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'Up w/Chris Hayes' for Sunday, February 3rd, 2013

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February 3, 2013

Guests: Michael Hastings, Barbara Slavin, Ali Gharib, Kiron Skinner, Michael Brendan Dougherty, Dylan Glenn, Michelle Goldberg, Julianne Malveaux, Joseph Stiglitz, Ed Conard, Joe Weisenthal

CHRIS HAYES, MSNBC ANCHOR: Good morning from York. I`m Chris Hayes. A
suicide car bomber killed at least 35 people at a provincial police
headquarters in northern Iraq this morning.

Here in the U.S. today it is, of course, Super Bowl Sunday. Last night
Vikings running back Adrian Peterson, back from an ACL injury, beat out
Broncos quarterback Peyton Manning for the NFL`s most valuable player

But right now, my story of the week. War and that other thing. Thursday`s
Senate confirmation hearing for a Secretary of Defense nominee Chuck Hagel
was an omnidirectionally embarrassing debacle for everyone involved.
First, there was the Senate Republican who seethed with such theatrical
contempt for Hagel and his ideas, you would have thought the president have
nominated Noam Chomsky for the post, who incidentally wouldn`t be my first
choice to head the Pentagon, but who I would take over Donald Rumsfeld in a

Republican senator after Republican senator threw questions at Hagel that
even by the debate standards of a nominating hearing were the cheapest kind
of demagoguery and bullying.


SEN. JIM INHOFE, (R) OKLAHOMA: Why do you think that the Iranian foreign
ministry so strongly supports your nomination to be the Secretary of

SEN. TED CRUZ, (R) TEXAS: To go on Al Jazeera, a foreign network
broadcasting propaganda to nations that are hostile to us and to explicitly
agree with the characterization of the United States as the world`s bully,
I would suggest is not the conduct one would expect of a Secretary of

SEN. DEB FISCHER, (R) NEBRASKA: You continue to hold, I believe, extreme
views far to the left of even this administration.


HAYES: If you were a visitor from another country and you just listen to
Hagel`s Republican interlocutors, you would have had to ask where did this
moral monster Chuck Hagel come from? Where had this seditious dissident
been hiding for the last decade, and the answer, of course, is mostly in
the Republican Senate caucus. Watching Lindsey Graham make the pained
gassy face of displeasure while he listened to Hagel, I wonder how he ever
stomached sitting next to the guy on the Foreign Relations Committee for
all those years or how John McCain could have said this in 2000 about
potential defense secretaries.


SEN. JOHN MCCAIN (R) ARIZONA: As far as Secretary of Defense is concerned,
there`s a lot of people that could do that. One of them I think is Senator
Chuck Hagel.

HAYES: Then there were the Democrats on the committee who seemed intent on
steering clear of big policy questions where eliciting a debate about some
of the bipartisan conventional wisdom, opting instead to praise Hagel`s war
service, praise Israel or gently lead the witness back towards the safe
confines of approved foreign policy bromides and away from dangerous


SEN. JOE MANCHIN, (D) WEST VIRGINIA: Your commitment that Iran should not
under any circumstances have the ability to have a nuclear weapon. And I
appreciate that position very much.

SEN. JOE DONNELLY, (D) INDIANA: And I appreciate your taking the time to
meet with me. We had an extensive discussion and your understanding of the
complex challenges we face in the Middle East and the importance of our
alliance with Israel.

SEN. BILL NELSON, (D) FLORIDA: I would like for you as the committee is
getting to know you, know something about your service in Vietnam and your
combat experience. Were you wounded, Senator Hagel?


HAYES: And finally, there was the nominee himself, who appeared to have
prepared for the hearing by skimming a few briefing talking points on his
cab ride to the Capitol, and who rather than defending some of his more
enlightened heterodox statements on foreign policy, about the necessity of
diplomacy even with adversaries, the importance of exhausting every chance
of peace rather than leaping into the horrors of war, the dysfunctional
congressional politics of Israel/Palestine -- well, he seemed resign to
glumly recant.


SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: Name one person, in your opinion,
who is intimidated by the Israeli lobby in the United States Senate.


GRAHAM: Name one.

HAGEL: I don`t know.

GRAHAM: Well, why would you say it?

HAGEL: I didn`t have in mind a specific person.

GRAHAM: Do you agree it`s a provocative statement? That I can`t think of
a more provocative thing to say about the relationship between the United
States and Israel and the Senate or the Congress than what you said. Name
one dumb thing we`ve been goaded into doing because of the pressure from
the Israeli or Jewish lobby.

HAGEL: I have already stated that I regret the terminology.

GRAHAM: But you said--


HAYES: American conservative editor Daniel McCarthy, who comes from the
realist tradition of conservatism, tweeted, "This Senate hearing is like a
Maoist self-criticism session." And he was right. Perhaps, the most
depressing of all was what seemed to be the underlying assumption of nearly
every one on the dais, that American military and foreign policy is doing
just great, that the status quo establishment consensus on threats and
possible wars is a holy catechism from which no heresy can be tolerated.
Instead of doing penance every single day for the rest of their natural
lives for the deaths of 4,042 Americans and according to a survey from John
Hopkins School of Public Health, the deaths of at least 650,000 Iraqis, the
architects and principal advocates of the Iraq war angrily brave for more,
more aggression, bigger military and more wars. And the non-neocon
conservatives, the ones who`ve been proving definitively right by history,
seem to just meekly nod along. The DNC didn`t even issue a press release
all day.

And so, all of the lessons that could have been learned are unlearned. As
we enter the 12th year of the longest war in the nation`s 237 year history,
so many of the senators seem so intent on laying the groundwork for the
next war against Iran, they could hardly trouble themselves to discuss the
actual ongoing war that Hagel would be in charge with ending. Iran was
mentioned 180 times at the hearing, Israel, 96 times, but Afghanistan
warranted just 26 mentions. Why trouble ourselves with that old thing when
there are new shiny conflicts on the horizon?

Most revealingly, in nine full hours and more than 40,000 words in the
entire hearing`s transcript, the word "war" was mentioned 120 times while
the word "peace" warranted just three mentions. No wonder we`ve been at
war for 11 years and counting.

Joining me now, is Kiron Skinner, research fellow at the Hoover
Institution, she was a foreign policy advisor to both Mitt Romney and Newt
Gingrich`s presidential campaigns, was a member of the Bush Pentagon`s
defense policy board, where she advised on the Iraq and Afghanistan wars;
Michael Hastings, author of the new digital book "Panic 2012: The Sublime
and Terrifying Inside Story of Obama`s Final Campaign" Also, a Buzzfeed
correspondent and "Rolling Stone" contributing editor.

Barbara Slavin, senior fellow of the Atlantic Council`s South Asia Center
where she`s worked for former Senator Hagel for the past few years. Also
Washington correspondent for the Middle East news Web site
And Ali Gharib, senior editor for "The Daily Beast" Middle East blog, "Open

It`s great to have you all here.

UNIDENTIFIED MALE: Good to be here.

HAYES: So I am -- well, where to start? I think the lessons unlearned to
me was the most troubling. It seemed to me we had a moment in 2008
particularly, in which President Obama articulated this kind of alternative
foreign policy vision and did so quite forthrightly. For instance,
negotiations with Iran and Ahmadinejad. And somehow four years later,
we`ve moved backwards, right?

That the old -- as we`ve -- I guess as we`ve gotten further away from the
debacle of Iraq, as that`s more remote in people`s memory, there`s more and
more the sense of well, Iraq kind of ended up OK and you saw this -- I
thought it was so interesting, it was the relitigation of the surge.


HAYES: Because that in some ways is this key narrative plot point that
somehow redeems the entire war. And so you saw, for instance, John McCain,
incredibly invested in redeeming the surge. Here is an exchange, a little
long, but check this exchange between the two of them, and then I want to
hear your reaction to it. Take a look.


MCCAIN: You stand by that -- those comments, Senator Hagel?

HAGEL: Well, senator, I stand by them because I made them. And ...

MCCAIN: Were you right? Were you correct in your assessment?

HAGEL: Well, I would defer to the judgment of history to sort that out,
but I`ll ...

MCCAIN: I think this committee deserves your judgment as to whether you
were right or wrong about the surge.

HAGEL: I`ll explain why I made those comments and ...

MCCAIN: I want to know if you were right or wrong. That`s a direct
question. I expect a direct answer.

HAGEL: The surge assisted in the objective. But if we review the record a
little bit ...

MCCAIN: Will you please answer the question. Were you correct or
incorrect when you said that the surge would be the most dangerous foreign
policy blunder in this country since Vietnam? Were you correct or
incorrect, yes or no?

HAGEL: My reference to this surge being most dangerous ...

MCCAIN: Are you answering the question, Senator Hagel? The question is
were you right or wrong. That`s a pretty straightforward question.

HAGEL: Well.

MCCAIN: I would like the answer whether you were right or wrong and then
you are free to elaborate.

HAGEL: Well, I`m not going to give you a yes-or-no answer on a lot of on
things today.

MCCAIN: Well, let the record show that you refused to answer that
question. Now, please go ahead.

HAGEL: Well, if you would like me to explain why I ...

MCCAIN: No. I actually would like an answer, yes or no.

HAGEL: Well, I`m not going to give you a yes or no. I think it`s far more
complicated than that, as I`ve already said. My answer is, I`ll defer that
judgment to history.


HAYES: Kiron, you worked in foreign policy circles among Republican
candidates. And I just -- where is your understanding of where their
understanding is of the Iraq war and the importance the surge plays in
somehow making the rest of it OK.

KIRON SKINNER, THE HOOVER INSTITUTION: Well, there`s no one kind of
Republican center and that`s what we were seeing in these hearings. I
think it`s the fracture in the Republican Party was manifest and this
hearing was a proxy for the breakdown in having a foreign policy and
domestic policy center among Republicans. And it was not so much about
Chuck Hagel as the absence of a consensus and an alternative point of view
among Republicans.

I actually think that there is something of an emerging bipartisanship in
foreign policy. Just as you stated, there was the kind of hope and change
approach across the board in candidate Obama in 2008. Four years later, we
see Republicans and Democrats actually converging on a number of issues,
like Afghanistan, that we`ve got to exit in 2014 without a clear sense of
what the residual force will look like.

What was happening in this hearing, I think, is that a number of the more
kind of conservative Republicans were trying to figure out how to stake out
a position for what they have stood for as much of what`s happening in the
party is converging with the Democrats. We saw that with Romney and the

HAYES: With foreign policy debate, never objected to anything, yes.

SKINNER: He never -- he really didn`t show up with an alternative point of
view. And so, I think some senators like McCain are trying to kind of ...

HAYES: That`s interesting.

SKINNER: ... save a Republican kind of alternative spirit when, in fact,
there`s a lot of consensus emerging in the foreign policy realm.

HAYES: That`s a really fascinating point. And I think to me what I found
so troubling as, you know, lefty old me was that basically you have
bipartisan consensus, you have a kind of right flank in the personages of
Lindsey Graham and John McCain and Ted Cruz and this kind of neocon, and
there was nothing on the left, right? There was no one affirmatively
making the case for anything to the left of what has become. I think
you`re totally right, there`s kind of bipartisan consensus here.

MICHAEL HASTINGS, AUTHOR "PANIC: 2012": The answer to Senator McCain`s
question was given this Sunday in Kirkuk where there were 35 Iraqis killed.
It was given last October in the first weeks of October where you had 325
Iraqis killed. That is the answer to whether the surge was a success.
That is one of the answers.

The other answer is to step back and say how was the surge a real success?
It was a success in Washington, it was a political success in Washington, a
political failure in Baghdad. And by that I mean it was a political
success in Washington because you could stand up now before the American
people and with a straight face pretend that the Iraq war was not a total

And the Democrats, one of the reasons why there was no pushing because
they`ve seeded the ground on it. Because when Obama got -- became the
commander in chief, he had to put on the stance that, look, yes, it might
have been a really dumb decision, but you guys have done great and the
surge actually worked and the surge, in fact, worked so well we`re going to
go to Afghanistan. I mean that was even the argument ...


HASTINGS: ... to go there. So I think they see that the narrative and
it`s tough to get it back. And so ...

SLAVIN: ... and the surge in both cases has a very political implication
here. It`s covering the U.S. rear so that United States can withdrawal its
troops, leave these countries to whatever their fates are going to be and
say, well, we tried. We put in the maximum effort, right? And I thought
it was really unseemly the way in which McCain tried to get Chuck Hagel to
say yes or no. Because clearly Iraq is a country in a great deal of
trouble and clearly we do have to await the judgment of history to see how
this place comes out five years, ten years down the road now.

HASTINGS: But -- and that`s only one 18-months period in a seven-year war.

HAYES: Right. I mean ...

SLAVIN: And there were other things that went on. The Anwar awakening, I
mean Hagel tried to talk about some of these other things, but he was cut

HAYES: I want -- I want to talk about -- the surge is just one little sort
of part of the bipartisan narrative of how American foreign and military
policy have operated. There is a whole bunch of other aspects that Chuck
Hagel ran afoul of and was forced to recant. I want to talk about those
recantations right after this.


HAYES: Kiron, the point you made, I just want to -- I want to hit it
again. Because I think it`s a totally different interpretation of the
hearing than I had, so, which is basically that -- the kind of vociferous,
you know, theatricality of John McCain and Ted Cruz and Lindsey Graham
represents a play for relevance as they are being marginalized, and
actually just kind of broadening bipartisan consensus is emerging and the
Republican foreign policy right now, it`s very kind of decentered.

SKINNER: Absolutely. And so, that`s what was happening. I think Chuck
Hagel represents something of a center in the Republican Party, as may be
hard to believe given the way that he was being skewed in the hearing.

HAYES: It is hard to believe.

SKINNER: But when you listen to his prepared statement, not the actual
questions, it was hard for most Americans to disagree with what he was
saying. There was the internationalist component that we need our
alliances. They`re going to be as important as they`ve ever been, perhaps
more. There will be new configurations of alliances. New kind of burden
sharing that we didn`t see at the height of the Cold war. You know, he`s
known to have supported global zero, but he also talked about a strong
nuclear presence until we can get rid of nuclear weapons. That`s really
hard for the Republican right to hear.

HAYES: But what`s interesting is that he represents this -- I guess this
is a point, he represents an older foreign policy consensus, right?


HAYES: Right. Yes. Exactly. That doesn`t exist any more. I mean that`s
the thing I find so disturbing, and I think in some ways, the reason that
he`s such a threat, the reason he was treated with such contempt is because
of the fact that his personal biography and his, you know, decorated
veteran - that he has this kind of unique credibility to speak about the
horrors of war.

There`s this quote from this "New Yorker" profile when he`s talking about
his opposition to surge, and he said, "As he listened to his colleagues
discussing more troops to Iraq, he was struck by a cavalier approach as if
it were an abstraction. Very few people now much about war, very few are
touched by it. It`s also time we`ve seen over a period of four years, so
much deception by this administration," blah-blah-blah. "And now we`re
going to send 30,000 more troops into the meat grinder."

The meat grinder to me is such an intense term to use for the horrors of
war that you don`t hear U.S. senators throw around. And I think what I
find disturbing is that this consensus, this bipartisan to me, Ali, has
moved to the right, particularly if you look at something like Iran. We
were talking negotiations four years ago and now we`re talking toughness.

ALI GHARIB, THEDAILYBEAST.COM: Yeah. Now like the standard is -- I mean,
it was pretty amazing to watch Kelly Ayotte question Hagel about Iran and
act like the administration`s position wasn`t that we should talk to Iran.
You know, Biden was traveling yesterday and made the statement again that
we should talk to Iran, and they just grilled him like it wasn`t -- like
he`s totally out of line with the country when really he`s perfectly in
line with the Democratic Party and the administration. But that`s because
like -- the Congress is a totally, totally dysfunctional institution on
foreign policy.


GHARIB: Just I mean -- and what you were saying during the break, it`s
not, you know, I agree with you, I don`t think that leadership is going to
come out of the Congress and D.C. is this totally toxic place. I mean if
you look at the way the people that were the big newsmakers like Elliott
Abrams going on NPR and calling Chuck Hagel an anti-Semite, Dani (ph)
Pletka, who is the Vice President of Foreign Policy Studies of -- whatever
that means, and she did the same thing, like, that`s the kind of discussion
that`s happening in the dominant -- you know, these are two of the
institutions of the D.C. Republican foreign policy right now and they`re
excommunicating people like Chuck Hagel and I`m just not so sure that
there`s much hope in the -- I sort of see it the opposite way that you do.
I think that the party is kicking out what used to be that reliable
bipartisan center.

SLAVIN: I did an interview with Hagel in May of last year and I asked him,
are you a Republican? He said, I don`t know what a Republican is any more.
So ...

SKINNER: I think many people actually feel that way and I don`t actually -
- on the one hand, I believe that bipartisanship merging in foreign policy,
but I`m not sure that it`s actually healthy and rooted in reality as you`ve
tried to refer to in terms of what`s happening on the ground in Iraq and
just the impact that Iran is having in Iraq. The impact that it`s having
all over the region. The answers to the big questions in the international
system and the role of the United States and the world are going to come
from outside of the Beltway. And the dysfunction that we`re seeing ...

HAYES: But the only thing -- but the problem is that this is the problem
with foreign policy. Is that the only place where foreign policy seems to
get made is inside the Beltway. And when I hear bipartisan consensus, I
think, you know, I think my particular generational cohort, which was -- I
was, you know 24 years old when we went to war in Iraq, that experience of,
like, what bipartisanship on foreign policy means to me is like anytime I
see a bipartisan consensus on foreign policy I run head long in the other
direction, right?

SKINNER: It`s your--


HAYES: Because I remember that there was an authorization of use of
military force, in which one member of Congress in both houses voted
against it, and that`s what precipitated the black sites in Guantanamo and
the 11-year war in Afghanistan. So, when I hear bipartisan consensus, and
right now the place where I see bipartisan consensus is precisely on Iran,
and there was this moment in the hearing ...

SKINNER: I agree with you. I agree with you.

HAYES: I have to show this moment in the hearing where it was like -- it
was this -- it was like out of a movie where he had said something wrong
and was handed a card to correct himself on the Iran policy. I want to
play that right when we get back.


HAYES: I wanted to play to you that little clip, but now we have technical
difficulties back there. This was basically Chuck Hagel supporting the
president`s policy on Iran containment. And then he says, after he says
that because by the way, I just have been handed the note. I misspoke and
said I supported the president`s position on containment. If I said that,
it meant -- means to say that obviously, his position on containment, we
don`t have a position on containment, so I recognize I had more attention
paid to my words the last eight weeks than I ever thought possible.

And what I think is fascinating here, containment was the framework for 50
years of American foreign policy and the Cold war.

SLAVIN: Containment is our policy on Iran. It has been for the last 34
years, we`ve been containing Iran. That`s exactly what we`ve been doing
and it`s exactly what we would do if they got nuclear weapons. So, Hagel
has been consistent. Since 2001, he has advocated direct unconditional
talks with Iran. And the thing that distinguishes him and that didn`t come
through in this very unfortunate hearing is that he`s somebody who likes to
listen. He likes to ask questions.

I had a trip to Iran in December 2001. I was asked to come in and brief
him on this trip. It was a snowstorm in Washington, D.C. Congress was
essentially shut down. I went through the snow. There he was and he asked
me questions for an hour about things I hadn`t been able to put in stories
that I had written on my trip to Iran. He`s somebody who really cares and
he thinks about things before he opens his mouth and makes judgments. So I
think it was really sad to see how he had to backpedal.

SKINNER: But why even logical -- yeah, but why did he?

GHARIB: And he had to backpedal on these really, really important issues.

HAYES: Right. That was sort of disturbing. That now a self-criticism

GHARIB: Right. Right. I mean it was more like a public shaming. He --
but he like it was Republican purge, basically. No offense or anything.


GHARIB: It was very -- it was once actually very, very malice. The -- it
was amazing to watch ...

HASTING: You need to go (ph) to Stalin.


HASTINGS: You need Stalin on the air.

GHARIB: It was just like ...

HAYES: Not a literal comparison for the literalists watching at home.

GHARIB: It`s just amazing that this whole - you know, this is like the
Beltway discourse now. And this is the bipartisan consensus. That you may
not say, you know, all options are on the table with Iran, except for
containment. The thing that worked with the Soviet Union ...

HAYES: Right. Right.

GHARIB: ... with its thousands of nuclear weapons.

HAYES: Right.

GHARIB: Except that one policy. We can do anything except that.

HAYES: Right. And that`s what I mean -- that`s what I mean by this
rhetorical shift that came out of the hearing to me, which is that these
things that used to be -- and, again like, I don`t have much stake
personally in my own ideological perspective in my world view in what was
establishment bipartisan American realism, whatever. I don`t -- I don`t
really have a dog in that place except for the fact that what seems to be -
- it`s being replaced by something far more aggressive, right? If
containment used to be the thing that we all agreed on and now containment
is some sort of crazy taboo. What does that mean about how things are

HASTINGS: And we saw it shift, right? When Obama came into office in
2008, there was this hope that this was going to talk the Iranians. But
then that`s moved to well, OK, and now he`ll support air strikes, that`s
one possibility, and he keeps moving to OK, he supports all the wars that`s
necessary. So, you`ve had this rhetorical shift. Where not only -- and
it`s been a shift that`s been driven by the guys like McCain and Lindsey
Graham and these hawkish voices within the Republican Party and these
Democratic caucus who kind of go along with it. So, by the end of the day
even saying, oh, I want to have talks with Iran is a controversial

HAYES: Are there people in the Republican foreign policy apparatus,
foreign policy class of which you remember in this strategic class, are
there people -- is there some share of those people who share Hagel`s
views, who are fine with a policy of containment on Iran, who think there
should be more diplomacy?

HASTINGS: Jon Huntsman.

SKINNER: Absolutely. And I think we actually saw that in the Romney
campaign and in terms of his foreign policy advisers. Many of them, Paula
Dobriansky ...

SLAVIN: Mitch Williamson.

SKINNER: And absolutely working ...


SKINNER: Who would --


GHARIB: ... for his transition.

SKINNER: Yes, and ...

GHARIB: ... which neocons went crazy about.

SKINNER: And these are people who have worked with Democrats, Republicans,
they have worked on soft power issues, on hard power issues, and they`re
the emerging leadership. But I actually ...

HASTINGS: (INAUDIBLE) and John Bolton were the biggest voices in the
campaign for ...


HASTINGS: They were.

GHARIB: They were seen by the "New York Times" as this the top foreign
policy adviser.

SKINNER: Well ...

GHARIB: And I kind of agree with you that he went back and forth a little
bit on those issues.

SKINNER: But you have to look at what actually the candidate did himself,
and look what he stated, how he performed in the final debate, the
Republican debate on foreign -- the presidential debate policy ...


SKINNER: But I actually just want to bring a point ...

GHARIB: Because they are embarrassing, he embarrassed himself ...



SKINNER: I think he showed that there was some areas of common ground that
he was willing to even emphasize himself. Even, for example, on Libya.
But I want to speak to this issue about a kind of rhetorical shift. I
actually think there`s more of rhetorical confusion. And the confusion
belies the fact that we don`t have a grand strategy in the United States on
how we deal with the range of threats we`re facing. Ad when I talk about
consensus, I don`t mean that you vote down the line in the House and the
Senate on a particular foreign policy issue. But that there`s a common
understanding of what the threats are. And I think this is a problem for
Democrats, Republicans, for all Americans.

HAYES: Definitely.

SKINNER: And that is what is going on and that`s what we saw in this
hearing is that there`s not a common language even are we in the global war
on terror, we jettisoned that term used by the Obama administration when --
I mean by the Bush administration when President Obama assumed the office.
Now, the Obama administration is clipping back to that language. I think
we`re having some fundamental problems about the threat.

HAYES: I want to -- I want to hold it for a second because I want to also
turn to why -- should I support Chuck Hagel? Like what is my investment
after his performance in this which I thought was like pretty desultory.
So -- so, I want to hear at least an affirmative case for why the guy
should be running the Pentagon, which I didn`t hear in a nine-hour hearing.
Right after this.


HAYES: All right. So the affirmative case for Chuck Hagel, after watching
this bizarre spectacle -- you`ve worked with him, I think you`re an admirer
of his. Why should I care? Nothing I saw in that long thing made me feel
particularly strong for him, because he was ...

GHARIB: Oh, come on. McCain`s hatred for him.

HAYES: Yes, right. No, that`s right. The only case for him is that who
his enemies are. So, the question is what is the affirmative case for this
guy to run what is -- it`s actually the largest part of the government?

SLAVIN: The affirmative case is as I said before, he`s somebody who
listens. He`s somebody who actually thinks about things before he opens
his mouth and gives advice. He`s non ideological. I mean it was
incredible, they were trying to paint him as some sort of leftist. He`s
non-ideological. He is pragmatic. He`s also a really decent human being.
And, you know, he`s somebody who does things not because he gets some
personal payback, but because it`s the decent thing to do. I mean I`ll
give another example.

HAYES: Let me just say, I don`t know if being a decent human being is
either necessary or sufficient to be a good head of the Department of

GHARIB: Might in fact, be a flop.



SLAVIN: You know, he was -- he was a guest -- gala for something called
International Student House, which is an NGO, nonprofit, nobody has ever
heard of it. It`s in Washington. It gives support to 90 foreign graduate
students every year. He teaches at Georgetown. He mentors young people.
I mean, this is a really decent human being. And it was very, very painful
to watch him being whipsawed by this kind of questioning.

HAYES: I will say I interact with a former student of his at Georgetown
who had incredibly laudatory things to say about him as a teacher, and
particularly about the fact that he was pushing students to not just accept
conventional wisdoms, which again, is the thing that I think he`s gotten in
trouble for.

SLAVIN: (INAUDIBLE) the real maverick, it was in one of the clippings that
you sent me, not McCain.

HASTINGS: But my question after watching this, how does an individual who
got rolled like that in public project his force of will over the
bureaucracy of 3 million people? And it`s going to be -- there`s going to
be so much resistance. I mean this is an institution that he has spent a
large part of the last decade criticizing what their day-to-day activities
-- their day-to day activities are waging war in Iraq and Afghanistan.
Hagel obviously has been a very, very severe critic of that. Can he -- I
think he will be ...

HAYES: Yes, it`s a very good point.

HASTINGS: (INAUDIBLE) leadership if they continued this, if the Obama
administration continues to support him.

GHARIB: Mike, my boss Peter Beinart reported that he talked to some
sources close to Hagel and that some of the administration and the
administration sources played it down, but the sources closer to the Hagel
side of the confirmation said that basically the administration told him to
lay down.

HAYES: Right. Yes. Right. Exactly.

GHARIB: You don`t want to ...

HAYES: You just don`t want to pick a fight. And ...

GHARIB: You know, and the guy got rolled. It`s like my -- you know, my
little bit of ...

HAYES: He was strategically allowing himself to be rolled.

UNIDENTIFIED MALE: He pulled an Obama.


GHARIB: Yeah. My little bit of armchair psychology on it is that he just
-- he did it with absolutely no grace because here is a guy who is used to,
you know, whatever he thinks, he just spouts out, and it`s got him in
trouble, and it`s really, really poor, like I`m going to just let these
guys ask me tough questions and give you the scripted language. But he is
just bad at that. It`s not Chuck Hagel`s strong suite.

SLAVIN: He doesn`t like talking points.

HAYES: And it didn`t like -- yeah, and it looked like there was a gun off
screen aimed at his head, right? It had a kind of hostage video quality to


HAYES: Where it was like -- he couldn`t muster any kind of performative
investment in his recantation.

HASTINGS: Because the foreign policy debate is so narrow, it`s 15 degrees
to the left, to the right or the center.

HAYES: Right. Right.

HASTINGS: And if you`ve expressed any views outside of that, which Hagel
has done ...

HAYES: Right.

HASTINGS: You are immediately -- they try to marginalize you as much as
they possibly can.

GHARIB: But, in fact, I think -- oh, sorry.

HAYES: Could you?

GHARIB: I think that he will actually be able to -- I mean I don`t know
what his bureaucratic skills are like, you know, the old Republican talking
point said he was a CEO, which makes for good executive skills. I don`t
really know if that`s all true ...


GHARIB: ... to work in a government bureaucracy like that. But the guy
like, he really is in the right place, (INAUDIBLE) these big challenges
coming up, despite what he said about Iran, he`s really great on Iran.
And, you know, and frankly, he is even a little bit to the right of me,
like he`s talking up the -- all options on the table thing. Like I don`t -
- I think that at some point you`ve got to cut out all the threat making
with Iran if you want to make a deal. But at least he wants to have the
conversation about how terrible that war would be. You know, he`s on the
record as having said that. I wish he`d said it in his confirmation
hearing. I understand why he didn`t. On getting out of Afghanistan, his
head`s in the right place on that, on cutting the Pentagon budget, and I do
think that he was out of place not being able to say what he thought. But,
you know, if he gets into the Pentagon bureaucracy, yeah, I think he`s
going to have some enemies there, but he`s also got the respect of even a
lot of brass there.

HASTINGS: And these are going to be fights.


HASTINGS: I mean, even on the withdrawal of Afghanistan this past year,
General John Allen has been put in tremendous pressure on the White House
not to withdraw.

HAYES: Yes, we should be sure. That this is not a foregone conclusion.


HAYES: I remember someone in the White House once telling me about Iraq.
When Iraq was done and everyone was just kind of like forgot about it,
someone in the White House saying, that was a harder plane to land than it
looked. Right? I mean ...


HAYES: That was -- the actually ending war is harder than, I think ...

GHARIB: Yeah, because John McCain doesn`t want to get out of any of them.


SKINNER: Actually, I think there is a case that we should talk about in
terms of making Chuck Hagel the Secretary of Defense. And it`s not just is
he a good man and it`s good to hear that you have -- you understand the
kind of human side of him. But the fact that we`re going to make cuts in
defense, no matter what happens, someone who comes from the ranks of the
military and has credibility there, having been a decorated Vietnam vet is
important. And he will have credibility on that score, and some others
might not. The fact that he will have the ear of the president and this is
the Republican that the president reached out to is going to be important.
We want a strong Secretary of Defense to be a player at the table of this
administration. We know that Secretary Kerry will be a formidable
Secretary of State because of his relationship to the president, his long
record, and his performance in the Senate. So I think he brings that
background. Also, if you just looked at the visual of the hearings, who
was seated on the either side of him?

HAYES: Right.

SKINNER: Senator Warner, Senator Nunn.

HAYES: Right.

SKINNER: How many people can command that kind of support? It`s going to
be necessary to get the hard work done in the future.

HAYES: Yeah. And the battles that are coming up on both policy and
bureaucratically, organizationally at Pentagon are really massive
challenging. Michael Hastings from Buzzfeed. Barbara Slavin of the
Atlantic Council, Ali Gharib of "The Daily Beast". Thank you so much for
being here.

GHARIB: It`s a pleasure.

SLAVIN: Thank you.

HAYES: It appears that compromise may no longer be a dirt word for
Republicans? That`s next.


HAYES: In the wake of President Obama`s decisive victory over Mitt Romney,
the Republican Party`s posture -- I mean implacable opposition seems to
have altered and become possibly a bit more placable. Rather than fight
and block, we`ve seen prominent Republicans open themselves up grudgingly
reluctantly to some kind of compromise. They went ahead with a fiscal
curve deal and let tax rates rise on top incomes. They unilaterally
capitulated on extending the debt limit. They agreed to $50 billion in
Sandy relief after president initially asked for 60 billion. And the most
recent example of Republicans coming to the tables takes place in the
Senate, the so-called Gang of Eight`s proposal for comprehensive
immigration reform, which at least in broad strokes looks a lot like the
plan the president put forth.

Now, one of the reasons for change is that politics have changed. The
president is more popular than he`s been in quite some time while the
public has a pretty negative view of the Republican Party. A "Washington
Post"/ABC survey shows President Obama with a 60 percent approval rating,
while former Republican Secretary of State Colin Powell recently reminded
his party of very unfavorability.


COLLIN POWELL, FORMER SECRETARY OF STATE: I mean, 26 percent favorability
rating for the party right now. It ought to be telling them something, you
know. So, instead of attacking me or whoever speaks like I do, look in the
mirror, realize how are we going to win the next election?


HAYES: So is the Republican Party looking at a full fledged structural
change? That has the establishment taking the reins back from an activist
base? More concerned with the set of principles than electoral viability
or is this just a temporary tactical shift in the wake of the election?

The president spoke about this issue in a recent interview with "The New
Republic" and seemed wary of drawing any definitive conclusion saying,
quote, "the Republican Party is undergoing a still early effort at re-
examining what their agenda is and what they care about. I think there is
still shock on part of some in the party that I won re-election. There`s
been a little bit of self-examination among some in the party, but that
hasn`t gone to the party as a whole yet."

Joining us now at the table, Michael Brendan Dougherty, national
correspondent for the "American Conservative", Michelle Goldberg great to
have that (ph) senior contributing writer for "Newsweek" and and Dylan Glenn, former special assistant to President
George W. Bush, now a managing director of Guggenheim Partners, a financial
services firm.

All right, so I guess, start with the thesis, have -- do you buy the just -
- the basic thing that we`ve seen a shift in the institutional behavior at
the Republican Party in the wake of the election?

MICHELLE GOLDBERG, THEDAILYBEAST.COM: I mean did you see the story in the
"New York Times" today about Karl Rove`s new pact that`s basically devoted
to fighting the Tea Party?

HAYES: Right.

GOLDBERG: I mean that to me shows that you at least see a big
institutional shift among establishment -- among the Republican
establishment, or at least the Republican establishment kind of strikes

HAYES: Yeah. Let me read from that. This is a report saying (INAUDIBLE)
looking to protect Senate races from Tea Party candidates. Because you can
count I think, it`s about six or seven winnable races in the last two
cycles that have been booted away. I remember watching on election night
and imagine Mitch McConnell, you know, throwing his bourbon across the room
because he keeps being denied at shot of majority leader, because you`ve
had people like Christine O`Donnell famously and Joe Miller in Alaska ...


HAYES: Right, exactly. And Todd Akin and Mourdock and all these people.
The biggest donors in the Republican Party financing a new group to recruit
seasoned candidates, protect Senate incumbents from challenges by far right
conservatives and Tea Party enthusiasts who Republican leaders worry could
complicate the party`s efforts to win control of the Senate.

GOLDBERG: So, in a way the Iowa race is going to be kind of the test case
about whether they can reform themselves, right? I mean if -- they
basically have kind of Karl Rove and all these donors working to head off
the nomination of Steve King.

HAYES: Steve King being ...


HAYES: ... extremely far right, outspoken Republican Congress person from

GOLDBERG: Right. As kind of the id in certain ways as the kind of Tea
Party base of the party. You know, but so far, but -- they`ve tried in the
past, right? They`ve tried to mobilize in the past. You know, I mean Todd
Akin was also not the candidate of the Republican establishment, and they
put a lot of money as far as I know into some of -- into his challengers.


GOLDBERG: Right. But -- I mean so to me, the problems that you have this
change at the institutional level of the Republican Party. But I`m
wondering -- and you`re much more in touch with them than I am -- whether
there`s any sense of a necessary change among actual Republican voters and
the Republican base.

HAYES: In the base.

some -- I mean you see that the identification with the Tea Party among
Americans is just going down and down and down. And I think this has a lot
to do with what I think you`ll be talking about later, the economy is
starting to rebound. People are slowly starting to get back into work.
Not look as dismal. They`re not seeing these emergency measures for
economy like TARP or the major stimulus and that has just lowered the
temperature on the right.

And that means you see -- I mean in 2010 and 2011, when you looked at the
Republican Party and when the Republican Party looked at itself, they
thought, we are facing a permanent revolution on the right where if we
don`t vote this way, there is going to be another Tea Party challenger and
another Tea Party challenger. And although these efforts like Karl Rove`s
are getting started now, I mean I think they`re finding out that there
isn`t an endless bench of Tea Party candidates that are credible, that can
win primaries. And that has loosened it up for them to do the debt ceiling
deal that you just talked about, or to make a little bit of room on
immigration reform.

HAYES: Yeah.

important. They matter. And I think that South Republicans, you know,
want to win Senate seats. They may want to win the presidency.

HAYES: Well, political science 101, a party exists to get elected, right?

GLENN: That`s exactly right.

GOLDBERG: But the question is, but they`ve wanted that for a while. The
question is whether they can get primary voters to go along with them,

GLENN: You know, I don`t know. I`ve been around it for a while. These
things tend to be typical. And my sense of it is, is that, you know, the
party is still basically, is about ideas and having the right people, which
express those ideas. Is how you get across the finish lines successfully.
I think that you`ll see, you know, the new Karl Rove group, as you will,
the conservative victory project just trying to sort of shape influence
recruitment of candidates that speak across -- you know, that appeal to a
broader group of people.

HAYES: Right.

But the point here, I think there`s sort of three things. Because you
mentioned this. I want to put them -- I want to -- there`s like people in
candidate recruitment, right? Which is like don`t recruit people who say
wildly offensive things about rape, right, that is a sort of new principle
for candidate recruitment.


HAYES: Then there`s -- then there`s the actual ideological center of where
the party is, whether that`s changing, and then there`s the kind of
tactical choices made about opposition and cooperation.

GOLDBERG: Right. It seems like the there`s changes at one and three, but
not a lot of changes at two.

HAYES: Right. So I want to talk about which of those three are actually
changing right after we take this break.



HAYES: Kiron, there was a point you wanted to make. As I was saying that
basically -- there are three levels at which to look the shifts, right, the
candidates who recruit the people, the actual ideology that`s motivating
all this, what people believe, where the center of the party is and then
the decisions the party makes institutionally, tactically about how to
either oppose or cooperate with the president.

SKINNER: So, I think the big problem is not the people or the tactics or
the strategies, but it`s actually what are the ideas and I think that`s a
problem for both parties. I believe that since the breakdown of the new
deal coalition, that we have not had a relatively stable coalition in
American politics. Many talk about the Reagan revolution and I`ve done a
number of books on Reagan.

In my view, what Reagan stood for was a kind of an updating of the new deal
coalition. He brought together an unusual group of Americans. He, in
1980, took the college age vote, the female vote surprisingly despite the
fact that he was against the equal rights amendment ...


SKINNER: ... an important - He took the blue collar vote, as well, and
this unusual coalition that replaced the kind of south in the cities that
had stayed in relatively stable condition from FDR to that.

HAYES: Right. Right.

SKINNER: And we haven`t seen anything since. The Reagan revolution seems
to have ended when Reagan left the stage and what we`ve had in both parties
is inability to find the ideas combination, that will hold the coalition

GOLDBERG: But Obama, actually has the pretty stable coalition. I mean I
guess it`s the big difference between Reagan and Obama as far as coalition
building is that the Ron`s Democratic Party didn`t react to Reagan`s
ascendancy the way the Republican Party is reacting to Obama, right? I
mean you also had a kind of a Democratic Party that was for a time being
somewhat ideologically marginalized, but they didn`t basically adopt the
policy total of structure.

SKINNER: Yeah. I don`t think you can really declare in the middle of
administration that it has put together and enduring coalition that`s going
to succeed it. And that`s what I`m really talking about.

GLENN: And I said -- that you can`t claim that the president`s re-election
was a realigning event. I mean, you know ...

GOLDBERG: Absolutely.

GLENN: He won with 52 percent -- he won actually with less percentage than
he had in 2008. And, you know, Republicans too, like 30 governors, there`s
is, you know, a meaningful number of senators.

SKINNER: But there -- may be a --

GLENN: And control of one of the bodies of the United States Congress. My
point is ...

HAYES: Although they lost by 5 million votes.

GOLDBERG: Right. They have that because of gerrymandering, because of
redistrict ...

GLENN: Which was the same gerrymandering that existed when Speaker Pelosi
was Speaker Pelosi. I mean look, it`s gotten more gerrymandered but this
is not a new concept in American politics.

SKINNER: I think we really, though, and even with Reagan, it`s not just
Reagan. We began to see the realignment happened in `68 with Richard
Nixon. Because by `72 when he faced re-election, the south had now moved
to the Republican column. We don`t really -- I think we`re in a fluid
period and it`s due to the fact in part that that we don`t have a set of
ideas that will bring unusual groups of people together and that`s what a
coalition is. You can`t be just a coalition of the willing. It`s got to
be those who are different on ...

HAYES: Unwilling--



SKINNER: ... that they see something in common. For example, in 1980 on
election day, the exit interviews showed that many or most of those who
voted that day disagreed with Reagan on school prayer, gun control,
abortion ...

HAYES: Right.

SKINNER: ERA. But 90 percent of those people also agreed with him on
defense and economic policy. He found an issue combination that worked.
No one has been able to do that, including President Obama. It`s just a
very difficult time. And for Republicans to say, my platform is limited
government, you know, less spending, return the power to the people, it`s
just not enough to build a coalition.

HAYES: Yeah, and we should know they`ve lost five of the last six popular
elections for national office, which is not a great run. You`re making
this interesting case about what the makeup of the coalition is as being
determinative. And Michael, I`ve written a lot about this, I want to talk
about what the coalition -- where the coalition is at and what it makes its
politicians say after this.


HAYES: Hello from New York. I`m Chris Hayes here with Kiron Skinner of
the Hoover Institution, Michael Brendan Dougherty of the "American
Conservative" magazine, Michelle Goldberg of Newsweek and, and Dylan Glenn, former special assistant to President
George W. Bush.

We are talking about the modern Republican Party post the election, and a
string of decisions that are made at institutional levels, I think,
particularly in terms of how Congress has acted as the opposition, that
appear to indicate that the behavior has shifted a little bit, that the
long period in which kind of constant obstruction was the way that
Republicans thought was the best of countering the Obama administration and
the Democratic Party has shifted quite a bit in terms of the debt ceiling
deal, the fiscal cliff, the bipartisan senators who came together on
immigration, which, again, that`s kind of a rope thing in Washington, D.C.,
but it`s been totally absent for the last four years, right? That`s the
sort of thing you would have expected. When George W. Bush was elected, No
Child Left Behind was his top domestic policy priority, and you had a kind
of gang of eight style thing. Right?

GLENN: No Child Left Behind just didn`t happen. President Bush reached
out to Ted Kennedy, the Democratic lion of the Senate, and he worked the
issue and he built a coalition.

HAYES: Sure. They worked on the Recovery Act. They wanted the recovery--

GLENN: They didn`t work on the --

HAYES: Yes, they did.


GOLDBERG: It was one of those ludicrous Republican myths that Obama didn`t
reach across the aisle. And that myth, right, is so foundational, I think,
to a lot of Republican thinking, and I`m guessing to you and I it seems so
divorced from reality that it`s hard to even engage with, right, the idea
that Obama didn`t attempt to genuinely attempt a bipartisan governing

GLENN: You can call it a myth. I don`t know, but I think the proof is in
the pudding. I think that this --

GOLDBERG: So you blame Obama for the fact that there`s this --


GLENN: Listen, I`m in politics. I think most of those people we elect
hopefully are there because they care about solutions for the country,
right? And to get solutions, you have to give on both sides, you have to
come and have real bipartisanship. Just because the president of the
United States was re-elected on what he thinks is his progressive agenda,
doesn`t mean that he should get everything that`s in his progressive

HAYES: No, but I think --

GLENN: But that seems to be his governing, the way he`s governed the first
four years of his presidency.

HAYES: You and I totally view this differently. I mean, look at the
Affordable Care Act. The Affordable Care Act is a perfect example, right?
They pushed and pushed and pushed the Affordable Care Act. And the reason
they pushed and pushed and pushed was because they were trying to get this
group of Republican senators, right, in the Senate Finance Committee,
spearheaded by Max Baucus, who is probably one of the most conservative
members of the Democratic caucus, to get some kind of bipartisan deal.
They wanted nothing more in the universe and, in fact--

GLENN: You could have done insurance reform and we would have had a deal.
And you could have built, you could have built momentum for health care.

HAYES: I totally disagree with that.

DOUGHERTY: Well, I think the acrimony of Obama`s first term was a product
- was equal to the anxiety about the economy, and there was, also there was
a political anxiety with Republicans that health care reform could really
damage the Republican Party for the next 40 years by making it so that when
the average American parent, when their child gets sick, they think of the
federal government, and that scares the crap out of Republicans, because
they`ve seen how it`s changed the Tory Party in the UK. It is a
fundamental shift in the state, in the nature of the federal government,
along, maybe not equal to the Great Society or the New Deal, but in the
same vein. So I think that was a big part of the anxiety. And that,
again, we`re in a place politically where the temperature just keeps
cooling. And a lot of those fights have shifted to the courts.

HAYES: That`s interesting.

DOUGHERTY: We`re outside of the election year now. So you don`t have to
have Todd Akin or Mitt Romney talking about conception. That`s going to be
a court battle between Hobby Lobby and HHS.


HAYES: Let me just come back to this point. Because I think it`s
important to see what the political incentives are. So in terms of this
decision about, OK, there`s something on the table, right? Legislatively,
and you`re making this calculation, do I get on to the train and then try
to have conversations with it and change its direction and mix the
metaphors, I guess, or do I just like let it go and try to block it? OK?
The tale of Bob Bennett to me is the kind of paradigmatic one. Bob Bennett
was a fairly conservative senator from Utah, right, of long standing, he
was not some super lefty heterodox guy, right? And his huge heterodoxy was
that he had cosponsored a health care bill with Ron Wyden. It was not the
health care bill that actually got passed. It was called the Wyden-
Bennett, and in fact, a lot of Republicans later said, well, we really like
Wyden-Bennett, right? But what happened to Bob Bennett just for
cosponsoring this health care bill? He went back to Utah and got booted
out in that state`s Republican convention after serving, what, two or three
terms, OK. And I interviewed Bob Bennett --

GLENN: What about Ron Wyden? He wasn`t exactly embraced by the Democratic

HAYES: No, I agree, but that is the key. That`s the key, what you just
said is the key. Ron Wyden will not face a credible primary challenge.
And that actually is a huge asymmetry. Bob Bennett--

GLENN: That`s because the Democrats have the presidency, and they can
protect Ron Wyden.

HAYES: No. It`s because there`s a real difference in the way their bases
operate. Sometimes to my great frustration. I would like to see more
primary challenges.

GOLDBERG: We constantly think -- I mean, as a progressive, you constantly
think, you know, why can`t our base carry the same sort of weight in the
Democratic Party that the Republican base carries in theirs? And there is a
tradeoff there, right? On the one hand, you have basic grade, the
Democratic Party -- what is the saying, the Democratic Party hates its base
and the Republican Party fears its base? So the Democratic Party tends to
treat progressive activists with a fair degree of contempt.

HAYES: Contempt, totally.


HAYES: Let me just say for the record, Ron Wyden is a very good senator in
many ways, and very progressive on a lot of issues. Just so that is on the

GOLDBERG: And so on the one hand, this is immensely frustrating to
progressive activists, but the upside of that is that you don`t have kind
of this constant veto threat from the most implacable elements of your

SKINNER: I actually disagree with the idea that the Tea Party or the far
right is the core base in the Republican Party. I think the base is
shifting and reforming, and I think the election helped to make that a lot
more apparent. If you look at what happened at the National Review
Institute`s conference, just a few days ago, and some of the statements
that are coming out, Governor Jindal saying the Republicans are stupid,
there is a sense that--

GOLDBERG: Wait, but Jindal is not the base.


SKINNER: But I really think that we have to give it time, that the
Republicans are coming out of shock with the election. A lot of resources
went into the Romney camp, and there was a sense, throw money at the
problem and we will win. That did not happen. We`ve not begun a serious
conversation about the role of racial minorities in the Republican Party.
And I did an op-ed on the "New York Times" online a few weeks ago talking
about how the black vote needs to be recaptured, and the party needs to
become the party of Lincoln again, especially in light of the film
"Lincoln," which is all about the role of race and rights in the United
States and the beginning of the Republican Party.

HAYES: There`s a lot different in everyone`s politics in 1865. I mean,
nothing would cheer me more than to bring back the Republican Party of
Thaddeus Stevens, but I think that train is--

SKINNER: But I`m not saying we`re going to reform the party of Lincoln,
but the elements are there about race and rights, and the party that has
that legacy also has a certain responsibility. We are even having a
serious conversation at this point. They`ve identified this person, the
Marco Rubio. Here is a black senator there. That`s not the answer, a few
people. It is about coming to common ground on a set of core beliefs that
we call the American creed and how do you bring racial minorities into

HAYES: You have a lot of thoughts on that.

DOUGHERTY: Yes, I have argued that the Republican Party should try to
reach out to the black community before it reaches out to the Hispanic
community -- one just to reconnect with any kind of urban voter whatsoever.

HAYES: Because it completely alienated--

DOUGHERTY: And, too, because I think conservatism speaks to a sense of
loss, and I think that blacks may feel, in the next generation or two, as
America continues to change, that they are the minority with something to

HAYES: That`s interesting.

DOUGHERTY: In their status. So I think that the Republican Party may be
able to speak to that.

HAYES: I love how clear-eyed you are about the emotional appeal of


DOUGHERTY: It`s very difficult, it`s very difficult, because the image of
the Republicans -- there are two images of the Republican Party for the
average person. It`s the country club tassel loafer guy on the one hand,
and the wife-beater-wearing toothless redneck, toting a Bushmaster on the

HAYES: Right.

DOUGHERTY: That does not look like the future of America. In fact, it
doesn`t even look like the present of the Republican Party.

GLENN: But that`s the image, certainly.

DOUGHERTY: But that is the image. The Democratic Party has the advantage
of it`s so diverse in one sense that it doesn`t have one dominant image
that can kind of scare the rest of the--

SKINNER: I like how you put it about the Republican Party and its
relationship to black voters. Because I believe that the black vote is the
lead indicator vote for what`s going to happen with other racial
minorities. And if the party can`t win back part of the black vote, I
don`t believe that it`s going to take over the Hispanic vote. And the
reason that I think it can, is that there is a long tradition, of
conservatism among African-Americans on social issues, on defense. The
military has been the pathway. The GI bill, for example, for most of us or
a large part of us into the middle class. I wouldn`t be here were it not
for the GI bill and the way it allowed my father to get educated by Holmes
(ph). All of those--

GOLDBERG: But the GI bill is a liberal policy.

SKINNER: But no, listen to what I`m saying underneath it. I`m talking
about the commitment to national defense and understanding of the role of
the military in the United States, the relationship between the military,
national readiness, how we project ourselves in the world.


SKINNER: Some of the most patriotic Americans in the United States are

HAYES: Sure. But --


HAYES: -- liberals. Those things are --

SKINNER: No. But I think when you go underneath, there is a deep well of
social conservatism among African-Americans.

GLENN: I agree 100 percent with that. But I don`t want to see the
Republican Party become a pandering party, either.

SKINNER: No. That`s not what I said.

GLENN: I know that`s not what you said. But our message used to be one of
growth, opportunity for everyone. And I think that that still is a salient
message, we just don`t get it out in an appropriate way.

UNIDENTIFIED FEMALE: And that`s a very good point.

GLENN: And I think beyond that, the policies that support that are what`s
really important, and I`d like to see us get back to --

GOLDBERG: Can I just say quickly, there`s been this idea on the right for
a while that they were going to reach out to African-Americans on the basis
of social issues. That was the basis of a lot of these anti-gay marriage
amendments. And we`ve seen the complete breakdown of that strategy. So I
can`t imagine that you would want to --

GLENN: I don`t think I agree that was the strategy on the right.

GOLDBERG: Of course there was.


GLENN: It just happened to be, you know, Southern Baptist black ministers
that don`t believe in gay marriage.


HAYES: Wait, wait. Hold on a second. Hold on a second. Two things.
Important, right? The actual opinions of African-Americans on gay marriage
are moving in the same way that everyone`s opinions are. So that sort of
social conservatism -- the final thing I would say here about coalitions,
which is a point that I hit a lot, that I`ll say again, which is that
people are smart enough to not join coalitions that are going to be in
coalition with other people that don`t want them, right? And the version
of this on the Democratic side are gun enthusiasts. What Democrats did on
policy was they completely retreated. No gun control, the only gun bill
the president signed was to carry guns in national parks, right? Now, gun
enthusiasts can chose between two major political coalitions. And even if
one isn`t coming after you from a policy perspective, you understand that
that one coalition has the people that don`t like you and one coalition has
the people that like you. And the same is true of African-Americans and
Latinos. You can change on policy, but the problem is, at the coalitional
level, which coalition are you going to choose at the margin, and that`s
the deeper problem.

Kiron Skinner of the Hoover Institute, Michael Brendan Dougherty of the
American Conservative, Michelle Goldberg of Newsweek and the DailyBeast,
and Dylan Glenn, former special assistant to President Bush. Thank you for
calling (ph) my mom (ph) (INAUDIBLE), and thank you for joining us this
morning. Nobel Prize winning economist Joseph Stiglitz on inequality and
recovery after this.


HAYES: All right. This week saw two starkly different reports on the
state of the economic recovery, which is becoming something of a ritual.
On Wednesday, there was the gasp-inducing news. The economy actually
contracted in the fourth quarter of 2012. GDP fell by 0.1 percent, due
almost entirely to a sharp decrease in defense spending associated with the
drawdown of the wars. The negative GDP number followed relatively steady
growth of 2 to 4 point percentage points over the last three years. That
fourth quarter number is likely to be revised, but it nonetheless sent
ripples of anxiety through markets and the political class, and reminded us
of something obvious but absent from much recent political conversation.
The recovery is still very, very fragile, and there are still millions of
Americans out of work. In his weekly address yesterday, President Obama
blamed the negative economic growth on manufactured crises in Washington
like the fiscal curb.


OBAMA: 2013 can be a year of solid growth, more jobs and higher wages.
But that will only happen if we put a stop to self-inflicted wounds in


HAYES: Fortunately the bad GDP news was balanced with more hopeful signs
in the Labor Department`s latest jobs report on Friday. Employers added
150,000 more jobs for January. But the even bigger news came from the
revised jobs numbers for November and December. In those two months, the
economy added a combined 127,000 more jobs than was initially reported.
With those revisions, the initial turnaround from the lowest depths of the
financial crash look fairly impressive. In 2009, the U.S. economy lost an
average of 421,000 jobs a month, a really staggering figure. By 2012, we
were gaining an average of 181,000 jobs a month. That`s good news, of
course, but it is still not enough to get us back to full employment
anytime soon. So the question is, is the modest rate of job growth we`re
experiencing now simply the new normal, or is the economy finally on the
cusp of reaching the escape velocity we need to return to pre-recession
levels of employment? And if not, what`s standing in the way?

Joining me now are Julianne Malveaux, author of "Surviving and Thriving:
365 Facts in Black Economic History," also an economist and president
emeritus of Bennett College. Joe Weisenthal, deputy editor of Nobel Prize winning economist Joseph Stiglitz, author
of the book "The Price of Inequality: How Today`s Divided Society Endangers
Our Future," and a professor at Columbia University. And Edward Conard,
author of "Unintended Consequences," why everything in Joe Stiglitz`s book
is wrong.


HAYES: Not really. "Why Everything You`ve been Told About the Economy Is
Wrong." And a former partner at Bain Capital. But it basically is that,

But one of the things -- let`s start with this question of distribution in
the recovery. Because I think it`s a really interesting one. One of the
things about the recovery is if you look at it in the aggregate, and
particularly if you look at it in the aggregate and compare it to other
places digging out of financial crises, it looks pretty good in certain
ways. We`ve rebounded faster than some other economies have coming out of
financial crises. If you zoom in and you look at it distributionally, in
terms of how does your median worker look, it looks not that good, right?

One of the ways of looking at this is just corporate profits and employee
compensation in the recovery. Corporate profits hit a new high of 10
percent of GDP in 2012. Employee compensation fell to a low of 43.5
percent. So that top line is profits, that bottom line is compensation.
And you see in the recovery them moving in opposite directions.

Joe, you wrote an op-ed that got a lot of attention, basically making the
case that inequality, the levels of inequality, this distributional issue
we have, is actually an impediment to macro aggregate growth. With
inequality at its highest levels since before the Depression, you wrote in
the New York Times, a robust recovery will be difficult in the short-term,
and the American dream -- a good life in exchange for hard work -- is
slowly dying. Politicians typically talk about rising equality and the
sluggish recovery as separate phenomena, when they were in fact
intertwined. Inequality stifles, restrains and holds back our growth.

Why do you think that`s the case?

JOSEPH STIGLITZ, ECONOMIST: The most obvious reason is that what sustains,
particularly the American economy, is consumption. And the people at the
top spend on consumption a smaller fraction than those at the bottom. In
fact, those at the bottom have to, to get by, spend about basically 100
percent. So when you move money from the bottom and the middle to the top,
overall spending gets constrained. And that weakens the economy.

So in the current context, as you pointed out, with wages, income going up
so modestly, most of the gains going to the very top, and 2010, 93 percent
of all the gains went to the top 1 percent. With that kind of a recovery,
not a surprise that we`re not going to have robust demand. And without
robust demand, we`re not going to have a robust recovery.

HAYES: Why is it the case, so that the standard GDP calculation, right,
government plus consumption plus investment, and then minus your trade
deficit, right? So if it`s not going to consumption and it`s going into the
pockets of the top 1 percent or whatever, why aren`t we seeing that
reflected in investment? In fact, we saw very good business investment
numbers in the latest economic data. Where are those dollars disappearing
to? Why aren`t we seeing it, say, in investment?

STIGLITZ: Point is, people invest when there`s no return. If there is no
return, if there is no demand, you can`t sell your goods. If you have
excess capacity, you`re not going to build more excess capacity just
because the Fed has low interest rates. I mean, if you look at investment
overall, before the crisis, about 40 percent of all investment was in real
estate. Now, that is going to be dampened just because we built too many

HAYES: Right. And we had a bust, right?

STIGLITZ: And we had a bust. The good news is that a lot of them were
very shoddily built, and they`ll fall apart, and we`ll have to reconstruct

HAYES: Thank heavens.

STIGLITZ: But the fact is that, we overbuilt. The other part is actually
not doing badly, given how weak demand is. It`s not a lack of money. It`s
not the weaknesses in our financial system. That was one of the big
mistakes Obama made. But the belief was that all we needed to do was to
fix the financial system and everything would go back to before 2007. That
was wrong.

HAYES: And my sense is that you don`t agree with this sort of
distributional point, and I want to get your thoughts on it and bring you
guys in right after we take a quick break.


HAYES: We`re talking about the recovery, such that it is. And Joe, you
just made this discussion about inequality and its role in it. I want to
hear your thoughts on that.

points. First is, I think in a recovery, you see capital recover before
labor, because you have high unemployment so the wages don`t rise, they are
actually falling before you get back to high employment. So I don`t think
the pattern is so unique here.

The second is, is inequality driving the slow growth? We know that we had
much higher inequality than Europe and Japan and much higher growth over
the last few decades. We can parse through that, but I think it`s very
difficult to make the case that inequality slows growth. We have seen
higher growth, higher employment, higher median wages, more hours of work
for a working (INAUDIBLE), faster productivity in the U.S. And I think
that stems from the difference between Joe and I about what is causing the
inequality. Is it the success of the top 1 percent and the innovation in
the U.S. economy or is it crony capitalism which suboptimizes the economy
and slow down growth?

But the last also is, Joe takes a very traditional view of investment,
which is we`re simply building capital to meet the demands of consumers, as
opposed to what we`re doing in our economy, which is pouring money into
innovation. Which is creating its own demand, lowering costs. You don`t
need demand to fund innovation. And if you really parse through the
numbers and recalculate investment to include innovation, which is largely
salaries, and appears as the intermediate cost of production, not as
investment in and of itself, you see that we`ve had a very high rise in
investment, and we`re going to have a more volatile economy when our
economy is being driven by investment, but all the indications are
consistent with that higher productivity, faster growth, more employment.

JULIANNE MALVEAUX, ECONOMIST: You know, I think that Joe`s point is well
taken. And I think the four reasons as you talk about inequality in your
"New York Times" article, the one that is most compelling to me is the
issue about investing in education. Because our participation in education
is about the future. And what we`ve seen with much of higher education is
that financial aid has switched from need to meritocracy. So you have a
lot of working class, lower middle class folks who want to send their kids
to college but who can`t.

In addition, people are taking on a lot more debt. When I graduated from
Boston College in 1974, I left with two grand worth of debt. The average
student today leaves with about 25,000. The average African-American
students, nearly 30,000. When I was president of Bennett College, I used
to go through as seniors graduated to see what they owed. I saw numbers as
high as $80,000. This is a drain on our future. And that not only starts
inequality, but causes inequality to be quite--


STIGLITZ: It`s also the burden of that, because you can`t discharge it
even in bankruptcy.

MALVEAUX: Exactly.

HAYES: But then there`s also this broader question about the indebtedness
of the American consumer, right? Which is -- one of the things -- one of
the reasons that you have this reduced consumption and slow growth in the
wake of the financial crisis, right, is that you have to go through the
process of deleveraging, right? And deleveraging is a big part of what
we`ve had to do for the last four years.

STIGLITZ: But the student debt has now exceeded credit card debt. And
that`s really a change, because that`s really--

JOE WEISENTHAL, BUSINESSINSIDER.COM: I think one of the dangers -- and I
think a lot of your points make a lot of sense. But one of the dangers
with the inequality driving the weak recovery discussion, is that it starts
getting into these big questions like, oh, it`s structural, is it an
education problem? Is it a problem with how much we outsource our
industries? And all of those are interesting questions, but then they start
to detract a little bit from like, the demand, demand, demand, spend,
spend, spend.

HAYES: Which is of course your monomaniacal obsession.

WEISENTHAL: Which is how we should get out of the recovery. And so all
these, are we underinvesting in education and infrastructure? Definitely
interesting questions, but they`re not core to what needs to be done to
just get back to--


HAYES: -- boost demand.


MALVEAUX: But if you say spend, spend, spend, and you have all this debt
that exists, people can`t spend, spend, spend. And with the unemployment
rates, with the slow level of growth, you really cannot spend, spend,
spend. If you do not want people who are in economic distress to spend,
and the way that we advertise, you`ve got to have -- everybody has a little
black dress. Sort of pushing the pressure on to people to spend, spend,
spend, but these are folks who have so much credit card debt, that they
probably couldn`t buy a pencil on their MasterCard.

HAYES: But the weird, right, the weird paradox of the kind of Keynesian
case, right, is that we don`t want the savings rate to go up, we want it to
stay low to boost aggregate demand during this period. Right? We want to-


STIGLITZ: -- if we gave more income to people at the bottom and the
middle. That is the way we can square that circle.

MALVEAUX: And the whole notion of cutting government spending at a time
like this, which I would argue is part of the reason why we saw such poor
numbers for the fourth quarter. Cutting government spending, with 23
percent of African-American women work for federal government, and others,
I mean, 18 percent of the whole economy works for the federal government.
So you`re cutting government spending, which means you`re cutting jobs.

HAYES: I want to talk about the role the government has played in this
recovery. And also whether -- whether we are kind of in a new normal or
not, right, whether basically the way the recovery has gone has been
surprising or predictable. I think that`s kind of an interesting question,
because it makes us think about the what path forward is right after this


HAYES: So you mentioned, Professor, right before we went to break that
government has been shrinking during this period of time, government
spending. And I just want to show this chart about this private
contribution to GDP and public contribution to GDP. Because I think it`s
important. What we`ve basically seen is retrenchment. Right? So the
private sector has been positive for much of the last 16 quarters, you
know, and its contribution to GDP has been positive, and for most of the
last 16 quarters, the public sector has had a negative contribution to GDP,
right? The public sector has been contracting in terms of what it does.

And then the question becomes, OK, we have this cyclical problem, we have
this government retrenchment, there`s this lack of demand. Are we going to
look at this economy looking this way for the next four years, or are we
going to have something that looks like a real recovery that happened, you
know, in the 1980s, that happened in the 1990s? And this line graph gives
you a kind of a stark sense of what that would mean for full employment,
right? If we have 208,000 jobs per month, which would be a good -- that`s a
fairly good, right? That`s above what the last year was. We don`t get the
full employment until August of 2020. If we have 321,000 jobs a month, we
get there by 2016, and 472,000 jobs a month, which is a really robust job
recovery, we get there May 2015. So you look at that and you think, man,
we are far from full employment, and this recovery so far is not producing
the number of jobs necessary to get us there.

MALVEAUX: And you know what? The federal government, the American Jobs
Acts has languished since December of 2011 that President Obama suggested.
That jobs act would create hundreds of thousands of jobs. But in addition,
if we decided that full employment was our goal, and we employed some of
these people, I think that we would not have some of the deficit issues we
have, because these people would pay taxes. You know, they`re

Instead, we`re paying I don`t know how many people with the 99 week
extended to basically -- I won`t say sit at home, because many of them are
looking, but we`re paying them not to be productive. We could put them,
given our failing infrastructure and any number of other things, if the
federal government would increase its spending, which I know this makes the
Tea Party go crazy, but if we would increase spending, I would argue that
the rate of return on that spending would be well--

WEISENTHAL: That first chart that you showed, the two lines I think is
probably one of the most defining charts of this week recovery. We
basically had unprecedented austerity, other than the first few quarters,
when we had the stimulus. Which many economists thought was not that big.


MALVEAUX: We pushed stimulus for one period.


STIGLITZ: The downturn caused the deficit, not the other way around. The
fact is, in terms of jobs, we`re talking about the loss of jobs in the
public sector, state, local, federal, it`s about 700,000. If we had normal
growth, we would have added about 1.8 million jobs, so the jobs deficit in
the public sector is enormous. No. If the private sector had grown enough
to offset that, I think all of us would be happy. But the point is, the
private sector has not done well. You look at the last jobs report, the
one that just came out, what we see is that one of the things that
everybody had hoped for was the growth of exports as a source of job
creation. Not there.

HAYES: Everyone in the world wants to be a net exporter.


CONARD: -- government jobs is that government spending is up 30 percent.
It`s largely transfer payments, not employment in government, and that
should go -- flow through the economy and create employment in the private

MALVEAUX: Well, transfer payments would go down if we were able to do more
job creation.


STIGLITZ: If we had not spent the money on unemployment insurance, on --

CONARD: We continue to spend it every year.

STIGLITZ: The fact is that our economy would be even weaker.

HAYES: Right. So I guess my question for you, Ed, is why -- I understand
why people are -- I sort of understand why people are concerned about the
deficit or we`re spending too much money. But I don`t see -- no one I`ve
seen makes the case of why that`s the thing that is making the recovery
sluggish. The best I`ve ever --

CONARD: Joe does.


CONARD: There are two binding constraints on the economy.

HAYES: Hold that thought. Explain it when we come right back from break.


HAYES: All right. Ed, you want to make the case of why the sluggish
recovery or the sluggish jobs recovery particularly, what its link is to
the deficit.

CONARD: Yeah. Well, sort of. I think there`s two constraints that bind
the economy. One is properly trained talent, incentive to take the risk,
which grows the economy. And that hasn`t changed. The second is, you need
equity to bear the risk that goes along with taking those risks. And that
has changed a lot. We woke up in 2009 and 2010 and recognized that there`s
a lot more risk of damage from withdraws from our banking system than we
had realized, and we have dialed down the amount of risk taking that we`re
willing to take per dollar of equity. It`s no surprise that we have more
equity per dollar per employee and per dollar of GDP, and we`ve grown
faster and we`ve produced more innovation than other economies have. So
when we talk about spending more money in order to increase consumption in
the short run, that money has to come from somewhere, and it largely comes
from income that would otherwise be saved and invested as equity.

Now, we look to the surplus of capital that is sitting on the sideline,
that surplus is risk-averse, short-term capital that will not underwrite
the risk that grows the economy. We need equity. And Joe`s work is all
about how equity is the binding constraint, and how equity, the lack of
equity amplifies the business cycle, because when you fear that you`re
going to go bankrupt in a business cycle, you dial backwards, thinking (ph)
if you had more equity, you wouldn`t do that.

HAYES: Marshall McLuhan, please.



STIGLITZ: To the point, first of all, investment in the kind of risk
taking kinds of things like software, R&D is really actually quite strong.
The weakness in investment, not surprise, is in things like real estate,
because we overbuilt. If we hadn`t had that problem in terms of the
investment sector, not consumption, not exports, not government, would be
back to normal.

MALVEAUX: And, you know, the thing is, when you look at this whole notion
of conservative investment, the mortgage area is one of those where we`ve
seen the banks behave horribly. They were given money from the United
States government with the notion that they would then invest. Instead,
what you`ve seen is in order to qualify for a mortgage, you go from a 680
in 2008 to a 720 in 2012, which means that it is much more difficult.
Especially for --


HAYES: But that is the difference -- that is another way of saying what Ed
said, right? Which is risk aversion on the part of --


MALVEAUX: What I`m saying here is the government gave these people these
money not to hoard, but to spend. And the thought was if banks had more
money, they would spend it.

HAYES: Which they have not done.


WEISENTHAL: There`s another important constraint on the economy, which is
just real resources and inflation. None of those things that you said
about people wanting to invest would preclude the government from, say,
building a bridge or building 100 bridges. And we got consumer
construction numbers on Friday. You can just see, the amount of public
spending on roads and bridges and all that stuff just continues to decline
even now, and that`s the unprecedented austerity that I`m --

HAYES: Very quick point, yes.

STIGLITZ: If you go back to the Great Depression, one of the real forces
that got us out of the Great Depression, and particularly maintained the
economy after World War II was all the investment that was done during the
Great Depression on infrastructure and all the investments that were done
during the war and after the war on human capital and in technology.

HAYES: And a big part of this question is how does -- I mean, from
whichever side you approach it, right, the cash that`s sitting on the
sidelines, right? The question is how to push that out. That is in some
ways the problem behind this.

STIGLITZ: All that cash was there before 2008. You can see a chart of how
that goes up.

HAYES: What you should know for the news week ahead, coming up next.


HAYES: In just a moment, what you should know for the news week ahead, but
first, a quick update on stories we`ve been following. Last week, we
talked about the possibility that fallout from the war in Libya may be
fueling conflicts in North African countries like Mali and Algeria. On
Tuesday, the New York Times reported that the U.S. is preparing to build a
base for surveillance drones in North Africa to gather information on
possible threats there. But as the Times reported, officials have not
ruled out conducting missile strikes in the region if the threat worsens.

There are also reports this week that law enforcement officials are nearing
a settlement with the Royal Bank of Scotland over the bank`s role in an
industry-wide rate rigging scandal. As we discussed last year, traders at
RBS, Barclay`s, UBS and possibly several other major global banks engaged
in systemic fraud when they intentionally manipulated a key global interest
rate known as libor or the London Interbank offered rate, to benefit their
own trading positions.

The rate is used to set interest payments as a benchmark on hundreds of
trillions of dollars of loans worldwide, including consumer loans like
mortgages and credit cards. In many cases, traders bumped up the rate to
line their own pockets, meaning your mortgage payments may have been bumped
up, as well. According to reports, U.S. officials are seeking a guilty
plea from RBS on criminal charges in addition to a fine of possibly $785
million. Swiss bank UBS has already been fined $1.5 billion.

All right, so what should you know for the week coming up? Well, you
should know that right now, there is an organized campaign from a who`s who
list of prominent and powerful New York politicians, including members of
Congress, state legislators and mayoral candidates, to do everything in
their power to stop the horrifying possibility of a college holding a panel
discussion of a controversial issue. No, really.

You should know a group of Brooklyn College students organized an event to
discuss the boycott, divest and sanctions movement, which is an attempt by
activists here and around the world to pressure Israel to end its
settlements and occupation through organized boycotts, international
sanctions, and divestments, modeled on those directed at South Africa
during apartheid. You should know a whole lot of people understandably
find any comparison to South Africa offensive, and I myself genuinely
wrestle with the justness and the efficacy of the BDS approach. But, of
course, the entire point of academic freedom is to discuss ideas that may
be viewed with contempt by the political mainstream.

You should know that according to Brooklyn Political Science Department,
the students who organized the event asked the college`s political
department to cosponsor it, which they did, opting to cosponsor the event
though not endorse it. It will feature two prominent proponents of boycott
divestment and sanctions, Omar Barghouti and Judith Butler. You should
know the department co-sponsors all kinds of speaking events without
endorsing the views of the speakers.

I understand why there`s an outcry from citizens or writers or
intellectuals who find the BDS approach odious. But it is genuinely
outrageous and outright chilling for politicians to line up to attempt to
force an academic institution to cancel an event, particularly when some of
those politicians, members of the New York State legislature, actually
determine the budget of the institution.

Think of the precedent that is being set here. Do you really want state
legislatures determining the budgets of our public universities and
colleges based on which speakers they invite? How would you feel if an
Alabama state legislature told the University of Alabama to disinvite, say,
gay writer and activist Dan Savage or face consequences? And I would ask
the same question to Hakeem Jeffries, Yvette Clarke and Jerry Nadler, all
members of Congress I respect and had had on the show, and all of whom have
signed on to a letter to Brooklyn College`s president calling on the
political science department to withdraw its co-sponsorship of the event.

Many of those now browbeating Brooklyn College claim their problem with the
panel isn`t the speakers, but the lack of balance. Now, I happen to be in
the business of putting together panels for a living, and I can say that
sometimes, you want, quote, "both sides of the issue," but that panels
with, quote, "only one side of the issue" or participants who agree on a
basic set of principles are often just as edifying and informative, and
reveal new and unexpected areas of tension, conflict and discord.

In fact, just two weeks ago, I moderated a panel at NYU law school about
human rights, with three panelists who are all avowed human rights
advocates. And amazingly, not one of the politicians now complaining about
Brooklyn College raised a ruckus that we did not have anyone opposed to
human rights on the panel.

In fact, you should know that Alan Dershowitz himself, who`s led the
crusade to intimidate his alma mater into canceling the event or having the
co-sponsorship withdrawn, insists he`s troubled by the lack of balance in
the panelists - well, he gave a prominent lecture by himself at Brooklyn
College, at the college`s invitation, just a few years ago, and somehow
never seemed to require a rebutting voice to his rather controversial views
as a precondition of his appearance.

It`s OK to get one side if that side is Alan Dershowitz`s. You should know
some people seem rather selectively worried about balance.

I want to find out what my guests think we should know for the weeks coming
up. I`ll begin with you, Julianne.

MALVEAUX: Well, the last 10 days of January represent the time when we do
our census of the homeless. Of course, how do you do a census of the
homeless? But in any case, what we see is relatively level rates of
homelessness. But the rate of homeless veterans has gone down a little
bit. But we don`t hear the word homeless being used so very much anymore,
so I thought it was interesting to see that in some cases, people have come
together, Secretary Shaun Donovan and the head of the Veteran Affairs
Department to basically do this work.

Again, we don`t hear, there are some words that have basically been
abolished from the political discourse. Homeless, poverty, race and those
kind of things.

HAYES: Homelessness is interesting, too, because homelessness is something
that did dominate political discussions, particularly in the 1980s, when it
first kind of appeared en mass. I know growing up in New York City, Mayor
Ed Koch who just passed away, this was a huge issue. But there`s actually
been a fair amount of progress made on the policy front of ending
homelessness. And there are a few different cities that have taken some
pretty innovative approaches that have borne tremendous returns in terms of
actually turns out the way to solve homelessness is just get people homes,
right? Building enough actual shelters to put people into, and so forth.
Joe Weisenthal?

WEISENTHAL: One of the really interesting stories that is developing in
the global economy right now is Japan has been trying all these new fiscal
and monetary stimulus.

HAYES: I knew you were going to go with Japan.

WEISENTHAL: Really? And the yen has been weakening. And at the same
time, in Europe, the euro has just been on a tear. It`s strengthening
because the crisis is basically over there, the financial crisis, not the
economic crisis. The euro has been surging. And it`s really freaking out
German politicians and heads of German export-oriented companies, because
their own currency is super strong, while another major exporter is seeing
its currency dive. So they are worried about competitiveness. There is an
ECB meeting coming up later this week, and it will be really interesting to
see if they do anything or say anything to try to talk down the euro and
what kind of pressure there is.

HAYES: That may be - this is a high bar, but that may be the nerdiest "you
should know" that we have ever had. Yes, nailed it. Relative strength of
the euro and the yen. Fascinating experiment happening in monetary policy
in Japan right now for the monetary policy nerds out there. Joe?

STIGLITZ: Well, you showed a chart earlier showing how the share of
corporate profits has been rising. Wages going down. Also troubling is
that many of the corporations have found ways of avoiding taxes. Part of
that avoiding taxes is moving -- keeping money abroad. And with that,
keeping jobs abroad, rather than creating jobs in the United States.

Senator Sanders of Vermont is going to be introducing a bill, I believe
this week, where he`s going to try to limit the scope of this kind of tax
avoidance activity and to make corporations begin to pay a fairer share of
their responsibility and to try to close some of these loopholes,
particularly those related to exporting jobs abroad.

HAYES: You know, one of the other proposals that has been on the table,
not from senator Sanders, right, which is this kind of amnesty idea, right?
Of course, amnesty is this toxic word, but if it`s corporate money, just
like, come back, no hard feelings, no harm, no foul.


STIGLITZ: We saw what happened. That was under President Bush. You pay a
little bit of tax, money came back. No job creation. That`s not a good

HAYES: Ed Conard.

CONARD: I`m eager to see the Congressional Budget Office`s 10-year
forecast which comes out this week, to see if they do the same thing this
year that they have done for the last three years, which is predict fairly
anemic growth for two years, followed by three years of boom, which they
then push back every year, year after year. Never admitting that their
forecasting model really doesn`t work in these times.

HAYES: And I think actually the forecasting question is a really
interesting one, right? Because one of the things that happens is when we
talk about these deficit conversations, right, we are talking about the out
years, 2030, 2035, 2040. And it just seems to me like, what the heck do we
know about the economy in 2040?

CONARD: We can`t predict one year ahead.

HAYES: We can`t predict one year. And maybe innovation is incredible and
we have all sorts of new gimmicks, and or maybe we have like 40 years of
essentially Japanese zero growth. And like obviously, things are going to
change a lot.

I want to thank my guests today. Economist Julianne Malveaux. Joe
Weisenthal from Joe Stiglitz, author of "The Price of
Inequality," and Ed Conard, author of "Unintended Consequences." Thank you
all, that was great.

MALVEAUX: Thank you.

HAYES: Thank you for joining us. We`ll be back next weekend Saturday and
Sunday, 8:00 Eastern Time. Our guests will include Gloria Steinem and
Marlo Thomas, talking about their new documentary, including their
interview with Hillary Clinton, the state of feminism today and more.

Coming up next is "MELISSA HARRIS-PERRY." On today`s "MHP," former
Congresswoman Gabby Giffords made the point on guns, you must do something.
The question is, just what should we or Congress or the president or a city
mayor do. The hard questions, unpacked, up next on "MHP."

And we will of course, see you next week here on UP. Have a fun Super


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