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'The Rachel Maddow Show' for Monday,October 8th, 2012

Read the transcript to the Monday show

THE RACHEL MADDOW SHOW
October 8, 2012

Guests: Dennis Lieberman, Tom Ritchie, Michele Flournoy


RACHEL MADDOW, HOST: That`s excellent. You can tell we`re getting
closer and closer to the election, as we more and more feel compelled to
get out into the country and report from other places. I am also not in my
home studio tonight, Ed.

Thanks a lot, man. I appreciate it.

SCHULTZ: Thank you, Rachel.

MADDOW: Thanks to you at home for joining us this hour.

If things do look a little bit different tonight, it`s because we are
broadcasting not from our New York studio, but from California. I did a
book event in Santa Barbara yesterday for my book "Drift." I did that at
the Arlington Theater. I spoke to a room of about 2,000 people, which is
unnerving, if you`re not used to doing that sort of thing.

And then the Q&A, after I talked about my book, I got asked a question
at this event about the political impact of the first presidential debate.
And the way it went seems to me important in terms of understanding the
temperature of the country on the presidential race right now.

Obviously, most everybody agrees that the first debate was won quite
handedly by the Republican challenger Mitt Romney and lost very much by
President Obama. But yesterday in Santa Barbara, I told this giant room
full of people in this theater when asked about this subject that as
clearly and as cleanly as Mr. Romney won the debate, it still seems
politically important that Mr. Romney did not win the debate in a way that
produced a single sound byte.

I mean, yes, 60 million people watched Mr. Romney win the debate
overall. But for the 240 or so million American who did not watch that
debate, who might conceivably have been curious about how it went, there
was no single sound byte to take away from the debate to remember and
repeat as the reason that Mr. Romney won.

And so, I sat at this event that even though Romney won that night,
won on debate night, there wasn`t any day two story that could explain to
people why it was that he won. I said, really, thinking about it -- the
only line, the single line that survived the debate, the only line that I
think anybody can remember from the debate, I said this to a room of 2,000
people. There`s one line that everybody can remember from that debate and
that was -- and everybody in that theater simultaneously said back to me
"Big Bird."

Two thousand people all at once "Big Bird." The morning after the
debate, "The New York Times" reports today that the Romney campaign
surprised Democrats with the decision not to hold a big post-debate rally
for Mr. Romney. The Romney campaign did not try to capitalize on Mr.
Romney`s triumph in the debate by doing a big event the next morning.

So, the next day news coverage of the results of that late night
debate, the first presidential debate did not include follow up, post-
debate footage of Mr. Romney. But they did include footage of President
Obama. President Obama on the stump, the next morning, looking
comparatively strong and reflecting on his rather sorry performance with a
bit of a grin and hitting Mr. Romney on the one line that everybody
remembers from the debate which is Big Bird.

The Obama campaign, in fact, dispatched a new, very tall, very yellow-
feathered surrogate to follow the Romney campaign around and remind voters
of that one memorable line from the debate. Mitt Romney saying he would
fire Big Bird.

And ever since, President Obama has been out there enjoying the
campaign`s Big Bird moment.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When he was asked what
he`d actually do to cut spending, he said he`d go after public television.
So, for all you moms and kids out there, don`t worry, somebody is finally
cracking down on Big Bird -- cracking down on him. Elmo has made a run for
the border.

Governor Romney plans to let Wall Street run wild again, but he`s
bringing the hammer down on Sesame Street.

(END VIDEO CLIP)

MADDOW: Although Mitt Romney clearly won the debate, the Obama
campaign right away on Thursday managed to crystallize the public`s funny
bone -- a cross between a funny bone and a hot nerve reaction to defend Big
Bird and company. That was Thursday.

Then on Friday, the Obama campaign got that huge jobs report with
unemployment falling below 8 percent for the first time in the Obama
presidency. Unemployment above 8 percent has been a favorite talking point
for Mitt Romney and that talking point on Friday went kaput.

And more importantly, the country has now had the best election year
improvement in the unemployment numbers since Ronald Reagan ran for
reelection in 1984. Remember the whole "Morning in America" thing, that`s
what it was about.

So Mitt Romney may have won the debate on Wednesday night, but
President Obama won the post-debate. At least it seemed that way for these
last few days.

And then today, back down to Earth for Democrats. When we started
getting in the first solid round of polling that reflected the results of
the debate. And however well the Obama campaign did in managing the post-
debate spin and the post-debate campaigning, the poll numbers clearly have
now shifted in Mitt Romney`s favor.

In the new national poll out today from the Pew Research Center,
Governor Romney is now tied with the president. Romney had trailed in this
particular survey by nine points before the debate. So that is a big shift
toward Mitt Romney and away from Barack Obama in that national poll.

Likewise in the new national Gallup poll, Mr. Romney polled even with
the president after the debate, erasing what have been a 5-point advantage
for the president.

We also have new polls tonight from all-important swing states and
near swing states, polls that include reaction to the first debate. In
swing state Wisconsin today, the president leads by just two points.
That`s according to a relatively left-leaning poll. And that showed --
that particular poll previously showed the president having a 7-point lead
before the debate. But now, it`s down to two.

In Colorado, in one right-leaning poll, Romney is now up by three
points. The same survey had showed Mr. Romney losing by five before the
debate. Now, he`s up by three.

In Virginia, sort of lefty leaning poll shows the president ahead by
three in Virginia. That same poll had the president`s lead at 5 points
before the debate. So, that shows the president`s lead shrinking.

In Michigan, it`s now Barack Obama by just 3 points. The president
had led by 10 last month. Now it`s down to three.

In Iowa today, a poll on the right gives the president an edge of 2
points. Now, interestingly, that poll in Iowa shows a gain for Mr. Obama,
a 5-point gain.

In Florida today, that same company`s poll shows a 4-point swing
toward Mr. Romney. They`re now putting Mr. Romney up by two points in
Florida.

So, the bounce, the counter-bounce, the major fall, the minor lift.
However you rattle the numbers loose, this race now looks tighter than Dan
Rather and that staying about a tick that nobody understands. As the
overall national polling shifts and the swing state races shift with them,
the state where the Romney campaign is hoping for the biggest shift of all
is in Ohio.

In modern political history, Ohio has been the path to the presidency
for Republican candidates. If Republican candidates win Ohio, they win the
White House. If Mitt Romney doesn`t win Ohio, he honestly has to put
together a hard to imagine combination of Colorado and Virginia and Florida
and, and, and.

But if he wins Ohio, he has a much clearer shot at actually winning
the White House.

The deadline for registering to vote in this year`s presidential
election for Ohio is tomorrow. They started voting in Ohio last week with
Democrats camping out so they could cast votes on the very first day of
early voting.

And yet in Ohio, the overall rules for voting right now are still kind
of a mess. They are already voting, but we still don`t know what the rules
are for voting in Ohio. The rules are not set.

Look at the headline today in the "Cincinnati Enquirer." Quote, "As
November 6th nears, Ohio rules still not set." This is kind of remarkable,
right? Ohio`s Republican secretary of state John Husted says voting
procedures should be, quote, "locked down" months before Election Day,
especially if the rules or the laws have changed since the last election,
which the paper points out they have in Ohio.

Quoting Secretary Husted, "We`re just trying to run an election here.
Tell us what the rules are and settle it earlier." He says, quote, "The
later you make a decision, the more likely it is to cause a problem.
Consistency matters in how you run an election. Consistency and clarity.
Time is of the essence and confusion is dangerous."

That`s what Ohio`s Republican secretary of state says when he`s
talking about voting rights and elections and democracy in his state.
We`re just trying to run an election, he says. He says it`s already late
in the game by his own timetable.

He`s on the record saying those things when he`s trying to pressure
the courts into ruling his way on matters of dispute in Ohio voting. But
when it comes to the issue of early voting, when it comes to the evident
desire of Ohio voters, particularly Ohio Democratic voters to head for the
polls and bank their vote before election day comes, when it comes to this
question about early voting, which the courts have already settled,
Secretary Husted in Ohio has decided, you know, maybe he feels urgency
about some other things. But this, he`s going to kick this down the road.

On Friday, a federal court, as you know, ruled that Ohio voters could
vote early right up until Election Day. The court ruled Ohio voters could
cast ballots on that final Saturday and Sunday and Monday before Election
Day when nearly 100,000 Ohio voters voted last time around.

But now, Ohio voters are waiting to see whether their Republican
secretary of state, their top elections official, John Husted, is going to
appeal that decision for a second time. He`s apparently in no rush on
this. He released a statement on Friday saying he would do nothing that
day and he would do nothing over the weekend.

Today, Monday, he appears not to be doing anything either. Given an
answer by the court about early voting, John Husted has decided just to
kick it down the road. I don`t know about this one. We`ll let it ride.

If Secretary Husted decides to appeal, that will push the ultimate
resolution of when you get to vote in Ohio. It will push that resolution
even closer to Election Day. We`re already inside a month.

I mean, he could just accept Friday`s decision and establish statewide
early voting hours. But, you know, why the rush? Seriously, the election
is still almost a month away. I have my hair to wash and stuff.

By his own admission, the later you change the rules before an
election, the more pressure that puts on local elections officials to
accommodate those rules. They have to publicize the hours, they have to
staff the polls, they have to have the machines ready -- everybody has to
be trained. The voters have to know when and where they can vote. That`s
the job of the elections board, right?

Ohio has had early voting for everyone and every election since 2005.
So, the secretary of state was already trying to get them to change from
something they had been doing. Now, he`s making it so they won`t know what
they will be able to do and whether they will go back to the way it used to
work since 2005, or whether they`re going to have shorter hours and fewer
days. He`s now making it so that the local elections boards will not know
any of those things until as late as possible, putting that burden on
county election officials now less than a month before the election.

This is nuts. I mean, this has not been a normal year for Ohio
elections boards. Ohio Republicans first tried to cut early voting in
half.

When they failed at that, they decided to cut off those last three
days of early voting. The same three days when African-American churches
like to carpool down to the polling place, their Souls to the Polls
campaign, the Sunday before the election. Nearly 100,000 people voted in
those last three days of 2008.

A new study just published today shows that African-Americans in the
Cleveland area were 26 times more likely to cast an early in person ballot
than white voters. That`s not a typo -- 26 times more likely.

It was with that very recent history in mind that two elections
officials in Montgomery County, Ohio, voted to open the polls on the
weekend right through the Election Day, on the weekend before, right
through Election Day. At the time the state had approved expanded weekend
voting in Republican counties, but not in the counties that lean
Democratic. But these two officials decided that weekend voting would be
good for their county, for their Democratic-leaning county too.

And for that, Ohio`s Republican Secretary of State John Husted fired
them effective immediately. He kicked them off their county board of
elections.

And as of last week, Mr. Husted had once again kicked the question he
said he so fervently desires to settle, he kicked it down the road again.
Why rush? Why try to avoid confusion? You know what confusion looks like
on Election Day, don`t you? Long, long lines.

Joining us now are: Dennis Lieberman and Thomas Ritchie, the
Democratic members of the Montgomery County, Ohio board of elections,
former members because they were fired by Secretary of State John Husted
for wanting to do in their county what a federal court now says Ohio
counties must be allowed to do.

Mr. Lieberman and Mr. Ritchie, thank you both for being here. It`s
nice to have you back.

DENNIS LIEBERMAN (D), FORMER OHIO ELECTIONS OFFICIAL: Thank you.

TOM RITCHIE, SR. (D), FORMER OHIO ELECTIONS OFFICIAL: Thank you.

MADDOW: Mr. Lieberman, let me put it to you, chime in if I have
missed anything here. In my description about what`s been happening there
in Ohio, I know you guys follow it even closer than we do. Did I get
anything wrong there or did I confuse any of the details there?

LIEBERMAN: No, I think you got most of it pretty much correct. We
are still fighting these fights. We have some victories, some important
victories from the United States District Court and then most recently from
the Sixth Circuit Court of Appeals, which affirmed it.

And we`re just waiting to set the hours on the weekend before Election
Day so that we can get everybody down there and get everybody to vote.

MADDOW: With this delay --

(CROSSTALK)

MADDOW: Sorry, go ahead. I didn`t mean to interrupt you there, sir.

RITCHIE: No, I agreed with Dennis. I think it`s very critical for us
to get folks to the poll and do it as soon as we can, and try to forego any
of the delays that`s been planned by people.

MADDOW: Well, with this delay in responding to the federal ruling
here, we have the federal ruling on Friday. We got immediately got a
response from the secretary of state saying he wasn`t going to respond that
day. He wasn`t going to respond either day over the weekend. And he
didn`t respond today either.

So, he`s pushing the decision of whether or not this will be a settled
matter or not, further and further, and closer and closer toward Election
Day.

Am I right to suppose that a lack of clarity over when people are
going to be allowed to vote is the sort of thing that can create both
confusion at the county level and potentially something that can translate
into longer lines and sort of chaos at the polling place? Is it right to
connect those two things?

RITCHIE: I think you`re absolutely right to connect those two.

LIEBERMAN: You know, what we have -- what we have seen is that when
there`s a lot of confusion relating to voting hours or when people can
vote, they just stay at home because they don`t know what to do. And I
really think that this is by design, frankly.

I mean, after all, it didn`t take Mr. Husted a weekend to decide to
fire us when we voted for early voting. Within two hours, we were
suspended.

So I know he`s capable of making some quick decisions.

MADDOW: Based on this court ruling on Friday, one of the things that
I have been trying to figure out, if it`s a possible outcome of this, is
something that Secretary Husted tried to sort of arrange before, which is
that for a time in Ohio, it looked we were going to get more early voting
hours, night time hours, more weekend hours, for example, in Republican-
leaning counties than we were going to get in Democratic-leaning counties.

Do either of you look at this ruling from this judge, look at the lack
of response from the secretary of state in Ohio and think that it`s
possible one outcome we could get here is that different counties are going
to have different provisions in terms of when people can vote and how many
early voting days there are?

LIEBERMAN: Yes. I mean, I think that that is a possible outcome,
but, you know, there`s a real easy way for Mr. Husted to deal with this.
And that is to instead of breaking those ties in the major urban areas,
which is what he was doing, in favor of no early voting or in favor of
limited hours, instead of doing that, break the ties the other way.

Make it so that everybody has open hours, everybody has early voting
on the weekends, and make it so that people can come and have access to
voting. That`s all he has to do. If he wants to make it uniform? Great.
Make it uniform so that everybody has that chance to vote. Don`t make it
uniform so that you limit people.

MADDOW: Dennis Lieberman and Thomas Ritchie, former Democratic
members from Montgomery County, Ohio Board of Elections, before the
secretary of state took the jobs. Gentlemen, thank you for your time
tonight. I have a feeling we`ll be talking to you again as these fuzzy
rules continue to unfold in Ohio closer and closer to election night.
Thank you it, gentlemen. I appreciate your time.

RITCHIE: Thank you.

LIEBERMAN: Thank you very much.

MADDOW: Lots still to come tonight, including a big deal get for us
for the interview, which I`m very excited about. I`ll tell you about that
in a moment.

Plus, the best worst story about gasoline you have heard since the
last time you heard something truly amazing about gasoline.

We`ve got a lot to go through on tonight`s show. Lots to come. Stay
with us.

(COMMERCIAL BREAK)

MADDOW: In 2008, the John McCain campaign produced a big package of
opposition research on Mitt Romney. John McCain won the Republican
nomination fight against Mr. Romney, thereby winning the right to lose in
the general election to Barack Obama, right?

But earlier this year, when Mitt Romney was running for the Republican
nomination for the second time, so he could earn the right to run against
Barack Obama, earlier this year, the McCain campaign`s whole opposition
research treasure trove against Mitt Romney from the last election found
its way on to the interview. Andrew Kaczynski at BuzzFeed.com found the
ample research against Romney that the McCain campaign put together and he
published it from beginning to end.

It was essentially a how-to guide for running against Mitt Romney.
All of his observed weaknesses, his inconsistencies, his politically
disadvantageous statements on the record.

For people interested in politics and the political prospects of Mitt
Romney, it was a bit of a gold mine, right? There were huge sections on
Mitt Romney at Bain Capital, buying up companies and then gutting them for
his own personal profit. Ten pages documenting his varied and many stances
on abortion rights.

And there was this bit: gun control -- gun control in the top hits
section. Remember, this is relativity straight forward opposition research
from one of Mitt Romney`s fellow Republicans. This is research that the
John McCain campaign put together to use against Mitt Romney when they were
competing in the Republican primary.

So, it says things like this. In 1994, when Mitt Romney first ran for
Senate, he backed the Brady Bill and the assault weapons ban. As governor
of Massachusetts, Mitt Romney upped the cost of gun licenses four-fold and
he promised on the campaign trail to not chip away at gun laws.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: We do have tough gun laws in
Massachusetts. I support them. I won`t chip away at them.

(END VIDEO CLIP)

MADDOW: And he did not. In 2004, Governor Romney, in fact, signed
the permanent assault weapons ban in Massachusetts.

Then Mitt Romney decided to run for president. He started prepping
himself for the Republican presidential primary and then, of course, things
got hilarious on the subject of guns.

Mr. Romney said in a virtual debate with "The Boston Globe," quote, "I
have a gun of my own. I go hunting myself." To which someone in the room
replied, and I quote, "Excuse me, but isn`t that your son Josh`s gun?"
Yes, yes, it was.

Out on the campaign trail, Mr. Romney touted his Second Amendment bona
fides by saying he was a lifetime member of the NRA. He would brag about
that. That was sort of true. He joined the NRA as a lifetime member in
August 2006, just before announcing his presidential run.

You see, lifetime isn`t the same thing as lifelong when it comes to
membership in the NRA. You too could become a lifetime member of the NRA
right now, simply by giving them 1,000 bucks.

When asked about his very recent membership that he was calling a
lifetime membership, Mr. Romney explained, quote, "I`m after the NRA`s
endorsement," in other words -- I`m running for office for Pete`s sake.

Mitt Romney wasn`t just after the NRA`s endorsement in the 2008
Republican presidential primary. He was also after the NRA`s endorsement
retroactively for a previous political campaign. Watch.

(BEGIN VIDEO CLIP)

ROMNEY: I also was pleased to have the support of the NRA when I ran
for governor. I sought it. I seek it now. I`d love to have their
support.

(END VIDEO CLIP)

MADDOW: Yes, Mr. Romney`s campaign spokesman later had to clarify.
Actually, quote, "The NRA did not endorse him in the 2002 campaign."

So in the `08 Republican primary, he owned a gun, only he didn`t. It
was his son`s. Mitt Romney proclaimed himself a lifetime member of the NRA
for a matter of months. Mr. Romney said he was once endorsed for governor
by the NRA, only he wasn`t.

And then there was a little issue about whether or not he was a hunter
and if so, what kind.

(BEGIN VIDEO CLIP)

ROMNEY: I`m not a big game hunter. I made it very clear. I`ve
always been, if you will a rodent and rabbit hunter, all right? Small
varmints, if you will. I began when I was 15 or so, and have hunted those
kinds of varmints since then. More than two times, I also hunted quail in
Georgia.

It`s not really big game hunting, if you will. It`s not deer and
large animals, but I have hunted a number of times, various types of small
rodents.

(END VIDEO CLIP)

MADDOW: Let me save you the trouble of looking up. The last time
somebody used the word varmint on the screen on which you are watching me
right now is the last time you watched "Caddyshack". It was Carl and
caddyshack and his primary characteristic in that movie was that he was not
qualified for his job.

And yet the National Rifle Association, the NRA, which is supposed to
be so principled on gun rights, principled to the exclusion of all other
political considerations, the NRA last week endorsed Mitt Romney for
president.

Why did they wait so long? I don`t know. But they did. But they
endorsed Mitt Romney despite Mitt Romney`s actual record on guns, and his
previous statements on gun policy.

They are still delighted to endorse him. And more importantly, to run
this it new ad in four swing states criticizing President Obama for being
just terrible on gun rights.

What has President Obama done that`s so terrible? What anti-gun laws
has President Obama passed?

Precisely none. Zero. President Obama`s actual record on guns as
president is that you can now carry guns on Amtrak trains and in national
parks. And that`s the guy who did not get the endorsement of the NRA.
This guy did.

(BEGIN VIDEO CLIP)

ROMNEY: I don`t line up 100 percent with the NRA. I don`t see eye to
eye with the NRA in every issue.

(END VIDEO CLIP)

MADDOW: The NRA is not looking to honestly compare the two
candidate`s records on their one and only issue of gun rights, right? The
NRA just wants the Republican. That`s what they want. That is why they
exist. They are a Republican-interest group and describe them any other
way is to play into their spin.

Their idea about how to advance their own interests is to get a
Republican elected to office. And whatever you think about them in terms
of its effectiveness on Republican politics, frankly, that stinks for
people who really do care about gun policy because they have the worst
supposed advocates ever.

(COMMERCIAL BREAK)

MADDOW: Hey, the interview tonight responding to Mitt Romney`s big
foreign policy speech today, the interview tonight is the highest ranking
woman in the history of the Pentagon. Very excited for this interview.
That`s straight ahead. Stay with us.

(COMMERCIAL BREAK)

MADDOW: OK. Chart imitates life. Look at this -- this is what we
have been spending on our military over time. This is the base budget for
the Pentagon. The Web site of "Foreign Policy" magazine posted this today.

The first spike there, that`s military spending going up, going way up
for the Korean War and then you see it comes back down again. The second
spike, that`s military spending going way up for the Vietnam War and then
it comes back down again. The third spike, that`s the Cold War, giant
arm`s race buildup and then, of course, the Soviet Union starts to collapse
into 1989 into 1991, and our spending -- our post-Cold War spending comes
back down.

Then you get the terrorist attack in September 2001 and the spending
goes back up again.

Again, the reason this does not show e it going through the roof
between 2001 and 2010, which it did, is because for the whole Bush
administration, they did not count the spending on the wars in Iraq and
Afghanistan as if it were defense spending. They did it as an emergency.

So this is just the base defense budget. This just shows how the base
defense budget went up after 9/11, not including that emergency spending on
Iraq and Afghanistan.

Now, here`s the amazing thing. Watch this. So this is where our
spending is now, OK? That`s what the blue line means. If we were to let
our spending drop like we did after the end of the Cold War, our spending
would look like this.

OK. Now, you know the sequester that you`ve been hearing about, with
all those draconian defense cuts that all the hawks are saying would be so
awful, this is what our spending on the military would be like with the
sequester. That`s the purple line there.

President Obama`s plan, what the Pentagon and President Obama have
agreed should happen and what their plan is if President Obama gets a
second term is this line -- to have military spending to have go like that.
The third one there in the little stack, essentially setting the spending
levels we have got now as a new normal, even though he keeps spending going
slightly up over time.

Now, check this out. People say, oh, there`s no difference between
the candidates. There`s no real difference, but maybe the Republicans
would be better for the deficit. Maybe the Republicans would spend less
than the Democrats or something.

Check this out. This is what Mitt Romney is proposing for spending on
the military. Tada!

People say there`s no real difference between the candidates? Holy
mackerel! When you`re talking about the biggest pile of money in the whole
world, the largest amount of discretionary money spent on anything by our
government -- boy, howdy, is there a difference here. Boy, howdy, does
this election matter.

But for a guy who wants to be thought of as cheap, as thrifty, for a
guy who wants his campaign to be thought of as tough on spending, to be
proposing that radical a spike in a pile of money that`s already
unimaginably enormous, to get us back to Korean War levels of spending and
then some, he must really have some big idea that he`s really committed to,
to justify that. To justify such a radical and expensive change in course
for the country.

He must, right? This must be something he knows a lot about and cares
a lot about. Right?

(BEGIN VIDEO CLIP)

ROMNEY: About our commitment to our military effort in terms of
building a military that`s prepared for the eventualities of a future
that`s hard to predict. I mean, I -- back in 2008 during the presidential
debates, there was no discussion of terrorism.

UNIDENTIFIED MALE: No.

ROMNEY: And yet a year later, the world was changed. So it`s very
difficult to predict precisely what will develop in the world.

(END VIDEO CLIP)

MADDOW: Hold on. That was Mitt Romney today speaking to a roundtable
of retired generals after his big foreign policy speech today. Mr. Romney
is telling the retired generals in the 2008 presidential debates -- I`m
quoting him directly -- "back in 2008 during the debates, there was no
discussion of terrorism."

What is he talking about?

(BEGIN VIDEO CLIPS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The war on terrorism
started in Afghanistan and it needs to end there had.

SEN. JOHN MCCAIN (R), ARIZONA: My friend, some of this $700 billion
ends up in the hands of terrorist organizations.

OBAMA: The central front on terrorism.

MCCAIN: A signal from a terrorist.

OBAMA: The possibility of nuclear weapons falling into the hands of
terrorists.

MCCAIN: Preventing the spread of terrorism.

OBAMA: The war on terrorism. The drug trafficking that`s funding
terrorism.

MCCAIN: A sponsor of terror.

OBAMA: Dealing with critical issues like terrorism.

(END VIDEO CLIPS)

MADDOW: Mitt Romney today after his big foreign policy speech told a
room full of retired admirals and generals that all never happened, that
there was no discussion of terrorism in the 2008 presidential debates and
that makes no sense at all.

Mitt Romney today in his big foreign policy speech said that President
Obama has not signed any free trade agreements in the past four years.

(BEGIN VIDEO CLIP)

ROMNEY: The president has not signed one new free trade agreement in
the past four years.

(END VIDEO CLIP)

MADDOW: With respect to Romney, that also makes no sense unless Mr.
Romney is contending that when we all thought President Obama was, in fact,
signing free trade agreements with South Korea and Colombia and Panama,
maybe he`s contending that the president secretly wasn`t doing that at all
and he was signing something else and duping us all?

Mr. Romney also in his speech today criticized President Obama for
only having hope that things will get better in the Middle East, for only
having hope, but not having a strategy to make that so.

(BEGIN VIDEO CLIP)

ROMNEY: I know the president hopes for a safer, freer and more
prosperous Middle East allied with us. I share this hope. But hope is not
a strategy.

(END VIDEO CLIP)

MADDOW: Hope is not a strategy.

Remember what Mitt Romney told his donors was going to be his strategy
in the Middle East?

(BEGIN VIDEO CLIP)

ROMNEY: You hope for some degree of stability, but you recognize that
this is going to remain an unsolved problem. And we kick the ball down the
field and hope that ultimately, somehow, something will happen and resolve
it.

(END VIDEO CLIP)

MADDOW: Today, he gives a speech on how hope cannot be the strategy
in the Middle East. Hope explicitly is his strategy in the Middle East,
unless kicking the ball down the field is something way more specific than
I think it is.

At least when he`s speaking behind closed doors, he admits the only
thing he`s got to offer in the Middle East is hope and can-kicking.

Listen, Mr. Romney has never really had a firm grasp on basic foreign
policy stuff. The last time he ran for president, he said, "It was the
right decision to go into Iraq. I supported it at the time. I support it
now."

Then this past December, he said, of course, we should not have gone
into Iraq knowing what we know now.

Today, he said we shouldn`t have left Iraq. That ending the war in
Iraq was too abrupt. Eight years into that war, he thought the two and a
half yearlong process of ending that war was too abrupt.

He`s had a tough time deciding whether he`s for or against the
timeline for withdrawing troops from Afghanistan. Today on what was build
as this major foreign policy address from Mr. Romney, he waited until the
37th paragraph of his 46-paragraph speech to even mention the war in
Afghanistan.

More importantly, when he finally got there, in his five-sentence
statement on the war, he came out both for and against a timeline for
leaving, saying he would get U.S. troop out of Afghanistan by the end of
2014, but that President Obama`s plan to do exactly the same thing, that`s
what he called a politically timed retreat -- a politically-timed retreat
that he`s also going to follow.

Listen, this is not this man`s forte. This is not what he has ever
done in his life. Nor is it what anyone thinks he does well.

But what he`s saying he will do on the subject of the military is
mathematically startling in its enormity. Look what he`s proposing to do.
Particularly for a candidate who seems to have the loosest grasp on the
basics of this subject on which he is proposing such a radical change.

Year 12 of the war in Afghanistan starts this week. It`s the worst
birthday present ever, right? But what`s even harder to grasp than this
war going on this long is that the presidency of a country that`s been
waging a war, that`s been going on that long, that presidency is being
contested without one side even bothering to come up with a position on
that war.

Mr. Romney`s top foreign policy advisors told David Sanger for a
startling article in "The New York Times" today that they are not even sure
Mr. Romney reads the policy papers that his own foreign policy advisers
prepare for him. They said that he just doesn`t seem that engaged or
interested on the subject of foreign policy at all. They said that he has
no enthusiasm for the subject and that even they, Mr. Romney`s own top
foreign policy advisers, have no idea what he would do about foreign policy
if he were elected president.

Has there ever before in American history been a presidential campaign
where one side just forfeited on this subject? Year 12 of the longest war
in American history is starting this week. The president`s Afghanistan war
plans are really hard to explain, let alone to square with public opinion.
This really ought to be a foreign policy election.

But on what is supposed to be Mitt Romney`s big foreign policy day
today, it has never been more clear that it really, truly, truly is not.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROMNEY: Drones and modern instruments of war are important tools in
our fight, but they are no substitute for a national security strategy for
the Middle East. I`ll restore the permanent presence of aircraft carrier
task forces in both the eastern Mediterranean and the Gulf. I`ll restore
our Navy to the size needed to fulfill our missions by building 15 ships
per year, including three submarines.

The route to war and to potential attacks here at home is a
politically-timed retreat that abandons the Afghan people to the same
extremists who ravaged their country and use it to launch the attacks of
9/11. I`ll evaluate conditions on the ground and weigh the best advice of
our military commanders and I will affirm that my duty is not to protect my
political prospects but to protect the security of the nation.

(END VIDEO CLIP)

MADDOW: Former Massachusetts Governor Mitt Romney today giving what
his campaign described as a major foreign policy address. Those remarks
were some of the specifics in that speech, or at least a close
approximation of the specifics.

Joining us now for the interview is Michele Flournoy. She`s the
former undersecretary of defense for policy. She`s now co-chair of the
National Security Advisory Committee to President Obama`s reelection
campaign.

Ms. Flournoy, thanks very much for your time. I`ve been really
looking forward to talking to you about this.

MICHELE FLOURNOY, FORMER DEFENSE UNDERSECRETARY FOR POLICY: Very
happy to be here. Thanks.

MADDOW: Mr. Romney`s foreign policy address was titled "The Mantle of
Leadership." He tried to cast President Obama as weak, saying that in the
Middle East, the risk of conflict in the region is higher now than when the
president took office. What`s your assessment of that claim? What`s your
reaction to that?

FLOURNOY: Well, I think the president`s record speaks for itself. I
mean, this is a president who has been very -- very good at doing what he
actually says. He said he would bring us out of Iraq responsibly, he did
that. He said he would refocus the fight on al Qaeda, he`s done that. He
said he would chart a transition course in Afghanistan to bring our troops
home in 2014, and he`s done that.

So I think, you know, when you think about what this speech needed to
do for Mitt Romney, it needed to do two things. One is to be clear that he
articulates some kind of vision, indicate that he has some kind of compass
on these issues. And secondly, to clarify if he has differences with the
president, exactly what would he do differently as commander-in-chief.

And I don`t think he passed the test on either count.

MADDOW: Specifically, you mention the issue of Iraq. One of the
things that I wonder a lot about and one of reasons that I sort of hope for
a revival of the Republican Party`s confidence on the issue of foreign
policy is because I`m not sure what the lessons learned are for us as a
country of the war in Iraq. Mr. Romney was for the war in Iraq although he
later said in retrospect he would have been against it. He famously said
that he thought it was possible that Saddam Hussein had hidden his weapons
of mass destruction in Syria. I mean, he`s had some -- he`s had some
difficulty with the basic facts of that.

But I wonder with Mr. Romney today saying that we shouldn`t have left
Iraq, that we left Iraq precipitously, that it was too abrupt that we`d be
better off if the war in Iraq were still going on and American troops were
still there.

I wonder if you feel like there is any sort of foreign policy or
military foreign consensus about what we should have learned from Iraq,
about what we won`t do as a country because of what we learned with the
Iraq war.

FLOURNOY: Well, I think there should be a consensus because I think a
lot of the lessons are very clear. I think the first Bush administration
rushed into war based on intelligence that turned out to be wrong, to go
after weapons of mass destruction that didn`t exist and ended up occupying
a country without having thought through a strategy, without having a plan,
and finding ourselves -- got ourselves deeper into the middle of an
insurgency and a counter-insurgency campaign that cost us thousands of
lives and, you know, put America`s blood and treasure on the line for a
cause that was really in the end questionable.

I think when President Obama came in, he was very clear that he wanted
to responsibly end that war. And he did that. The discussion here -- the
question of whether we should have left troops -- I mean, my question to
Romney would have been why, and under what conditions?

The president in our negotiations with the Iraqis, the Iraqis made
clear that they were not willing to provide legal protections for our
troops to stay even as trainers on a long-term basis. And so that`s not --
those are not conditions under which you could actually leave troops, leave
them unprotected, if you will.

So, you know, I think it`s a great rhetoric, but you wonder what is
really his substantive position at the end of the day on these issues.

MADDOW: I highlighted just a moment ago that the proposal that Mr.
Romney is making for military spending, for increased military spending,
he`s proposing a dramatic increase in military spending. And the president
frequently charges that that is additional spending that the Pentagon does
not want.

FLOURNOY: That`s right.

MADDOW: What does that mean and why wouldn`t any part of government,
even the Pentagon, want additional money that a politician wanted to dump
on them?

FLOURNOY: I think the point is, first, there`s no strategy behind the
Romney plan. He`s arbitrarily picked a percentage of GDP, 4 percent. And
he said that`s what our military spending should be.

But there`s no strategy driving that number, there`s no stated
military requirements driving that number, there`s no threat assessment
driving that number. It is simply throw a mark on the wall because it
sounds good and it sounds strong.

But the second question is, you know, how would you pay for that?

MADDOW: Yes.

FLOURNOY: Especially if you`re not putting revenues on the table. If
you`re part of the Republican consensus that says no new taxes even for the
wealthiest Americans, how in the world do you pay for that, and what does
that 4 percent of GDP towards defense that we don`t need, what does that do
to our deficit? I mean, after all, the foundation of our national security
is our economic security and we have to remember that.

MADDOW: Michele Flournoy, former undersecretary of defense for
policy, now co-chair of the national security adviser committed to the
president`s reelection campaign, thanks for your time tonight. I`d like to
have you back whenever you want to talk national security with somebody who
dorks out on that --

FLOURNOY: Thanks. I would be happy to do that.

MADDOW: Appreciate it. Thanks.

All right. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: In election season, pundits follow the campaigns, but
political scientists don`t necessarily follow the campaigns. Some of them
instead follow this -- one of the lousier, determinist theories holds it
doesn`t much matter who the candidates are, or how they are running for
office. It`s really the price of gas that determines who wins the
election.

This theory has basically been debunked, but it is still repeated a
lot any way. It`s sort of pot poli sci.

Well, in the great state of California right now, gas is the most
expensive it has ever been. Ever. The average price of a gallon of gas in
California is $4.67. Depending where you are in the state, you could fine
yourself paying as much as $6.65 per gallon.

It happened all of a sudden. It does not seem to have happened just
in a normal course of events. There have been a bunch of different oil
refinery troubles in the West, including this fire at the Chevron refinery
in Richmond, California, back in August. And then a different refinery, an
Exxon one in Torrance, California, shut down when it had a power outage.
That caused further shrinking in the availability of gas.

California`s governor just announced measures to boost supply
yesterday, to try to help the state deal with the rising prices.

But today, Senator Diane Feinstein of California called for a federal
investigation into whether this is more than just the supply and demand
issue, whether something shady or possibly even illegal is going on here.
She says that publicly available data appears to confirm that market
fundamentals are not to blame for rising gas prices in California. Senator
Feinstein is asking the Federal Trade Commission to start monitoring the
gas market for fraud or illegal manipulation -- illegal manipulation -- of
the whole market.

Like, oh, I don`t know maybe speaking hypothetically here, main some
random broker accidentally buying -- buying, most of the global market in
oil futures and causing a ginormous spike in oil prices because he was
super drunk?

Look, drunken broker. On June 30th, 2009, between the hours of 1:22
a.m. and 3:41 a.m., a very drunk young man in England who also happened to
be a commodities broker gradually bought 69 percent of the global market of
oil futures.

On the morning of the 30th, an administrative clerk called him to ask
why he had bought 7 million barrels of crude during the night. The broker
had no recollection of the transaction and it turned out he had made the
trades during a drunken blackout, according to way Financial Services
Authority investigation in the U.K.

At 6:30 a.m., presumably sobering up and realizing what he had done,
he sent a message to his boss claiming an unwell relative meant he would
not be able to make it into work that day. The drunken broker said he was
sorry, he got fined, he got his license revoked for five years. When the
British authorities revoked his license, they said the broker quote poses
an extreme threat to the market when drunk, which is both a hilarious back
story, to why there was that one sudden and unexplained spike in oil prices
in the world in 2009.

But it also makes me much more sympathetic to the idea that there
ought to be an investigation into what the heck is going on in California
with $6 a gallon gas breaking out inexplicably one month before the
election.

Now it`s time for "THE LAST WORD" with Lawrence O`Donnell. Have a
great night.

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

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