updated 6/8/2012 12:14:23 PM ET 2012-06-08T16:14:23

Guests: John Nichols, Brad Woodhouse, Jimmy Williams, Krystal Ball, Abby
Huntsman, E.J. Dionne, Michael Hastings


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

Republicans are claiming victory after Scott Walker keeps his seat in
Wisconsin. Tonight, with I have a message to Democrats and the middle
classers of America. You don`t want to miss it.

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

(BEGIN VIDEOTAPE)

CHUCK TODD, MSNBC HOST: You`re comfortable with all that outside
money that came in and frankly overwhelmed TV stations?

SCHULTZ: Citizens United saved the day for Scott Walker in Wisconsin.

GOV. SCOTT WALKER (R), WISCONSIN: We`ve got to change the recall
process.

SCHULTZ: We`ll go inside the numbers from last night with John
Nichols of "The Nation" magazine. And I`ll tell you why Democrats and
labor need a major wake-up call.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Responsible austerity
measures of reining in government growth really will help our nation.

SEN. RAND PAUL (R), KENTUCKY: Wisconsin`s the beginning -- the tip of
the iceberg.

SCHULTZ: And conservatives say Scott Walker`s win should mean
austerity everywhere.

WALKER: Austerity is in, who would have thought it.

SCHULTZ: Tonight, Thomas Frank and E.J. Dionne will tell you why the
righties are dead wrong.

(END VIDEOTAPE)

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

Governor Scott Walker and his allies took a victory lap of sorts today
after winning the recall election in Wisconsin. Walker`s divide and
conquer strategy worked, but so did his lie and buy strategy. Walker
misrepresented his own record and used at least $30 million in spending to
his advantage.

Walker is so confident today, he`s telling Mitt Romney how to campaign
in the Badger State.

(BEGIN VIDEO CLIP)

WALKER: I think it will be a competitive Wisconsin. The key for
Governor Romney to be competitive enough to win is I think he`s got to lay
out a clear platform -- something similar to what our friend Paul Ryan has
done just down the way -- I think if he does something like that and he
makes a compelling case to the people of Wisconsin, that he`s willing to
take those kind of risks that would get America back on track for our kids
and our grandkids` kids, he can win.

(END VIDEO CLIP)

SCHULTZ: Romney spoke with reporters on a conference call today. He
promoted Walker`s record as a template for the rest of the country.

(BEGIN AUDIO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The vote that we saw last
night in Wisconsin said that people in what many have considered a blue
state, it hasn`t voted for a Republican for president since 1984 -- a blue
state said, we`ve seen a conservative governor, he cut back on the scale of
government and has held down taxes and stood up to the public sector
unions, and we want more of that, not less of it.

(END AUDIO CLIP)

SCHULTZ: Virginia Governor Bob McDonnell went on MSNBC to gloat about
the so-called success of Walker`s reforms.

(BEGIN VIDEO CLIP)

GOV. BOB MCDONNELL (R), VIRGINIA: To me, the message that a
politician that stands up and says, "This is what we need to do, this is
what we can afford, and if you do these things, we`ll get results and bring
in jobs and reduce our budget deficits" -- and then it works, the voters
will reward them for it. I think that`s why he was so successful last
night and why the unions failed.

(END VIDEO CLIP)

SCHULTZ: So, right off the bat, we`ve got Walker, Romney and
McDonnell are picking right up where the Walker recall campaign left off.
They talk about how great Walker`s reforms have been for Wisconsin. They
claim Walker has cut the state`s deficit and given them a surplus.

But independent fact checkers aren`t so sure about those claims. ABC
News says the deficit savings, quote, ignore the pay decreases faced by
union workers as a result of the law Walker signed.

Republicans -- they don`t care about the facts. They care about how
the rest of the country is going to be following Walker`s lead. That`s
where the story is with these righties now.

Tea Party favorite Rand Paul says, get ready for more cuts to the
public workforce.

(BEGIN VIDEO CLIP)

PAUL: This is going to be duplicated in state after state after
state. Wisconsin`s the beginning -- the tip of the iceberg. You`re going
to have Illinois. You`re going to have California. It`s happening in my
state.

We can`t afford the pensions we promised all the government workers.

(END VIDEO CLIP)

SCHULTZ: Yes, they can`t afford the pensions for the government
workers or the public sector workers, because they`ve got to give tax
breaks to the top 1 percent.

Speaking of the Tea Party, Sarah Palin also took advantage of the
Walker win to promote her own anti-government agenda.

(BEGIN VIDEO CLIP)

PALIN: People are going to recognize, through Governor Walker`s
efforts, that austerity measures -- responsible austerity measures of
reining in government growth really will help our nation as a whole with
the economic woes that we face.

(END VIDEO CLIP)

SCHULTZ: And Sarah Palin and the lot, well, they forget how Scott
Walker`s austerity measures have led to the worst job creation in the
United States over the past year. Wisconsin is dead last.

But elections have consequences and Karl Rove claims the consequences
will echo all the way to November.

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER BUSH AIDE: It is a blow for the -- for organized
labor, particularly, organized labor represented in public employee unions.
It`s going to embolden similar efforts in other states by other governors.
It`s clearly going to put Wisconsin in my opinion into play in November.

(END VIDEO CLIP)

SCHULTZ: All of these Republicans are overlooking a very key fact
here. A majority of Wisconsinites, 70 percent, in fact, said that they
disagreed with the recall principle on its terms. NBC News exit polls
showed only 27 percent of the voters said the recalls were appropriate for
any reason, as long as people signed recall petitions. Sixty percent said
recalls are appropriate only for official misconduct. Ten percent of
Wisconsin voters said recalls are never appropriate.

Not enough Wisconsinites -- this is the bottom line -- not enough
Wisconsinites were convinced the recall was justified. Even if they don`t
approve of Scott Walker, most Wisconsinites were not convinced he did
enough to be removed from office.

So the Republicans knew this, and they took advantage of it. Like
Walker said, divide and conquer.

And now, the Republican plan is to diminish organized labor in
America, and that is playing out exactly how Karl Rove said it would play
out last year.

(BEGIN VIDEO CLIP)

ROVE: They lost 612,000 union members in 2010 alone. Now, think
about it, every one of those 612,000 people had literally perhaps several
hundred dollars worth of union dues going into the political coffers of
their union to spend on politics. So, yes, you keep having couple of
hundred thousand people each year, for half a million people leave the
labor union movement every year and pretty soon, you start having a crimp
in the political budgets of these unions, it has a direct effect on the
presidential elections.

(END VIDEO CLIP)

SCHULTZ: So you get the reason why Wisconsin is so important? The
plan is working and the proof is in the numbers.

Take a look at how AFSCME membership in Wisconsin dropped after the
Walker law took effect. This is the second largest union in the state and
it lost more than half its members. I guess you could put up the banner
now, mission accomplished.

Folks, there is no way around the reality of what happened in the
state of Wisconsin yesterday. You can`t put and you can`t buy enough
lipstick to put on this political pig for the Democrats.

Republicans figured out how to chip away at unions. It hurts the
Democratic Party and squeezes the working class, no doubt about it. It
happened in Wisconsin. And Citizens United makes it likely it`s going to
happen again.

You will never convince me that the outcome of this election would
have been the same if the money was equal or near equal on both sides.
I`ll have a lot more on this later in the broadcast.

Get your cell phones out. I want to know what you think.

Tonight`s question: will Walker`s win affect the future of the middle
class? Text A for yes, text B for no, to 622639. You can always go to our
blog at Ed.MSNBC.com. We`ll bring you the results later on in the show.

Now, joining me tonight, John Nichols, Washington correspondent of
"The Nation" magazine and author of the book, "Uprising".

All right. John, let`s dig into these numbers a little bit -- 70
percent of the state residents did not think that the recall was completely
justified.

And if you go back to the fund-raising that Walker was doing early on,
I remember an ad he took out way back in November, that really put I
thought the nail on the head. He had, went after the opponent -- went
after to the people who were going for the recall, that he put this ad
together. Here it is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I`m not big on recalls and I think that at this
point, in my opinion, and I`m only speaking from the eye, it feels a little
like sour grapes. It`s -- you know, we didn`t get our way and so we want
to change the outcome.

The person that I`m going to stand behind and that`s going to get my
vote is the man or the woman that says what they mean and means what they
say, and it`s not about being popular, you know? It`s not about getting
the votes. This is what is right.

I mean, Scott Walker said from the beginning, I`m going to do what`s
right for Wisconsin and he did. He did.

(END VIDEO CLIP)

SCHULTZ: So, the bottom line here is, early on, you had Scott
Walker`s campaign smart enough to tell the folks of Wisconsin, hey, this is
bogus. We`re going -- and he played into that scene early on.

Your thoughts, John?

JOHN NICHOLS, THE NATION: My thought is that that`s exactly right.
That for eight months, eight months straight, Scott Walker and the
independent groups that back him kept a constant drum beat in media saying
that the recall`s a bad idea. And remember, he didn`t just do it in ads,
he did it in virtually every interview he did with any news outlet in the
state or out of the state.

And so, people constantly heard that the recall was unfair, that it
was a bad idea, that it shouldn`t be done. And in addition to Governor
Walker, at the close of the campaign, you had about a month and a half of
steady independent expenditure ads with Wisconsinites talking to the camera
about how this isn`t the Wisconsin way. Ultimately, that --

SCHULTZ: The point that I`m going to make here is that, you know,
that`s framing the issue. First of all, this is all bogus.

NICHOLS: That`s exactly right.

SCHULTZ: Had he had not had that kind of money, he might not have run
that ad, because he would have had to save it to go after an opponent once
the opponent was listed by the Democrats. But because he knew he had
resources come in, framing of this whole thing was important, and in the
numbers, it stuck.

This was AFL-CIO President Richard Trumka today speaking to reporters
about if they had done anything different.

(BEGIN AUDIO CLIP)

RICHARD TRUMKA, AFL-CIO: Would we do things differently? Hell, I
don`t know if we`d do anything differently. I think the people did a
yeoman`s job, a great job in that state mobilizing people, getting
volunteers out, getting people excited. And I said, it`s just the
beginning.

(END AUDIO CLIP)

SCHULTZ: Just the beginning. Well, confidence, I think, might be a
little bit low right now. How do you seize all of that?

NIHCOLS: Well, I`m a big fan of Richard Trumka. I`ve known him for a
long time and covered him for many years.

But I think on that one, I would tend to disagree with him. I think
there were things that should have been done differently. If you launch a
recall, with you should spend some money up-front to explain why you`re
doing it. So, I think there should have been counter ads to the governor`s
ads, saying why the recall is a good idea and why it`s necessary.

I also think that there should have been much more communication about
collective bargaining. The governor attacked collective bargaining for the
better part of 16 months, telling people it was expensive, it was bad, it
had to go away. And there was not a sufficient counter to that.

So much of the campaign ended up as a debate about whether you liked
Scott Walker or didn`t like Scott Walker. I would have liked, in hindsight
-- and I wrote about it at the time -- to see more of a framing about why
this recall was necessary. And a part of why it was necessary was because
Scott Walker attacked basic labor rights -- the rights of people to
organize and to have a voice in the workplace and in our political life.

SCHULTZ: All right. So Walker and the Republicans win. They already
got the narrative out there that this is the tip of the iceberg.

In Wisconsin, the good news is the Democrats got the Senate back.
They won one of four senate recall seats. What does that mean? Does that
mean nothing gets done in Wisconsin now and Walker can make a bigger play
on the national level?

NICHOLS: Well, this is election year, and we`ve had our filings for
the fall elections, and so there`s going to be a lot of campaigning. But
this is the important thing to take away from it. For all of the talk and
all of the spin, and certainly, accepting the reality that the governor won
his victory last night, the Democratic Party is in a stronger position in
Wisconsin than it has been at any point since 2010, in the sense that for
the first time, it can stop the governor from advancing an initiative in a
special session of the legislature. He cannot move on new voter ID laws.
He cannot move on new anti-environmental issues. He cannot move, if he
wanted to, on right to work.

And so that something significant happened today when Mark Miller
announced that he is now the majority leader of the state Senate.

SCHULTZ: No doubt.

NICHOLS: And so, no, I don`t think the governor will have the power
that he did as of yesterday even.

SCHULTZ: Elections have consequences.

John Nichols, great to have you with us. Great work on this Wisconsin
story all along. Thanks so much.

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. Citizens United had a major impact on
last night`s outcome in Wisconsin. Democrats -- bottom line here, folks --
need to figure out how to fight back. What`s their template? I`ve got a
comment on that, coming up.

And what does the Walker win mean for Mitt Romney in November, if
anything? Our panel: Krystal Ball, Abby Huntsman and Jimmy Williams have
got some thoughts and will weigh in all of that.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, the recall results in Wisconsin, I think, need to
be a wake-up call for labor in this country. Commentary, coming up.

Big money helped put Scott Walker over the top. Could it play a big
part in some key swing states this November? I`ll ask DNC communications
chairman, Brad Woodhouse, about how the party will combat the cash.

And conservatives see Walker`s win as a defining moment for their
radical agenda. How do they keep getting middle class voters to
continually vote against their own self-interests? Author Thomas Frank and
"Washington Post`s" E.J. Dionne will join me.

Share your thoughts on Twitter using #EdShow.

We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: OK, righties. You can get a good piece of me right now.

Last night, Wisconsin -- in my opinion -- was about one election and
one night of disappointment. Democrats, that`s how we`ve got to look at
this. But the fight, it continues on.

And let me be up-front. You can`t sugar-coat this. I mean, you can`t
buy enough lipstick to put on this big political pig for the Democrats. It
was a rough night -- a rough night for Wisconsin Dems, a rough night for
labor, a tough night for wage earners.

And to me, from the start, from the very first time we started
covering this story, Wisconsin has been a big inspiration. It has been a
moving story. It has been emotional. And it was last night.

But the first day we started covering this, I wanted Americans to see
the big picture in all of this, because I knew where this was going. All
those comments we played in the first block about how they`re going after
labor, I`ve known that forever, OK?

So it`s about Citizens United. Now, they`ve got the money to do that,
and I`ll be back talking about that in a moment. But what happened in
Wisconsin, when you lose, you have to look inside. Houston, we got a
problem.

NBC exit polls from last night painted, I think, a pretty doggone
scary picture for organized labor in this country.

Despite Walker ending collective bargaining for public employees, 27
percent of union members voted for this guy? Twenty-seven percent of union
members said, "Hey, he`s our guy! He`s taking our voice away in the
workplace, but he`s our guy." Amazing!

And 38 percent of union households voted for Scott Walker. That`s
even more amazing.

I`ll tell you, I don`t understand it. I don`t get it.

This guy has gone after your wages, he has gone after your pension, he
wants to limit your voice in the workplace, and union families in
Wisconsin, you voted for him?

If this is a smack-up time, so be it. You`ve got to explain to your
country and to your union why the hell you did that. This guy is after --
he thinks you`re the problem! He does. He thinks that the budget is out
of whack and you`re the problem and we`re going to give tax breaks to
corporations and we`re going to give tax breaks to the wealthiest
Wisconsinites.

This is -- there`s something -- there`s some disconnect here that I
think union membership in this country has to get at the war table and
figure out what`s the problem.

Wait a minute, wait a second. That`s right! President Obama brought
this up years ago on the campaign trail when he said folks in rural areas
cling to their guns and their religion. And he was criticized for it.
Example A, right there.

But one thing we know, Citizens United played a major role in last
night`s outcome. Nah, you can get into the polls and look at it any way
you want. Look, Walker was able to frame it because he raised over $30
million to fight this recall. Two-thirds of the money Walker raised came
from out of state.

Governor Walker outspent Tom Barrett 7.5 to 1. That`s a pretty
damaging pie, especially if you`re over there.

When it comes down to it, Walker spent 88 percent of the money in this
election against 53 percent of the vote. Scott Walker and his buddies had
a lie and buy strategy right from the start. They flooded Wisconsin
airwaves with ads like this commercial from the National Rifle Association.

(BEGIN VIDEO CLIP)

NARRATOR: This is your freedom. This is your freedom if Tom Barrett
gets the chance to recall your gun rights.

Any questions?

Tom Barrett has a rating of "F" from the NRA. Don`t let Tom Barrett
recall your gun rights.

(END VIDEO CLIP)

SCHULTZ: As we`ve told you on this program, that commercial
absolutely false. There`s no doubt the NRA`s big money and their last few
weeks of tactics of scaring the hell out of the folks in the rural area,
those sportsmen out there, that their gun`s going to get grabbed from them,
had an impact in this election. Just look at the rural numbers.

This is a map of last night`s results, right here. Now, you can see
that Tom Barrett won the urban areas, Walker won the rural areas. Usually,
where do hunters live? Well, the firearms are out in the rural areas,
aren`t they?

In Milwaukee County, Barrett crushed Walker, 63 to 39 percent. In
Dane County, another Democratic stronghold, he beat him 69 to 31 percent.
But it wasn`t enough.

Republicans bought Wisconsin last night, thanks to Citizens United.
But the question now is, are you going to let him buy America?

Senator Bernie Sanders put this in perspective on my radio show today
about Citizens United.

(BEGIN AUDIO CLIP)

SEN. BERNIE SANDERS (I), VERMONT: I take a deep concern that what we
saw in Wisconsin can happen in any state throughout this country and in the
presidential election. Billionaires like the Koch brothers and others are
now prepared to spend unbelievable sums of money to elect extreme right-
wing candidates. They and their friends have the ability to control the
United States Congress, the White House. This is an incredible undermining
of American democracy.

(END AUDIO CLIP)

SCHULTZ: Don`t you think the GOP has shown their hand for November?
They are going to go back to all of these folks and say, you really got to
give us the money now, because we can do this in state X, Y, and Z --
except this time, the stakes are about 10 times higher than Wisconsin.

Democrats are going to have to figure out new ways to fight this
avalanche of money. The silver lining out of all of this for the left in
this country and Wisconsin, this is a wake-up call for the Democrats
absolutely wherever.

Coming up: what the Democratic Party and President Obama can learn
from Wisconsin. Communications director of the Democratic National
Committee, Brad Woodhouse, will join me.

Then, whose side is he on, anyway? Bill Clinton says he wants to keep
giving tax cuts to America`s wealthiest Americans. We`ve got to have a
reality check on this one, when we come back. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Everyone`s trying to understand if Wisconsin has national
implications. And for many reasons, it definitely does, as I see it.

After Citizens United, Democrats need to find a way to combat
unlimited sums of money, pouring into the conservative column.

As for last night`s voting patterns, there is some hope. Despite
Walker`s victory, Obama, President Obama, leads Mitt Romney by seven
points. In fact, 17 percent of Walker voters favor President Obama over
Mitt Romney.

Some of the discrepancy can be explained we this number -- 60 percent
of voters say that they favor recall only in the case of official
misconduct. A recall was a hard sale to some people who might usually
favor a Democrat. One thing is certain, there are no guarantees and
battleground states favoring President Obama are obviously vulnerable.

Is the tide turning?

Let`s turn to Brad Woodhouse, communications director of the DNC.

Brad, good to have you with us tonight.

BRAD WOODHOUSE, DNC COMMUNICATIONS DIRECTOR: Ed, thank you for having
me.

SCHULTZ: You bet.

It`s about the money at this point. It`s ground game versus the
money. On the basis of money alone, isn`t the Democratic Party outmatched
after Citizens United?

WOODHOUSE: Well, look, Citizens United is a big deal. And thank god
you`ve been talking about it. And we really need to talk about in the
aftermath of Wisconsin.

I mean, look, Tom Barrett was outspent 7 to 1. The Koch brothers gave
more money to Scott Walker, twice as much money to Scott Walker, than Tom
Barrett ever even raised. So this is a critical, critical issue.

And look, I think one thing it says is that people need to help us
out. I mean, they need to go to BarackObama.com and Democrats.org, and
we`ve got to get the money and we can`t be outspent in the fall the way Tom
Barrett was outspent in Wisconsin. We can`t have --

SCHULTZ: Well, what if you were outspent like that? I mean, what if
you`re outspent four to one or five to one? What`s the game plan? I mean,
do you have new ground troops? Do you have enough organization?

WOODHOUSE: I do think we have enough organization, I think we have
enough ground troops. We know for a fact -- you know, they made a big deal
today about the fact that Scott Walker is going to turn over his offices in
Wisconsin to Mitt Romney.

Why didn`t Mitt Romney have offices in Wisconsin? He doesn`t have
offices in North Carolina, three or four.

SCHULTZ: Yes.

WOODHOUSE: They have no ground game. And you know, we`re going to
exploit that, but we`re going to have to reach to as high as parody as we
can on the spending side. But importantly, we`ve got to expose the
evildoers. That`s probably the only way to put it.

SCHULTZ: Well, you need money to do that, too.

WOODHOUSE: Right.

SCHULTZ: I mean, when you look at Ohio, you look at Florida, you look
at Virginia -- I mean, what happened in Wisconsin could happen in those
states to President Obama. I mean, what, do you just react to it? How do
you -- how do you combat that? How do you get ready for it?

WOODHOUSE: Well, I think -- one, we`ve really got to expose who`s
behind this spending. And I think that we have the resources to do that
and I think those on the outside that support us have the resources to do
that. We need to make sure people know, why are the Koch brothers
interested in what`s going on in Wisconsin?

SCHULTZ: Well, for environmental reasons. They want deregulation.
And that`s exactly where Walker has gone in his first term. He`s done some
things in that regard. They want to build a stable of conservative rulers
that are going to favor them when it comes to tax laws and also industry.

But the key here for the Democrats, as I see it, is you`re going to
have to come up -- now that Wisconsin is behind us, you`re going to have to
come up with some kind of confidence in your tackle box to make sure that
you`ve got something that`s going to be able to fight this stuff. Because
who`s to say this isn`t going to happen in states that President Obama
needs?

WOODHOUSE: Well, I think it very well could. I mean, I think the key
here is that we`ve seen in the past, is it`s one thing to be outspent, you
know, 1.5 to one or two to one, if you`ve got the ground game, you know, if
you`ve got the right ideas and if you`ve got the best candidate. You can`t
be outspent seven or eight to one. And I don`t think there`s any chance
that President Obama`s going to get outspent seven or eight to one.

SCHULTZ: Right into the detail of who`s voting the for who, does
President Obama have a hard time with white working men?

WOODHOUSE: Well, I think, you know, if you look at the results in
Wisconsin, you might draw that conclusion. I think if you looked at
results of 2008, you would see that it`s a mixed bag. I think that the
president has the story to tell here. And let`s be clear, Mitt Romney`s
not the person to attract those votes. Mitt Romney was laying those people
off to profit for himself and for his investors and for his partners when
he was at Bain Capital.

So we`re going to have a story to tell, both about what the
president`s trying to do. But this is not going to be a referendum. This
is going to be a choice.

SCHULTZ: I hope you have enough money to tell it, because they found
out that their money does have an influence. Walker was able to frame this
early on, that the recall was bogus. I mean, it`s all relative. They`re
going to be able to frame issues in all of those states.

Brad, we`ll do it again. Thank you. Appreciate your time tonight.

There`s a lot more coming up in the next half hour of THE ED SHOW.
Stay with us.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What`s your mandate? Do you have a mandate and
what is it?

GOV. SCOTT WALKER (R), WISCONSIN: I think it`s to move on and to move
forward.

(END VIDEO CLIP)

SCHULTZ: Republicans are now trying to draft Scott Walker for vice
president. The big panel weighs in next.

Bill Clinton has done it again.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Does that mean extending the tax cuts?

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I
don`t have any problem with extending all of it now.

(END VIDEO CLIP)

SCHULTZ: The White House is responding tonight.

And how do Republicans get middle classers to vote against their own
interests?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Austerity, who would have thought it?

(END VIDEO CLIP)

SCHULTZ: Thomas Frank and E.J. Dionne are here for the discussion.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: What Scott Walker has shown tonight
is that good policy is great politics. You know, all the experts would
say, don`t take these bold stands, don`t take these courageous stands,
don`t take on the unions, don`t make these tough decisions. He did the
exact opposite.

SARAH PALIN, FORMER GOVERNOR OF ALASKA: Looking to see if Governor
Walker would keep that resolve, keep that stiff spine and recognizing that
as his spine stiffens, the rest of us then feel empowered. Other governors
across the nation feel empowered and emboldened to do the right thing for
the people that they`re serving.

(END VIDEO CLIP)

SCHULTZ: As predicted, they can`t get enough of the guy. Welcome
back to THE ED SHOW. Last night`s victory cemented Governor Scott Walker`s
reputation as the rock star of the Republican party. And now some say
Walker could help out Mitt Romney in November.

Former Bush Speech writer Mark Gerson writes, "putting Walker on the
GOP ticket would make Romney instantly competitive in Wisconsin and it
would force President Obama to spend time and resources defending a state
he expected an easy win in November."

And if the Republican ticket did pull an upset in Wisconsin, "Obama`s
chances for a second term would be slim to none." Let`s bring in MSNBC
contributors Krystal Ball and Jimmy Williams, and political commentator
Abby Huntsman. Great to have all of you here tonight.

Let`s start with the future of Scott Walker. I mean, he is the guy
that`s getting all the praise. Jimmy, you first. What`s happening? He`s
the new star.

JIMMY WILLIAMS, MSNBC POLITICAL ANALYST: Remember that song "The
Future`s So Bright, I`ve Got to Wear Shades?" That`s a great song and it`s
completely Scott Walker.

SCHULTZ: Does it fit.

WILLIAMS: It totally fits Scott Walker. Look, I have a weird opinion
about this whole Wisconsin -- I don`t like recalls. I think that`s a wimpy
way out --

SCHULTZ: Well, they do now. Look, it`s propped him up to be a hero.

WILLIAMS: It certainly has. I don`t like ballot initiatives. I
think buyer`s remorse stinks. If you don`t like who you voted for the
first time, perhaps you ought to go out and do a little education. But now
that they`ve got him twice, they`ve got him -- they got him big-time. In
fact, he won bigger this time than last time. OK, fine. Put him on the
freaking Romney ticket and guess what happens?

SCHULTZ: What do you think, Krystal?

KRYSTAL BALL, MSNBC POLITICAL ANALYST: There`s no way that Romney`s
going to put someone who has 160,000 dollars sitting in a legal defense
fund --

SCHULTZ: Guess what happens, Jimmy. What were you going to say?
Guess what happens?

WILLIAMS: Democrats win Wisconsin in landslide.

(CROSS TALK) .

SCHULTZ: Abby, you like this ticket?

ABBY HUNTSMAN, MSNBC POLITICAL ANALYST: There`s been a new VP
candidate every single day, it seems like.

WILLIAMS: Because we don`t have one yet. That`s the problem.

HUNTSMAN: I do want to give Governor Walker credit, I think we all
should. I like what David Gergen said about this is really a psychological
win for the Republicans. He was very much the leader of that movement.
And it became very much a national campaign. And I thought he handled it
very well. He remained sane.

It`s obvious that the -- you`re giving me a bad look, Ed.

SCHULTZ: How can I give you a bad look? The guy won. I can`t
sugarcoat it.

HUNTSMAN: He won with an even greater percentage this time, I think
37 percent of which said they were in favor of the unions. But they still
voted for him, because he`s doing things. The economy is still at 6.8
percent, which I said earlier is lower than the national average. And
people are clearly happy there with him.

BALL: He`s doing things, all right. And to your point, he made it a
national campaign. I mean, 64 percent of his funding, his 29 million
dollars, came from outside the state. So no question, he is a national
right-wing celebrity now.

SCHULTZ: He does have experience going around the country raising
money.

HUNTSMAN: He absolutely does. I don`t think -- I can`t see them
putting him on the tick this time around, but 2016 is not that far down the
road. And you never know.

SCHULTZ: I don`t want to rain on anybody`s parade, but we should
mention that there is a John Doe investigation going on.

HUNTSMAN: Exactly.

SCHULTZ: And we really don`t know. We don`t know the outcome of
that. What if Romney were to select him, and uh-oh, here come the feds.

WILLIAMS: Well, that`s happened to nominees. That`s happened to
potential nominees.

HUNTSMAN: If we know Romney, he`s going to make the most calculated
choice. That`s not going to happen.

WILLIAMS: He`s going to make the most private equity choice.

BALL: And if he wants a Wisconsin guy who`s a celeb on the right and
who doesn`t have those sort of investigation issues, Paul Ryan is another
potential option.

SCHULTZ: What do you make of the numbers that came out, a lot -- 18
percent of the people that voted for Walker said that they`re going to vote
for Obama.

BALL: I`ll tell you. This election wasn`t really about collective
bargaining. It really wasn`t about Scott Walker. It was about the recall
itself. And as you`ve been pointing out, 70 percent of people said they
weren`t comfortable with the recall itself.

And so that`s why you see such a split between people who are -- who
voted for Scott Walker to stay in office and people who are willing to vote
for President Obama. And one other thing I will add to that, I think this
is a classic example of Democratic hang wringing. Oh, is it OK to have a
recall. Should we be giving to super PACs. Is it OK to attack Mitt Romney
on his --

SCHULTZ: Well, the recall gave them the control of the senate. There
were nine recall elections last summer. The Democrats won five of them.

WILLIAMS: Right.

SCHULTZ: Now, there`s 1.2 million Democrats that were OK with the
recall.

WILLIAMS: Yes, just not enough of them.

HUNTSMAN: But to the 17 percent that said they`re still going to vote
for Obama, I think people are making too much out of how this will affect
the general election. If you look back in 2003 when there was a recall in
California, the vote still went Democrat in 2004 with Kerry. So this could
very well -- I would guess it would go to Obama.

WILLIAMS: With all due respect, that`s California.

(CROSS TALK)

WILLIAMS: California`s never voted Republican, at least since Reagan
maybe. I could be wrong on that one. I`m not disputing what you`re
saying, and I see the correlation.

Look, that was completely 1,000 percent about the fact that people at
home in Wisconsin didn`t like people from not home in Wisconsin walking
into their state and telling them what to do with their crappy governor.
They didn`t like it. And I`m from South Carolina. If somebody walked into
my state and said, Nikki Haley, we`re going to recall you, I would be
opposed to it, despite the fact I think she`s a terrible governor.

SCHULTZ: Was it local enough?

WILLIAMS: I think it was completely --

SCHULTZ: All right, Abby, what about Romney in Wisconsin? Does this
change the landscape for him?

HUNTSMAN: I think it definitely does. I think he definitely has the
momentum right now. I don`t know how long that will list. It might be
short lived. But Obama clearly has the lead there.

SCHULTZ: Does he put resources in Wisconsin now?

HUNTSMAN: I think he already has. I think he`s definitely moving on
that.

BALL: I hope that he does, because I think that would be a big
mistake. If you look at -- in my home state of Virginia, for example,
there`s a tendency when people put -- when swing voters vote for one party,
then they want to give the other side a hearing. So in Virginia, for
example, my home state, they have never voted for a governor of the same
party as the president since the `70s because they like divided government.

So I actually think -- I brought some lipstick to put on your pig,
your political pig. I brought a little bit of lipstick. I think there
could be a little bit of a backlash --

SCHULTZ: What shade is it? It`s got to be really, really red.

BALL: It`s red.

SCHULTZ: Let`s talk about Citizens United for just a moment. What
are the Democrats going to do? I just asked Brad Woodhouse, they don`t
have a game plan other than to get boots on the ground.

This could happen in Ohio, this could -- you think Sherrod Brown`s a
little bit nervous? They`re already throwing six million dollars at him
already. We haven`t even gotten started. This could happen in Florida.
This could happen in Virginia. What`s the game plan here? I think the
Republicans found out a lot about Citizens United in Wisconsin.

HUNTSMAN: I agree, but I`m still going to go back to the fact that
it`s going to come down to the economic numbers. That`s what it`s going to
be about. There`s obviously so much money being put into both races right
now. But at the end of the day, people are going to say, is my life
better? And Obama has not done a great job really reminding people of what
he`s done over the last four years.

I don`t think Bain was the right way to go. So I think he`s got to
really re-frame his message around what he has done, what jobs has he
created.

WILLIAMS: I agree with Abby. He has not done a good enough job
telling people what he has done. He should do it more.

SCHULTZ: Krystal Ball, Jimmy Williams, and Abby Huntsman, great to
have you with us tonight. Thanks so much.

Coming up, what the heck was President Clinton thinking. Find out why
the heck Republicans are so thrilled that some say that he`s on their side
now, when we come back. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Well, confusion junction here or what? Former Vice
President Bill Clinton is giving the Republicans a lot to be happy about
tonight. He`s decided to distance himself from President Obama when it
comes to extending tax cuts for the wealthiest Americans. Take a listen.

(BEGIN VIDEO CLIP)

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I
don`t have any problem with extending all of it now, including the current
spending levels. They`re still pretty low, the government spending levels.
The real issue is not whether they should be extended for another few
months. The real issue is whether the price the Republican House will put
on that extension is the permanent extension of the tax cuts, which I think
is an error.

(END VIDEO CLIP)

SCHULTZ: Just last week, President Clinton said that Mitt Romney`s
business career had been sterling. Now he`s saying the president should
extend the Bush tax cuts that continue to hurt the economy. That`s an
argument that could be made. Last night, NBC`s Brian Williams asked the
former president if he`s off-message.

(BEGIN VIDEO CLIP)

CLINTON: Mr. Simon may think I should be an employee of the campaign,
but I`m not. I`m trying to help the president win re-election because I
think he`s done a better job than most people know. And I think, you know,
I`ve been aghast by all this flutter about it. I think that I`m not -- I
don`t think I should have to criticize Romney personally to disagree with
his politics.

(END VIDEO CLIP)

SCHULTZ: Hours later, Clinton issued a clarification. He says he
only wants to extend the Bush tax cuts for a little while, not permanently.
But the damage has been done. The Republicans are spinning Clinton`s words
right into gold. Senator Orrin Hatch thanked Clinton for his "call for
action." Representative Cantor Tweeted about his agreement with Clinton.

Representative Roskam calls Clinton`s remarks "a gift from heaven."
And get this, Speaker Boehner`s staff wants to call the extension the
Clinton Tax Cuts. The Republicans sang Bill Clinton`s praises at a press
conference as well.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Even Bill Clinton came out for
it, before he was against it.

SEN. ORRIN HATCH (R), UTAH: As the speaker indicated, coupling that
with Bill Clinton`s remarks.

UNIDENTIFIED MALE: It`s not often in Washington that you get a
bipartisan, view but is you listen to former President Bill Clinton.

UNIDENTIFIED MALE: Obviously President Bill Clinton gets it. He
knows in this economy you should not be raising taxes on anybody.

(END VIDEO CLIP)

SCHULTZ: They don`t miss an opportunity, do they? Let`s get real.
We`re talking about cutting taxes for the wealthiest two percent of
Americans. White House Spokesman Jim Carney told reporters today,
"President Obama will not, I could not be more clear -- he will not support
extension of the upper-income Bush tax cuts."

Bill Clinton has been campaigning for the president`s re-election, but
all the fund-raising and speeches in the world won`t change the reality
about what`s good for the economy. The Bush-era tax cuts did not work.
The tax cuts expire in January. At the exact same time, 1.2 trillion
dollars in spending cuts take effect. Everyone`s got to pay for it.

The president`s simply asking two percent of Americans to just pitch
in and help out on the budget.

Tonight in our survey, I asked will Walker`s win affect the future of
the middle class? Eighty one percent of you said yes, 19 percent of you
said no. And oh, by the way, a correction, his name is Jay Carney. Thank
you.

Up next, Walker said he was winning one for the Gipper. But we`ll
talk to Thomas Frank and E.J. Dionne about whether conservatives are still
fooling the American public. Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I voted for Scott Walker.

UNIDENTIFIED FEMALE: Why does this issue matter to you?

UNIDENTIFIED FEMALE: Oh, gosh, I`m terrible at this.

UNIDENTIFIED FEMALE: That`s all right. Do you feel like this
election could be a factor as far as the presidential election coming up?

UNIDENTIFIED FEMALE: I do. I think it has a big -- a big effect on
the presidential election, yeah. And with all the shows that I`ve been
watching, they`ve been also talking about that as well.

(END VIDEO CLIP)

SCHULTZ: In the Big Finish tonight, citizens obviously have a right
to vote any way they choose. But after last night`s results in Wisconsin,
it looks like people are still persuaded to vote against their own economic
interests. Now, just the facts: Governor Scott Walker has not been a job
creator. He hasn`t hit anywhere near the 250,000 mark that he wanted.

He did not create a real surplus. He`s played with the numbers, no
doubt, kicked the can down the road to other budgets. But there`s no
surplus and it`s certainly not 150 million dollars. And he is against
equal pay for women.

So what`s going on here? I`m joined tonight by Thomas Frank, authors
of "What`s the Matter with Kansas" and his latest book, "Pity the
Billionaire." and a columnist at "Harper`s Magazine." And E.J. Dionne with
us tonight, MSNBC contributor and senior fellow at the Brookings
Institution.

Gentlemen, great to have you with us.

Thomas, let`s go to the heartland. Let`s go to Wisconsin. What
happened here? Is this another example of some working class voters going
against their own economic interests? What do you think?

THOMAS FRANK, AUTHOR "WHAT`S THE MATTER WITH KANSAS": Come on, Ed,
that`s the story of our times, right? Going back 30, 40 years. This is
what happens again and again and again. But what`s going on lately, OK, in
the last two, three years with the conservative movement is something
really, really interesting, OK?

These guys have taken, as you know, a shard shift to the right, OK and
they`ve taken sort of the politics of say Herbert Hoover and made it the
new politics for our hard times moment. OK? We`re in this terrible
economic slump, this persistent economic slump that doesn`t go away, and
they have made the sort of, you know, 19th century banker view of the world
the -- you know, the remedy for all that ails us, you know?

It`s an amazing accomplishment, what they`ve done.

SCHULTZ: It is amazing. And they`ve got the money to do more of it.
E.J. Dionne, the working class voting against their own best interests.
How do you size it up?

E.J. DIONNE, THE BROOKINGS INSTITUTION: Well, you know, I think the
first role of democratic politics, with a big or a small "D," is to pay
respectful attention to why people did what they did. You talked about it
earlier. There were some people who just didn`t think a recall was right.
But I think there are some real problems we progressives have to deal with
because conservatives take advantage of them.

One of them is the decline in confidence in government`s capacity to
improve people`s lives.

SCHULTZ: To do anything.

DIONNE: Right. And that`s a real dagger pointed at the heart of
progressivism. Because we believe government can actually improve things.
One of the reasons I wrote my new book, "Our Divided Political Heart," was
to talk about what government had done in our history to build up the
country, to create institutions that made us all wealthier. And
progressives have a lot of work to do in that area.

Secondly, there`s a kind of spiral going on with the trade union
movement. When I grew up, unions were a vital part of life. They were a
very important institution. People were in unions or had friends who were
in unions. It was just part of your community.

With a decline in unionization, there were fewer and fewer people who
have the experience of unions. So it`s easy -- it`s easier to run against
them. And with such a big share of the union population in public employee
unions, the Republicans can split private and public workers against each
other.

The last thing, you said it earlier, is Citizens United. In
elections, people often vote for people and not issues. And when you
looked at some of the vicious ads against Tom Barrett that Governor Walker
was able to run, that also undercut Tom Barrett`s vote and got people
voting on a person rather than on some of the core issues in this election.
And that`s normal. But it`s something we`ve got to be aware of.

SCHULTZ: Thomas, what do you make of 37 percent of union households
voting for Walker, a guy who has gone right after their kitchen table?
Their voice in the workplace, their benefits, their health care, the lot?
What about that?

FRANK: It`s astonishing. But then, on the other hand, that`s pretty
much in keeping with how it always goes. But the other side of that coin
is that means what, 67 percent of them are voting for Democrats. The
amazing thing is working class people who aren`t in union who tend to vote
Republican by these sort of massive numbers. That`s what boggles the mind.

Look, there`s two -- if you look at the arguments that conservatives
have been making for the last three or four years -- this is what "Pity the
Billionaire" is all about, OK? First of all, it`s extremely populous.
These guys present themselves -- and they have no right to do it, but they
do it anyways, present themselves as the opponents of entrenched power, OK?

They have this term that they like to throw around, the ruling class.
They`re always going against what they call the ruling class. It`s
preposterous, but they say it all the time. It sort of makes sense in this
kind upside down world they live in. The other thing is that they have
this very Utopian view of the world. It`s very 1930s.

They have this vision of the sort of heroic producer capitalist,
whereas a long time ago, it would have been the heroic working man who
produced -- you know, who built America. But they have this vision of, if
only we could get government completely out of the picture and let the free
market do everything exactly as it wanted, that would be a legitimate
economy. That would be what would solve all our problems.

SCHULTZ: Thomas Frank, E.J. Dionne, I wish I had more time for this,
because I think this is the fabric of this election year: messaging and the
money to do it. Thanks so much.

That`s THE ED SHOW. I`m Ed Schultz. "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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