updated 1/13/2012 11:58:10 AM ET 2012-01-13T16:58:10

Guests: David Cay Johnston, Tyler Jones, E.J. Dionne, Ari Melber, Krystal Ball, Obery Hendricks, Steve Bullock

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

Mitt Romney is facing more heat regarding his record at Bain Capital,
and this time it`s coming from his own party. Romney is hiding from the
truth. And America deserves answers.

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

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think any time a job is
lost is a tragedy. For the family, for the individual that loses a job,
it`s just devastating.

SCHULTZ (voice-over): The bigger tragedy for Romney is when your
investors don`t get paid. John McCain is coming to Romney`s defense. His
old running mate is twisting the knife.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Governor Romney has claimed
too have created 100,000 jobs at Bain. And, you know, people are wanting
to know, is there proof?

SCHULTZ: Tonight, my commentary on the mother at failings of middle
class men.

Don`t look now -- but we have a tight race in South Carolina. And
it`s getting uglier by the minute.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Crony capitalism where
people pay each other off at the expense of the rest of the country is not
free enterprise, and raising questions about that is not wrong.

SCHULTZ: Democratic strategist Krystal Ball, E.J. Dionne of "The
Washington Post" and Ari Melber of "The Nation" magazine on the chaos in
Carolina.

Jim DeMint goes rogue with his White House pick and lands in "Psycho
Talk."

And so far, Mitt Romney has stayed under the radar on the issue of
race. Tonight that`s all over. Mitt Romney and his Mormon faith are being
called on the carpet.

(END VIDEOTAPE)

SCHULTZ: Good to have you with us tonight, folks. Thanks for
watching.

Ultraconservatives are not buying Mitt Romney`s claim of being a job
creator. Last night on FOX News, Sarah Palin defended Rick Perry`s attacks
on Mitt Romney. She said Romney`s record in the private sector is fair
game.

(BEGIN VIDEO CLIP)

PALIN: Governor Romney has claimed to have created 100,000 jobs at
Bain. And, you know, people are wanting to know, is there proof of that
claim, and was it U.S. jobs created for United States citizens?

(END VIDEO CLIP)

SCHULTZ: It`s that old reporter coming out in Sarah Palin, so much
for sports.

Newt Gingrich isn`t stepping on the brakes either. Watch this testy
exchange he had with the kids on "FOX & FRIENDS" this morning.

(BEGIN VIDEO CLIP)

GINGRICH: There are a series of cases that don`t look right, and I`m
saying for a guy to run for president, use his record as the basis for
running, and then tell us we`re not allowed to even ask about his record?
To ask about the record of a presidential candidate is somehow
inappropriate?

UNIDENTIFIED MALE: Well, sir, let me follow that up, though --

GINGRICH: What I don`t get is automatic blanket, please don`t look,
please don`t ask for details -- I can`t think of any other place in
American life where --

UNIDENTIFIED MALE: But, sir --

GINGRICH: -- where the news media would back off and say, oh, my
gosh, we can`t look at this.

(END VIDEO CLIP)

SCHULTZ: These hard right wingers don`t sound much different than the
Democratic congressman that I had on my radio show today. Listen to South
Carolina Congressman James Clyburn talked about Mitt Romney`s finances.

(BEGIN AUDIO CLIP)

SCHULTZ: You think Romney`s hiding something?

REP. JAMES CLYBURN (D), SOUTH CAROLINA: I really think so. I have no
doubt in my mind that he has some reason for not wanting us to see his tax
returns.

SCHULTZ: Are you suggesting there may be a scenario where he`s not
paying any tax?

CLYBURN: There may well be. And there`s only one way for us to know
and that`s for him to make his tax records available for the public to see.

(END VIDEO CLIP)

SCHULTZ: You know, when it`s all about finance, it all comes
together. I mean, when you got James Clyburn, Sarah Palin and Newt
Gingrich pretty much on the same page, the Republicans get really nervous.

Well, the latest poll out of South Carolina shows the attacks may be
working. Romney is ahead of Newt Gingrich by only two points. John McCain
is making the rounds now defending the Mittster.

But in 2008, McCain sounded a lot like Gingrich and Palin when it came
to Romney and Bain Capital. He was confronted about it on FOX today.

(BEGIN VIDEO CLIP)

MEGYN KELLY, FOX NEWS: You made an issue of Bain as well, and pointed
out that he presided over this company which laid off thousands of workers
and some of your surrogates went a little further than you did.

SEN. JOHN MCCAIN (R), ARIZONA: Yes, my surrogates are -- that`s why
you have surrogates to go further than you.

(END VIDEO CLIP)

SCHULTZ: Well, it just wasn`t surrogates, Mr. McCain. That is what
John McCain told "The New York Times" about Mitt Romney back in 2008. "As
head of his investment company, he presided over the acquisition of
companies that laid off thousands of workers." Pretty good surrogate work
there, Senator.

McCain is singing a different tune about Bain Capital today.

(BEGIN VIDEO CLIP)

CAIN: To go after him on really what is the essence of what we
Republicans believe in about economy, I think -- I think is a serious
mistake. And, frankly, I think it`s the last resort of a very desperate
campaign.

(END VIDEO CLIP)

SCHULTZ: But that`s not what you said in 2008. McCain says Romney`s
tenure at Bain Capital is the essence of what the Republican Party is all
about?

Here`s the essence John McCain is defending. Robbing hard working
Americans of their pensions and putting the excess debt on the back of the
United States taxpayer. In 1993, Bain Capital became the majority
shareholder of a Kansas City steel mill.

Now, according to "Reuters", less than a decade later, the mill was
padlocked and some 750 people lost their jobs. Workers were denied the
severance pay and health care insurance they had been promised. And their
pension benefits were cut by as much as $400 a month. How`s that for
treating the workers good.

The remaining benefits, by the way, were paid by the Pension Benefit
Guarantee Corporation, a pension protection agency in the United States
government. Because Bain left the government on the hook for the pension
benefits, the cost to the taxpayers was a $44 million bailout.

Mitt Romney`s candidacy may be the best thing that could have happened
to the American worker because it`s a wakeup call for everybody. Now, we
know income inequality has gotten worse in the last three decades, now
American people are learning about the vultures who have helped make it
worse.

But I want to be clear here, and I don`t -- I think this is part of
the story that needs to be put out there, just so we`re all on the same
page as Americans. There seems to be some misconception floating around
the story.

When we talk about leverage buyouts by corporate raiders, we`re
talking about corporate raiders that don`t look for companies that are
dying or on the verge of bankruptcy or cash strapped in anyway. They go
after companies that are successful, companies that have cash or other
liquid assets. They strip it out and then they declare bankruptcy. It`s
called -- I guess you could say -- chop shop vulture capitalism. Mitt was
pretty damn good at it.

Just keep in mind, Mitt Romney wasn`t in the business of creating jobs
and being such a good citizen that, oh, look, I`ve created 100,000 jobs.
No, he worked in the financial sector and his job was to make money at any
cost, and not worry about who he left behind.

Get your cell phones out. I want to know what you think. Tonight`s
question: does Mitt Romney need to come clean about his record at Bain
Capital? Text A for yes, text B for no to 622639, and you can go to our
blog at Ed.MSNBC.com. We`ll bring you the results later on in the show.

I`m joined tonight by David Cay Johnston, "Reuters" columnist and
author of the book, "Free Lunch."

Mr. Johnston, good to have you with us tonight.

The scenario that I painted, is it very -- is it accurate? You know,
I mean, is this what companies do? Is this what these financiers do? They
go around looking for companies that have it pretty good, have a bank
account, have assets, go in there and do the dirty deed? What do you
think?

DAVID CAY JOHNSTON, REUTERS: Well, the record on Romney is somewhat
mixed. There are companies that they essentially bought, sucked all the
cash out of them, and then left behind. And I think the pension guarantee
issue is one that will cause him a lot of problems, and a lot of explaining
is necessary about why the government had to step in in this area.

But he also was involved in creating some companies. And in those
cases, you have to look at the fact that Staples, for example, created a
lot of jobs, a lot of people buy things at Staples. But it also destroyed
a lot of the mom-and-pop stationery stores.

Now, if it makes the economy more efficient, that may be good for the
country. But it certainly is part of this remaking we`re doing to the
economy that helps explain inequality. We`ve been eliminating all sorts of
other positions and pushing money up to the top, and Romney was very
successful at that. He`s a very hardworking smart guy.

SCHULTZ: Did Bain profit from reducing pensions?

JOHNSTON: Oh, there`s no question that they were able -- in the
particular case that was mentioned involving the steel mill, to take money
out of this company, that didn`t have a properly funded pension and fawn it
off on the Pension Benefit Guarantee Program is clearly an important part
of this story. There are other parts of it that have not come out yet with
other companies, where they made changes to the benefit programs for
workers.

If you have a business and you want to sell it, one of the first
things you do, if you`re one of the companies that comes in and buys firms
to resell them is strip down the staff, stop reinvesting in the business or
reduce your reinvestment in it, cut spending on pensions, health care and
other things, so the company appears to be on the spreadsheet more valuable
than it is in the real world.

SCHULTZ: So, what we have here, is the Republican Party has broken
out in a conversation they just don`t want to have in front of the public.
They want to have it behind closed doors. This is really who we are.

In fact, John McCain let the cat out of the bag, he said, this is the
essence of the Republican Party. Here`s more of what McCain said today.

(BEGIN VIDEO CLIP)

KELLY: Now, you came out this morning and suggested there`s an
alternative to the way Bain does business, and it`s called communism.

MCCAIN: Yes.

KELLY: You know, where everybody gets a fair share.

MCCAIN: Keep everybody in business, keep every industry no matter how
bad it is, and that`s what communism is. And, unfortunately, it doesn`t
work.

(END VIDEO CLIP)

SCHULTZ: What do we have here? Do we have John McCain calling Newt
Gingrich a communist? Take --

(LAUGHTER)

JOHNSTON: Well, what we have, I think, Ed, is something absolutely
fascinating. We are seeing the divisions in the Republican Party between
real business and financial business. Between Wall Street and Main Street,
the tension has always been there.

When Newt led the revolution in 1994 and briefly was the speaker of
the House, what did you see? You saw Main Street going up against Wall
Street. And that`s what this is about. This is the split within the
Republican Party between the financier class and the business class.

SCHULTZ: Well, another thing, you have Newt Gingrich out there saying
Mitt Romney ought to hold a press conference and open himself up to all
kinds of questions. It could be very embarrassing if he said he reduced
people`s pensions and cut payroll after faking over a solvent company.

Another issue is his tax -- go ahead.

JOHNSTON: Well, I was going to say, Gingrich has raised the real
important questions for the Republicans. If they don`t vet Romney, can you
imagine what Obama will do with his research in the main election if they
run Romney?

SCHULTZ: Very good political point.

What about releasing tax returns? Why do you think Governor Romney is
so hesitant? In fact he may not do it at all?

JOHNSTON: Well, Romney doesn`t want to release them because what
they`re clearly going to show is that he arranged his finances to pay very
small amounts of taxes. He may have a lot of his wealth never having been
taxed, all perfectly legal, absolutely legal, Ed. I`m sure that he
conducted himself legally.

But it`s the system that allows this. And I don`t see how Romney can
get to the White House without releasing returns. But if he does, I
suspect they`re going to cause enormous problems at the same time because
people who drive buses and teach school and are police officers are going
to discover that his tax rate many years was lower than theirs and he was
making more money in a single year than they`ll make in 10 lifetimes.

SCHULTZ: David Cay Johnston, always a pleasure. Good to have you
with us tonight. Thanks for your insight.

JOHNSTON: Thank you, Ed.

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

South Carolina is only nine days away, and the stakes could not be
higher. Our political panel joins me tonight.

Mitt Romney`s religion, Mormonism, has a troubled history on race.
And it may be time for Romney to address this head on. Obery Hendricks
will join me on that subject.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, we got a race in South Carolina. Newt Gingrich
is closing it on Mitt Romney in the latest polls in that state. Democratic
strategist Tyler Jones works that territory. He`ll join us.

Jon Huntsman said third place was the ticket to ride in New Hampshire.
But will a disappointing showing make South Carolina his last stop or will
daddy fork out the bucks?

More talk on the Bain business. We`ll visit with Krystal Ball and
E.J. Dionne and Ari Melber on our panel tonight.

And Montana rejects Citizen United. You`re going to want to watch
this one. State Attorney General Steve Bullock joins me later in this
hour.

Share your thoughts on Twitter using #EdShow.

We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

The latest polls show Newt Gingrich within striking distance of Mitt
Romney. But the former House speaker is now reframing his attacks on
Romney, his days running Bain Capital.

(BEGIN VIDEO CLIP)

REPORTER: Are you attacking Bain or just asking questions?

GINGRICH: I`m just asking a question, and I`m shocked at how
defensive they are.

REPORTER: Mr. Speaker, do you think Mitt Romney could have done
anything to save those jobs at Bain? Is there anything he could have done
to save those jobs?

GINGRICH: Well, you don`t know, do you?

(END VIDEO CLIP)

SCHULTZ: As the "Las Vegas Sun" reports Gingrich`s moneyman, casino
mogul Sheldon Adelson, is distancing himself from Gingrich`s King of Bain
ads, ads Adelson helped fund.

Rick Perry on the other hand is showing no signs of letting up.
Perry`s attacks on Mitt Romney`s Bain`s records have turned off one of
Perry`s key financial backers. Investment fund executive and Republican
donor Barry Wynn, told "The Associated Press," he`s switching his support
from Perry to Romney.

Wynn says Perry went too far, "I`ve been fighting for this cause most
of my life. It`s like fingernails on a chalkboard. It`s just kind of
irritated you to hear those kind of attacks."

Perry, who needs all the cash and support that he can get, brushed it
off, telling the state newspaper, quote, "If somebody wants to cut and run,
that`s their call."

Let`s turn to Tyler Jones, Democratic strategist and co-founder of
South Carolina`s Forward Progressive Web site.

Great to have you with us tonight, Tyler.

I think most Americans want to know, is it really going to be a horse
race in South Carolina? And the only way it`s going to be a horse race is
if Mitt Romney continues to have to fence off these attacks from Newt
Gingrich. Is the Bain conversation hurting Mitt Romney?

TYLER JONES, DEMOCRATIC STRATEGIST: Well, first thanks for having me,
Ed.

And short answer, we don`t know yet, but probably. You know, Newt
Gingrich has committed $3.4 million to South Carolina in the form of TV
ads, and they`re probably all going to go after Romney. So, we don`t know
if the Bain issue is going to hurt Mitt in South Carolina and just how
much. But we think it probably will.

I mean, nobody spent $3.4 million in the course of nine days I think
in South Carolina political history. And look, Mitt Romney has a history,
and it deserves to be exposed. And he`s going to have to face some serious
questions about his past that he`s never had to.

You know, he came into South Carolina two decades ago, and he
decimated jobs -- 150 families lost their jobs here in the upstate of South
Carolina. And, look, I mean, this is what they do. Mitt Romney and people
like Mitt Romney, Wall Street guys from the north, they come down here and
they take the jobs and they send them overseas, and they ruin lives and
they ruin livelihoods.

And isn`t it ironic that he`s asking for South Carolina voters to give
him a job when he was the one that took their job two decades ago?

SCHULTZ: What do you hear on the street about Newt Gingrich? He
claimed this was his territory. It`s going to be a different scenario.
That`s what he was inferring.

What do you think?

JONES: Well, I think he`s got a chance. I mean, I think he and
Santorum both have a chance to knock off Romney in the state. But it`s
going to take money. One thing that newt has going for him, he has a lot
of money. Like I said, he`s spending $3.4 million.

We don`t know what`s going to happen with that. It could be too
overwhelming for voters in South Carolina, they might turn them off. But
he`s got some pretty good issues to bring to light. You know, Mitt
Romney`s flip-flopped on some key issues to social conservatives in South
Carolina like abortion, like gay rights.

And he`s going to have to go into these small towns and small
communities in South Carolina, look people in the eye and explain to them
why he`s flip-flopped, why he came into South Carolina two decades ago, and
took their jobs away. And --

SCHULTZ: So you think that --

JONES: -- you know, $3.4 million can do a lot of things.

SCHULTZ: -- you think that South Carolina story is going to haunt
him, even two decades later?

JONES: Oh, absolutely.

SCHULTZ: OK.

JONES: It wasn`t that long ago, Ed. And 20 years ago, the upstate
was full of textile mills. It was full of manufacturing plants and Mitt
Romney and people like Mitt Romney came in here and they decimated the
place.

SCHULTZ: All right. Tyler Jones, good to have you with us tonight.
Thanks so much.

Now, let`s turn to Democratic strategist Krystal Ball, E.J. Dionne
with us tonight senior fellow at the Brookings Institution and "Washington
Post" columnist, and also, Ari Melber, correspondent for "The Nation"
magazine.

Great to have you all with us tonight.

Well, Perry and Gingrich --

KRYSTAL BALL, DEMOCRATIC STRATEGIST: Thanks, Ed.

SCHULTZ: You bet. Perry and Gingrich have been getting heat for
their attacks on Romney, the record at Bain.

E.J., what do you make of it. Is this Newt Gingrich`s best and only
shot to get back into this race?

E.J. DIONNE, WASHINGTON POST: Well, I don`t know. I think maybe
he`ll get an ambassadorship from the Obama administration when this is all
over.

SCHULTZ: He`s doing them a favor, isn`t he?

DIONNE: He sure is.

I think that, you know, what`s fascinating about these attacks is they
work on two levels, report on two levels. One is Romney says his main
calling card is I`m a business guy, I understand business, I created jobs
and he can point to those companies he helped start, like Staples and
Sports Authority, therefore make me president.

But what Gingrich and Perry are both saying is, wait a minute, let`s
look at the whole record of what Romney did. It wasn`t all job creation.
What do private equity firms do?

Well, sometimes they help start new enterprises, sometimes they just
suck the cash out of businesses and those businesses die. And that leads
to the larger argument. Mitt Romney likes to say, it`s free enterprise on
trial.

Actually, it`s about different kinds of capitalism. There are many
kinds of capitalism.

Warren Buffett was asked about private equity by "Time" magazine this
week, and he said he wasn`t crazy about it, because they took too much
money out of companies and saddled them with debt. So, let`s debate, what
kind of capitalism do we want?

SCHULTZ: Krystal Ball, this is a conversation that has evolved that`s
almost embarrassing to the Republicans, isn`t it?

BALL: Yes. It absolutely is. I mean, getting called heartless by
the Republicans is kind of like having Donald Trump telling you you have
too big of an ego. It`s really a bad thing. And it also exposes the
divisions within the party.

One thing I want to point is we just came from the New Hampshire
primary, obviously, where the median income per capita is the seventh
highest in the country. So, relatively wealthy state. Mitt Romney does
better with voters the higher up the income scale you get.

South Carolina, on the other hand, is near the bottom, it`s 42nd in
the country in terms of median per capita income. This is a place where
he`s going to struggle and, frankly, where these attacks, these populist
attacks on how he enriched himself through Bain are going to have resonance
there.

SCHULTZ: Ari, this has got to help the Obama camp. They`ve got to be
behind closed doors high-fiving one another watching all of this. What do
you think?

ARI MELBER, THE NATION: I think so. I think this is a preview of
some of the debates we`re going to see. But the important point here is,
while it`s fascinating that this has come up within the Republican Party
and Newt Gingrich has pushed it, as well as Rick Perry -- this is
fundamentally something that Mitt Romney brought up.

He made a claim -- he said they created at least 100,000 net jobs. If
you go to Bain, according to "Politico," they will not confirm yes or no
whether there were any gains in net jobs. So, that`s a gap between 100,000
claim by Mitt Romney and Bain, a company that has certain responsibilities
even though it`s not regulated like some companies, it has
responsibilities, and so far they won`t say where they`ve created one job.

So, Mitt Romney brought this up and it`s not going away.

SCHULTZ: E.J. Dionne, you wrote about --

BALL: And know what, Ed?

SCHULTZ: Go ahead.

BALL: I was just going to add to that, what`s really ironic about
that is he made this same mistake when he ran against Ted Kennedy in 1994.
Then he said he had created 10,000 jobs. He put an actual number to it,
and that opened him up to all sorts of criticisms in fact from the Ted
Kennedy campaign that were quite damaging to the campaign. You would have
thought that he would have learned his lesson back then.

SCHULTZ: Well, what`s so surprising is that the Romney aides were
saying today that they were somewhat unprepared for these attacks that were
coming in the realm of Bain.

MELBER: And, Ed, just briefly, isn`t it funny that, you know, it was
Boehner who was always saying to Obama where are the jobs? And Mitt Romney
has managed to make a claim that has a lot of people, including
journalists, trying to figure out where are the jobs? Because he`s brought
up his own record and doesn`t have evidence or documents to substantiate
it.

SCHULTZ: All right. Krystal Ball, E.J. Dionne and Ari Melber, stay
with us. We got a lot more to talk about.

Next up, Stephen Colbert is making a big announcement tonight about
his political future. Yes. "Politico" has breaking news on what Colbert
is going to say tonight.

Later, Senator Jim DeMint says he wants the next president of the
United States to be like Wisconsin Governor Scott Walker. Really?
Statements like that give you a one way ticket and you can`t return. It`s
"Psycho Talk."

(COMMERCIAL BREAK)

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

New Hampshire was a must win for Jon Huntsman, the guy finished third.
Nevertheless, Huntsman said a bronze medal gave him a ticket to ride to
South Carolina. But it ain`t looking too good for South Carolina for the
former -- in South Carolina for the former governor of Utah. Needless to
say, he`s keeping expectations very low -- very, very low -- as he told NBC
News.

How bad is it for Huntsman? The latest polling from the Public Policy
Polling shows that the comedian Stephen Colbert getting more support from
South Carolina voters than Huntsman.

Last night, Colbert hinted -- hinted -- at a possible run.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, COMEDIAN: A major pollster has me at 5 percent ahead
of the third place finisher in New Hampshire. I got to ask, what do you
think, nation, should I run for president in South Carolina?

(CHEERS)

COLBERT: Ladies and gentlemen, I hear what I`m asking you, but that`s
a really big decision. First, I need to pray on it. OK, God`s good with
it.

(END VIDEO CLIP)

SCHULTZ: And just minutes ago, Colbert announced he is exploring a
run for president. "Politico" reporter Mike Allen Tweets that Colbert will
be exploring a run for the, quote, "United States of America of South
Carolina."

Jon Stewart will run his Super PAC. You mean Stewart`s going to have
a real job? Let`s bring back Democratic strategist Krystal Ball,
"Washington Post`s" E.J. Dionne and "the Nation`s" Ari Melber.

Well, it`s out of the bag now. How do we handle this, E.J.? Have we
got -- What`s going to happen in South Carolina now, with Stephen Colbert
saying that -- that he`s just going to have to take a close look at it?

DIONNE: You know, for the last six months, the Republican race has
been pretty funny in a lot of moments without Colbert. I can only imagine
what it will look like now. Maybe Huntsman will promise to put him on the
ticket and they`ll get up to nine percent. And they`d I guess still be
running behind Newt Gingrich and Rick Santorum.

SCHULTZ: That`s right. Let me ask you, E.J., what about Rick Perry?
Rick Perry does not seem to be backing off. There was even some talk about
some alliance between Romney and Perry at one time, because they`re both
governors from the Republican Governor`s Association. But he`s just as or
more aggressive than Newt Gingrich. And he just won`t give up.

DIONNE: You know, I`ve been trying to figure Perry out. I mean, it
is worth remembering that he was once a Democrat. And it sounds like he`s
got old -- great old Texas populist tapes from back in the `70s and `80s.
I was thinking that Molly Ivans, that great columnist -- populist columnist
from Texas, must be smiling up there in the people`s paradise.

But I think that Perry figures he`s got to bring Romney down. I have
the only -- I think Romney`s going to win South Carolina. It`s very hard
to see him losing. But if he does lose, I think what you might see is a
kind of pitch movement, where Gingrich and Perry both go after Romney. But
if he can gather a little bit of money together, Rick Santorum could then
be the guy that comes out ahead.

Because a lot of times in these fights, the guy who lets the other
guys fight sneaks everybody. And that`s his one shot.

SCHULTZ: That`s the whole thing. All these other contenders seem to
have sugar daddies, so to speak. Ari, is Huntsman finished? Is there a
way forward for him?

MELBER: No. I think Huntsman was someone that was very appealing to
the media and to an aspirational idea of where the Republican party might
go. But this is a good season in politics. This is the time where us
commentators matter less, and the voters matter more.

If we listen to what the Republican electorate has said in the first
two states, it is that they are more comfortable with Mitt Romney than what
we were led to believe, and that they are very excited about this guy named
Ron Paul, who has currently got the second most votes but who nobody wants
to deal with, both in the Republican establishment and I would say in a lot
of the referees in the media.

Fox News, I`ll say, in closing, cut away from Ron Paul`s speech on the
victory night in the Iowa caucus, because they didn`t want to deal with the
fact that he was doing so well.

SCHULTZ: Everybody says that he just has no chance. Krystal Ball,
but he has his following. And he`s raised what -- some 13 million dollars
as of late, over the last quarter. I mean, he`s got the money to continue
on. And he`s set up pretty good in these caucus states. What about it?

BALL: Well, they don`t want to have to admit that there`s a
significant portion of their party that believes in civil liberties and
limited intervention abroad. So they`ve always wanted to marginalize Ron
Paul. And frankly, his coalition probably isn`t big enough to actually win
the Republican nomination.

But they ought to be awfully nervous about him potentially launching a
third party bid. We have a landscape right now where Americans have an
eight percent approval rating of Congress. Both parties have historically
low approval ratings. There`s a lot of dissatisfaction out there.

And if Ron Paul did decide to mount a third party bid, it would be
very, very damaging to Republicans, and essentially hand the victory to
President Obama. So they have to be very careful about the way they treat
Ron Paul.

SCHULTZ: I think that Jon Huntsman`s ego is big enough that he would
think about a third party bid, the way this is breaking down. Yesterday,
Laura Bush told a group in Florida that both she and her husband want Jeb
Bush to run in 2012. E.J. Dionne, is there anyway that this could happen,
if they get to the convention and can`t make up their mind and they just
throw it up in the air? In walks Jeb Bush?

DIONNE: You know, if Mitt Romney had lost New Hampshire and you could
imagine a really long race with Ron Paul taking a fifth of the vote fairly
consistently and winners winning -- different people winning, then maybe
you could have a brokered convention. But right now, it`s very hard to see
how that could happen.

There are a bunch of Republicans, Bill Kristol is another one who`s
been pushing the idea of Jeb Bush. There are a lot of Republicans who
aren`t happy with this field. That`s what the polls show. Jeb Bush is one
guy they keep turning to. And then some of them long to bring Chris
Christie in, even though he`s committed to Romney.

SCHULTZ: And of course, the breaking news, Colbert hands over the
super PAC to Jon Stewart. We have to have more on that tomorrow. Krystal
Ball, E.J. Dionne and Ari Melber, great to have you with me tonight.

(CROSS TALK)

SCHULTZ: Coming up, is it time for Mitt Romney to address the issue
of race in his Mormon faith? My next guest, theology professor Obery
Hendricks, says yes it is.

We can thank the Supreme Court`s Citizens United case for unlimited
corporate spending in elections. But one state is bucking the Supreme
Court and arguing an exception to its disastrous decision. That story
coming up. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have never been so
naive as to believe that we can get beyond our racial divisions in a single
election cycle, or with a single candidate. But I have asserted a firm
conviction, a conviction rooted in my faith in God and my faith in the
American people, that working together, we can move beyond some of our old
racial wounds.

And that, in fact, we have no choice. We have no choice if we are to
continue on the path of a more perfect union.

(END VIDEO CLIP)

SCHULTZ: Four years ago, President Obama`s powerful speech on race in
America came on the heels of relentless attacks about his association with
the Reverend Jeremiah Wright. This election season, some in the religious
community believe it`s time for Mitt Romney to step up to the podium and
give his own speech on race, specifically addressing his Mormon faith.

Theology Professor Obery Hendricks writing in the "Huffington Post"
today points to several passages in "The Book of Mormon" which condemn
black people as cursed. For example, "after they had dwindled in unbelief,
they became a dark and loathsome and a filthy people, full of idleness and
all manner of abominations."

Pretty heavy stuff. Beyond their next religious text, African-
Americans were not allowed to fully participate in the Mormon priesthood
until 1978. Mitt Romney, who was once a leader in the Mormon church,
addressed the issue in late 2007 on "Meet the Press."

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I love my faith. And I`m
not going to distance myself in anyway from my faith. But you can see what
I believed and what my family believed by looking at our lives. My dad
marched with Martin Luther King. My mom was a tireless crusader for civil
rights. I was anxious to see a change in my church.

I can remember when I heard about the change being made. I was
driving home from I think it was law school. I heard it on the radio. I
pulled over and literally wept. Even at this day, it`s emotional.

And so it`s very deep and fundamental in my life, and my most core
beliefs, that all people are children of God.

(END VIDEO CLIP)

SCHULTZ: One of the people who thinks Romney`s statement doesn`t go
far enough is the author of the "Huffington Post" article I mentioned,
Obery Hendricks. He`s a professor of Biblical interpretation at the New
York Theological Seminary, and author of "The Universe Bends Toward
Justice."

Professor Hendricks, thanks for joining us tonight.

OBERY HENDRICKS, NY THEOLOGICAL SEMINARY: My pleasure.

SCHULTZ: What does Mitt Romney need to do, if anything, in your
opinion?

HENDRICKS: First, I want to make it clear that I am not accusing mitt
Romney of being a racist. I have no evidence that that`s the case.

But I think that given the very -- the racist history of the Mormon
church for 150 years -- the first 150 years of its existence, it held all
black people as a cursed, the cursed seed of Cain. And that didn`t change
until he was over 30 years old.

What he needs to do, I think, is to assure America that he does not
maintain any residual feelings that black people are inferior. Because
that`s what his religion taught for 150 years, that black folks were a
curse, and therefore inferior to the uncursed whites.

SCHULTZ: In the sound bit that we played, did he not do that?

HENDRICKS: I think there`s a difference in saying -- I mean, it`s
very admirable that he believes that all people have equal rights -- should
have equal rights under the law. He also said that he felt that all people
had equal rights to get into heaven.

But that`s not the same as saying that he also believes that all
people are inherently equal, that no one is inferior to anyone else.
That`s a very important distinction, because, as we`ve seen in our nation`s
history, that when leaders did not -- were not fully convinced that black
people were the equals of whites, that we were inferior in some way, they
also treated our interests as inferior. And we suffered quite a bit.

SCHULTZ: Do you think he should address this issue in the manner that
President Obama addressed race and religion back when he was dealing with
the criticism of his association with Jeremiah Wright?

HENDRICKS: No question. I mean, to assure Americans that he is --
that he can be the president of all Americans equally. I mean, President
Obama had to do that, as a result of --

SCHULTZ: And you think Mitt Romney needs to --

HENDRICKS: Yes, yes. I mean, President Obama had to do it because of
a few statements by one man. We`re talking about Romney, who was -- who
grew up in this faith for -- into manhood believing that -- at least
accepting this doctrine that black people were inferior.

Let`s face it. This was taught very deeply in that faith. It`s not
just some overlay. It`s a doctrine and it`s codified in their holy book.

SCHULTZ: If this man were to become president of the United States,
do you think the Congressional Black Caucus has an obligation to go down
this road?

HENDRICKS: Go down this road?

SCHULTZ: In other words, expect some explanation from Mitt Romney on
how he`s going to deal with minorities in this country?

HENDRICKS: I think that we all deserve an answer right away.

SCHULTZ: And this isn`t condemning him. This is the vetting process.

HENDRICKS: Exactly. Giving him a chance to put all Americans at
ease, that he`s going to be a president equally -- that he`s able to do
that. Because until he comes right out and says, no, I do not believe that
this is divinely ordained, that these are orders from God in my holy book,
it raises questions as to whether there is some residual belief in
inferiority in black people.

SCHULTZ: In "The Book of Mormon," what I read -- "after they had
dwindled in unbelief, they became a dark and loathsome and a filthy people,
full of idleness and a manner of abominations."

I mean, that is heavy stuff.

HENDRICKS: That`s not all.

SCHULTZ: I haven`t read "The Book of Mormon." but is there other
stuff in there?

HENDRICKS: Oh, yeah. I cite three or four other passages in my
article in the "Huffington Post" today that are just as bad, if not worse.

SCHULTZ: All right, other GOP candidates like Ginrgrich and Santorum
have had more publicized issues with making what many people think are
racist comments. Is this a problem with the Republican party, in your
opinion?

HENDRICKS: Yes, I think it`s a problem with the Republican party.
They`ve always had a problem with race. The Republican party has always
wanted to conserve power and wealth where it already was. And as we know
from most of our nation`s history, it was with the rich whites in America.

And if you go back to Buckley -- William Buckley, who was the
godfather of modern conservatism, he was very much a racist. He came right
out and said that black people were inferior people, and so we did not
deserve the same kind of policy considerations as others. He said that.
That`s documented.

SCHULTZ: Professor Hendricks, thank you for your time tonight.

HENDRICKS: My pleasure.

SCHULTZ: Up next, Scott Walker leads the nation in job loss. But
South Carolina Senator Jim DeMint wants him to be president. Psycho Talk
is next.

(COMMERCIAL BREAK)

SCHULTZ: And in Psycho Talk tonight, South Carolina Senator Jim
DeMint -- he hasn`t endorsed anybody for the Republican nomination yet.
But today he gave us an idea of the kind of candidate he`ll support. And
it`s scary stuff.

(BEGIN VIDEO CLIP)

SEN. JIM DEMINT (R), SOUTH CAROLINA: In business -- if you`re going
to stay in business, you have to make hard and painful decisions in the
short term to save the whole company in the long term. That`s what we`re
missing in Washington right now.

We don`t need someone who is going to make mold promises they can`t
keep. We really need someone like a Governor Scott Walker, who was willing
to take the pain in order to save the whole state.

(END VIDEO CLIP)

SCHULTZ: Does he want Scott Walker to be president of the United
States after he has absolutely butchered the state of Wisconsin? Jim
DeMint says he doesn`t want a candidate who makes bold promises he can`t
keep. Well, Scott Walker promised 250,000 new jobs by 2015. But since
he`s implemented his education slashing, union busting budget, Wisconsin
has been steadily losing jobs.

In fact, Walker`s state leads the nation in job loss. Wisconsin has
lost jobs for, count them, five consecutive months, including 14,600 public
and private sector jobs in November, which brings net job creation under
Walker down to about 16,000 jobs.

So he has 233,692 jobs to go to fulfill his bold promise of a quarter
million jobs. Folks, it isn`t going to happen. Scott Walker`s policies
are running the state right into the ground. The people of the state can`t
stand the guy. That`s why they`re going to recall him.

That story is coming up next week. So for Jim DeMint to say he wants
someone like Walker to run the country is job killing Psycho Talk.

The very first case to challenge Citizens United, the Supreme Court
case which opened the flood gates of corporate cash in politics. Montana
is holding the line. Attorney General Steve Bullock joins me next. Stay
with us.

(COMMERCIAL BREAK)

SCHULTZ: ED SHOW survey tonight, I asked does Mitt Romney need to
come clean about his record at Bain Capitol? Ninety eight percent of you
say yes; two percent of you say no.

Coming up, Montana is the first state in the nation to take on the
Supreme Court ruling of Citizens United. Will their ruling hold up in the
country`s highest court? Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Big Finish Tonight. Now what
has been par of the conversation in this election season has been the big
concern by many Americans -- and that is Citizens United and its effect.

Finally, there is a direct challenge to Citizens United, The Supreme
Court case which led to unlimited, unidentified corporate spending in
politics. The 2010 case was so dangerous, so wrongly decided, President
Obama addressed it in his State of the Union Address.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: With all due deference
to separation of powers, last week the Supreme Court reversed a century of
law that I believe will open the flood gates for special interests,
including foreign corporations to spend without limit in our election.

(END VIDEO CLIP)

SCHULTZ: What does Sam Alito think now? That was the night he was
shaking his head no. Even though Citizen United dealt with the federal
election law, it was widely interpreted to strike down any state law with
corporate spending bans.

So here`s a map of the 24 states with hair own laws restricting
corporate spending before Citizens United? Quite a few. A lot of them in
the middle of the country. After Citizens United, 23 out of the 24 of
those states stopped enforcing their own restrictions.

Only one state, Montana, defended its own law. And now the Montana
Supreme Court has agreed. This guarantees a big showdown. But if the
United States Supreme Court recognized this exception, it would at least
lessen the terrible impact of Citizens United.

I`m joined tonight by Montana Attorney General Steve Bullock, who led
the fight to defend Montana`s law. Steve, good to have you with us
tonight.

This is -- this is something that`s really going to catch the
attention of the American people, because of so much money that is just
pouring into these campaigns. If and when this case goes up to the Supreme
Court, is there any chance they would strike it down?

STEVE BULLOCK, MONTANA ATTORNEY GENERAL: I think there is, Ed. At
the end of the day, the Citizens United decision dealt with a completely
different electoral system, the federal elections and federal laws. But
the vast majority of elections are at the state and local level.

And there`s real differences there. And that`s what we pushed. And
that`s -- you know, I think that the court would recognize that.

SCHULTZ: The state`s rights crowd, they love to talk about the
importance of the 50 state laboratories in this country. Well, your state
has a story to tell about what happened when there`s unlimited corporate
spending in elections, doesn`t it?

BULLOCK: Yeah. You know, it was about a century ago that, by
citizens` initiative, we passed -- ironically, it`s called the Corrupt
Practices Act of 1912. And that happened because, at one point, there was
complete corporate domination by the copper kings of our electoral system,
from our legislature to judges to county assessors.

Everybody was basically on the company payroll. So it was the
citizens that passed this law. For the last century, it has sure served us
well.

SCHULTZ: You know, if the United States Supreme Court actually
allowed states to enforce their own campaign finance laws, would super PACs
still be able to spend money in states like the state of Montana?

BULLOCK: Well, super PAC can certainly continue to spend money in the
federal election, but not where the vast majority of elections occur. And
that`s at the state and local level.

You think about it, the average U.S. senator wins spends 8.5 million
dollars. In Montana, the average state senator wins paying 17,000 -- or
spending 17,000. So it`s a big difference.

SCHULTZ: We`ve seen a big attack on labor. Of course, we`ve seen a
lot of unidentified money coming to certain states, fighting back for the
working folk. So in other words, you`re saying that no one could come in
and buy the gubernatorial chair in your state. I mean, the super PAC money
would still be out?

BULLOCK: Yeah. (inaudible) corporations could --

SCHULTZ: Steve Bullock, appreciate your time tonight. We lost that
satellite feed just at the end of the program. That`s THE ED SHOW. I`m Ed
Schultz. That`s all we have time for tonight.

You can listen to me on the radio, Channel 127, XM Sirius, Monday
through Friday. You can follow me on Twitter @EdShow and like THE ED SHOW
on Facebook. Do all of that. Will you?

"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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