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'The Last Word with Lawrence O'Donnell' for Wednesday, June 13, 2012

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Guests: Howard Dean, Timothy Noah, Bruce Bartlett, Sam Stein, Jonathan Capehart

LAWRENCE O`DONNELL, HOST: And just when you thought Ohio was getting
way too much attention in this presidential campaign, President Obama and
Mitt Romney have both decided to give big campaign speeches tomorrow -- in


do is return to the very policies that got us into this mess in the first

ALEX WAGNER, MSNBC HOST: The president is going to be making a speech
on Thursday.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We`ll hear what he has to
say tomorrow.

TIM PAWLENTY (R), FORMER MINNESOTA: Just goes back and blames
President Bush.

UNIDENTIFIED FEMALE: What he called the failed policies of the past.

WAGNER: To fix the damage done by President Bush.

TAMRON HALL, MSNBC ANCHOR: In a major campaign speech --

ANDREA MITCHELL, NBC NEWS: The president will argue they would be
worse off if Mitt Romney were in charge.

PAWLENTY: Nobody wants to hear him whining and complaining. You
actually have to something.

UNIDENTIFIED FEMALE: He has done stuff.

UNIDENTIFIED MALE: Question -- are you going to be better than you
were four years from now?

WAGNER: Channel the Gipper.

RONALD REAGAN, FORMER U.S. PRESIDENT: They say we`re all against
things, we`re never for anything.


REAGAN: There you go again.

excuse me.

WAGNER: Reagan`s legacy is causing a bit of a fracture in the GOP.

necessarily pass the litmus test.

GINGRICH: President Reagan -- excuse me.

CHRIS MATTHEWS, MSNBC HOST: What can Mitt Romney do to appear more

STEPHEN COLBERT, COMEDIAN: He`s had a little trouble relating to Joe

UNIDENTIFIED FEMLE: An opportunity to insult some more small business
owners on the quality of their cookies.

UNIDENTIFIED MALE: First off, donuts, anyone?

ROMNEY: Would you see if one of those chocolate -- one of those
chocolate goodies finds its way --

UNIDENTIFIED MALE: Donut, referred to as a chocolate goody.

UNIDENTIFIED MALE: He won`t even eat their poor little cupcakes.

ROMNEY: I`m going to be doing some testing on that one right there.

MATTHEWS: So conehead talking.

ROMNEY: I`m not sure about these cookies.

COLBERT: Mitt is just your average blue-collar fan of dressage.
Whoo! I just get swept up.


O`DONNELL: Tomorrow, President Obama and Mitt Romney will deliver
dueling speeches on the most important issue to voters in judging by the
candidate`s travel schedules, the most important state in the presidential
election. The speeches on the economy will take place in Ohio. President
Obama will speak in Cleveland. Mitt Romney will speak in Cincinnati. And
Mitt Romney knows already which speech is going to sound better.


ROMNEY: He will speak eloquently, but the words are cheap. And that
the record of an individual is the basis upon which you determine whether
they should continue to hold on to their job.


O`DONNELL: Mitt Romney himself has, of course, determined whether
many people should continue to hold on to their jobs.


UNIDENTIFIED MALE: To get up on national TV and brag about making
jobs, when he has destroyed thousands of people`s careers, lifetimes, just
destroying people.


O`DONNELL: A new "Washington Post" poll shows dissatisfaction with
both candidates` plans for the economy, 37 percent view Mitt Romney`s plan
for the economy favorably and 47 percent view it unfavorably, 43 percent
view President Obama`s plan for the economy favorably and 50 percent view
it unfavorably.

Joining me now is former chairman of the DNC and governor of Vermont,
Howard Dean, and MSNBC political analyst, Richard Wolffe.

Governor Dean, what does the president have to say tomorrow in Ohio to
get a little bit more approval for his economic plans?

HOWARD DEAN, FORMER DNC CHAIRMAN: He needs to condense his economic
message to three or four words, and then repeat them every single day
between now and the election. People fundamentally don`t trust Mitt
Romney. They believe he only cares about people who have great wealth,
which is probably true.

But the president`s got to close the sale. And the way to close the
sale is to have a slogan and repeat it and repeat it and repeat it and
repeat it. He was doing very well right after the jobs speech. He needs
to get back into that groove.

O`DONNELL: Well, let`s listen to the groove he was in yesterday in


OBAMA: The private sector creating nearly 4.3 million new jobs in the
last 27 months, over 800,000 jobs just this year alone. Now, does this
mean I`m satisfied? No. Not when we`ve got so many folks who are still
out there looking for work.

When I hear Governor Romney say his 25 years in the private sector
gives him a special understanding of how the economy works, my question is,
why are you running with the same bad ideas that brought our economy to the
brink of disaster?

And we`re here to say, we remember and we`re not going back there!
We`re moving this country forward.


O`DONNELL: Richard Wolffe, he seems to strike the note in there,
satisfied, no, while he`s trying to suggest there has been progress, it is
not satisfactory progress.

is that -- well, for starters, he`s trying to be honest here. You know, if
he drew the parallel of President Bush in 2004, he never actually said in
2004, you know, our security is not all it might be. You know, Iraq could
be going better and bin Laden is still out there.

What he actually said is, we are more secure now than we were four
years ago. We are better off than we were pre-9/11. I have kept you safe.
We have not been attacked again.

This administration is trying to tell the story as it really is.

And the truth is, if you take the Reagan question, are you better off
than you were four years ago, the answer is yes. The economy is not
falling off a cliff. We`re not losing 800,000 jobs a month. We`re
actually gaining them, albeit in smaller numbers than you`d like. The
stock market has rebounded from its lows.

There are lots of things that are better than they were four years
ago. But the administration is taking this tentative approach, because of
all the polling and the focus grouping and everything else. I suspect if
President Bush had tried that approach in 2004, he`d have seemed a lot
weaker against John Kerry.

O`DONNELL: Let`s listen to a worry of James Carville`s that`s been
getting a lot of attention. Let`s listen to.


White House or the campaign talks about the progress that`s being made,
people take that as a signal that they think that things are fine. And
people don`t feel that or believe that. They want to be reassured that he
understands the depth of the problem and that he has a plan to deal with
the deterioration of the middle class.


O`DONNELL: Governor Dean, that seems to be what the president is
dealing with when he, in his speech says that we`ve had progress, but he`s
not satisfied. Is that the right way to balance the issue, as James
Carville`s outlining it there?

DEAN: I think in terms of the speech, it`s fine. But as I said
earlier in the show, you have got to have three or four words. I think
Carville`s reputation is built on, it`s the economy, stupid. You`ve got to
have three or four words and repeat them and again and again and again.

So no amount of great speechifying and no amount of talking about the
jobs that Bush destroyed and so on and so on is going to really be

Look, Barack Obama has an enormous advantage going into the election,
because most people do not trust the Republicans and do not trust Mitt
Romney in terms of their jobs. And that showed in the polling data that
you gave a couple of minutes ago.

But we`ve got to have a slogan on our side that`s believable, and
that`s what they have to come up with.

O`DONNELL: Any thoughts on what that slogan should be, Governor?

DEAN: Well, I mean - no, not right here on short notice on the

O`DONNELL: Listen, I`m not good at this -- I`m not good at this
either. I`ve never come up with any kind of slogan that would fit on a
bumper sticker or work in campaign speeches. It`s not an easy thing to do.

DEAN: No, it`s not.

O`DONNELL: I think you`re right about the size of the bite. It`s
tricky in this situation to come up with what those words are.

DEAN: Well, you could figure it out. It would take you about 24
hours to do it, and they`ve got some very smart people working for them, so
I think I`ll let them come up with their own slogan, but it`s got to be
short, it`s got to talk about jobs, you know, we`re not going back. Or
something like that.

But that`s what it needs. And it`s got to be repeatable and
memorable. He`s going to win this election, but he`s got to put it away,
and he can put it away now.

O`DONNELL: Richard Wolffe, there`s been more talk about a memo that
James Carville put out, saying the voters are very sophisticated about the
character of the economy. They know who is mainly responsible for what
went wrong and they are hungry to hear the president talk about the future.
There`s some concern that the president should not be talking so much about
what he inherited from George W. Bush and mentioning Bush by name, because
the presumption there is everybody knows that, now, let`s tell us where
you`re going.

WOLFFE: Well, look, the president has talked a lot about investments
in the middle class, which is what Carville and Kerry seemed to do. By the
way, Carville is focused on the sort of empathy question. That`s one of
the president`s strongest points. It`s curious that he thinks that there`s
a worry that this president is going to seem out of touch when, if you just
put up the head-to-head on who understands your problems and gets it, this
president scores much, much better than Mitt Romney and much better than
any other figure on the national stage.

I think, you know, to take the Bush example once again, when it came
down to the 2004 election, did you ever hear President Bush or any of his
surrogates not talk about the terrible events of 9/11? They had no problem
dwelling on the awfulness of the past and saying that they had a plan,
albeit, not a fully executed one when it came to Iraq and national

I don`t see why the president should not talk about the past. That`s
his record. His record is as a turnaround guy -- turning around an economy
that was falling off a cliff and putting it back on track.

You know, if he doesn`t talk about that, then he`s missing the entire
framework of this election. So I don`t know how he avoids it.

O`DONNELL: Howard Dean, a lot of Democrats are getting very nervous
now that the polls are tightening. People always get nervous when the
polls are tightening. And the polls always tighten.

You, tonight, are very confident, still, that President Obama`s going
to win this election. Why are you so confident?

DEAN: Because I think a lot of the angst that`s generated, Lawrence,
is inside the Beltway. James, God bless him, came here 20 years ago with
Bill Clinton. He`s been inside the Beltway ever since. You get a lot of
those kind of people talking and agonizing and wringing their hands.

This election is going to be fought outside the Beltway and the
president`s spending all his time outside the Beltway. If you look at a
state like Ohio, the jobs are beginning to come back, because of the
automobile industry. There`s a huge difference between what Mitt Romney
wanted to do to the automobile industry and what Barack Obama did do for
the automobile industry.

So I think the president wins Ohio, I think he wins Virginia, and
that`s the end of Mitt Romney, right there, if he can just win those two
states. It`s very clear whose side Barack Obama is on. And it`s not
Governor Kasich, who is down in the 40s in approval because of the things
that he`s done while he`s governor of Ohio.

The Republican brand has been hurt badly there. Obama needs to just
get out and punch the way he can, the way he did for the first six months.

O`DONNELL: Howard Dean and Richard Wolffe, thank you both for joining
me tonight.

WOLFFE: Thanks, Lawrence.

O`DONNELL: Coming up, the myth of Ronald Reagan. Reagan was not
nearly conservative enough for today`s Republican Party. So why do
Republicans keep pretending he`s their hero?

And in the "Rewrite" tonight, another episode of who`s the real
American? The contestants, Barack Obama and Mitt Romney, and the category,

And in the next segment, the category will be food. You will watch
Mitt Romney trying to figure out what a donut is. That`s coming up.



COLBERT: Kids need to start admiring society`s real heroes -- job
creators. That`s why I`m calling for free market-affirming children`s
books, celebrating the 1 percent. What about "James and the Giant Year-End
Bonus"? Or "Green Eggs and Howard Weinberg, Senior Vice President of
Global Currency at Goldman Sachs"? Have your kids read them.

Or you might need to read them to your kids. Because if Romney wins,
we might be a little low on teachers.




MATT LAUER, "TODAY": I`m curious about the word "envy." Do you
suggest that anyone who questions policies and practices of Wall Street and
financial institutions, anyone who has questions about the distribution of
wealth and power in this country is envious? Is it about jealousy or is it
about fairness?

ROMNEY: You know, I think it`s about envy. I think it`s about class
warfare. I think when you have a president encouraging the idea of
dividing America based on 99 percent versus 1 percent and those people have
been most successful will be in the 1 percent, you`ve opened up a whole new
wave of approach to this country, which is entirely inconsistent with the
concept of one nation under God.

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

ROMNEY: You know, I think it`s fine to talk about those things in
quiet rooms.


O`DONNELL: Joining me now in tonight`s quiet room segment, Timothy
Noah, the author of the new book, "The Great Divergence: America`s Growing
Inequality Crisis and What We Can Do About It."

Tim, before we get started on the book, my Twitter question for my
audience -- which of my guests tonight is related to a former "West Wing"
writer, do you want to answer that for them?

actually. I am the brother of your former colleague on "The West Wing,"
Peter Noah.

O`DONNELL: There you go, the Twitter people have their answer.

Tim, this notion of Romney`s that we really, we really shouldn`t be
talking about what you have written a book about, where could that possibly
come from? Of course, the tax structure is about income distribution.
There`s so much that government`s focus has been on for the better part of
a century on this issue of income distribution, and Romney doesn`t seem to
know that.

NOAH: Well, this issue is a real loser for the Republicans. They
keep trying to figure out a way to come at this. First they tried to deny
that the inequality trend existed. Then they tried to say, well, it`s
justified by the fact that upward mobility in the states is so much swifter
than elsewhere, which turns out to be not true. The U.S. lags most other
industrial democracies when it comes to mobility.

Finally, I think, they`ve just given up and said, let`s just not talk
about it at all. And when I hear talk about how sort of any discussion of
class constitutes class warfare, I think to myself -- geez, you know, these
people really don`t know what class warfare -- we had real class warfare in
the United States a hundred years ago, and, you know, there was bloodshed.
You know, there were killings. I mean, that`s warfare. This is

O`DONNELL: And we`ve also had much, much higher tax rates. I mean,
here you have Republicans today saying it`s class warfare. If you take
what is now the top income tax rate and you push it up by 4.5 percentage
points, they call that class warfare, if you push it up to 39 percent.

We had rates, even when Reagan was in office, that were much higher
than that.

NOAH: Oh, it`s preposterous. They were 70 percent when Reagan came
in, twice what they are today.

O`DONNELL: And they pushed them down to 50 percent, they pushed them
down below that. But then if you go back into -- I remember, you know,
when Babe Ruth was playing baseball, the top tax bracket cut in around $5
million. Not these $100,000 maximum -- you know, top tax brackets measured
in hundreds of thousands of dollars, where we are now.

What happened to all of that progressivity that we used to have in the
tax code, recognizing much, much higher incomes?

NOAH: Well, it`s interesting. Tax is actually a complicated
situation, because weirdly enough, the income tax is slightly more
progressive today than it was in 1979. Which is pretty amazing,
considering how far down the top marginal rates have come.

And that`s because the people at the lower end have been taken off the
tax rolls, which was a conservative idea to reward the working poor. Now,
of course, Republicans want to put all those people back on the tax rolls.

So the one good trend we`ve had in the midst of this growing income
inequality, Republicans want to eliminate. But, yes, I mean, we had a real
long period from about 1934 to 1979 when incomes in the United States were
growing more equal, not less equal, and there were a number of causes for
that, but it had a lot to do with government policy. It had a lot to do
with the rise of labor unions, and, you know, we had higher -- a growing
high school graduation rate, which leveled off in the 1970s. And, of
course, we had some serious regulation of Wall Street, which started to
deteriorate in the 1970s.

O`DONNELL: And we also used to believe in trying to, as much as
possible, pay for wars while we were raging them. During World War II, we
had wage and price controls in this can country, and FDR actually, and I
learned this from your book, this I did not know, FDR actually tried to
raise the top income tax rate to 100 percent.

NOAH: That`s right.

O`DONNELL: That was news to me, thanks to your book. Tell us about

NOAH: Yes, he had instituted the first minimum wage about a decade
before, and then during World War II, he said there should be a maximum
wage. I forget what the precise level was, but he said there was a point
above which the marginal rate should be 100 percent. Congress didn`t let
him do it, but the fact that a president would even raise such a notion
gives you some idea of how different the political environment was back

O`DONNELL: Yes, Congress didn`t let him do it, but they compromised,
in effect, at 94 percent, which became --

NOAH: That`s right.

O`DONNELL: Which became the top rate, up from 88. You know, FDR was
saying the top rate is 88, but now in this situation, in war, we should
really have 100 percent above, what was about, I believe, as I recall from
the book, somewhere around the equivalent of $350,000 today.

NOAH: I think that`s right. And that 90 -- you know, the rates
stayed, the top marginal rates stayed above 90 percent, not just through
World War II, but through the 1950s and until the tax cut in 1964. And
during those years, with a 90 percent top marginal tax rate, we had a level
of prosperity that we would kill for today.

O`DONNELL: And Henry Ford knew that the workers in his factory had to
make enough money to be able to buy the product that was rolling out of his
factory, in order for his business to grow and be as successful as he
dreamed of it being. What has happened to that understanding of consumer
demand being the real driver of our economy, being the real job creator of
our economy, and you can`t have consumer demand without significantly
better distributed middle class incomes.

NOAH: That`s right. Well, that idea has gone out the window. And
there`s very little concern for the welfare of middle and lower income
workers on the part of bosses. The unions, you know, union density was
about 40 percent back in the 1950s. It`s dwindled down in the private
sector to 7 percent. Only 7 percent of the workforce, private workforce,
is unionized today.

You know, there`s very little interest in what happens at the middle,
which is very ironic to me, because, you know, we hear an awful lot about
how the job creators at the top need to be incentivized. But there`s no
talk about why the middle income worker doesn`t need to be incentivized.
Middle incomes have been stagnant, actually declined slightly over the last
dozen years, and stagnant over the past 33 years, relative to the period

There`s very little concern about that. And you know, I`m worried
that workers at the median will feel no great motivation to improve their
productivity, as they have done spectacularly in the last decade. They
haven`t seen any benefit from it, personally. You know, where`s the

O`DONNELL: Timothy Noah, brother of Peter Noah, and columnist for the
"New Republic," and most importantly, the author of the new book that Mitt
Romney is hoping you cannot afford to buy, "The Great Divergence: America`s
Growing Inequality Crisis and What We Can Do About It" -- Timothy, thank
you very much for joining me tonight.

NOAH: Thank you, Lawrence.

O`DONNELL: Coming up, the Romney campaign uses a diner in Iowa to
stage a phony roundtable discussion and while they`re at it, the Romney
staff trashed the diner. You`ll hear from the owner of the diner and see
more video of Mitt Romney in his struggle to be human.

And in the "Rewrite" tonight, Barack Obama has been known to play a
game of horse on the basketball court and Mitt Romney owns a horse that may
be on its way to the Olympics, which once again raises, and we think
answers, the question, who`s the real American? That`s in tonight`s



O`DONNELL: The Republican Party continues to worship Ronald Reagan,
but that`s because most of the worshippers have no idea what Ronald Reagan
actually did as governor or president, like -- you know, raise taxes, as
well as cut taxes. They only remember the tax cutting.

Ronald Reagan would have been attacked in this year`s Republican
presidential primary as a tax-raising liberal from California. The myth of
Reagan is coming up.

And President Obama and Mitt Romney are in the "Rewrite" tonight. We
will examine each man`s chosen sport. President Obama`s favorite is the
purely American sport of basketball, invented in Massachusetts. Mitt
Romney prefers the ancient and profoundly un-American sport of dressage.
Guess who wins in tonight`s episode of who`s the real American?

That`s coming up.



SEN. HARRY REID (D), MAJORITY LEADER: Ronald Reagan would not put up
with what`s going on here today, because there`s no question that Ronald
Reagan, country came first, not elections.


O`DONNELL: In the spotlight tonight, Romney as Reagan. Earlier this
week, Jeb Bush questioned whether either his father, George H.W. Bush, or
Ronald Reagan, could get the Republican presidential nomination today,
saying, "back to my dad`s time and Ronald Reagan`s time, they got a lot of
stuff done with a lot of bipartisan support. Reagan would be criticized
for doing the things that he did."

Some Republicans took issue with those comments, including former
Minnesota Governor and current vice presidential contender Tim Pawlenty,
who called Mitt Romney Reagan-esque this morning on "MORNING JOE."


nominated Mitt Romney, or presumptively nominated Mitt Romney, who is in
the Reagan tradition. A conservative with a conservative record, governed
effectively in a blue state, working across the aisle, somebody who`s
produced results. So to look at that and just say, you know, the party
wouldn`t be capable of endorsing a Ronald Reagan-type figure today, I think
Mitt Romney is a Ronald Reagan-type figure.


O`DONNELL: Last night, Fox News` Charles Krauthammer hit back at Jeb
Bush`s comment, insisting that Ronald Reagan would be comfortable with
today`s Tea Party.


coherent set of ideas and policies. And Reagan had them and he pursued
them. And I think he would be very comfortable today with the Tea Party
and the Republican party. This is a return to Reaganism.


O`DONNELL: "Time" political columnist Joe Klein accused Krauthammer
of Reagan myth making, writing, "Reagan did not govern as a movement
conservative. He cut taxes, then raised them three times, including the
1982 bill that hit businesses and was, by percentage and constant dollars,
the largest tax increase in American history. He failed to cut the size of
government, but then he didn`t try very hard. He was a conservative, to be
sure, but more in rhetoric than reality."

Joining me now, Bruce Bartlett, who served as a senior policy analyst
in the Reagan White House and a deputy assistant secretary of the Treasury
during George H.W. Bush`s administration. He is now columnist for "The
Fiscal Times," a contributor for "the New York Times," and author of "The
Benefit and The Burden: Tax Reform, Why We Need It and What It Will Take."
Also joining us, Sam Stein, political editor and White House correspondent
for "Huffington Post."

Bruce, when I listen to Tim Pawlenty comparing Romney to Reagan, I
think in a way he`s on to something. He`s saying that in Massachusetts,
Romney governed in a kind of reasonable bipartisan way, where he got
support from the legislature of another party, and by the way, ended up
doing things in Massachusetts, like the health care bill, that the current
Republican party despises, just as Reagan as governor ended up doing
things, raising taxes at times, that the current Republican party would
attack him for, or would have attacked him for if he had been in this
Republican presidential primary this season.

BRUCE BARTLETT, "THE FISCAL TIMES": Well, I think that`s right,
except that that Mitt Romney, you know, was interred in the grave, you
know, four years ago, and is certainly long gone now. But it is certainly
true that Ronald Reagan was far more -- I don`t want to say liberal, but he
was certainly not in concrete on key issues. Even as governor, he signed
the largest state tax increase in American history, as governor.

And he signed an abortion bill, among other things. And of course he
did a lot of other things to cross the aisle on taxes, immigration, and
foreign policy, and a number of other issues.

O`DONNELL: And Bruce, take us back to the Reagan campaign, in the
primary. In the Republican primary, did he get attacked as a tax-raising
governor when he was running in the Republican primaries?

BARTLETT: I`m sure he must have, but I can`t offhand remember who was
running to his right in 1980. He had George H.W. Bush, of course, was his
principle competitor. But there`s no question that when Reagan first
talked about running, especially in the 1976, I think there were a number
of conservatives who had a lot of misgivings about whether he was really
conservative enough.

O`DONNELL: Sam Stein, we have Michael Steele and others allowing
publicly that, yes, Ronald Reagan would have trouble in today`s Republican
party. Is -- when you get Republicans in Washington actually speaking to
you off the record and frankly, do they allow that, yeah, Reagan would have
some real trouble in this version of the Republican presidential primary?

SAM STEIN, "HUFFINGTON POST": Yeah, because I don`t think there`s
much else to discuss on that front. I mean, it goes beyond the issue of
taxes, which Bruce has covered. There`s a quasi-famous video clip of
George H.W. Bush and Ronald Reagan debating in the 1980 primary. And
they`re talking about the subject of illegal immigration, and what to do
with children of illegal immigrants.

And the rhetoric they use is so open in comparison to today`s
Republican party that you have to scratch your head. They`re talking about
how to get better path to citizenship, what to do with respect to getting
these people into colleges and in-state tuition. And then you contrast
that with what the discussion was just a few months ago between Rick Perry
and Mitt Romney, and you think that these aren`t parties from the same

So, yes, when you look at the historical trends, it`s very obvious
that the Republican party has moved right. I think Thomas Mann and Norm
Ornstein, two eminent scholars from Washington, D.C., have written a whole
book on this.

O`DONNELL: Bruce, I want to read you something that Erick Erickson
said at about could Reagan get elected today. He said -- he
wrote, "anyone who says Ronald Reagan could not get the Republican
nomination in today`s Republican party most likely would not have voted for
Ronald Reagan in the Republican primaries of 1980. That includes Jeb

What`s your reaction to that?

STEIN: How does he know that?

BARTLETT: Well, I think Erick Erickson is an utter fool. Why anybody
pays any attention to him is a complete mystery to me. But I think one has
to remember, I mean, the world is a different place today than it was in
1980. We had different problems back then.

And this is one of the problems I have with many of today`s
Republicans, is they believe in cookie cutter policies. You should just do
the same thing, always, year in, year out, the same identical policies,
regardless of whether the economic conditions are the same. And I think
that that is where -- a key area where people simply don`t understand the

O`DONNELL: Sam Stein, we can, I think, also imagine that the Mitt
Romney of 1980 could not possibly have gotten nominated. The Mitt Romney
of 1994 could not have gotten nominated. The Mitt Romney of 2000 -- the
Mitt Romney who used to be pro-choice and so forth. So you could play this
game the other way, seeing how recently Mitt Romney`s positions were
absolutely impossible to clear in a Republican presidential --

STEIN: Keep in mind, in 1994, Ronald Reagan was too conservative for
Mitt Romney. He famously said he didn`t want to go back to Reagan/Bush.
But, obviously, there`s been an evolution since then. You know, the way
Mitt Romney governed, in the context of this conversation, was somewhat
similar to what we`re discussing about Reagan.

I mean, he did use tax increases -- they were called fees -- in
Massachusetts to help close the budget loophole. That is,, you know -- and
that`s caused him a lot of problems with his conservative base. And it`s
something that he`s generally shied away from talking about, because like
every other Republican on the stage, he`s said he wouldn`t vote for a debt
ceiling increase that was 10 to one spending cuts versus tax hikes.

So yes, the evolution has happened. It`s not just been from `94 to
now, it`s been from 2004 to now.

O`DONNELL: And Bruce, there`s a recklessness now in Republican
politics and in the politics of governing -- not just campaigning, but the
politics of governing for Republicans, where they`re willing to say, yeah,
we shouldn`t raise the debt ceiling, let`s risk default, all these kind of
things, which would have been absolutely inconceivable to Ronald Reagan,
wouldn`t it?

BARTLETT: Of course Ronald Reagan signed into law a number of
increases in the debt limit, and spoke -- there are statements he made as
president -- they`re quite eloquent -- in why that was necessary. And you
know, obviously there`s a lot of hypocrisy going on here.

But I do think that Ronald Reagan would be out of step with today`s
Republican party.

O`DONNELL: Bruce Bartlett and Sam Stein, thank you both for joining
me tonight.

STEIN: Thanks, Lawrence.

O`DONNELL: Coming up, Stephen Colbert, Mitt Romney and President
Obama are in tonight`s episode of Who`s The Real American? The categories
in tonight`s contest are sport and food. You will see Mitt Romney trying
to figure out what a doughnut is. That`s coming up.



DAVID LETTERMAN, "THE LATE SHOW": This is an announcement now about
the governor and marijuana. And look how it`s already being exploited.
Watch this.

UNIDENTIFIED MALE: New York Governor Andrew Cuomo has proposed
decriminalizing the private possession of small amounts of marijuana.
Andrew Cuomo, the right choice for president in 2012.

UNIDENTIFIED MALE: A message from Frito Lay, makers of Doritos,
Cheetos, Fritos, Tostitos, Fun Chips, Ruffles and Lay`s Potato Chips.



O`DONNELL: In tonight`s Rewrite, another episode of Who`s The Real
American? Tonight`s contestants are Barack Obama and Mitt Romney. And
tonight`s category is sport. The Romney sport dates back to 400 BC, with a
multinational heritage that isn`t even remotely American. It was invented
by the Greeks and given a French name, dressage.

And this is Mitt Romney we`re talking about, so he doesn`t actually
play the sport himself. He hires someone to do it for him. And that
someone rides the dressage horse that Mitt Romney owns, a horse that just
might be taking Mitt Romney back to the Olympics.


STEPHEN COLBERT, "THE COLBERT REPORT": The old Romney luck continues.
The Romney`s horse might go to the Olympics! Though one would imagine,
it`s going to be a long drive to London on top of their station wagon.

Now --


COLBERT: Their horse, Refalca (ph), is competing at the United States
Equestrian Federation National Dressage Championships in Gladstone, New
Jersey, as if you don`t know from your equestrian fantasy league. Folks,
this is exactly what Mitt needs. He`s had a little trouble relating to Joe
Six Pack. Just listen to him talking about basketball.


ROMNEY: I met a guy yesterday, seven feet tall. I figured he had to
be in sport, but he wasn`t in sport.




COLBERT: The tall man was not in sport. Neither bounce ball nor
oblong leather Zeppelin toss. Jim, show us Refalca at sport. Whoo! Whoo!
Whoo-hoo! Refalca, number one! Refalca, number one! Go, Refalca!

And folks -- perfect hair. And folks, lest you think the horse is
doing all the work, Mitt picks the music himself. At this year`s World
Cup, he chose a selection of songs from the soundtrack to "Rain Man."
Clearly, Mitt envies Rain Man`s ability to connect with people.

Folks, in support of Mitt Romney, I am making dressage the official
"Colbert Report" sport of the summer. So, kids -- so, nation, sing it with
me, the official seventh inning anthem of dressage.

Take me out to the horse ring, take me out to dressage. Buy me some
jodhpurs and a velvet hat. I don`t care if the orchestra`s flat. Let me
softly clap for the home horse. If he don`t win he`ll be glue. For it`s
one, two botched vaults you`re at the United States Equestrian National
Dressage Championship at Gladstone, New Jersey.

Play sport!


O`DONNELL: And Barack Obama`s sport is basketball, which was invented
in Springfield, Massachusetts, in 1891. All the rest of our sports are
modifications of sports invented elsewhere. Baseball obviously more from
cricket. American football more from soccer and rugby. And so tonight`s
winner of who`s the real American in the sport category is the man who
plays our mostly truly American sport, basketballer Barack Obama.


OBAMA: I may not make the first one, though. But I`ll make one



O`DONNELL: The next category in tonight`s Who`s the Real American
Contest is food. Here`s Mitt Romney trying to figure out the name of that
thing that we Americans call a doughnut.


ROMNEY: Garrett, would you see that one of those chocolate, uh -- uh,
those chocolate goodies finds its way into our lives.

UNIDENTIFIED MALE: These haven`t been approved for consumption like -

ROMNEY: Well, I`m going to be some testing on that one right there.


O`DONNELL: Well, that was Martian Mitt Romney at the Main Street Cafe
in Council Bluffs, Iowa, for a staged roundtable discussion last Friday.
Romney, who would never mistake a brioche for a croissant, may have lost
votes in the Main Street Cafe, because according to Diane Bauer (ph), the
owner of the cafe, the Romney staff broke stuff while setting up, including
a keepsake from her father.

She told a local TV station that Mitt Romney didn`t even bother to say
hello to her. When that story broke, Romney gave Bauer a call to try and
smooth things over.


DIANE BAUER, MAIN STREET CAFE: He responded, well, I`m sorry that
your tablecloths got ripped off, wadded up, and thrown in the back room.
And I took it as a mocking. Is that how he`s going to treat others? You
know, if he gets in office, is he going to be that way to us little people?
It just leaves you a bad taste. You don`t want to have them back.


O`DONNELL: Joining me now, someone I always want to have back,
Jonathan Capehart, "Washington Post" opinion writer and MSNBC political
analyst. Jonathan, it was one of those Romney robot moments, where he`s
staring at a doughnut and he just -- the man doesn`t know what it is,
Jonathan. How could that happen?

what it is, but realized that the word he was going to say would not be one
he should probably use as a presidential candidate, such as cruller or
eclair. How you forget doughnut is beyond me.

But, you know, look, he`s been on the campaign trail for a long time.
He`s there with people he doesn`t know. Maybe I`ll give him a little pass
on that. We all have those brain freezes every once in a while.

O`DONNELL: And you know, this is, of course, is a woman who runs her
cafe in Iowa, so she`s had presidential campaigns before.


O`DONNELL: She actually said she was expecting Romney to be like Rick
Perry, who she said -- and I`m going to quote her here -- "made a point of
stopping in the kitchen before he ever went to the other side to address
the public and the media, to thank us and introduce himself."

I mean, that is -- the basic politician knows this. And as Rick Perry
shows you, you do not have to be the smartest politician in America to know
that that`s your first move when you go into a place like that.

CAPEHART: Right. And the most courteous politician is the one who
does it. I mean, to this day, if you go to New York City, to any of the
big hotels there where President Clinton has ever been during his tenure as
president, they will all rave about him, because he always took the time to
shake everyone`s hand, take pictures, say hello. That`s what you do,
because you`re disrupting -- you`re disrupting their work.

And you know, they`re putting themselves aside so that you can make
your way through. The idea that Mitt Romney didn`t have time to say hello
to -- Diane is her name -- yes, Diane and her husband, Earl, to say hello
to them, to say thank you for allowing me in your business, for closing off
part of your business to allow me to hold this press availability, where I
won`t be able to remember the name of the confection that you`re selling,
is -- it`s really poor form.

You don`t want a Diane Bauer in Iowa or Michigan or Ohio or Florida or
Pennsylvania to have that idea of you, that you`re just this hoity-toity,
look down your noise kind of guy coming into your establishment and, you
know, treating you poorly.

O`DONNELL: And it`s not just her customers who might hear about it.
She was on TV news in Iowa. You know, pretty much half the state probably
saw her talking about this, which is much more effective than any super PAC
anti-Romney commercial.

CAPEHART: Right. Again, you don`t want a Diane Bauer in any -- in
Iowa, anywhere, quite frankly. But in Iowa or any swing state talking bad
about you. And especially when you`re a candidate who everyone is looking
at -- in your own party, views you as just this odd guy who they just
acquiesce and say, fine, we`ll make you the nominee. Sure, go ahead.

O`DONNELL: Jonathan Capehart, who knows a doughnut when he sees one,
thank you very much for joining me tonight, Jonathan.

CAPEHART: Thanks, Lawrence.

O`DONNELL: You can have THE LAST WORD online at our blog, And you can follow my Tweets @Lawrence, even the
Tweets I was doing during the show tonight.

"THE ED SHOW" is up next.


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