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'The Rachel Maddow Show' for Wednesday, December 26th, 2012

Read the transcript to the Wednesday show

THE RACHEL MADDOW SHOW
December 26, 2012

Guests: Alice Rivlin, Richard Rosenfeld, Heather Hurlburt

EZRA KLEIN, GUEST HOST: Good to see you, too, Michael. Thank you
very much.

And thank you to you at home for sticking around for the next hour.
Rachel has the night off, but we have big news out of Washington where
nothing and I -- absolutely nothing is happening.

The House, it is not in session, and as of this moment has no plans to
be in session for the end of the year. The Senate is quiet and it`s been
agreed nothing is stirring, not even Harry Reid. Yes, I`m still in the
Christmas spirit.

The president, meanwhile, is in Hawaii and won`t be returning until
tomorrow. Now, normally nothing happening would not be big news in
Washington. Nothing happening is kind of the status quo in Washington.
Getting nothing done is to our political system as, I don`t know, saying
"great" is to Tony the tiger. It`s just kind of what we do now.

But, right now, this week, nothing happening is huge news. And the
reason is that usually when Washington doesn`t do anything, nothing
happens. If you do nothing, nothing happens. That`s how it goes. In
fact, that`s why people call it doing nothing, because after you do it,
nothing occurs.

But not now. Not this week. If Washington doesn`t do something, a
lot happens. All the Bush tax cuts expire, the payroll tax cuts expire.
Doctors participating in Medicare see their reimbursements cut by more than
25 percent. Good luck getting a doctor then.

More than a trillion dollars in spending cuts are triggered.
Unemployment insurance runs out. The economy probably falls back into
recession -- and, oh, merry Christmas and happy New Year from Washington to
you, the American people.

This basket of problems is what Washington calls the fiscal cliff.
You`ve been hearing about what we should call for months now cliff, curve,
bomb, crisis. We`ll talk a bit more about that later.

You`ve heard a lot about whether or not it will matter. You`ve heard
about the offers and the counteroffers President Obama and House Speaker
John Boehner put on the table. In fact, beginning this week, if you live
in the Washington, D.C. area, and you drink Starbucks coffee, you`re going
to be at least reading about the cliff whether you like it or not.

CEO Howard Schultz explained in an open letter today that "rather than
be bystanders, we at Starbucks have an opportunity -- and I believe a
responsibility -- to use our company`s scale for good, by sending a
respectful and optimistic message to our officials to come together and
reach common ground on this important issue. This week, through December
28th, partners at our Washington, D.C., area stores are writing `come
together`" on customer`s cups."

I am hugely in favor of this new Starbucks initiative -- I want you to
know that. And not because I think writing come together on coffee cups
will bring anybody in Washington together, I have very horrendously,
embarrassing coffee order, and I`m hoping that when they write on my cup,
they writer over the part where people read what I`m drinking and then
judge me.

But back to the deal-making, this is crunch week. And tonight, here
on the show, I want to step back and give you five things to remember the
next week. Think of it as fiscal cliff notes.

All right. Number one, there is a giant misconception to clear up. A
key mistake at the heart of it. The thing people call the fiscal cliff, it
equals too much austerity too quickly. This -- it drives me up the wall.
People seem to think the fiscal cliff is a problem of big deficit, the big
CEO group is formed around the cliff is called Fix the Debt.

If you take nothing else away from the show tonight, take this -- the
problem with the fiscal cliff, the thing we`re trying to avoid, the actual
danger to the economy, is that we will get too much deficit reduction too
quickly, about $600 billion next year alone. That`s more than there is in
Simpson-Bowles, more than in the Ryan budget, or in any of the Obama or
Boehner budget proposals.

If reducing the deficit was what the economy needed, we could just go
right off the cliff and leave it there.

You can see it in this graph. That line going down, that is the
fiscal cliff. If we went over, our deficit problems, gone baby -- totally,
totally gone. Our economy, probably in the tank.

One thing the fear of the fiscal cliff shows, by the way, in the fox
hole, everyone`s a Keynesian. Republicans, Democrats, everybody agrees,
government spending, take it out, cuts jobs. Taxes, push them, it cuts
jobs. And go the other way, and you increase jobs. We`re all Keynesians
in a fox hole.

So, that is number one -- too much austerity way too quickly.

And here`s number two: President Obama is not asking for that much in
taxes. It`s worth getting a bit of perspective in here. You`ll be shocked
to know, we got a graph for that.

Here`s what happens if we go over the cliff. You get more than $5
trillion in tax increases off the bat. And now, here`s what happens if we
pass the sainted Simpson-Bowles plan. You`ve heard the Simpson-Bowles, the
big bipartisan debt commission plan. They have $2.6 trillion in tax
increases. President Obama`s latest offer to John Boehner has $1.2
trillion in taxes. That is half as much, less than half than, in fact, as
Simpson-Bowles, and less than a quarter of what is in -- simply going over
the fiscal cliff.

Now, I think the tax increases in Obama`s offer are too little. But
still, they are what they are. And it`s something to remember as we reach
the edge and you hear a lot of complaints about the tax side of Obama`s
offer.

What he`s asking for in terms of tax increases is not that radical, it
is way less than if we don`t reach a deal.

OK, number three: contrary to what you may have heard, Republicans
want to raise taxes too. I know, shocker, right?

The superficial take on this, one that you hear a lot, is that the
argument between Democrats and Republicans is between Democrats who love
taxes, just want to tax everything. And Republicans who totally Grover
Norquist taxes, they hate them.

That is not true. To a degree that kind of disturbs me, actually, the
two parties mostly agree on keeping the Bush tax cuts, up to $250,000 in
income, which is a lot of income. Democrats and Republicans and Democrats
want to keep all the Bush tax cuts. In fact, Obama offered up to $400,000
in income. That`s way more than 80 percent of all the Bush tax cuts. They
agree on all of that, no argument.

Where they disagree is Democrats want to raise taxes on any income
over $250,000. And they`ll accept at this point $400,000. And
Republicans, though, this is what people don`t always know, Republicans
want to raise taxes too.

But they want to raise them on poor people. They want to let the
payroll tax cuts expire and the stimulus tax cuts expire. Those are tax
cuts that are helping poor and middle folks. And Republicans want them
gone.

That will taxes on those people, a family making $60,000 will see a
tax increase of almost $1,000. The White House opposes that tax increase.

So, that is the shape of the disagreement on taxes. Democrats want to
raise them on the rich. Republicans want to raise them on the poor. That
is where the fight is happening.

OK, here, number four. And I cannot emphasize this enough. It`s just
important to step back and say it clearly.

This is really stupid. It`s been four years since we had a terrible
financial crisis. The economy remains very weak, the job market not
recovered, Congress has literally set a trap for the recovery.

Now, when they were setting that trap, they told us, don`t worry, they
would disarm it, well before it ever became a problem. It`s just there to
make them do something even better.

But now, it seems like it`s going to become a problem. In a sane
political world, here`s what we`d be doing right now. We`ve got high
unemployment and we can borrow for nothing, less than nothing once you
account for inflation.

We`d be putting people back to work, rebuilding infrastructure,
cutting taxes for businesses that hire people. Cutting taxes for middle
class people generally, and investing in the future of the country, the
future of our infrastructure and jobs.

Meanwhile, we`d agree to a deficit reduction package that would
trigger the moment unemployment fell below 6.5 percent. Instead we`re
going to cut stimulus now, hurting the economy, not do enough deficit
reduction from later, and maybe we`ll just hang for recovery along the way.
(INAUDIBLE) guys, and by that, I mean terrible, terrible job. It`s just
impossible to overstate how dumb this whole thing is.

Which leads us to number five, the fifth and final thing to remember
this week as we approach the edge. The thing you really need to fear, the
thing that keeps me awake at night: fear of the debt ceiling. A lot of
smart people argue about how quickly the fiscal cliff will damage the
economy. We`ll talk a bit more in the show about what the timetable it
might be.

But here`s what you need to know. Tonight, the Treasury Department
said on Monday, on Monday, they need to begin taking action to keep us from
breaking through the debt ceiling. They can buy us about two months with
the sort of tricks that they have up their sleeve.

But if we waste that time, we get to the debt ceiling and we haven`t
climbed back up the fiscal cliff and the Republicans begin playing games
with the debt ceiling, maybe it will tip over, that would be fiscal
suicide. We breakthrough the debt ceiling, we`re talking depression. Not
a quick recession.

It would be the single stupidest and most damaging act of economic
sabotage in American history. And it cannot be allowed to happen.

And here, hopefully to tell me why it will not happen is Alice Rivlin
-- who probably knows more about the budget and the budget deals than
probably anybody else alive. She was former President Bill Clinton`s
budget director, she`s appointed to President Obama`s National Commission
on Fiscal Responsibility and Reform. And she`s currently a senior fellow
at the Brookings Institution.

Alice, thank you so much for being here tonight.

ALICE RIVLIN, BROOKINGS INSTITUTION: Happy to be here.

KLEIN: Now, as I said, you know much more about this than I do. So,
you heard the intro. First, I want to ask you, is there anything you want
to add or correct anyway you see the fiscal cliff that you think people
should know about?

RIVLIN: No, I thought your five points were good ones, especially the
one about austerity, what we`re talking about now is doing something really
stupid as you said, and letting the wrong policies go into effect. Too
much deficit reduction, too quickly, and we could push the economy into a
recession. That`s just dumb.

KLEIN: It is very dumb.

Now, you`ve been in many, many, many of these negotiations? You`ve
been also in the backrooms of a lot of the ongoing negotiations now.

Do you think they have any chance of getting a deal before the first
of the year?

RIVLIN: I`m always hopeful, Ezra, but I`m less hopeful as every day
passes. The problem is the rhetoric that`s flying back and forth between
Republicans and Democrats sounds like we`re still having an election that
it never was over.

I think that now -- now that we`ve had an election, and the American
public has spoken, whatever they meant, it`s time for the politicians to
get together, come together as Starbucks is saying, and get something done.

Nobody`s going to get everything they want. But it`s so much more
important to solve the problem than for one side or the other to get what
they want or blame the other. The atmosphere is just wrong.

KLEIN: When you -- when you hear the argument for going over the
cliff, when it`s been told to me by both Democrats and Republicans, by
actually some Republicans as well, they say that it would be easier to get
a deal after January 1st, because taxes will go up, and anything they do is
a big tax cut.

Do you think that`s right? Do you think that we just need to wait
this out and then it will happen quickly because the central political
impediment would have been cleared away?

RIVLIN: No, I think if we do go over the cliff or down the slope,
that there will be every reason to get it done quickly, because people will
be horrified at what`s happened. But I don`t think this argument that the
taxes will go up automatically and, therefore, we can fool people into
thinking that the same action that could be taken now and would be called a
tax increase will be called a tax cut. That`s sort of too clever by half.

KLEIN: When do you think -- you talked about the question, whether
it`s a cliff or a slope, how quickly do you think the real economy will
feel? The consequences of not coming to a deal? I mean, will it be a
week, a month, two months, when will there be that kind of pressure from
Main Street?

RIVLIN: Nobody knows, Ezra, it isn`t just a question of how quickly
the spending cuts go into effect or how quickly the tax increases go into
effect. Those come in gradually and they could come in more gradually if
the government officials thought there was going to be a deal and they
better hold off. But the real uncertainty I think is what the markets will
do.

We look like a country that isn`t in control of its own destiny,
because we`re acting that way right now. Now, if you`re an investor,
whether you`re in some part of the United States or you`re in some other
part of the world, do you really want to buy American securities? Do you
want to invest in a country whose government isn`t functioning? I don`t
think so.

So, we could get a big market reaction, drop in the stock market. And
that might scare people.

KLEIN: How quickly do you -- sorry, go on.

RIVLIN: But it would also be a bad thing. I mean, it would, in
itself, contribute to the possibility of having another recession.

KLEIN: How quickly do you think we`ll feel tremors from the debt
ceiling now that the Treasury is beginning to talk about trying to avoid
it?

RIVLIN: Well, I think we`re seeing uncertainty about absolutely
everything. It`s cumulative -- it`s the debt ceiling, it`s the fiscal
cliff, it`s what taxes are going to be, it`s what spending is going to be.
People feel uncertain and when they feel uncertain, they pull back. That`s
a natural reaction, whether they`re investors or consumers.

KLEIN: Alice Rivlin, thank you for your time tonight very much.

RIVLIN: You`re welcome.

KLEIN: As crisis go, you hope for the best and you prepare for the
worst, right? Since the former is starting to not look so likely, the
preparing for the worst options are beginning to ramp up double time. The
emergency fail breakers, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAVID GREGORY, NBC NEWS: Is there a new gun regulation that you could
support?

WAYNE LAPIERRE, NRA: I`ll tell you what would work right now.
Tomorrow morning, and the NRA would be there every step of the way, if
President Obama would walk in and tell the attorney general of the United
States to tell every U.S. attorney, if you catch a drug deal on the street
with a gun, I want you to persecute him, take him off the street. Violent
felon, violent criminal, take them off the street.

Look, if ever --

GREGORY: But there`s no new gun regulation you would support?

LAPIERRE: This is what would work. If every U.S. --

GREGORY: Mr. LaPierre, I`m asking you a direct question. Is there
any new gun regulation you`d be willing to support?

LAPIERRE: I`m giving you the answer.

GREGORY: No, you`re saying we should prosecute more criminals.

(END VIDEO CLIP)

KLEIN: Spoiler warning, Mr. LaPierre did not go on to answer the
question directly.

But we do know the answer. The National Rifle Association does not
support any new gun regulations at all, period. End of story. Or at least
end of the NRA`s story. The real story of gun violence and some things you
probably don`t know about it is ahead.

There`s actually some good news here, or at least promising news,
scouts honor.

(COMMERCIAL BREAK)

KLEIN: News events need names, so we`ve got a shorthand way to talk
about them.

There are 1,000 names for the -- see? Before I choose a name, I can`t
even tell you the thing I`m talking about, the fiscal stuff that`s going to
happen at the end of the year. Congress doesn`t get its act together, and
it will be bad. That`s not a great name.

Congressional staffers tried to name it taxmageddon, which I like, but
the problem was it`s not just about taxes. Federal Reserve Chairman Ben
Bernanke, he kind of won the branding are actually, when he called it the
fiscal cliff. Usually Federal Reserve chairman are not that quotable.

But then, the Center on Budget and Policy Priorities said no, really,
it`s not a fiscal cliff. It`s more of an easy slope, to which the Economic
Policy Institute said, no, not a cliff, not a slope, not Armageddon, it`s a
fiscal obstacle course with I guess a fiscal climbing wall, maybe a rope
swing. First one to fall off the log gets voted off the island.

I like to call it the austerity crisis because I think it`s accurate.
But at a point I gave up on that and stopped trying to make fetch happen.
You can go to Paul Krugman and call it the austerity bomb, tick-tock, tick-
tock, with a hat tip to Brian Beutler of "Talking Points Memo," who first
thought that one up. The point is, whatever you call it, the thing is bad.
No one has suggested happy economic fun time because it would not be a
happy economic fun time.

The question is, how bad it will actually be. Even with the clock
running down, even if the clock runs out. The federal government has a
great deal of control over how much paint is spilt by whom and when.

By choices within the government`s control, the fiscal cliff or slope
or bomb could hurt a little or could hurt a lot, at least in the short run.
That is up to the government and the choices the government makes for the
first weeks or month or two at least.

For instance, the IRS, the Internal Revenue Service, can decide what
to do about how they treat the tax increase. The agency could delay
increasing the amount it withholds from your paycheck each week assuming
that Congress and the White House will reach a deal. That way, you
wouldn`t notice the tax increase in law and hopefully it would be turned
around before you did.

Of course, if it didn`t get reversed, well, you`re going to get quite
a bill from the taxman. Also, if we go over the cliff, and the spending
cuts begin to take hold, the various agencies of the federal government can
consider putting employees on furlough. Meaning those employees take
unpaid days off. That`s considered a better alternative than layoffs,
though, at some point, if we don`t get a deal fairly quickly, those
furloughs will have to become layoffs, and that will mean real pain.

The great question is how quickly that pain will begin. Would it hurt
the real economy before we get a deal? Or the prospect of pain create so
much political pressure that Congress will change course before things
actually get bad, before we actually feel it.

The strategy of the folks who want to go over the cliff, the theory
that is behind that idea is that going over will create so much political
pressure, so much political pain that we`ll quickly get a deal because
congressmen won`t want to stand before that amount of political anger. It
will happen before it causes much real damage to the economy, we won`t go
over for long. It will be a week or two.

That`s where these plans to blunt the impact could actually have a
very unintended consequence, though. If they work well enough, they take
away the pressure that is supposed to force a quick deal. That would drag
this whole thing out, meaning more damage gets done to the economy in
total.

Over the past week, government agencies have been sending out memos
like this one, from Defense Secretary Leon Panetta. The memo reassured
staffers their jobs will not be in danger next week if we go over the
cliff. It seems the agencies are preparing for a short run in which they
shift funding around and delay making painful cuts until Congress gets it
together.

The contradiction here, of course, is if the pain of those cuts which
is supposed to make Congress act doesn`t come, then perhaps Congress will
not act.

So, the government will wisely try its best to reduce the amount of
economic turmoil we might see in the New Year, is potentially lessening the
political pressure it needed to bring that turmoil to an end. Maybe the
market or the CEOs will be scared enough that they will mobilize before the
effects are felt on Main Street. Maybe they will force Congress to act
before the public knows anything is really wrong. But maybe not.

Eventually, if we go over the cliff, the government will not be able
to hide the effect. Budget wonk Stan Collender told us today he thinks the
White House won`t even want the agencies to hold out for very long, maybe
just until the end of January. Quote, "They want someone to feel the pain,
so they`ll make a deal," he told us. "If I`m trying to get them to reach a
deal, I want defense contractors to start seeing their contracts have
actually been cut."

This is a dangerous game Washington is now playing with the economy.
Both sides are preparing strategies in which they hurt the economy just
enough to break the other party`s will, but not so much that matters get
out of hand. It is a very delicate balance to strike. And this is not a
Congress that`s proven so adept at delicate situations over the last few
years.


(COMMERCIAL BREAK)

KLEIN: If my calculations are correct, and it looks like I did the
work all right, you did not spend any time at all on Christmas Day or the
day after thinking about the farm bill. If you did, maybe we can be
friends, because you and I -- we get along, we know what is up.

The farm bill is a big deal. Not just a policy wonks and the farmers,
but to people who purchase and eat food, which might be you, particularly,
if you purchase and eat dairy products, which might skyrocket in price.
We`re talking $7 milk here, people. Which is why you may want to pay
attention to tonight`s E.K. Challenge.

Can we in two minutes or less, explain the farm bill and why it might
totally mess up your grocery bill?

Can we get the clock? We have the clock.

All right. Here we go:

The farm bill covers billions of dollars in farm programs. America
needs a stable farm economy, which we currently kind of have. Congress
always passes a farm bill or renews one that is already in effect. They do
it, because if they don`t do it, the farm legislation lapses and we revert
to farm laws from 1938 and `49.

So, the Senate passed the farm bill months ago, but the House has not
even voted on its version. Congress doing nothing about even the stuff
everyone is paying attention to, not to mention being famously not in
session, it seems highly unlikely the House is going to get it done in
time.

So, what?

Here`s what, in one example. If there is no new farm bill six days
from now, the government will have to abide by the provisions of a 1949 law
regarding milk. That law would require the federal government to buy milk
from dairy farmers at hugely inflated prices based both on 1949 era
production cost and on adjustments for inflation since then. If that law
takes effect again in 2013, the government will be forced to pay double
what it currently pays for milk.

For a short time, it will be awesome for dairy farmers. They can sell
as much milk as they can to the government and make a ton of money. But
even dairy farmers, or at least people who speak for dairy farmers in the
media, know that the windfall will be bad news real quick, because the
government run on milk will lead to shortages for people who buy milk at
the grocery store or buy it to make dairy products like cheese, which is
found on things like pizza. And the American people -- we love our pizza.

The short supply of publicly available milk would drive up prices by
as much as double. That would make a gallon of milk more than 7 bucks.
And while I went to U.C.-Santa Cruz, go Banana Slug, and I can handle my
soy milk, I don`t want it all the time.

So, you`re right not to think about the farm bill over Christmas.
Christmas is not about the farm bill, but New Year`s, you are going to want
to be thinking about the farm bill over New Year`s.

(COMMERCIAL BREAK)

KLEIN: On Christmas, one day after a man in Webster, New York,
allegedly set the house he lived in with his sister on fire, and then shout
four volunteer firefighters who arrived (INAUDIBLE), killing two of them.
The local police chief announced the gunman`s sister is likely a third
victim of homicide.

We knew the gunman`s sister was missing, she and the gunman lived in
the house together but were not on good terms. Their mother lived there
too until she died in October. Human remains were found in the home.
Police believe they are those of the shooter`s sister, who was in her late
`60s.

There are no word yet on the shooter`s motives or how he got the guns.
In the 1980s, he was convicted of killing his 92-year-old grandmother. And
therefore, as a convicted felon, he was not supposed to be in possession of
firearms.

Among the weapons used by a shooter was a Bushmaster assault rifle.
That sounds familiar. It is the same weapon used in the shootings in
Newtown, Connecticut. The two shooters had something else in common, too.
Neither obtained their guns illegally.

In Washington, we`re trying to figure out how to stop these massacres.
One is far too many, and they seem to be a terrifyingly regular occurrence
in our country. Still, these horrific events shock us so deeply because
they remain, particularly compared to other kinds of violence, rare. And
because the circumstances of mass shootings are each so specific, it is
very difficult to make government policy to prevent them. Most of the
policies we think about in the gun control space wouldn`t have worked.

The federal private sales loophole often called the gun show loophole,
though, it`s much bigger than gun shows, it is all private schools, should
be closed. But there is no evidence the killers bought their guns at gun
shows or through the loophole more broadly.

Background checks should be stricter, but the guns used in western New
York and Connecticut were not registered in the names of the shooters.

Waiting periods make sense for gun buyers and particularly to prevent
suicide. But, again, they would have had little effect on killers who did
not purchase their guns through legitimate channels.

The assault weapons rifle ban should never have been permitted to
lapse. But if it were still the law, there`s little evidence that it would
stop private killer, even forced them to use a different kind of gun. The
ban was full of loopholes and any guns before it took effect were
grandfathered in as fully legal.

Taking large capacity magazines off the market, another feature in the
assaults weapons ban, that would be a good idea. There`s not much evidence
it would stop such violence at least not in the near term. Last time we
tried it, manufacturer`s flooded the market with high capacity magazines
before the ban went into effect, making it unusually easy for anyone to get
one.

Some gun enthusiasts have argued that if more people carried guns,
these killers would have been swiftly stopped. In Newtown, the killer`s
mother loved guns and was highly trained in their use. Those guns did not
save her life or protect her. They caused her death.

The country could surely do a better job providing mental health
resources and de-stigmatizing treatment. But here`s also no evidence, at
least not yet, that an inability or an unwillingness to get mental health
treatment was a problem for either family. And we need to be very, very,
very careful that we do not tip into profiling the mentally ill, who are
much more likely to be the victims of violent crime than the perpetrators.

Perhaps the wisest, single sentence I`ve read in the aftermath of the
shooting came from Mark Klaidman (ph), a crime specialist at the UCLA.
"Figuring out how to prevent another gun massacre or specifically the next
gun massacre at a school is a classic case of solving the wrong problem,"
he wrote. "The right problem is gun homicide generally, or homicide
generally."

According to the Brady Campaign, in United States, more than 12,000
people die in America, 12,000, after being shot in a homicide each year.
More than 18,000 kill themselves with a gun, almost 600 are killed in a gun
accident and more than 66,000 are injured by guns.

These traumas are sad but they are so common that they no longer have
power to shock. But they do get to the truth of the underlying policy
issue. We may not be able to stop every gun death, but there are lots and
lots and lots of gun deaths that we can stop. And a deadly mass shooting
like the one in Newtown is specific and idiosyncratic in ways that make it
very difficult to confront through policy, the average gun death follows a
much clearer pattern, a patter that better policy can quite reliably
interrupt.

When I asked to Klaidman about what we can do, he said he wasn`t the
guy to ask. He said to call a criminologist named Richard Rosenfeld at the
University of Missouri, at St. Louis. He joins us here tonight.

Richard, it is good to see you. I appreciates you being here.

RICHARD ROSENFELD, UNIVERSITY OF MISSOURI, ST. LOUIS: Thank you,
Ezra. Good to be here.

KLEIN: Give me your three policies. Give me the three policies if
the question is, how do we prevent gun deaths generally, that you would put
into place first?

ROSENFELD: If we`re talking about gun deaths generally, the first
policy I would put into place is already in place in many cities in the
United States, and I think should be spread even further. And that it
often goes under the popular term hotspots policing.

Policing has been shown to reduce what you referred to earlier as
average gun violence if any gun violence could be said to be average. That
is to say enhancing police patrols in those neighborhoods or even smaller
areas of the city where gun violence is highly concentrated, typically
during the night and evening hours, that`s been shown to reduce firearm
violence and incidentally without spreading it to adjoining areas.

The research literature is very clear on that, my own city of St.
Louis recently implemented such a program and experienced very substantial
declines in gun violence where the program was implemented.

So, policy number one for reducing our largest gun violence problem,
which is the problem of typically two young men in a dispute, one or both
of whom are armed, one kills or severely injures the other. We do know how
to reduce that problem. We`re not going to eliminate it, but it`s
important to keep in mind that over the last two decades, firearm homicide
notice United States has declined by roughly 50 percent.

KLEIN: Right, it is a huge success story.

ROSENFELD: It is a huge success story. We don`t know all the reasons
for the decline. But in those places in which smart policing of the sort I
described has been implemented, we`ve seen reductions, not simply in gun
violence but in other forms of criminal activity as well.

KLEIN: And how about policy number two?

ROSENFELD: Policy number two has to do with our other gun violence
problem. The problem we`ve been talking about over the last few days and
indeed over the last year. And that`s the gun violence problem associated
with the mass shootings. That`s a rather different problem.

Smart policing of the sort I just described is not going to work as
well because as you pointed out, mass shootings are rare, they`re not
spatially concentrated. And so smarter policing --

KLEIN: You don`t mean all in the same city?

ROSENFELD: They don`t occur all in the same city. They don`t occur
in the same neighborhoods. They`re so rare, they don`t occur clustered
anywhere, fortunately.

There it seems to me restricting access to high-powered weapons and
large capacity magazines is a necessary step. As you point out, it`s not
going to lead to an immediate elimination or even, it seems to me,
important reduction in the number of incidents. But overtime, I`m
reasonably certain that it would lead to a reduction in the number of
victims.

We call these mass killings because of the number of victims involved.
And if there`s less access to the kinds of weapons that show up
disproportionately to these killings over time, there should be fewer
victims.

KLEIN: And we could have a tighter assault weapons ban going-forward
as well.

Richard Rosenfeld, criminologist at the University of Missouri at St.
Louis -- thank you very much for your time tonight, and your work on this
issue.

ROSENFELD: Thank you, Ezra.

KLEIN: You probably remember Jack Klugman. He was Oscar Madison on
"The Odd Couple" and he was "Quincy", the most heroic medical examiner in
TV history.

But Jack Klugman was also the most heroic actor to play an American
medical examiner in American political history. And that story, and it`s a
great story, is coming up.

(COMMERCIAL BREAK)

KLEIN: Tonight, the state of Hawaii has itself a brand new United
States senator-elect. Congratulations, Hawaii. A little more than a week
ago, long time Hawaii Senator Daniel Inouye passed away outside of
Washington at the age of 88. His passing immediately kicked off a process
to replace him in Hawaii, and it is a process that`s kind of unique to
Hawaii.

The law requires the state Democratic Party provides Hawaii`s Governor
Neil Abercrombie with a list of three potential replacements for Senator
Inouye. The three names they put together were current Democratic
Congresswoman Colleen Hanabusa, a state official named Esther Kiaaina, and
the state`s current lieutenant governor, Brian Schatz.

Hawaii`s governor got to choose among those thee and tonight he
announced his decision.

(BEGIN VIDEO CLIP)

GOV. NEIL ABERCROMBIE (D), HAWAII: I have informed the leadership of
the United States Senate, spoken personally with Senator Reid, the majority
leader of the United States Senate, that I have appointed Brian Schatz as
the next United States senator from Hawaii.

(APPLAUSE)

(END VIDEO CLIP)

KLEIN: Brian Schatz, Governor Abercrombie chose his own lieutenant
governor to be the state`s next senator. Brian Schatz is a former state
representative. He`s a former chairman of Hawaii Democratic Party. And he
was state chairman of President Obama`s presidential campaign back in 2008.

His appointment is not without controversy. Senator Daniel Inouye`s
last request before he died was that he`d be replaced by Congresswoman
Colleen Hanabusa. Hawaii`s governor, however, chose to honor that request.

Tonight, the Senator Inouye`s office released this brief statement.
Quote, "Senator Inouye conveyed his final wish to Governor Abercrombie.
While we are very disappointed that it was not honored, it was the
governor`s decision to make. We wish Brian Schatz the best of luck."

According to White House officials, Brian Schatz will leave Hawaii
tonight with President Obama aboard Air Force One, in order to be sworn in
tomorrow evening in Washington. Yes, Brian Schatz has been promoted.

(COMMERCIAL BREAK)

KLEIN: You remember the whole Susan Rice fiasco a few weeks ago? We
spent weeks arguing about who knew what over talking points someone else
wrote when. Good times, right?

Susan Rice ended up withdrawing her name from consideration for
secretary of state before she was even nominated for the job. And
President Obama nominated Massachusetts Senator John Kerry. No one expects
his confirmation to be a problem.

But during that whole Susan Rice fight, there was almost no discussion
over whether she would have been good at the job. There`s not been much
over whether Kerry would be better.

These invented scandals can be obsessing, you spend so much time and
energy running forensics on whatever idiotic claim is leading (INAUDIBLE).
But by the end, you`re exhausted with the topic and you`ve learned nothing
of value, and nor is the public.

That I fear might be happening again with another high level cabinet
post.

(BEGIN VIDEO CLIP)

GREGORY: Senator Graham, final question, quick answer. Can Chuck
Hagel become secretary of defense if he`s the president`s nominee?

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: A lot of Republicans are
going to ask him hard questions, and I don`t think he`s going to get many
Republican votes. I like Chuck, but his positions, I didn`t really quietly
frankly know all of them, are out of the mainstream and well to the left of
the president. I think it will be a challenging nomination, but the
hearings will matter.

SEN. JOE LIEBERMAN (I), COINNECTICUT: If I were in the Senate on the
Armed Services Committee, and he was nominated, I would have some serious
questions to ask him.

BILL KRISTOL, THE WEEKLY STANDARD: I think Senator Hagel either will
not be nominated or not be confirmed. He conceded in the Obama White
House, he was a Republican, so Republicans will go for him. He was a
Republican senator. But on foreign policy issues, especially in the last
several years as a senator and since, he`s been way to the left of
President Obama.

(END VIDEO CLIP)

KLEIN: Former Nebraska Senator Chuck Hagel has been leaked not
nominated -- leaked as a potential nominee for secretary of defense. And
there was already a massive counter offensive against him. Now, to be
fair, it does have more substance to it, than the attacks against Susan
Rice, although a fair amount of that substance consists of insinuations
that Hagel is anti-Semite.

So, the sides are forming, there`s the Chuck Hagel defense corps and
the anti-Hagel chorus of vitriol and assault.

What is not happening as we go through to his nomination wars is just
sitting back and asking the simple question, would this person make a
better defense secretary than the alternatives, who are the other people up
for the job? Would one of them be better?

The front-runners for secretary of defense are Chuck Hagel, of course.
Then there`s also Michelle Flournoy, who is very well-qualified. She
served as undersecretary of defense for policy. She`s advised the defense
secretary on national security policy and oversight of military plans and
military operations. Also in the running is Ashton Carter, the current
deputy defense secretary.

Now, defense isn`t my issue, but I`d like to know, which of these
people would do the best job. We keep skipping the interview process,
going right to the smearing portion of the evening.

But not here on THE RACHEL MADDOW SHOW. Tonight, we have someone who
really knows these people and their records and the institution they might
lead and she is going to walk us through the part that everyone else keeps
skipping over.

Joining me now is one of the smartest defense wonks I know, the
executive director of the National Security Network, Heather Hurlburt.

Heather, it is good to see you.

HEATHER HURLBURT, NATIONAL ACTION NETWORK: Ezra, that`s quite an
introduction to live up to.

KLEIN: I`m sure you`ll do fine.

So, tell me -- when you think of the defense secretary job, what is
the job description? What do they actually need to be able to do well?

HURLBURT: So, the next defense secretary is going to have to do three
pretty hard things well. One is to lead the Pentagon out of Afghanistan,
lead our military into redefining itself, what is it, what is it do, why do
you join it? What do you serve in the post-post-9/11 era?

Second, lead the Pentagon and the country through more defense
spending cuts, which are coming, which the defense industry thinks everyone
except the few Republicans in Congress think is coming.

And third thing is to really to lead the nation through a discussion
of what`s our military for in the post-post-9/11 era? What`s the role of
counterterrorism? What are the limits of counterterrorism? What are we
doing in Asia? How do we work with our allies and with China in Asia?
Where has the Pentagon taken powers that maybe need to go back to the
civilian agencies?

Those are three enormous jobs they require you to work well with
Congress, to work well with the defense industry, to be trusted by our men
and women in uniform, and to have a really close relationship with the
president. That`s a big job description.

KLEIN: So if we take the sort of broad description then as guiding
the Pentagon through that period, it sounds like retrenchment and
reimagining. How do you see the strengths and weakness of the front
runners?

HURLBURT: Well, so the first thing to say about Senator Hagel is that
he clearly has a very strong personal relationship with the president,
which is something you really want. He`s also a decorated war hero, saved
lives of his company mates in Vietnam and is really well respected by folks
in the military, which matters, which matters a lot.

Michelle Flournoy may be one of the pre-eminent defense intellectuals
of our generation, and even before -- well, for her whole career, she`s
been thinking about how do you re-imagine the military? How do you
modernize the military? She`s held several big jobs at the Pentagon and is
very well-respected.

Ash Carter, currently the number two, he has actually spent the last
few years wrangling with the defense industry and also with Congress. So
he comes in with that kind of nuts and bolts experience of how to work
through this period of reshaping.

KLEIN: And when you think about Hagel`s personal views on Iran,
because that`s, I think, the most substantive of the foreign policy
critiques against him, what are they and do they matter for this job?
Sometimes I hear him and it sounds more like a secretary of defense issue
than a secretary of state issue.

HURLBURT: Well, we have had, as you well remember, it has not been a
year since the last time we had a manufactured crisis about going to war
with Iran. So I would expect to at least have one other one during Hagel`s
tenure. And his views which have been that we should exhaust negotiated
options before we think of a military strike on Iran, and that,
unfortunately or fortunately, depending how you look at it, but a military
strike on Iran will not necessarily stop Iran`s nuclear program, and Hagel
has been quite publicly skeptical about it -- a skepticism which is shared
by the current secretary of defense and his predecessor and the chairman of
the Joint Chiefs of Staff and the Israeli military, and, by the way, the
majority of the American public who only want a strike on Iran if they`re
sure Iran has the weapon.

So this notion that Hagel is outside the mainstream, he`s definitely
not outside the Pentagon mainstream, not outside the American mainstream.
He may be outside the mainstream in Congress, but Congress is its own
animal.

KLEIN: Heather Hurlburt, the executive director of the National
Security Network -- thank you very much for walking us through this
tonight.

HURLBURT: Thanks for having me.

KLEIN: Next up, a real-life medical triumph achieved by a fake TV
doctor. This story is great, I promise.

(COMMERCIAL BREAK)

KLEIN: The actor Jack Klugman died this week on Christmas Eve. He
was 90 years old. By the late 1970s to early `80s, he was already very
famous for, among other things, playing sloppy sportswriter Oscar Madison
in a TV version of "The Odd Couple", and was starring his own hour long
mystery series, about a medical examiner named Dr. Quincy. And he was in
that role that Klugman became a pioneer in the use of celebrity on Capitol
Hill.

"Quincy" episodes were often ripped right from the headlines. So,
when Klugman`s brother heard about a House sub-committee hearing on why
pharmaceutical companies were not spending money on drugs for diseases,
diseases that were named orphan diseases for this reason, because few
enough people have these diseases, so drug companies saw no profit motive
to try to cure them.

So Klugman`s brother wrote an episode about it in 1981. The disease
was correct. The episode was called "Seldom Silent, Never Heard." And the
week after the episode aired, Jack Klugman was testifying on Capitol Hill
himself in front of Congressman Henry Waxman`s subcommittee about how to
convince drug makers to work on orphan diseases, despite the fact they
would not necessarily get rich doing it in the private sector.

Klugman`s presence got the hearing and the issue a huge headline in
"The New York Times" and it got it attention and that freed the bill. The
resulting bill was called the Orphan Drug Act of 1982. It offered drug
makers incentives including a very big tax credit to pay for clinical
trials. It made it profitable for them and it was popular. The bill
passed the House, no problem.

But according to reporter Joshua Green, co-author of a book with
Congressman Waxman, the bill ran into trouble in the Senate at the hands of
Senator Orrin Hatch, who for reasons reportedly having to do with
senatorial perk stripped out the biggest incentive in the bill, the tax
credit.

So, what did Jack Klugman and his brother do? He and his brother
produced another "Quincy" episode in which a fictitious holds up passage of
a bill very much like the Orphan Drug Act of 1982. Until "Quincy" himself,
with the help of a crowd of extras, and all these extras were suffering
from orphan diseases in real life, go outside the Capitol and shamed the
senator into giving in by protesting.

After that episode, the real Senator Hatch, according to Green, gave
in. What is now known as the Waxman-Hatch Orphan Drug Act became law. In
terms that were not used in 1982, Jack Klugman pretty much rolled Orrin
Hatch, not an easy thing to do.

Ladies and gentlemen, you can behold the power of television. Jack
Klugman lived a famous life that`s worthy of note. He didn`t just save
lives on TV, he saved lives. May he rest in peace.

That does it for us tonight. We`ll see you again tomorrow. Don`t
forget to check out my work at "The Washington Post" at Wonkblog.com.

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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