updated 1/17/2012 12:07:41 PM ET 2012-01-17T17:07:41

Guests: Jonathan Alter, Robert Reich, Sam Stein, Caroline Heldman, Dr. James Peterson, Mike Papantonio, Sen. Bernie Sanders

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

The Mitt Romney campaign released a commercial bragging about his
record at Bain Capital. I`ll show you why Romney shouldn`t be bragging at
all.

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

(BEGIN VIDEOTAPE)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: He still is not prepared
to release any documents from Bain to prove anything.

SCHULTZ (voice-over): Newt keeps hitting harder. And the Romney
response is more pathetic than ever.

SEAN HANNITY, FOX NEWS: Whether or not he created 100,000 jobs, net,
net, net is fair game, do you agree with that?

UNIDENTIFIED FEMALE: You know, with all due respect to Mr. Gingrich,
no.

SCHULTZ: Robert Reich and Jonathan Alter on the existence of Romney`s
Bain.

Just when you thought Rick Perry couldn`t get any dumber, he screws up
the third thing again.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Commerce, Education
and the -- what`s the third one?

SCHULTZ: The drum beat for Romney to release his taxes is building.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Let`s get it out there.

SCHULTZ: Huffington Post`s Sam Stein on the chaos in Carolina.

And Stephen Colbert`s joke run is exposing the joke that is Citizens
United. Senator Bernie Sanders is here tonight.

JON STEWART, COMEDIAN: Now that I have the super PAC -- can I run as
supporting Stephen Colbert?

UNIDENTIFIED MALE: Yes, you can as long as you do not coordinate.

(END VIDEOTAPE)

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

Republicans and Democrats spent the week hammering Mitt Romney for his
record at Bain Capital. Today, the Obama campaign got in on the action and
we`ll have more on that coming up in the program.

Now, I`ve said all week Romney is going to have to come clean with the
American people and talk about his record at Bain. Romney`s campaign
thinks this television ad is an adequate response.

(BEGIN VIDEO CLIP)

NARRATOR: This is a business Mitt Romney helped start. And this one.
And this steel mill.

Mitt Romney helped create and ran a company that invested in
struggling businesses, grew new ones and rebuilt old ones, creating
thousands of jobs. Those are the facts.

(END VIDEO CLIP)

SCHULTZ: All right. If Romney wants to talk about facts, we could
talk about facts.

Let`s start with the facts surrounding this company, Steel Dynamics.
Well, it was back in 1994, Bain put more than $18 million in the company to
become the largest U.S. equity holder.

Five years later, Bain sold the stake for $104 million. They made a
cool profit of more than $85 million. The Indiana company still employs
more than 6,000 workers.

Now, here are some facts that the Romney campaign is leaving out.
According to the "L.A. Times," Steele Dynamics also received generous tax
breaks and other subsidies provided by the state of Indiana and the
residents of DeKalb County. Well, the raw numbers are this: the state and
county ponied up $37 million in subsidies and grants for the project.
County residents were hit with a new income tax to help pay for it all.

Bain Capital made a profit on Steel Dynamics, thanks to subsidies and
tax breaks from the government. Meanwhile, Mitt Romney is going across the
country saying the government does not create jobs.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Fundamentally what happens
in America that creates jobs is not government. It has its role, but by
and large, it gets in the way of creating job.

(END VIDEO CLIP)

SCHULTZ: Seems like Steel Dynamics created thousands of jobs after
getting money from the government. The money also went to Mitt Romney`s
pockets. But Romney says the government and President Obama shouldn`t be
picking winners or losers.

(BEGIN VIDEO CLIP)

ROMNEY: Because the government`s chosen their favorite, so as a
result of what he did, he not only wasted government money, he made it more
difficult for entrepreneurs and innovators to come up with new ideas in the
future. This president doesn`t understand how this economy works. It`s
time to get a president who does.

(END VIDEO CLIP)

SCHULTZ: Bain Capital was picking a winner when it decided to build
the steel mill in DeKalb County, Indiana, where taxpayers paid for a good
chunk of it.

Mitt Romney is vilifying the president of the United States on the
campaign trail, saying that President Obama doesn`t understand the economy.

(BEGIN VIDEO CLIP)

ROMNEY: When he took office, the economy was in recession. And he
made it worse. And he made it last longer.

I look at this president, realized that he just doesn`t know what has
to be done to get this country on track again.

And this president wakes up every morning looks across America and is
proud to announce it could be worse.

(END VIDEO CLIP)

SCHULTZ: You know, I want to go back to something that the right wing
talkers continually brought up during the Clinton impeachment years, you
know, back in the 90s, when President Clinton was dealing with his issues.

They said character counts. Really? That what Limbaugh used to say
all the time -- character counts. This is a character issue for Mitt
Romney. He pretends to talk like a Tea Party conservative, but he`s been
really at the trough, hasn`t he?

Romney is nothing but a corporate welfare hog if you look at the
facts.

You mean to tell me that Romney didn`t know about the tax breaks and
the subsidies that steel dynamics was getting? That just he didn`t know
the semantics of the deal and the dichotomy of it all? Come on. How can a
Tea Party ever support this guy?

One of the reasons Mitt Romney got rich is because taxes and
government programs helped his investments. And I think a lot of Americans
will come to the conclusion that he`s nothing but a phony.

But what`s going to happen in November and we got a long slog before
we get to November. There`s going to be a lot of stories dealing with Bain
Capital and just how Mitt Romney made his millions.

What it`s going to come down to is the American people are going to
render judgment before Election Day. Do we accept any kind of ethics or
morals in business or is this just the way business is? That we can crap
all over workers, we can just distort the facts on television all the time
with campaign commercials, to make people think that he was really out
there creating jobs, but then again we don`t have any hard numbers about
how many jobs he actually created, but we do know the people who are
interviewed about losing their job, losing their pension and seeing jobs
shipped overseas.

I hope the Obama administration jumps all over this, because there is
a real story to be told. We are at a crucial intersection in this country,
do we value workers? I can render personal judgment I don`t think Mitt
Romney knows anything about workers in this country, he only knows about
profit. He wasn`t there to create jobs, he was there to create wealth. He
comes from the financial sector.

I`m joined by Robert Reich tonight, secretary of labor, now a
professor at U.C. Berkeley and author of the book "Aftershock."

Great to have you with us tonight, Mr. Secretary. Appreciate your
time.

Is it accurate to say that Bain Capital accepted corporate welfare
based on this story?

ROBERT REICH, FORMER LABOR SECRETARY: Well, of course, Bain Capital
accepted corporate welfare. I mean, Bain Capital probably wouldn`t have
made the investment in Steel Dynamics had it not been for the big wallop of
corporate capital and corporate welfare that came from the state of
Indiana. The state offered it in order to entice Bain Capital into making
the investment Bain Capital did.

This is the most common and in a sense the worst among the worst forms
of corporate welfare because it doesn`t create new jobs. I mean, if every
state is competing against every other state for the same steel plant, you
know, basically it`s taxpayers in one state vying against taxpayers in
another state.

This is money that went into Mitt Romney`s pockets, Bain Capitalism,
Bain Capitalism is not product capitalism it`s financial capitalism. It`s
moving money. It`s getting as much money out of the public sector as
possible.

SCHULTZ: Mr. Reich, doesn`t this make him an enemy to the Tea Party
in their philosophy that companies would be getting taxpayer dollars? I
mean, wouldn`t this run up the deficit? Wouldn`t this run up the debt?

I mean, what`s this about?

REICH: Well, if there were logic to Tea Party ideology and some
consistency, yes, of course. I mean, Mitt Romney, even when he was
governor of Massachusetts, he was doing exactly the same thing. He was
using state tax dollars to try to lure companies from other states into
Massachusetts.

I mean, you know, whether he was the head of Bain Capital and
pocketing the corporate welfare, or governor of Massachusetts and doling
out taxpayer corporate welfare, it`s the same corporate welfare, and it
basically has very little to do with producing real products and services.

SCHULTZ: What is the economic danger of a Romney presidency? I mean,
if this is where he came from, you can only imagine about what kind of laws
he would be in favor of having passed by his fellows in the House and the
Senate.

I mean, he would obviously have some real corporate friends at the
front door saying, "hey, do this, do this" -- how dangerous could this be?
How much could it take us in destruction of the middle class?

REICH: Well, it takes us into deep end of financial capitalism, Ed.
And what we really got to understand and the Republicans -- I never thought
I would hear it from Newt Gingrich and Perry and other Republicans -- what
Republicans are beginning to articulate is what a lot of Democrats have
said all along, financial capitalism isn`t real capitalism.

SCHULTZ: Yes.

REICH: It doesn`t create new jobs. It doesn`t put people to work.
It actually ends up reducing the number of jobs. It displaces people, puts
risks on people, it lowers wages.

I mean, financial capitalism is what we`ve had in this country for the
last two or three decades. And it`s all centered on Wall Street. It`s not
about making good jobs with good wages and making things.

SCHULTZ: And, Mr. Reich, Romney`s response, that ad that we played
just a moment ago, is that a good response? Is he going to be able to get
this off to the side of the road or is this going to dog him throughout the
entire campaign?

REICH: Well, I think we`re going to find out more and more about Bain
Capitalism, Ed. And my prediction is that where Bain Capitalism ultimately
leads, whether you want to call it leverage buyouts or you call it private
equity management, or whatever you want to call, where it leads is to the
heart of finance, to the heart of Wall Street, to the heart of what`s
happened to the American economy, no longer produces things and money and
the movement of money and financial transactions that really benefit just a
very few people who are clustered around the financial industry.

SCHULTZ: Yes.

REICH: I mean, this is what we`re going to learn, and there is a very
important distinction between Bain Capitalism, that is financial
capitalism, and real capitalism.

SCHULTZ: It ought to be a softball for the Obama campaign. Robert
Reich, always a pleasure. Great to have you with us tonight. Thanks so
much.

Coming up: the Obama campaign weighs in on Bain Capital. Mitt Romney
was a corporate raider who closed plants and laid off American workers.

And later, Sam Stein of the "Huffington Post" will give us the latest
details on South Carolina. Our political panel will join me to give me
their take. Dr. James Peterson, Mike Papantonio, and Professor Caroline
Heldman are all here.

Stay tuned. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Coming up: the Obama campaign gets did you have on Mitt
Romney`s record of job creation. Jonathan Alter joins me next for the
conversation.

Liz Cheney is, I guess you could say, fitting in just fine over at FOX
News. Her comments about President Obama`s military policy put her in the
zone tonight.

Stephen Colbert makes his presidential run official and mocks the
super PAC scam. Vermont Senator Bernie Sanders on campaign financing and
Citizens United later in the hour.

Share your thoughts on Twitter #EdShow. We`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

The Obama campaign has a simple take on the Bain Capital controversy.

The Republicans attacking Mitt Romney are spot on. Romney killed
jobs.

Obama campaign strategist Stephanie Cutter released a lengthy scathing
memo today about Mitt Romney`s time at Bain.

Here are some of the highlights: "Romney closed over 1,000 plants,
stores and offices, and cut employee wages, benefits and pensions. He laid
off American workers and outsourced their jobs to other countries. Free
enterprise isn`t running for president, Mitt Romney is. Mitt Romney and
his friends made money hand over fist while working families lost their
grip on the middle class lifestyle they earned. Between now and November,
the American people will decide whether to respond to the crisis by
electing a corporate raider, who profited from -- and promises to restore -
- the conditions that caused it."|

Pretty strong stuff.

Let`s bring in Jonathan Alter, MSNBC political analyst and columnist
for "Bloomberg View."

I like it. I mean, it`s campaign on now.

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Yes.

SCHULTZ: And it`s kind of interesting, Jonathan, because this week I
think Newt Gingrich filed off a few edges and using some different
terminology and not as aggressive, although his ads are, but on the stump
it`s a little different. What do you make of the Obama team jumping into
this?

ALTER: Well, they expected to do this later, but the Republicans gave
them an opening to pile on now and to draw on that blank slate.

Look, in politics, a lot of winning elections is about drawing on the
blank slate before the other guy. Most people don`t know really anything
about Mitt Romney. In some ways, he`s just being introduced. Most people
are not watching all these cable shows, paying attention to the Iowa
caucuses.

So, if they can essentially characterize him in a certain way and go
after his strength -- remember, this is what Romney brought up, that he was
the job creator. And the problem with it as an argument for Romney, it`s
not true. As you said before the aim of Bain Capital was to create wealth,
not to create jobs. And they need to make sure that even though people
don`t understand the complexities of this --

SCHULTZ: That`s what his DNA was, yes.

ALTER: -- they need to get to the fundamental fundamentals.

SCHULTZ: Well, it always seems that the conservatives do a great job
of messaging. You know, they went after John Kerry, Massachusetts liberal,
tax cuts, private accounts, that kind of stuff.

Here comes the Obama team and I love it, corporate raider. I mean,
they are putting that label on him. Is it going to be effective?

ALTER: I think it will be, because politics at the moment elemental
level is about stigmatizing the other guy. They have been very bad at that
kind of thing in the last several elections. Republicans are much better
at playing pin the tail on the donkey, than Democrats are at this kind of
cut and thrust.

It`s very important that moving forward, the Democrats bring up their
game and this is a sign that they might be able to do so.

SCHULTZ: Newt Gingrich said today about his own super PAC.

(BEGIN VIDEO CLIP)

GINGRICH: I`m calling on the super PAC, I cannot coordinate with
them, I can`t communicate directly, but I can speak out as a citizen
talking to you, I`m calling to edit out every single mistake, or to pull
the entire film, but not run the film if it has errors in it. I think we
ought to have -- somebody who wants to be president ought to have the
courage to stand up for the truth and ought to be prepared to say something
is wrong.

(END VIDEO CLIP)

SCHULTZ: Interesting move by Gingrich, because we had the producer on
here the other night, it`s all vetted. It`s all correct and now, he`s
saying if it`s wrong pull it out. What do you make of that?

ALTER: Well, that is the blow-back in the Republican Party. He`s
taking a lot of in-coming for having done this, because he`s doing the work
of the Democrats, Republicans are furious about it. But in the process
what is happening, which is great, the American public is getting an
education in what you called vulture capitalism.

Romney was just about to get away with the idea that, you know, he was
like Thomas Edison or Steve Jobs, that, you know, he was creating all these
jobs and instead what he was doing was sucking capital out of the
workplace, transferring wealth from workers to bankers. Essentially all he
is, is a banker.

Lending money is not the same thing as creating jobs by inventing a
new product.

SCHULTZ: What`s the toll? What is the toll he could pay in the long
run on this if this story sticks?

ALTER: Well, I think this could doom him in the fall or at least if
the unemployment rate goes back up again, none of this will save Barack
Obama. But in a close race, which it looks like it will still be, this is
extremely important in getting Obama over the finish line that Romney is
stigmatized and the guy who is a poster boy of Wall Street raiders.

SCHULTZ: Do you think he has answered to the attacks well?

ALTER: No.

SCHULTZ: Romney is struggling with this.

ALTER: He is struggling. Now, there is an argument that this
inoculates him, gives him a chance, spring training, you get to learn how
to deal with this. That`s a rationalization by Republicans who are deeply
worried that they`re going to have wounded candidate in the fall.

SCHULTZ: All right. MSNBC political analyst Jonathan Alter, always a
pleasure. Great to have you with us.

Next in "Psycho Talk," brand new FOX contributor Liz Cheney says
President Obama is decimating the military. But the chairman of the joint
chief of staff says the president is doing what`s best for America.
Shooter`s daughter back in the zone.

And did Rick Perry call on this mannequin at a South Carolina town
hall? We`ll check the tape with our political panel. Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: And "Psycho Talk" tonight, Liz Cheney recently signed on as
a FOX News contributor, and she is hitting the ground running hitting all
the high notes. This morning on "Fox and Friends," Cheney hammered
President Obama for his proposal to cut military spending.

(BEGIN VIDEO CLIP)

LIZ CHENEY, FOX NEWS: What President Obama is doing is something that
America`s enemies, the Taliban, al Qaeda, have been unable to do, which is
to decimate the fighting capability of this nation. And when you look at
his rhetoric, he talks about, you know, the need now that hostilities are
over to cut our spending, as though we are no longer at war. And I think
it`s irresponsible and I think it will be very, very difficult for him to
convince the American people they ought to reelect a president who, in
fact, is so decimating our military capacity.

(END VIDEO CLIP)

SCHULTZ: Well, she will probably get a raise for that comment.

Liz Cheney`s knee-jerk anti-Obama reaction directly contradicts
military experts like the chairman of the Joint Chiefs of Staff, General
Martin Dempsey.

(BEGIN VIDEO CLIP)

GEN. MARTIN DEMPSEY, CHAIRMAN OF THE JOINT CHIEFS OF STAFF: We are in
the military are not being victimized by this budget issue. There are some
out there speaking about it in those terms but as I mentioned to you
earlier, we clearly have a role to play, all of us, as citizens in helping
the nation address its economic crisis. This is something that we the
joint chiefs have embraced as what`s best for America.

(END VIDEO CLIP)

SCHULTZ: The chairman of the Joint Chiefs of Staff says the cuts are
what is best for America. On the other hand, Liz Cheney, her old man,
well, did major damage to the military by leading us into a war based on
false intelligence. The Bush-Cheney war in Iraq stretched the military so
thin, troops had to return for three or four tours of duty, not to mention
the 4,474 men and women who lost their lives.

And the estimated $60 billion lost waste, fraud and abuse in Iraq and
Afghanistan, but Liz Cheney thinks President Obama is the one destroying
the military? She`s going to fit in real good at FOX News as an employee
with that kind of outrageous psycho talk.

(BEGIN VIDEO CLIP)

STEWART: I assume there`s reams of complicated paperwork to be
executed before we transfer the reins of power as something of critical as
super PAC?

UNIDENTIFIED MALE: I brought the one document with me.

(END VIDEO CLIP)

SCHULTZ: It takes a comedian to point out the joke about the Citizens
United ruling? Bernie Sanders on Stephen Colbert is coming up.

And in South Carolina, even Rick Santorum is piling on Mitt Romney.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: I won`t criticize his work
at Bain Capital. But it doesn`t necessarily mean that you want your boss
running for president.

(END VIDEO CLIP)

SCHULTZ: The big panel on the latest chaos in Carolina is next.

(COMMERCIAL BREAK)


(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m pretty happy to show my
record of job creation. Actually, my job creation record in the private
sector has created more jobs than President Obama has created in the entire
country.

(END VIDEO CLIP)

SCHULTZ: Really? Give us the number. Welcome back to THE ED SHOW.
In the Playbook tonight, Mitt Romney has made some pretty incredible claims
when it comes to his experience as a so-called job creator at Bain Capital.
Romney says Bain created 100,000 jobs. We have yet to see the evidence
supporting that assertion.

Well, South Carolina Governor Nikki Haley, a Romney surrogate, says
Romney, well, he doesn`t need to back that claim up.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS ANCHOR: Newt`s so that because the governor`s
record, whether or not he created 100,000 job, net, net, net, is fair game.
Do you agree with that?

GOV. NIKKI HALEY (R), SOUTH CAROLINA: You know, with all due respect
to Mr. Gingrich, no. I mean --.

HANNITY: It`s not fair?

HALEY: Well, I think what you have to understand is what does the
private sector do? I come from a business background. I know that when
times are tough, we have to make hard decisions. We never want to let
people go. And when times are good, we love to expand and we love to hire
people.

(END VIDEO CLIP)

SCHULTZ: I`m joined tonight by "Huffington Post" political reporter
Sam Stein. That wasn`t the question. Give me the number. Is this going
to be a tough one for Romney?

SAM STEIN, "THE HUFFINGTON POST": I hadn`t seen that clip. That`s
amazing. Of course it`s a tough one because they`re asking for very
specific details. When you get in that, you get in to the stories of the
companies. And when you get into the stories of the companies, there is
going to be some successes, but there`s also going to be some sob tales.
So yes.

SCHULTZ: But doesn`t he run the risk of going around, throwing out an
actual number and then not being able to back it up? You would think his
advisers would be saying, you know, we got to get into the credibility game
here.

STEIN: They had the same problem in the `94 campaign against Ted
Kennedy, as well as gubernatorial campaign in 2002. They don`t want to put
out a number there, because then inevitably, it invites back checking. I
don`t think they want to have that happen.

SCHULTZ: He won`t release his taxes, Sam. How much of a problem is
this going to be for him?

STEIN: It`s a big problem. It`s one of these things that as a
reporter, it drives me crazy. Obviously, everyone should be advocating for
transparency, especially in this profession that we`re in. Every president
back to I believe it was Nixon has done this, or presidential candidate.
He has opened up the possibility that he`ll do it once in office, but what
good does that do? That doesn`t give anyone -- any voter a chance to
scrutinize what exactly he`s doing.

It invites us to guess. Maybe he has offshore money. Maybe he`s
paying lower rates. That`s what it invites.

SCHULTZ: Isn`t the question now, if he is not going to release his
taxes, are you paying any tax at all, yes or no?

STEIN: I think that is perfectly fair to ask those questions, and
even insinuate as much. Because if he`s not going to meet the voters
halfway on that, or at least the reporters halfway on that, then we have to
guess.

SCHULTZ: The latest from Public Policy Polling shows Gingrich gaining
ground on Romney. The numbers, Romney at 29 percent, Gingrich is sitting
at 24. Ron Paul at 15. Interestingly enough, Santorum is stagnant.

STEIN: Yes, total nose dive, not just stagnant, he actually dipped
five points from last week, which is shocking. You would think South
Carolina, great terrain for him, social issues. The poll found that people
really don`t care about social issues right now.

It`s about the economy. South Carolina has been hit really hard by
the economy, by the foreclosure crisis. That is why Romney is holding
steady. It will be interesting to see what these Bain attacks do to that
number..

SCHULTZ: Fifty eight percent of South Carolina primary voters do not
want Mitt Romney to be the nominee.

STEIN: It`s been like that for every -- every contest, it has been
like that. Yet because this field is divided into five not-Romneys, not
one of them can get enough support to beat him.

SCHULTZ: Sam, good to have you with us. Thanks so much, Sam Stein of
the "Huffington Post."

Now let`s bring in Dr. James Peterson, director of Africana studies at
Lehigh University, Caroline Heldman -- she`s a professor of politics at
Occidental College. And Mike Papantonio with us tonight, host of the "Ring
of Fire" radio show.

Great to have all of you with us. Mike, you were in South Carolina
recently. What do you make of these poll numbers? Santorum slipping and
Newt making a gain and Romney seems to be holding steady. What did you
find out down there?

MIKE PAPANTONIO, RADIO TALK SHOW HOST: Real predictable. Gingrich is
-- it`s chaotic. It`s absolutely chaotic. But Mitt Romney is the guy that
-- he might be holding steady right now, but this is having an effect on
him. Everyday, there is a new story, Ed.

The new stories are coming out down there. The latest story, along
with the story about the steel company that you talked about, it`s where
his pals went and raided a company called World Wide Grinding in Kansas
City. They laid off 750 workers. Those people lost their jobs.

They left taxpayers having to pay 44 million dollars in pension plans.
Taxpayers ended up paying that. Mitt had made promises to these people,
that they were going to have a severance package, that they were going to
health care protection.

And as soon as he locked the doors, he took that away from them. Mitt
came away with 12 million dollars that he immediately put off in an
offshore bank. These stories, Ed, are emerging every day.

SCHULTZ: You know he put it in an offshore bank?

PAPANTONIO: I got to tell you, it would be my guess. It would be my
guess on everything I`m hear about this story. The reason the man will not
release his records -- the reason we can`t get the story from Mitt is
because a good reporter can find this. But a good reporter needs some of
that material.

So he`s fighting it desperately, Ed. I don`t think he`s in as good a
shape as he thinks he is in South Carolina.

SCHULTZ: Professor Heldman, what is the downside for the Republicans
to get answers out of their leading man in the polls, which is Mitt Romney
right now? I`m talking about releasing his taxes and also his business
practices at Bain. He has yet to justify the 100,000 jobs that he claims
he created. Why aren`t the Republicans going after him more on that?

CAROLINE HELDMAN, OCCIDENTAL COLLEGE: Well, I think because this is
something that will really bloody the party. He seems to be the inevitable
choice. And anything at this point is really going to weaken the party.
So you see party officials in South Carolina saying pull back.

I think what we will find is that he opened this Pandora`s Box by
saying that he created job. But the role of a venture capitalist is not to
create jobs. They actually go in and even when a company is profitable, if
it`s more profitable to break it up and lay people off, they will do that.

So this idea that he is a job creator, that wasn`t his role. So
touting 100,000 jobs was really bad on his part.

SCHULTZ: Dr. Peterson, the Romney camp is worried that Santorum could
surge again. Romney`s super PAC has came out with an ad hitting Santorum
on earmarks, playing in South Carolina and Florida. Is Santorum still a
threat to him, now that he has dropped down to 14 percent? Are the social
conservatives going to rally behind him?

DR. JAMES PETERSON, LEHIGH UNIVERSITY: I don`t think so, Ed. I don`t
think that Santorum is actually a threat. This is kind of like political
maneuvering here on the part of the Romney campaign. Because essentially
he needs Santorum and Gingrich to be in this fight right now, because it
helps keep the Republican base fragmented.

So he wants them all to be involved. He`ll attack one here and there,
just to insure that he keeps them in the fight, because as long as the
Republican base is fragmented, Romney can maintain his 25 percent.

SCHULTZ: Here`s what Rick Santorum had to say about Mitt Romney
today. Here it is.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: -- his work at Bain
Capital. It was -- I believe in capitalism. I believe in free enterprise.
And private equity firms are a very important and vital part of the free
market system in this country. And -- but that doesn`t necessarily mean
that you want your boss running for president. Right?

(END VIDEO CLIP)

SCHULTZ: Mike, is there something to that argument? What do you make
of it?

PAPANTONIO: I think Santorum right now is in a situation that we said
he was going to be a week ago. That is nothing that happened in Iowa
converted to anything meaningful for Santorum. He`s staggering. Nothing
really changes. It has not converted into excitement for his campaign.

I think he raised two or three million dollars after that. He`s going
into Florida a real underdog. I think he`s not long for this world,
frankly. This is down to a three-man race, Larry, Moe and Curly right now.

SCHULTZ: Well, it seems to me that you just can`t have it both ways.
He talks about the manufacturing strategy. And the very business model
that he`s defending from time to time on the stump, talking about Mitt
Romney, is the business model that gutted a bunch of manufacturing jobs
down in South Carolina.

Stay with us, panel, James Peterson, Caroline Heldman and Mike
Papantonio. We`ll be right back.

Coming up, Newt Gingrich`s latest ad paints Mitt Romney as an out of
touch Massachusetts liberal? A Massachusetts liberal, who also speaks
French. Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for watching tonight.
With one week to go until the South Carolina primary, Newt Gingrich -- he
isn`t holding back. Here is Gingrich`s latest ad targeting front-runner
Mitt Romney.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What has Massachusetts given us? A liberal
governor who wanted us to believe he is strong on defense. A liberal
senator who wanted us to believe he was a man of the people. And a
Massachusetts moderate who runs away from Ronald Reagan.

ROMNEY: Look, I was an independent during the time of Reagan-Bush,
I`m not trying to return to Reagan-Bush.

UNIDENTIFIED MALE: Romney donated to Democrats. And given the choice
to vote in the Democrat or Republican primary, Romney chose the Democrats,
voting for a democrat instead of President George H.W. Bush. Romney
opposed the Contract with America, raised taxes and offered government
mandated health care with taxpayer funded abortions.

But now he tells us, trust me, I`m a conservative. Massachusetts
moderate Mitt Romney, he`ll say anything to win, anything. And just like
John Kerry --.

SEN. JOHN KERRY (D), MASSACHUSETTS: Laissez less bon temps roulez
(ph).

UNIDENTIFIED MALE: He speaks French too.

ROMNEY: Bonjour. Je m`appelle Mitt Romney.

UNIDENTIFIED MALE: But he`s still a Massachusetts moderate. And a
Massachusetts moderate cannot beat Barack Obama.

(END VIDEO CLIP)

SCHULTZ: I mean, that is something else. Let`s bring back Dr. James
Peterson, Lehigh University, Caroline Heldman of Occidental College, and
also "Ring of Fire" radio host Mike Papantonio.

I would tell you, in culturally conservative Republican territory of
South Carolina, that ad hit it out of the park. Dr. Peterson, what do you
think?

PETERSON: So many problems with the ad. One, we should not be
disrespecting the legacy of Senator Kennedy. That just really sickens me a
little bit. Also, we have to remember that Senator Kerry is a war hero .
So to disrespect is also a little crazy.

The idea that by virtue of speaking French, somehow you`re not
American or somehow you are not sort of consistent with the principles of
the people of South Carolina and this country -- all the things in there
are really, really sad.

But you`re right, Ed. Unfortunately, this will have some impact and
it will directly impact the ways in which folks think about Mitt Romney in
South Carolina.

SCHULTZ: Professor Heldman, your thoughts on that ad. We`re talking
about the cultural conservative attitude of Republicans in South Carolina.
Compare that with -- like would Jim Demint like an ad like that? I think
so. What do you think?

HELDMAN: Well, I find it interesting that they are aligning him with
John Kerry, of course using the speaking French. They`re trying to make
him aristocratic. But they`re also kind of feminizing him. They did a lot
of this with John Kerry, who then responded by being very masculine and
engaging in sports.

And so I find it fascinating that they`re going after Romney in the
same way. I think it might work, because there are a lot of working class
voters in the south. Remember, they flipped. They left the Democratic
party and joined the Republican party because of racism, because they
didn`t like the stances of the Democratic party in the 1960`s and onward.

So I think that will resonate with a lot of working class folks who
don`t like the aristocratic nature of speaking French and don`t like maybe
the feminizing nature of speak French, which is not properly presidential.

SCHULTZ: Yes. All right, here we go, Rick Perry, he has done it
again. He had another memory lapse today. Here it is. Let`s look at it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: One of them wanted to know how many federal
departments would you get rid of and which ones when you`re elected
president?

GOV, RICK PERRY (R), PRESIDENTIAL CANDIDATE: Three right off the bat.
Commerce, Interior and Energy are three that you think of right off the
bat.

(END VIDEO CLIP)

SCHULTZ: Previously, Perry said the three agencies he would cut are
Commerce, Energy and Education, not Interior. Mike, is he ready for prime
time? He hasn`t improved too much, has he?

PAPANTONIO: Well, you know, in the deal with the mannequin today, it
wasn`t clear who had the emptiest head, whether it was perry or the
mannequin, where he called on the mannequin during his press conference.

The truth is this: the wheel is spinning, but there is just no hamster
at home. His campaign is basically over. Even the staunchest Perry people
right now are saying he is walking the political "Green Mile," because he
simply does not have the intellect to make it even through the next --

(CROSS TALK)

SCHULTZ: Here is Perry at the Squat and Gobble Restaurant earlier.
Here it is.

(BEGIN VIDEO CLIP)

PERRY: I think we`re going to answer a few questions, if that`s all
right, Caton (ph). Caton Dawson (ph), your forme -- I was going to -- I
thought this lady had her hand up over here. Just kidding.

Best question I`ll get, right?

(END VIDEO CLIP)

SCHULTZ: Here is the person he was calling on. It`s a mannequin in
the restaurant. Given Perry`s track record, should he stay away from jokes
like that? What do you think, Dr. Peterson?

PETERSON: Absolutely. This guy is -- he is a dead man walking. He`s
pretty much done. He`s kind of a prop for what I was talking about
earlier, which is the fragmentation of the conservative -- socially
conservative base and the Tea Party. But does the Tea Party even really
want this guy representing them nationally?

SCHULTZ: Good question. You know, a federal judge -- moving on --
will not add Gingrich, Huntsman and Perry to the Virginia ballot.
Professor Heldman, is this going to matter? What do you think?

HELDMAN: I don`t think it will matter. I think that Romney is the
inevitable winner here, similar to what we saw in 2004. Voters danced with
a lot of candidates. So far, they have danced with Cain. They liked him
for a moment. Gingrich -- the liked Santorum for a moment.

But really, I think at the end of the night, they are going to go home
with Mitt Romney.

SCHULTZ: What are we going to see from these candidates in the
upcoming week? Mike, why doesn`t Newt Gingrich come out and hammer -- and
I mean hammer the business record of Mitt Romney? He`s right there in the
breadbasket of the south, where they have outsourced jobs. Factories have
been shut down. It would be so easy to make the case.

Why do you think Newt Gingrich would hold off on that at all?

PAPANTONIO: In back of Newt`s head, I really do believe, Ed, I think
there is something that if he plays nice, he is going to get something out
of this campaign. He`s going to get an appointment. We know he`s not
going to be a VP candidate. Maybe he`s thinking he is going to get some
cabinet position that is going to satisfy him.

But truthfully, the train has left the station with this issue. Genie
is out of the bottle. Newt is saying, look, I want you to be sure that you
edit this film that I`m about to expose Romney as being a -- a corporate
raider, somebody who steals jobs, somebody who takes all that money that he
steals from those jobs and those taxpayers and ships it oversees in
offshore banks.

The genie is out of bottle. Newt can try all he wants. So he might
as well just pile back on and understand, ride this out, because it`s not
going to mean anything to him in the end. He`s not going to get any
appointments.

SCHULTZ: The conventional wisdom, he wins South Carolina, it`s over.
And even if he just loses by just a little bit, he has got such good
infrastructure in Florida and the money is going to carry him. It`s
probably going to be Mitt Romney.

James Peterson, Caroline Heldman, Mike Papantonio, great to have you
with the discussion tonight on THE ED SHOW. Thank you.

Since Stephen Colbert is running for president, he`s given his super
PAC to Jon Stewart. The point`s pretty clear; our country`s campaign
finance system is seriously broken. Senator Bernie Sanders joins me on
what we can do, next.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. In the Big Finish tonight, the
super PAC scam is exposed for all it`s worth. Since Stephen Colbert is now
running for president of the United States of South Carolina, he is legally
required to give up his super PAC. He decided to transfer his supreme PAC
to his buddy Jon Stewart.

Colbert eve had his lawyer on set to advise him.

(BEGIN VIDEO CLIP)

JON STEWART, "THE DAILY SHOW": I assume there`s reams of complicated
paperwork to be executed before we transfer the reins of power for
something as critical to our very foundation of our democracy as a super
PAC?

STEPHEN COLBERT, "THE COLBERT REPORT": Trevor?

UNIDENTIFIED MALE: I brought the one document with me.

COLBERT: I sign here.

STEWART: I see, very interesting.

COLBERT: I believe you sign there.

STEWART: OK. I would be happy to do that. Is there any sense, by
the way, -- how much money we have in this thing? Because certainly as the
guy who is running it -- Ahh!

COLBERT: Trevor, if you will.

UNIDENTIFIED MALE: Colbert super PAC transfer activate!

STEWART: Ahhhh!

(END VIDEO CLIP)

SCHULTZ: Pretty funny stuff, but scary as well, because it reflects
our campaign finance system. When President Obama spoke out against
Citizens United two years ago, you have to wonder if he envisioned it
getting this bad this soon.

(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 floodgates for special interests,
including foreign corporation, to spend without limit in our elections.

(END VIDEO CLIP)

SCHULTZ: Let`s turn to Vermont Senator -- independent Senator Bernie
Sanders. Senator, if it takes the ridiculous to get the attention of the
American people, it`s a good thing. But it`s a ridiculous system that we
have right now when it comes to financing campaigns. I think that that is
a very telling piece of videotape, the president speaking and, of course,
Sam Alito, the justice, shaking his head against it.

It`s pretty telling right now. How do we fix this? What is the
impact of this?

SEN. BERNIE SANDERS (I), VERMONT: Well, I tell you, Ed, it`s not just
ridiculous. It`s very, very dangerous. And the Constitutional amendment
that I have offered to overturned Citizens United is called Saving American
Democracy. And I think I`m not overstating the case.

We are moving in a direction in which corporations not only will be
able to spend as much money as they want, like they can today, in terms of
ads, radio and television ads, but you`re looking at the day when
corporations will be able to provide as much money as they want to
individual candidates.

So you`re looking at a situation where the political process, like
every other commodity in America, will be controlled by the wealthiest
people in this country. That, to a significant degree, is a loss of
American democracy as many of us understand that to be.

SCHULTZ: How do the American people combat this in the election
season? You can social network. You can boots on the ground. You can get
the butcher, the baker and candlestick maker to give 10, five bucks,
whatever.

But this really opens the floodgates for corporations to own the White
House and the government. Or is that an overstatement?

SANDERS: No, that is absolutely not an overstatement. Here`s what I
think we can do: I think there are some pieces of legislation that we
should be voting on in the Senate, in the House, that could, to some
degree, diminish the horrendous impact of Citizens United.

For example, if I put an ad on television, as a candidate, I have got
to say I approve this piece of legislation -- this advertisement. If a CEO
of a large corporation is paying of an ad, that CEO should also be on TV
saying he or she approves that ad, if that is the case. Trust me, these
guys will not be running that many ads.

Second of all, we have to get foreign money -- right now, you could
have a company significantly owned by Chinese interests, putting TV ads on
for or against a candidate for the United States Senate or the House of
Representatives. Does anybody think that makes sense?

So there are short term approaches that we can utilize in order to
diminish Citizens United. Long term, in my view, we need to pass a
Constitutional amendment which overturns this absurd Supreme Court decision
that says a corporation is a person.

Interestingly, Ed, I was pleased to see that John McCain, whom I do
not usually agree with, regarded Citizens United -- just stated the other
day that Citizens United was one of the worst decisions he has ever seen.
,I think he`s right.

SCHULTZ: I was going to ask you, is there any momentum building on
the other side of the aisle? Are there any Republicans out there that see
how damaging this is, in taking the voice away from the little guy in this
country? That`s what made America great, is that we had voices heard from
all sides and from all parts of society.

And now they are being squashed. And now of course, you have Newt
Gingrich squawking about it during this campaign. It would seem to me that
somebody would see the light, even on the Republican side.

SANDERS: Well, maybe McCain has opened that door. He was very strong
in his statement, calling it one of the worst decisions he has ever seen.
And I tell you something, in my view, I think it is not just progressives
or Democrats who regard the Supreme Court decision as absurd and dangerous.
I think you have people all across the political spectrum.

Ed, how many people do you know who think that Exxonmobil is a person
entitled to First Amendment Constitutional rights in the political process?

SCHULTZ: Exactly. If Colbert and Stewart can help people -- get
people`s attention on the seriousness of this, I`m all for it, because it
could damage this country.

Senator Sanders, thanks for being with us tonight. I appreciate it so
much.

That`s THE ED SHOW. I`m Ed Schultz. You can listen to me on Sirius
XM Radio, Channel 127.

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

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