNBC.com.

And I want to ask you, does it bother you at all that Mitt Romney went
overseas to get seed money to start a business in the United States of
America, which eventually cut a bunch of jobs? Does it bother you at all?
Took foreign investment to work over American workers, is that true? We`ll
have that story tomorrow night.

Joining me now is Rick Tyler. He is a former Newt Gingrich campaign
spokesman and senior advisor to Winning Our Future, which is a pro-Newt
Gingrich super PAC.

Great to have you with us tonight, sir. I appreciate it.

RICK TYLER, WINNING OUR FUTURE: Ed, I`m glad to be here and you`re on
fire.

SCHULTZ: Well, I`m going to put left, right, blue, green, center, and
let`s just throw it out. Let`s just talk about the facts.

You have put together a documentary that is 26, 28 minutes long. I`ve
seen most of it.

Is this factual -- is this a factual piece of material that you`ve put
together?

TYLER: Well, let me give you a little background. I don`t want to
take credit for this movie. Jason Meath put this movie together, and he`s
an extraordinarily, obviously talented filmmaker. It is as good a quality
as I`ve seen.

When I first learned about it I was told it was good quality, you
always -- in campaign will always -- there`s always someone has the silver
bullet that will be the end of it and it never turns out to be true. Well,
this is as close to a silver bullet as I`ve ever seen.

And so, I watched the filmed. It`s obviously high quality. It tells
a compelling story, and then, you know, the first question is, OK, well, is
it true? And we have the documentation and it`s rock solid.

SCHULTZ: It`s rock solid. So, any line in that documentary is
completely the truth, that it is -- you`ve backed it up.

TYLER: I have citations.

SCHULTZ: OK. All right. You have document.

All right. Is there proof that Bain Capital -- and this is a key
question, because I think Americans want to know this. Is there proof that
Bain Capital under Mitt Romney went in and made profit from companies when
they shortchanged their pension funds? In other words, did they steal the
pension funs and call it profit in the general fund? Did they go after
peoples retirement?

I need to know that.

TYLER: Well, right here in South Carolina, there is a company called
GSI. They made steel. And Mitt Romney and Bain bought that company. They
liquidated it. They eliminated the jobs.

And there was a pension in that company and that pension got shorted.
And the federal government had to bail out the pension so taxpayer money
made up the difference in the pension and Bain Capital made a profit of
tens of millions of dollars in that deal right here in South Carolina.

SCHULTZ: Tens of millions of dollars and you`re telling me that the
pension the workers had ended up getting thrown off on the Pension Benefit
Guarantee Corporation, which of course is the federal government, and the
American taxpayers, bailing out the folks who worked in industries that
have failed, is that correct?

TYLER: That`s correct.

SCHULTZ: So Newt --

TYLER: That, by the way -- that, by the way, Ed, is not in the movie.

SCHULTZ: Yes.

TYLER: There is four case studies in the movie, there is AMPAD, DDI,
KB Toys and UniMac, and they illustrate this type of behavior.

But let me just back out if I could just a little bit, is that in the
capitalist system -- well, it`s interesting since I brought this up. Let
me give you a background story. It`s kind of funny. You know, we acquired
this film and then I bought a coach ticket to New Hampshire, I got a really
lousy hotel room for a week.

And we didn`t run a single ad, no one has seen the movie and the
arrogance of the Romney campaign, you would think that by criticizing him
and holding him to account, which is my central premise, he said he`s a job
creator. He`s not.

And so, I`m holding him account. You would think I`m attacking the
foundation and pillars of capitalism itself and the civilization was going
to fall down. I mean, the arrogance of the way they reacted to this is
really mind boggling and then you just played a series of clips in which
Mitt Romney under pressure from a super PAC that hadn`t spent any money.
Imagine, you know, his responses when he really is under pressure.

SCHULTZ: Yes.

TYLER: I mean, so -- the Republican Party should be paying close
attention that Mitt Romney under pressure is not very good on his feet and
Mitt Romney`s record -- and look, we`ve made disagree -- Mitt Romney
claims, you know, he was ran as governor, he was pro-choice, now he`s pro-
life. He said he was for the strictest gun laws in the United States in
Massachusetts, where possession of a handgun is a year in jail, he said he
supported that --

(CROSSTALK)

TYLER: For the Second Amendment.

SCHULTZ: So, he`s clearly --

(CROSSTALK)

TYLER: Of course, that is what all I`m saying is that he says I
created jobs. Show me.

SCHULTZ: Yes.

TYLER: Because capitalism works in this way. And they trump out,
they bring out all these economists to debate with me. I don`t want to
have an economic argument, I`m just saying he said he created jobs, and he
didn`t.

SCHULTZ: I just want the right wing talkers of America -- we know who
they are -- go on the air tomorrow and do this story, and ask the American
people, these conservative listeners, if they think it`s fair that Mitt
Romney took millions and threw the retirement off on the Pension Benefit
Guarantee Corporation.

Is that the capitalism we want coming out of the White House if by
chance he gets the nomination and were to win the White House?

Rick Tyler, we`re going to bring you back on the program again because
I`m anxious to see how this plays in South Carolina. I mean, the working
folk of America

(CROSSTALK)

SCHULTZ: You bet. If working folk of America know the real story
about how this guy operates, you`re not going to want him near Pennsylvania
Avenue.

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

Coming up, conservatives -- well, they don`t think Mitt Romney is
extreme enough for the Republican Party. But his policies tell a different
story. Katrina Vanden Heuvel will tell us how Romney is as right wing as
the rest of them out there.

And South Carolina`s primary is just 10 days away, and it could be the
last chance for Republicans to stop the Mitt-ster. Our political panel
coming up on that.

Stay with us. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Coming up on THE ED SHOW: Mitt has gone far right on the
campaign trial. Will he be a far right president? Katrina Vanden Heuvel
joins me on that.

And 2 percent Tim Pawlenty told me he needs a little help getting to
sleep. Well, I`ve got a bedtime story for the former governor of
Minnesota, and now, of course, surrogate for Mitt Romney. That`s coming up
in "Psycho Talk."

And former New Hampshire Governor John Sununu calls the Tax Policy
Center`s analysis of Mitt Romney`s tax plan a crock of crap. Well, I`ll
talk to Ezra Klein later in the program about that find out if it is.

Share your thoughts on Twitter using #EdShow.

We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for watching.

Mitt Romney`s Republican opponents, they want to paint him as a
Massachusetts liberal. But Romney has become as conservative and extremist
as Rich Santorum or Newt Gingrich. He made his views clear last night
during his victory speech in New Hampshire.

(BEGIN VIDEO CLIP)

ROMNEY: I will make the federal government simpler, smaller and
smarter. I will cut, cap and balance the federal budget.

This president has enacted job-killing regulations. I`ll eliminate
them.

He lost our AAA credit rating. I`ll restore it.

He passed Obamacare. I`ll repeal it.

Internationally, President Obama has adopted an appeasement strategy.
I will insist on a military so powerful no one would ever think of
challenging it.

(END VIDEO CLIP)

SCHULTZ: And Romney has also spoken out against Roe v. Wade. He`s in
favor of the Defense of Marriage Act, which would outlaw same sex marriage.
He wants to build a fence on the border between the United States and
Mexico. He doesn`t think waterboarding is torture.

And in December, he got behind Paul Ryan`s plan to cut Medicaid,
Medicare, spending it by giving it to the -- sending it off to the states
so they can use it as bloc grants. And, of course, the voucher system.

Romney insisted it wouldn`t hurt the beneficiaries.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS ANCHOR: You don`t think if you cut $700
billion in aid to the states some people will get hurt?

ROMNEY: In the same way that by cutting welfare drastically I don`t
think we hurt the poor, in the same way that cutting Medicaid spending by
having it go to the states, run more efficiently with less fraud. I don`t
think we`ll hurt the people that depend on the program for health care.

(END VIDEO CLIP)

SCHULTZ: No, he`s not going to hurt anybody with his economic
policies, I want to visit with Katrina Vanden Heuvel, editor, part owner
and publisher of "The Nation" magazine tonight.

I want to show this chart. We are now officially renaming this
economy chart, the vulture chart. The red line and blue line, which we
show so often here.

And I just do not believe from the tax policy that I have read that
Mitt Romney is talking about the blue line would advance forward. Your
thoughts?

KATRINA VANDEN HEUVEL, THE NATION: Ed, you just illustrated the
column I wrote the other day called "Extremists in Pinstripes." That is
Mitt Romney.

How is it think this is something worth talking about on your show
over these next months, how is it that what was once called reactionary is
now called moderate? Because Mitt Romney is a very reaction extremist
candidate on social conservatism, on national security and, of course, he`s
the champion of the 1 percent when it comes to economic policy in this
country.

I think he gets a pass on social conservative because of Rick Santorum
in the race. But as you said in the good set-up, he`s opposed to Roe v.
Wade. He has Robert Bork, a judge passed over by conservatives in Congress
because he was so reactionary, as his advisor on legal issues.

You would have a fifth to add to the gang of four, Robert, Alito,
Thomas and Scalia.

SCHULTZ: His new positions, I mean, he`ll say anything to get
elected. Is there a chance, if he did get elected that he would go in the
White House and actually become moderate, which is the fear of
conservatives? And that`s why the right wing won`t get behind him. They
just don`t trust this guy.

VANDEN HEUVEL: You know, it`s a good question. But I think what
we`ve seen with the Republican Party is the power of the right wing money
behind the guy is on the core issues, he will stay social conservative.
And on national security, by the way, Ed, I think it`s important to point
he`s to the right of Gingrich. He`s way to the right of Jon Huntsman.

He has the baggage of the bloody neo-conservatives behind him, those
who took us into the disaster of Iraq. He would add hundreds of millions
of dollars to the defense budget. But I think this man is a vessel and
vehicle of the Chamber of Commerce forces in this country.

SCHULTZ: What kind of judge do you think he would put on the Supreme
Court if he were president and have the opportunity?

VANDEN HEUVEL: Someone make it the gang of five. Someone who will be
one, who would invalidate Obama`s health care plan, which he, by the way,
as you pointed out, Romney has already come out to repeal Obama`s health
care plan.

I think it`s important to point out that he is to the right of George
W. Bush, as you probably pointed out in the show in terms of extending the
Bush tax cuts for the very richest. He is a buccaneer.

SCHULTZ: Well, he wants toto tax people under $10,000. He wants to
tax people under $40,000. If you make more than a million dollars, you
would see a 5 percent reduction.

Now, this is a tax policy of people putting this together.

VANDEN HEUVEL: In 2015, those who make a million dollars would see a
tax benefit of close to $250,000.

He would prey on those the vulnerable. We talked on this program last
week, when he heard of the appointment of someone to protect consumers,
veterans and students in the country or labor and working people, he called
that the worst kind of Chicago-style politics. He wants to cripple
regulations which help our -- help those who are the most vulnerable in the
system. He calls it the invisible boot of government.

Ed, I ask, is he having Jack London, the writer, channel his speech
writing? I mean, no really, what`s going on here?

SCHULTZ: That`s a question we will answer down the road. Katrina
Vanden Heuvel, thanks so much.

VANDEN HEUVEL: Thank you.

SCHULTZ: Thanks so much. Great work.

Coming up, we have a very special "Psycho Talk" tonight. Tim Pawlenty
told me last night in my show, it cures his insomnia. So, I`m going to
help him fall asleep with a bedtime story about his good friend, Mitt
Romney. You won`t want to miss it.

Michelle Obama denies reports of tension in the White House, and is
calling out her critics. Joy-Ann Reid, Jonathan Alter and Richard Wolffe
all weigh in on that and other political topics, coming up.

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

(COMMERCIAL BREAK)

SCHULTZ: And it`s "Psycho Talk" tonight.

Well, I got a bone to pick with former Minnesota Governor Tim
Pawlenty. During our coverage of the New Hampshire primary last night, we
interviewed the Romney supporter and failed presidential candidate. We
were talking about whether Mitt Romney was a vulture capitalist, when T-Paw
went out of his way to insult my show.

(BEGIN VIDEO CLIP)

TIM PAWLENTY (R), FORMER MINNESOTA GOVERNOR: I watched your show last
night. I have insomnia. I stayed up late.

I had nothing else to do. I had ironed my shirts, I brushed my teeth.
I had literally nothing else to do. So, I watched your show.

(END VIDEO CLIP)

SCHULTZ: Well, tonight, I`m going to have to cancel "Psycho Talk" and
help T-Paw gets some sleep. I have a bedtime story for you, Tim. It`s all
about your good buddy Mitt Romney and his plan for America. It`s called
"Goodnight Mitt." So here we go. Oh, it really is a wonderful book. .

In the great 12 million dollar beach house, there was a telephone and
250 million bucks, and a picture of greedy multi-millionaire schmucks on
the wall.

There were three little capitalists cronies and a bowl full of pious
baloney, and a quiet old lady who was whispering don`t privatize Social
Security.

Good night to union. Good night to health care. Good night jobs.
Good night clean air.

Good night public education. Good night immigration. Good night Wall
Street regulation. Good night middle class. Good night auto czar. Good
night dog on the roof of the car.

Good night Roe v Wade. Good night marriage equality. Good night to
the old lady whispering don`t privatize Social Security.

Good night Medicaid. Good night Medicare. Good night American dreams
everywhere.

Sweet dreams, T-Paw. Sleep just as good as your presidential
campaign. Nighty-night.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Tonight`s Playbook, it`s do or
die in South Carolina. And the strategy is everything, if Republicans hope
to take down Mitt Romney. Even Tea Party hero South Carolina Senator Jim
DeMint predicts a Romney victory.

(BEGIN VIDEO CLIP)

SEN. JIM DEMINT (R), SOUTH CAROLINA: I think Romney`s gonna win here.
And I think some of the others who might have had some advantage here have
really crossed paths or crossed ways with some Republicans as they
criticized free enterprise concepts.

I think you might see Mitt Romney win here. But it`s possible that
Gingrich or Santorum might make another run at it here. I just don`t know.
I know Perry has been spending time here, but he doesn`t seem to be getting
a lot of traction. And I think after Iowa and New Hampshire, it is going
to be tough.

(END VIDEO CLIP)

SCHULTZ: Newt Gingrich`s only hope is for conservatives to rally
around him. This was Gingrich in Spartanburg, South Carolina today.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Now, the fact is we have
to consolidate conservatives to beat Governor Romney. We keep getting told
by the establishment, you really ought to nominate a moderate because they
somehow can appeal to middle. These are the folks who were against Reagan
in `80.

(END VIDEO CLIP)

SCHULTZ: Gingrich continually compares himself to Ronald Reagan. Is
it wearing thin with a lot of Americans? It is with me.

I`m joined by Joy-Ann Reid tonight, MSNBC contributor and managing
editor of "The Grio," Jonathan Alter, MSNBC political analyst and columnist
for "Bloomberg View," and Richard Wolffe, MSNBC political analyst with us
tonight.

All right, Newt Gingrich, this guy is attacking Romney on multiple
fronts. But let`s take, for instance, what he`s doing going after him on
the Bain Capital issue. Gingrich`s super PAC has this documentary out
there, but he`s getting blow back from some Republicans.

Jonathan, will this strategy backfire? Will it work?

JONATHAN ALTER, "BLOOMBERG VIEW": I don`t think it is going to work
for the critics of Mitt Romney. But it does two very good things for
Barack Obama. The first is that it starts to implant in the minds of the
American people that Bain Capital and what you call vulture capitalism is a
legitimate campaign issue moving forward.

It`s an important debate for the country to have. And newt Gingrich
and his sugar daddies are kicking it off. So that is great.

The other thing -- just very quickly, the other thing that didn`t get
very much attention is that the backlash against it by the Romney people,
they are going and they`re trying to tell Adelson`s casino, the public
company that he runs, that it`s an improper use of money to get behind this
kind of thing. If that then becomes a model moving forward, it gives
progressives a way to resist the super PACs and the power of big money.

So moving forward, when other sugar daddies start to come up with all
this money, then progressives can go to share holder meetings and say, oh
no you don`t, there is a price to be paid for you in the court of public
opinion and before your shareholders, if you go down this super PAC road.
That is very important.

SCHULTZ: You`re really counting on people paying attention to where
the money is coming from.

ALTER: But your (inaudible) do that.

SCHULTZ: It`s important. But when you look, Joy-Ann, about Mitt
Romney in New Hampshire, he continued to slide. Then he had a big showing
with over 39 percent of the vote. How do you think this is going to go in
South Carolina? You got high unemployment down there. It`s different
dichotomy, the whole thing. How do you think it will play there?

JOY-ANN REID, "THE GRIO": Yes, absolutely. So far, Mitt Romney has
won. I don`t think 39 percent is an overwhelming victory, personally, when
he was the governor next door. But he did win. It was decisive. Only Ron
Paul came close to him.

But now they go down to South Carolina where unemployment is
considerably higher. I don`t think it`s liberals and Democrats and Occupy
Wall Street people who believe that a camp, a company, a corporation can do
bad things. Right? You don`t have to be anti-capitalist to believe that
this company exporting jobs and this company laying off workers is a
negative -- is a bad thing and is bad for the American workers.

I think Republicans could agree with that, too. I think, in a sense,
the narrative, as Jonathan said, is being implanted that Mitt Romney`s
company was a vulture capitalist, whatever your opinions on capitalism,
writ large.

And then I think it`s forced him into this position where he`s
parroting the sort of Rush Limbaugh-ism; don`t hate me because I`m rich.
I`m rich and that`s too bad if you`re not. That`s not good for him in a
general. Don`t think it stops him from winning, though, among Republican
voters in South Carolina.

SCHULTZ: Richard, 60 percent of the voters in South Carolina are
Evangelical Christians. And of course, Gingrich is hitting him hard on the
abortion issue. The ad is brutal. We have two definitely contrasting
comments from Mitt Romney on his position on this. Is this going to have a
big effect on the electorate?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: South Carolina is a
different place. I have to tell you, I was with George W. Bush in 2000
when he went down from New Hampshire, flew down and went straight to Bob
Jones University. And of course, he took apart John McCain right there.

Yes, Evangelical voters are a huge force in Republican politics. By
the way, economic populism is, too. There is a reason Mike Huckabee was so
successful across that sweep of the old south. And that is because he
struck some of the same tones that a lot of these candidates are.

Rick Perry talked about vulture capitalism. It`s not just people on
the left. So there is a strain of southern Republican politics that does
speak to those issues.

The problem, as it has been all through these early states, is that
Evangelical vote, that economic populous vote is going to be split. The
Anti-Romney vote is split. Until one of these head-strong, ego driven
conservatives drops out, they are going to keep on killing each other.

SCHULTZ: All right, Joy-Ann Reid, Jonathan Alter, Richard Wolffe,
stay with us. We got a lot more to talk about.

Up next, Michelle Obama responds to a book`s portrayal of her as First
Lady and calls out her critics. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: Who can write about how I feel? Who?
What third person can tell me how I feel? Or anybody for that matter.

(END VIDEO CLIP)

SCHULTZ: That was First Lady Michelle Obama, brushing off a new
book`s portrayal of her role as First Lady. The book is called "the
Obamas." It`s written by "New York Times" reporter Jody Kantor. And it
suggests Mrs. Obama`s strong opinions have caused tension in the White
House.

The First Lady says she hasn`t read the book, but denies clashing with
the president`s former chief of staff, Rahm Emanuel, and former press
secretary, Robert Gibbs. Mrs. Obama called out her critics and the
stereotype that has been following her since the 2008 campaign.

(BEGIN VIDEO CLIP)

M. OBAMA: I guess it`s more interesting to imagine this conflicted
situation here, and a strong woman and a -- but that`s been an image that
people have tried to paint of me since the day Barack announced, that I`m
some angry black woman.

(END VIDEO CLIP)

SCHULTZ: Now where would the First Lady get such an idea like that?
Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Is there something about Michelle Obama? Has
she been more vocal on policy?

UNIDENTIFIED FEMALE: She has quite a history of griping. And it`s
not exactly what people want to hear right now.

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: Her instinct is to start with
this blame America, you know, I`m the victim.

UNIDENTIFIED FEMALE: I do think America should watch out, though,
because the bitter half of the White House is being let loose on the
campaign trail.

SEAN HANNITY, FOX NEWS ANCHOR: She was in Reverend Wright`s church
for 20 years, apparently closer to Reverend Wright than Barack Obama was.

GLENN BECK, RADIO TALK SHOW HOST: You don`t think she is snotty,
really?

DON IMUS, FOX BUSINESS ANCHOR: No, I think she is fine.

BECK: Really? Ms. Arugula.

We`re living in a country where you can`t say that is a little uppity?
You can`t say that?

RUSH LIMBAUGH, RADIO TALK SHOW HOST: What kind of a self-centered,
arrogant, controlling character disorder are we dealing with?

UNIDENTIFIED FEMALE: We didn`t hear this about Laura Bush.

(END VIDEO CLIP)

SCHULTZ: Let`s bring back MSNBC contributor Joy-Ann Reid, MSNBC
analyst Jonathan Alter and also Richard Wolffe with us tonight.

Joy-Ann, I have to ask you, you know, why is Michelle Obama even
responding to this?

REID: Yes. First of all, I think conservatives need to ix-nay on the
uppity-ay. Like that`s a word they should just kill from the lexicon. It
just grates so much when you hear it.

I think what you`re hearing from Michelle Obama is three years of pent
up frustration at the way that she was portrayed from 2007, when the Obamas
first really got on that national stage, where she was just caricatured
over and over again, even by Mrs. McCain, as somebody who doesn`t love her
country, as somebody who hates white people, as someone who is angry.

Nothing about Michelle Obama has demonstrated this at all. She has
been very supportive of the president. But you have never seen her weigh
in on policy. The most sort of policy oriented thing she has done is to
really work with military families. Is that objectionable? Does that make
her angry?

I just don`t think that she`s probably frustrated. I don`t this book
necessarily portrayed her that way, from my understanding of it. But I
think you`re hearing her frustration.

SCHULTZ: Was there friction inside the White House?

ALTER: Not really. The book doesn`t actually depict very much
tension. It -- there is tension between Robert Gibbs and Valerie Jarrett.
But the First Lady made a mistake, I think, going out in public and
essentially attacking this book, which she admits she hasn`t read. It`s a
positive book. And what she is doing is drawing attention to a depiction
that didn`t even exist in the book. Not smart.

SCHULTZ: I don`t think she has to explain her relationship with the
president. I don`t.

REID: She was smart to do it. She said this is my husband. What I
did like about that CBS interview is that she emphasized over and over she
is talking about her husband. For her, that is what the relationship is.

SCHULTZ: Richard, why does the right wing have such a hatred for this
woman?

WOLFFE: I think you actually heard it in some of those clips, which
were, in most cases, completely unfactual, completely erroneous. Why were
they erroneous? Because they are actually projecting things that the
president, then a candidate in some cases, had said, and assuming that Mrs.
Obama had either been there or said that or done that.

She didn`t mention arugula. That was her husband. She wasn`t a
member of Trinity. It was her husband. So, you know, there is a
conflation. She is an easy target. There`s an easy narrative to say
everything that`s wrong with him is really to do with the wife.

We often do that with political couples. I think it`s easier with
this woman who is yes, strong, confident, accomplished and also having to
play a secondary role. It`s unusual.

ALTER: She`s had a great ride for three years. And it looks a little
bit self-pitying to indicate to the contrary. And -- so this is puzzling
to me. It`s not as if the right wing has been beating up on her with great
effect for the last three years. They did during the campaign. Most of
those clips are old.

And so if it ain`t broke, don`t fix it. Her relationship with the
American people wasn`t broken.

SCHULTZ: She was better off to ignore it?

ALTER: Absolutely should have ignored it.

SCHULTZ: In some strange way, will this make her even more effective
on the campaign trail?

REID: Yeah, because you know what? I think a lot of people have
wondered when Michelle Obama was going to finally react to it. I think I
agree that -- over the last year, I would say that Michelle Obama`s image
has definitely softened. You really have more seen focus on her sort of
style and her working with children and the things she has done in terms of
trying to get children to lose -- to be of a healthy weight.

SCHULTZ: Which they have mocked.

REID: Which have been mocked, too. But I have to be honest, she
wouldn`t be human if she didn`t have a human reaction to just the constant
tirades from the right.

SCHULTZ: Richard, will she have a different role on the campaign
trail, more intense maybe this time around?

WOLFFE: She is already out there campaigning tonight. She is great
at making the sale. I have to disagree with my old friend Jonathan though.
I don`t think she was self-pitying here.

If you get asked a question about how she is portrayed, she has to
respond to it. A lot of things have been projected on them, some by people
inside the White House. There is a device people use about saying oh,
well, the boss wants this, or his wife wants that. You never really know.

It is hard for writers to know unless they go to them directly and
say, did you want this, did you say this. If you don`t get that interview
opportunity, you cannot answer that question.

SCHULTZ: Joy-Ann Reid, Jonathan Alter, Richard Wolffe, thanks so much
for joining us tonight.

In the big finish tonight, John Sununu says an analysis of Romney`s
tax plan is a crock of crap. Well, we`ll ask Ezra Klein if that crock of
crap is just that. Or is it the truth? John Sununu, can he handle it?
That`s next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: ED SHOW survey tonight, I asked does our country need a
vulture capitalist in charge of the economy? Three percent of you said
yes; 95 percent of you said no.

Coming up the Tax Policy Center says Mitt Romney`s tax plan will raise
middle class taxes. John Sununu says that that analysis -- his words, not
mine -- he says it`s crap. Who has it right? Ezra Klein joins me next.
Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. In the big finish tonight, I`m
quoting here, "it`s a crock of crap." This is what -- that is what former
New Hampshire Governor John Sununu said when I asked him a question about
how Mitt Romney would give another huge tax break to the wealthiest
Americans. Here it is.

(BEGIN VIDEO CLIP)

SCHULTZ: According to the Tax Policy Center, the gentleman who is
projected to win tonight in New Hampshire, Mitt Romney, he would raise
taxes on people in this country making 40,000 dollars or less, and a
millionaire would see his taxes would drop by five percent.

JOHN SUNUNU, FORMER GOVERNOR OF NEW HAMPSHIRE: Where did that come
from?

SCHULTZ: It came from -- according to the Tax Policy Center, that
went through his tax policy. And they came out and said that Romney`s tax
plan would increase taxes for families making less than 40,000 dollars.
And a millionaire will see his taxes drop by almost five percent. Do you
think that that --.

SUNUNU: That is kind of strange. I`m sorry. Go ahead.

SCHULTZ: Go ahead, sir.

SUNUNU: I think that is kind of strange, when the governor has made
it clear he`s not cutting taxes on the upper brackets, that he is cutting
taxes on the hard-earning taxpayers in the middle, and that -- that he is
committed to flattening and lowering taxes across the board.

So with all due respect to that organization, there is a technical
term for that. It`s a crock of crap.

(END VIDEO CLIP)

SCHULTZ: Let`s turn to MSNBC policy analyst and "Washington Post"
columnist Ezra Klein. Well, is it a crock of crap or was the premise of
the question accurate?

EZRA KLEIN, "THE WASHINGTON POST": They`ve got to arm -- the Romney
campaign has to tell surrogates what is in his tax plan. Look, the Tax
Policy Center is not doing magic here.

Mitt Romney`s tax plan has a couple components, and they`re simple.
He extends all the Bush tax cuts. He cuts capital gains and dividends
taxes for people making less than 250,000. That`s the middle income tax
cut Sununu was talking about.

He cuts the corporate tax rate from 35 percent to 25 percent. And he
gets rid of the estate tax.

Now those last two, the corporate tax rate and the estate tax, they
benefit the rich hugely. And so when you add it all up, when you add up
the Bush tax cuts and Romney`s tax cuts, people who make more than one
million dollars are getting 50 percent of the benefits. When you just take
Romney`s cuts on their own, when you don`t have the Bush tax cuts in there,
they are getting a full 28 percent.

These are very tilted towards upper income Americans.

SCHULTZ: Simply put, it`s far more aggressive than what the Bush team
had on the table.

KLEIN: It is George W. Bush but more so. It`s interesting because
it`s more moderate than anything any of the other Republicans have, more
moderate than Huntsman, more moderate than Santorum, than Gingrich, than
Perry, than Cain. In this group, Romney is a moderate. But it`s vastly
more extreme than what Bush did.

One point you have to make on that is you have to ask how it`s getting
paid for. When Bush offered up his tax deal, we had a surplus. So the way
you were paying for it was you were just paying down a surplus. We have
deficits now. So this tax cut, and the Romney team has said this, will
have to come out of cuts to government spending.

Government spending obviously tends to benefit low income Americans
and middle income Americans. So you`re transferring a bunch of money from
the bottom half of the income distribution to pay for these tax cuts for
the top half, particularly for the top 20, 10 and one percent.

So it`s not just Bush but more so in the raw numbers on the tax cut
side. But given how it will have to be paid for, it`s actually even more
regressive than it looks at first glance.

SCHULTZ: Ezra, let`s say we were to implement Mitt Romney`s tax plan.
Just what kind of cuts would we have to make to the budget to make it
pencil out?

KLEIN: So Bush`s tax cuts are four trillion dollars over ten years.
Romney`s are -- just ball parking here, from the numbers I`ve seen, two to
three. That`s a conservative estimate. It could be three to four
actually.

So you`re talking about cuts over the next 10 years that need to equal
out to at least seven trillion dollars to pay for these tax cuts. Those
are big. You`re talking about vast, huge cuts to entitlements, to Social
Security, to Medicare.

There is not money for that in non-defense discretionary spending.
You have to start hacking in to the big parts of government to get you
there.

SCHULTZ: Is it true that he would have people making under 10,000
dollars a year also pay tax?

KLEIN: It`s a bit more complicated. So there is some stimulus
provisions that Obama passed called the Expanded Earned Income Tax Credit
and Expanded Child Tax Credit. Mitt Romney doesn`t extend those. So they
expire and low income pay more.

Whether or not you blame Mitt Romney for that I think is a judgment
call. But obviously he could have crafted his tax plan to give more
benefits to low income people. On the other hand, these are not things he
is specifically changing in law.

SCHULTZ: Ezra Klein, always a pleasure. Good to have you with us
tonight. so the question was spot-on and the answer was incorrect. As you
said at the top of this, the Romney campaign has to get their surrogates
all on the same page when it comes to tax policy. Thanks so much.

That is THE ED SHOW. I`m Ed Schultz. You can listen to me on Sirius
XM Radio channel 127, Monday through Friday, noon to 3:00. Follow me on
Twitter @EdShow. And like me on Facebook and all that other kind of stuff
that we do, you know.

Rachel, I`m coming to you just a little bit early tonight, because I`m
going to sneeze.

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

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