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'The Last Word with Lawrence O'Donnell' for Thursday, February 7th, 2013

Read the transcript to the Thursday show

THE LAST WORD WITH LAWRENCE O`DONNELL
February 7, 2013

Guest: Joy Reid, Howard Fineman, Paul Krugman, Sam Stein, Ari Melber, Ana Marie Cox


LAWRENCE O`DONNELL, MSNBC ANCHOR: Feeling sorry for Karl Rove yet?
He is having a lot of trouble getting Republicans to listen to him these
days. Maybe he shouldn`t have wasted 100 million of their dollars on the
last election.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Will the Republican Party change some of the
substance of their positions?

KARL ROVE, AMERICAN CROSSROADS: We need to do better if we hope to
take over the United States Senate.

WILLIE GEIST, MSNBC`S MORNING JOE: What`s going on here inside the
Republican Party?

UNIDENTIFIED MALE: They`ve gotten spanked a couple of times.

ROVE: Better conservative candidates and win.

UNIDENTIFIED FEMALE: You have two very Republican Parties on display.

UNIDENTIFIED MALE: On the official Republican side, you have Karl
Rove.

UNIDENTIFIED MALE: Karl Rove has a new super PAC to get rid of
candidate like Steve King.

ROVE: Some people think the best we can do is Todd Akin.

TODD AKIN, FORMER MISSOURI CONGRESSMAN: If it`s a legitimate rape --

UNIDENTIFIED FEMALE: Don`t talk about rape.

AKIN: The female body has ways to try to shut that whole thing down.

UNIDENTIFIED FEMALE: The Republican Party should split.

UNIDENTIFIED MALE: In order to rebrand yourself you have to re-think
about your positions.

UNIDENTIFIED FEMALE: They are talking the talk.

ROVE: I want to win better conservative candidates and win.

UNIDENTIFIED FEMALE: But they are not walking the walk.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Washington has to deal with its
spending problem.

UNIDENTIFIED MALE: The looming budget war.

BOEHNER: I`ve had enough of it. It`s time to act.

REP. NANCY PELOSI (D), MINORITY LEADER: We`ve seen the Republicans
playing game.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I love Nancy Pelosi.

PELOSI: Playing games with the budget.

OBAMA: They recognize that the sequester is a bad idea.

BOEHNER: I don`t like the sequester.

CHRIS CILLIZZA, MSNBC CONTRIBUTOR: Something so terrible.

OBAMA: I am prepared to do a big deal.

UNIDENTIFIED MALE: You need to have a balanced approach.

OBAMA: That ends this governance by crisis.

UNIDENTIFIED MALE: To solve it, you need to have a balanced approach.

UNIDENTIFIED MALE: Game of drones.

TAMRON HALL, NBC`S TODAY: John Brennan`s confirmation hearing.

UNIDENTIFIED FEMALE: Whether he should be the next CIA director.

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: He`s determined, he`s
strong. He`s a bull.

ANDREA MITCHELL, MSNBC`S ANDREA MITCHELL REPORTS: John Brennan is
going to face questions.

UNIDENTIFIED MALE: A lot of questions.

CHRIS JANSING, MSNBC`S JANSING AND COMPANY: About the legal
justification for using drone strikes.

UNIDENTIFIED MALE: Drones set to take center stage.

JANSING: To kill American citizens.

JOHN BRENNAN, CIA DIRECTOR NOMINEE: These targets are indeed ethical
and just.

JON STEWART, HOST, THE DAILY SHOW WITH JON STEWART: These are not the
drones you`re looking for.

(END VIDEO CLIP)

O`DONNELL: Republicans are at war with Karl Rove. Bush`s brain, as
Rove used to be known, when Rove was thought to still have a brain, is on a
mission to crush (inaudible) crazy Republicans so that the party will
actually nominate more reasonable candidates who have a chance of winning
general elections against Democrats.

Today, a Republican who writes big checks to Karl Rove told Politico
that the Republican Party, quote, "has had too many candidates who are nut
cases. I don`t think anybody anywhere with any sense is going to want to
elect a candidate who says if your daughter gets raped, it`s God`s will. I
mean, give me a break, will you?"

The problem for Karl Rove is that he and his rich Republican friends
may be outnumbered by crazy Republicans. After Rove announced his new
super PAC aimed at crushing Tea Party Republicans in favor of more
reasonable Republicans, the president of Citizens United declared the civil
war has begun. The president of Freedom Works declared the empire is
striking back. And long-time right-wing lunatic Brent Bozell wrote, "It`s
a fight between Republicans who want to not only run as conservatives but
govern as conservatives versus the Bush-Boehner-McConnell, never mind
approach."

Rove`s super PAC`s spokesman Jonathan Collegio said this.

(BEGIN VIDEO CLIP)

JONATHAN COLLEGIO, SPOKESPERSON, AMERICAN CROSSROADS: Bozell is a
hater and he also, like, has a long sordid history. Like hating Karl Rove,
too. So I -- he has like weird personal axes to grind.

(END VIDEO CLIP)

O`DONNELL: A bunch of Tea Party groups came to Bozell`s defense
saying, "Mr. Bozell is what we call in our movement a legacy. He has
devoted his life to the cause of American conservativism as did his father,
Brent Bozell II, who wrote `Conscience of a Conservative` for Barry
Goldwater.

"Maybe you`ve heard of Brent`s uncle, Bill Buckley. You may have
heard of his other uncle, Jim Buckley, a former U.S. senator, or Brent`s
mother, Patricia Buckley Bozell, both important figures and writers in our
conservative movement. You obviously mean to have a war with conservatives
and the Tea Party. Let it start here."

The president of Rove`s new super PAC told "The New York Times" this
week that they are particularly concerned about the Senate race in Iowa
because this guy might get the Republican nomination.

(BEGIN VIDEO CLIP)

REP. STEVE KING (R), IOWA: If there is a sexual predator out there
who has impregnated a young girl, that sexual predator could pick that girl
up off the playground at the middle school and haul her across the state
line and force her to get an abortion to eradicate the evidence of his
crime and bring her back and drop her off at the swing set, and that`s not
against the law in the United States of America.

(END VIDEO CLIP)

O`DONNELL: That is of course the dangerously crazy Iowa congressman,
Steve King. According to a new Public Policy poll, Steve King has a big
lead for the Republican nomination in -- among Republican primary voters
who obviously have no problem with crazy but as -- and this is exactly what
Karl Rove fears. That same Steve King in that same poll is running 11
points behind the leading Democratic candidate, Bruce Braley.

Steve King sent an e-mail to supporters today that thrilled Democrats.
"Nobody can bully me out of running for the U.S. Senate, not even Karl Rove
and his hefty war chest."

Joy Reid, these guys are making it fun.

JOY REID, MSNBC POLITICAL ANALYST: I know.

O`DONNELL: They`re just make making this fun.

REID: It`s brilliant. Because look, there`s always been more crazy
people than sort of the same people in the Republican Party. It`s just
that, you know, they`ve been called many things. The John Burke society,
right? We call them the no nothings. They are now sort of encapsulated in
the Tea Party and the only reason that Karl Rove was ever considered a
genius was that he managed to convince the crazy people in the party as
well as the evangelical wing that a Methodist named George W. Bush -- now I
-- I grew up Methodist.

I can tell you they are the most mild mannered Christian. They don`t
even shout in service. They just sort of nod affirmatively. That he was
an evangelical right-wing flame thrower like they are. And he convinced
them of that for eight years. He put one over on them and now they`ve
figured it out. They`ve had a taste of power and they want to run things.

O`DONNELL: Howard, what do the -- what does the Brent Bozell side of
the party think about actually winning elections? Is that -- is that --
does that come into their calculations anywhere?

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: I think they think somehow
history will bend in their direction, if they just sit or stand firmly
enough. That`s what they are. That`s what they do. And they are
relatively more numerous and powerful now in the Republican Party than
they`ve been at some time because in other respects the Republican Party is
kind of at low ebb.

As the water recedes, you see the rocks at the bottom. That`s sort of
where we are and that`s the problem that Karl Rove has right now. A
generation ago when he started doing what Joy talked about, when he put the
Bush machinery together in Texas, they were rather less powerful. Karl was
able to crush them in Texas and used Texas as a power base for George W.
Bush.

It`s a generation later now, these people have access to the Internet
and other -- other avenues to get their voices out that they didn`t have
before, which is why I wrote in "The Huffington Post" that he`s done. Not
that Karl isn`t going to keep raising money. Not that he isn`t a very
shrewd operative but he can`t be the architect when there`s no building
right now.

O`DONNELL: Joy, these dynamics have existed in both parties but in
the Republican Party it`s can completely out of control. The Democratic
Party has a left wing that is dissatisfied with many of the things that are
acceptable in the side of center and main territory of the Democratic Party
but the Democratic Party seems to hold itself together under these kinds of
tensions much better than the Republicans do.

REID: Yes, they do. And I think part of the reason is that the
Democratic left, you know, they sort of cut their teeth on anti-war
activism. Something that wasn`t popular in the country when they were
doing it, but once the war subsided, the difference is between moderate
Democrats and liberal Democrats are a lot more subtle and the business wing
of the Democratic Party sort of gets along with the left on a lot of issues
because a lot of very wealthy Democrats are politically liberal. They`re
socially liberal, I should say.

On -- in the Republican Party, there are serious differences between
the money wing of the party, which Karl Rove represents, ideologically, and
the far right, but the money people have been content to use the far right
and they really have really put one over on them for a long time. They
only want their energy at election time. They want nothing to do with
actually having abortion banned and all these other things. They`ve just
been using them and now the gig is up.

FINEMAN: And that`s -- I think that`s a fantastic summary of it and
Karl Rove is the embodiment of it to the grassroots Tea Party types.
That`s why I say he`s done. Not because he -- again, not because he`s not
smart and can`t raise money, but because he himself has become a symbol.
He`s the symbol.

O`DONNELL: Yes, yes, yes.

FINEMAN: So he can`t be the architect.

O`DONNELL: Yes, yes, yes.

FINEMAN: He can`t be the architect anymore. And they need a new
leader. They need what Ronald Reagan did a generation ago.

REID: Right. Right.

FINEMAN: And they don`t have it right now. They don`t have it right
now.

O`DONNELL: I want to go back to the Democrats on this because it
seems to me that it could be, that because they have a wider range of
interests and issues, environment, the drones question, you know,
Guantanamo, banking reform, there are people who object to Obama policy in
every one of those categories but who completely agree with Obama policy on
abortion rights.

REID: Right.

O`DONNELL: On a very long list of other issues and it seems that they
concentrate on what they agree on.

REID: Right.

O`DONNELL: When it comes time for election strategy.

REID: Yes. And I think that things that are fundamental to the --
the ideology of the left, they are much more frightened of allowing the
right to take over.

O`DONNELL: Yes.

REID: And to undermine those core principles and on things like
drones, they will fight a principled fight with Barack Obama but they won`t
blow up the party over it. And they`re also smaller in number.

On the right these guys want power. They very much want to blow up
the ideas of sort of garden variety, you know, business Republicans. They
want to blow the whole thing up and remake the country in their image and
because of 2010 they think they can. and they don`t want to let Karl Rove
get in their way. They`re not going to allow him to stop them.

FINEMAN: And even as they`re in sort of in retreat on the Hill,
because they`re going to cave on these various budget things going on, I`m
talking about the Tea Party types, they`re going to take it out at the
grassroots and they`re going to take it out in the next -- I think the next
couple of election cycles if they can because they are stymied in the
House. Boehner and the others will crush them up there, I think. But
there`s always the rest of the country.

O`DONNELL: Joy, there seems to be one state where Karl Rove doesn`t
have to crush a crazy Republican seeking a Senate nomination. That is
Massachusetts where, as predicted here on this program, Scott Brown is not
running for Senate.

REID: Right.

(LAUGHTER)

O`DONNELL: And the problem is, they can`t get any Republican to run
for Senate.

REID: No.

O`DONNELL: That`s their problem in Massachusetts.

REID: Exactly. Why would you? I mean, the last sort of famed --
Republican senator from Massachusetts was, of course, Mitt Romney. It`s an
ill fit. That state is obviously very, very blue. There`s no one viable
and Rove couldn`t invent someone who`s not only viable but who could fool
the Tea Party again the way, let`s face it, Scott Brown fooled them into
thinking he was one of them. So you couldn`t really built a coalition.
The independents in Massachusetts who are the bulk of voters are going to
lean Democrat.

FINEMAN: I think you just inadvertently hit on a strategy there. You
say he was senator, he was governor, right?

REID: I mean, sorry. Governor. I`m sorry.

(CROSSTALK)

FINEMAN: Yes, the governor but --

REID: Sorry, I mean --

FINEMAN: Why not?

O`DONNELL: Right.

(LAUGHTER)

FINEMAN: Mitt for Senate.

O`DONNELL: Right. There you go. He tried that once, Howard.

FINEMAN: Yes.

O`DONNELL: He tried that once.

FINEMAN: Try it again.

O`DONNELL: It was -- it was not an easy fit. I mean that`s the
problem in that state, Howard, right, is that -- is that when the
Republican runs for Senate, you get to attach Mitch McConnell to him and
all the crazy Washington Republicans. When you run for governor in
Massachusetts, you don`t have to worry about Mitch McConnell and alignment
with those guys.

FINEMAN: Well, it`s so ironic because attaching Mitch McConnell which
would -- which seems like an incendiary thing to do in Massachusetts has
the just the opposite effect in terms of the Tea Party people. They`re the
ones who view Mitch McConnell as the establishment incarnate, which is
pretty amazing.

O`DONNELL: Howard, quickly before we go, as our senior Kentucky
analyst --

(LAUGHTER)

FINEMAN: Thank you. I`ll treasure that.

O`DONNELL: I said Ashley Judd is going to crush Mitch McConnell last
night. All she has to do is announce. How do you -- I want to call the
race right now. I`m calling it for Ashley Judd.

FINEMAN: I`m not going -- as the senior Kentucky analyst, I have to
maintain an open mind here. And I find that when you make predictions,
people assume that you want a specific result based -- that you`re
predicting. So I`m not going to --

O`DONNELL: She`s three points behind him in a poll. It`s
devastating.

FINEMAN: It`s amazing. It is amazing.

O`DONNELL: It`s amazing.

FINEMAN: That she`s probably the first candidate who -- or potential
candidate who I`ve seen out of a Washington party wearing a gardenia in her
ear.

REID: And a beehive.

FINEMAN: And a -- and whatever to be within three points. But Mitch
McConnell has never been that popular in Kentucky. He`s seen as a big
inside player here but in the state of Kentucky, partly because he`s from
Louisville, he`s not that popular.

O`DONNELL: And you`re going to have fun on the campaign trail in
Kentucky, Howard.

FINEMAN: I can`t wait.

O`DONNELL: Joy Reid and Howard Fineman, thank you both for joining me
tonight.

REID: Thank you.

O`DONNELL: Coming up, Nobel Prize-winning economist Paul Krugman
joins me to talk about whatever he wants.

And in the "Rewrite" tonight, the England that Oscar Wilde would not
recognize. England has gone from throwing Oscar Wilde in jail for a crime
of homosexuality to this week`s vote in the House of Commons overwhelmingly
in favor of legalizing same-sex marriage. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Our big yet tonight is Nobel Prize-winning economist Paul
Krugman who will join me next. That`s why I`m wearing the glasses because
it makes me look smart, you know, when I`m talking to, like, you know,
Noble Prize winners.

And it turns out begging works. You don`t have to take my word for
it. Lynn Marie Sager posted on our Facebook page, "Your begging worked. I
have liked you for years but only just now clicked the button."

That`s right. I did beg last night for people to like us on Facebook.

Blessings White posted, "Lawrence, you did not need to beg." Yes,
sure, I didn`t. "We truly like your show. I guess we enjoy watching so
much that we overlooked the social media marketing of it. Tomorrow just
give folks a gentle reminder. They will do it."

See, that`s what my team thought, is that you`ve been liking the show
but overlooking the social media liking of the show and so they asked me to
beg and so I begged.

Barbara Adams said, "Couldn`t like last night but gotcha this a.m."
There you go. You can do it any time. Dave Fouchey, "Well, I would like
you tonight, Lawrence, but I already did ages ago."

Thank you, Dave, and thank you, everybody else, and it`s night two of
desperate begging to be liked on Facebook.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I am prepared, eager, and anxious to do a big deal, a big
package that ends this governance by crisis where every two weeks or every
two months or every six months we are threatening this hard-won recovery.

(END VIDEO CLIP)

O`DONNELL: The latest crisis faced in Washington is the sequester, a
package of drastic spending cuts, which Congress seems to have forgotten
they actually voted for. Congress now dreads the sequester they voted for,
which is scheduled to occur in three weeks. President Obama has offered
John Boehner a way out of sequester hell, a package that includes less
dramatic spending cuts and revenue increases through the elimination or
reduction of tax loopholes.

(BEGIN VIDEO CLIP)

OBAMA: They recognize that the sequester is a bad idea, but what
they`ve suggested is that the only way to replace it now is for us to cut
Social Security, cut Medicare, and not close a single loophole, not raise
any additional revenue from the wealthiest Americans or corporations who
have a lot of lawyers and accountants who are able to maneuver and manage
and work and game the system.

And I have to tell you, if that`s an argument that they want to have
before the court of public opinion, that is an argument I`m more than
willing to engage in.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Nobel Prize winning economist Paul
Krugman. He is a columnist for the "New York Times," a professor of
economics at Princeton University and author of the book, "End This
Depression Now," which is now available in paperback.

Professor Krugman, you know what I do when economics professor speak,
I take notes. So I`m going to be over here taking notes. I want to get
your reaction to what the president said today about his eagerness for a
big deal with Republicans and what are the possibilities there?

PAUL KRUGMAN, PRINCETON UNIVERSITY: Well, OK. I believe there is no
possibility of a big deal.

O`DONNELL: Exactly what I thought.

KRUGMAN: And I hope that there -- I hope that that is his plan, to
sound reasonable and say, I`m ready --

(CROSSTALK)

O`DONNELL: Yes. He`s done that in the past.

KRUGMAN: That`s right.

O`DONNELL: Done that thing about hey, I`m ready to do business,
knowing that the nuts wouldn`t do business.

KRUGMAN: Well, here`s a question. Sometimes in 2011 I`m afraid he
was actually sincere and he had us all terrified. But right now I do
believe, I hope, but I believe also that it`s political posturing, that
this is his way of saying, I am a grownup. But, you know, unfortunately
these guys -- because the reality is we should do nothing. The reality is
that the best thing to do right now is to kick the can down the roads.

We should not be having any spending cuts right now. You know --
close tax loopholes, fine, if we can do it. But the -- you know, this is -
- the sequester is not serving any useful purpose that could be served
better by something else. We should not be doing spending cuts at all
right now.

O`DONNELL: So with these sequester coming, with these cuts written
into law --

KRUGMAN: Yes.

O`DONNELL: What happens -- we may -- if we do nothing, then we are
going to have these spending cuts.

KRUGMAN: Yes. So it`s not a good thing. Now there is -- it`s kind
of important to make the distinction. The debt ceiling was scary as hell.
Be honest.

O`DONNELL: Yes.

KRUGMAN: We didn`t know what would happen. If the United States
stopped honoring its debts even for a day, who knew what would happen to
the world financial system. This time if it goes a month, it`s not good
but it`s not the end of the world but it`s big. This is a substantial
spending cut in a depressed economy. It`s exactly what you`re not supposed
to do, these -- this is exactly the wrong time to be having fiscal
austerity of any kind and, you know, the defense spending cuts are job
destroyers, just like anything else.

So not -- this is not what we want to see happen. If it all goes
through, it`s a pretty significant -- it`s enough to push us certainly into
rising unemployment, possibly even back into recession.

O`DONNELL: I want to listen to something that John Boehner said about
how we have handled deficits over the years. Let`s listen to this.

(BEGIN VIDEO CLIP)

BOEHNER: At some point, Washington have to deal with its spending
problem. Now I`ve watched them kick this can down the road for 22 years
that I`ve been here. I`ve had enough of it. It`s time to act.

(END VIDEO CLIP)

O`DONNELL: That is -- I`m trying to think of a word other than lie?
Kick the can down the road? We had a big tax increase in 1993 with
President Clinton along with big spending cuts.

KRUGMAN: Right.

O`DONNELL: That was a deficit reduction package that worked. They
continued to do more deficit reducing packages with Newt Gingrich on the
spending side throughout the decade and we`re on our way to a surplus.

KRUGMAN: That`s right. There`s this wonderful -- I`ve been calling
it the undecade, the 1990s has been written out of their record. They
would have you believe that it was always the way it was under Reagan and
then again under Bush.

O`DONNELL: Why don`t they see credit for that? Why don`t they just
say, you know, leave off the Clinton tax increase, which helped a lot, and
just claim they did it for spending cuts?

KRUGMAN: Well, because if you do, if they admit that something good
happened in the `90s, they have to ask, what happened after 2000?

(LAUGHTER)

O`DONNELL: Yes.

KRUGMAN: Right? This is -- because by making it -- it`s everybody`s
fault, everybody is to blame, they make it that nobody is to blame which
means they themselves are not to blame. So no, there`s this wonderful --
and by the way, a lot of centrist have adopted this narrative, too. We`ve
always had spending out of control. We`ve always been fiscally
responsible.

O`DONNELL: Yes.

KRUGMAN: Whereas the fact of the matter is, there are, you know,
distinct periods of responsibility and irresponsibility.

O`DONNELL: There`s this -- there`s this lie that you constantly hear
and it`s taken now as conventional wisdom that well, you know, Reagan went
along with the tax increases in exchange for the spending cuts but we never
got the spending cuts. Yes, we did.

KRUGMAN: Yes.

O`DONNELL: And we did indeed legislate half spending cuts in that
deficit reduction bill that Clinton did. Half of it was taxation, half of
it was real spending cuts.

KRUGMAN: That`s right. If you actually go back to the record when
Congress agrees to spending cuts, they actually happen. And if you
actually -- look, under Reagan, domestic discretionary spending was
squeezed a lot. It`s not as if nothing happened. There are a lot of
things that the U.S. government was doing in 1980. There was no longer
doing in 1990.

And this is all -- it`s all a story. And by the way, Social Security.
We did a big Social Security reform package that included spending cuts by
raising the retirement age back in 1985. So this notion -- it`s a mythical
history where nothing works except, except basically destroying the major
safety net programs and it serves a purpose but it`s not true.

O`DONNELL: The -- back when the president took office and it was --
and the economy was clearly in crisis and something had to be done, they
went for a stimulus package.

KRUGMAN: Yes.

O`DONNELL: And there were two main themes about the stimulus package.
One was that yes, we`ve got to do this and the other was an attack on it
saying it was filled with junk. I guess there was a third Republican
attack saying, hey, this stuff doesn`t work at all. And there was one
voice, exactly one voice out there saying, it`s not enough. You have to do
more. You were ridiculed for saying that.

The president actually singled you out, I remember, in a press
conference by name, saying well, you know, I don`t agree with him. Have
you gotten any apologies from the people --

KRUGMAN: No. No.

O`DONNELL: -- who were absolutely wrong?

KRUGMAN: I wasn`t alone but I was certainly the only person with --

(CROSSTALK)

O`DONNELL: You were -- the only one with the microphone.

KRUGMAN: That`s right. And -- no. Look, I`ve been in this business
now for quite a while and nobody ever admits that they were wrong about
anything. That`s just -- that`s just the way the world works.

O`DONNELL: Yes.

KRUGMAN: So, no, I mean -- but I sure looks -- it sure looks right.
I mean I -- I wish I hadn`t been right. But this was -- this was a once in
three generation crisis and we met it with a program that was, you know, a
better than no program but way inadequate. And that was obvious even in
January 2009.

O`DONNELL: Don`t we have enough evidence now in this era of austerity
worldwide and other countries to say to the president and to others in
Washington, OK, here is how the austerity programs have worked.

KRUGMAN: Yes.

O`DONNELL: Elsewhere. This -- that shows us what we should do?

KRUGMAN: Yes. I`ve sometimes said that what we`ve been doing is
we`ve been performing unethical experiments on human beings with all of
these austerity programs, right?

O`DONNELL: Yes.

KRUGMAN: And every place that austerity has been applied, there has
been a severe economics slump. Some places worse than others. But whether
it`s Ireland, or Greece, or Britain, you see that austerity has in fact had
the adverse impact that people like me said it would.

Now I think the White House actually does get this. At least the
people in the White House who talk to me get it. They are politically
stymied and they have -- they`ve made a decision, right or wrong, that the
president is not going to use his bully pulpit to try and change people`s
views about macroeconomics.

I don`t know whether that`s the right thing to do or not but I
understand what`s going on. So they`re trying to minimize the stupidity
but boy, have we -- we`ve gotten this totally wrong. We`ve lost all the
lessons of history and we did it all wrong in this crisis.

O`DONNELL: And it actually isn`t that hard. The history on this is
not that complex to have a reasonable mastery of it for political purposes.

KRUGMAN: No. This is -- this is econ 101 stuff.

O`DONNELL: Yes.

KRUGMAN: It is -- no, it`s -- it`s been amazing, though. People --
policy -- people with -- well, what I sometimes call very serious people --
I stole that phrase -- they believe what they want to believe. And so they
threw out all the lessons of history, everything that`s in the textbooks to
believe in this stuff about how cutting deficits is somehow adds to the
expansionary and how the deficit is an imminent threat even though the U.S.
government can borrow long term at a 2 percent interest rate, and the
result, that is, you know, if they hadn`t done that, we would be more or
less a full employment right now.

O`DONNELL: Paul Krugman, I could talk to you all night but we have to
go to a commercial so that this program stays solvent.

(CROSSTALK)

KRUGMAN: And no austerity here. OK.

O`DONNELL: No austerity here.

Thank you very much for joining me, Paul.

KRUGMAN: Thanks a lot.

O`DONNELL: Coming up in the "Rewrite" tonight, we will see a moving
speech by a member of the British parliament in favor of legalizing same-
sex marriage in the House of Commons. And Oscar Wilde is also in tonight`s
"Rewrite."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. RON WYDEN (D), OREGON: Now, what I`m going to be pressing for
today and in the days ahead is declassifying more information about those
issues. I think we can do it consistent with national security. And
that`s the next step.

Now, I was encouraged last night when the president called and he
said, as part of this effort, he is going to try to drive a more extensive
discussion about these issues.

(END VIDEO CLIP)

O`DONNELL: On the eve of today`s confirmation hearing for his nominee
for CIA director, President Obama directed the Department of Justice to
provide the Congressional Intelligence Committees access to classified
documents discussing the legal justification for drone killing of American
citizens abroad who are considered terrorists.

The request for those documents came after NBC News obtained Monday a
16 page document known as the white paper memo in which the Justice
Department`s Office of Legal Counsel signed off on the killing of Anwar al
Awlaki, a radical Muslim cleric who was born in New Mexico and who was
killed in an American drone strike in Yemen in September, 2011.

At John Brennan`s confirmation hearing today, protesters interrupted
five times.

(BEGIN VIDEO CLIP)

(CROSS TALK)

UNIDENTIFIED FEMALE: Please clear the room.

UNIDENTIFIED FEMALE: Please remove -- thank you.

(CROSS TALK)

UNIDENTIFIED FEMALE: They won`t even tell Congress what countries we
are killing children in.

UNIDENTIFIED FEMALE: Please --

UNIDENTIFIED FEMALE: I would like all the names and --

UNIDENTIFIED FEMALE: All right, I`m going to -- we are going to halt
the hearing.

(END VIDEO CLIP)

O`DONNELL: John Brennan, who has been the chief architect of the
drone program as the president`s counter terrorism adviser, defended using
drone strikes.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, NOMINEE FOR CIA DIRECTOR: I think there is a
misimpression on the part of some American people who believe that we take
strikes to punish terrorists for past transgressions. Nothing could be
further from the truth. We only take such actions as a last resort, to
save lives when there`s no other alternative to taking an action that`s
going to mitigate that threat.

So we need to make sure that there`s an understanding. And the people
that were standing up here today, I think they really have a
misunderstanding of what we do as a government and the care that we take
and the agony that we go through to make sure that we do not have any
collateral injuries or deaths.

(END VIDEO CLIP)

O`DONNELL: A substantial majority of Americans support the
president`s policy. According to a Farleigh Dickinson University poll in
December, 75 percent of Americans approve of the U.S. military using drones
to carry out attacks abroad on people and other targets deemed a threat to
the United States. And 83 percent said they support the use of drones in a
"Washington Post"/ABC News poll done last February.

Sam Stein, this had to come up in this hearing today, especially with
the release of the not so secret white paper, which I happen to have right
here.

SAM STEIN, "THE HUFFINGTON POST": NBC News watermark all over it.

O`DONNELL: And it`s a relatively simple case. I mean, it`s 16 pages.
But it basically comes down to the president may use force against al Qaeda
and its associated forces, as detailed in this white paper. In defined
circumstances, a targeted killing of a U.S. citizen who has joined al Qaeda
or its associated forces would be lawful under U.S. and international law.

Targeting a member of an enemy force who poses an imminent threat of
violence -- violent attack to the United States is not unlawful.

STEIN: Well, in concept, it seems fairly reasonable. But in
practice, it`s very messy. And part of the problem that the administration
is confronting right now is that they are saying, trust us. We know what
we are doing. We know where the legal boundaries are. We are never
crossing them.

What we have is a system where there`s very little oversight over the
drone program right now. For instance, what we don`t know is what
constitutes an immediate threat. How are we determining what is an
immediate threat? We don`t even know how they are determining whether
someone is a member of al Qaeda. What do you have to do to become a member
of al Qaeda? Do you have to take a pledge? How do we make those
determinations?

And finally, where do we draw the legal bounds? I mean, when it comes
to interrogation, we have fairly firm legal boundaries now. We didn`t have
them in place during the Bush administration. But we do have them now.
That`s not the same with the drone program. I think what you saw during
the hearing today was a bunch of senators saying, you have to be more
forthcoming with what you`re doing here.

ARI MELBER, "THE NATION": Lawrence, I would even go further. I
thought John Brennan was a big disappointment on substance, although
there`s no doubt that he is strong on style. I don`t think most of the
committee members in either party really got to the heart of the question.
It is obviously true under Geneva and under legal precedent that you can
shoot foreign fighters. Their citizenship actually, as you point out,
Lawrence, is not a big question.

O`DONNELL: I don`t point it out. I read it from the white paper.

MELBER: The white paper, I think, is completely over expansive in
some things. And we should understand it to be the most aggressive
arguments of lawyers trying to make a case for their client, the United
States, nothing more. It`s not a binding precedent of any kind. That --
what we`ve seen is not even from the OLC that has the final word on what is
law within the executive branch.

But more to the point, whether or not they are a citizen is not the
only question. Because we`re talking about things way off the battlefield
and people who have not, by anything the administration has released, if
the onus is on them, shown their allegiance. And then when you get into
children -- the tough question that wasn`t asked today is, OK, 18 years
old, you can target them, not collateral damage. That means they are on
the kill list.

Sixteen years old, the example that we had, you can target them.
Well, Mr. Brennan, what about 15, 14, 11, nine? The law cares a great deal
about consent and meaningful participation. And at a certain point here,
contrary to what we have in the public debate and the polling, which shows,
yes, in general you can do it. But when you get into children, American
children off the battlefield as conventionally defined under the AUMF, I
think you`re in really tough territory. And I think Brennan was wrong on
that.

O`DONNELL: Well, this effort -- I don`t even want to call it a war.
I don`t know what to call it. This effort has been off the battlefield
since September 11th. There`s no --

STEIN: What do we call a battlefield now?

O`DONNELL: See, this I think is a very serious problem. I don`t
think it`s a question that can be answered. These are all great questions.
Here`s what I don`t see. I don`t see how, under the way business is done
now and how it`s always been done -- I don`t see how any of the questions
can be publicly addressed and answered by the administration.

The amount of intelligence they would have to open up and hand over to
you to answer any of the questions you asked would presumably compromise
everything that they were trying to do.

STEIN: See, I have a slight disagreement with that. I think you`re
right in the sense that you don`t want to give away operational techniques
that could be used against you, correct. But you can redact those from a
legal memo. And what Ari is getting at, and what I think a lot of other
people are getting at, is that if you are going to do this, you need to
have a very firm legal ground on which you`re standing, because you`re not
the only president who is going to take this authority. There are future
presidents that can use it.

What happens, for instance, when other countries get the capacity to
do drone strikes, along the lines of what we do? We want to set firm legal
boundaries on this, not just for ourselves, not just for future president,
but for international.

O`DONNELL: Well, they have set the bounds. They have boundaries in
here that are pretty clear.

STEIN: Well, that, again --

O`DONNELL: The trouble is, we don`t know what -- what you really
don`t know is, are they actually adhering to what they say they are doing
here?

STEIN: Correct.

O`DONNELL: And my point is, I don`t know how you could ever discover
that and believe -- and have the program --

MELBER: Wait, their position right now, today, in court, under the
threat of perjury, in the "New York Times" and ACLU litigation, is that the
program`s existence is classified. So their position is farther than
yours. You`re talking about operational details and how difficult this is.
And that`s something we struggled with in a democracy for a long time.

The administration`s position -- and they are wrong, in my view -- is
that the program`s existence itself is classified. So there is room for --

O`DONNELL: Here`s a civil suit in federal court with the ACLU. And
they are sending interrogatories and they are wanting to do depositions.
They want the CIA to testify in a civil suit openly and completely about
how they do this operation. But that could never happen.

MELBER: Somewhere between the administration position and the ACLU
and Lawrence O`Donnell, there`s something in between. And the
administration`s position is all the way out here in Orwellian secrecy.

O`DONNELL: We are going to have to continue this in THE VERY LAST
WORD. We`re going to let the cameras run after the show. Sam Stein is
going to be able to hog the camera then. We`re going to go on and on after
the show with more of this. And you can see it online.

Sam Stein and Ari Melber, thank you both.

STEIN: Thank you, Lawrence.

O`DONNELL: Coming up, the House of Commons votes to legalize same-sex
marriage after a moving speech by a member of parliament that you will hear
-- you must hear, next in the Rewrite.

(COMMERCIAL BREAK)

O`DONNELL: Oscar Fingal O`Flahertie Wills Wilde was born in Dublin in
1854. He moved to London as a young man, married, had two children and
finished writing "The Picture of Dorian Gray" when he was 35 years old. By
then, he had already become one of London`s most important men of letters
and possibly the world`s greatest wit.

But that didn`t stop England from charging him with 25 counts of gross
indecencies and conspiracies to commit gross indecencies when he was 40
years old. The prosecution called young male witnesses to testify about
the criminal sexual behavior Oscar Wilde engaged in when homosexual sex was
a crime in England and most of the world.

During the trial, the prosecutor read a poem by Lord Alfred Douglas
that Wilde had said he admired and asked Wilde to interpret one of the
lines of the poem. The prosecutor`s question was, quote, "what is the love
that dare not speak its name?" Oscar Wilde gave a long answer at the end
of which the court transcript indicates, in parenthesis, loud applause
mingled with some hisses.

The sex crime defendant, facing ruination as he sat in the witness
stand, answered that question this way: "the love that dare not speak its
name in this century is such a great affection of an elder for a younger
man, such as Plato made the very basis of his philosophy and such as you
find in the Sonnets of Michelangelo and Shakespeare.

It dictates and pervades great works of art like those of Shakespeare
and Michelangelo. It is, in this century, misunderstood, so much
misunderstood that it may be described as the love that dare not speak its
name. And on account of it, I am placed where I am now.

"There is nothing unnatural about it. That it should be so the world
does not understand. The world mocks it and sometimes puts one in the
pillory for it."

That kind of honest and indeed noble testimony won Oscar Wilde in the
courtroom and a sentence of two years in prison. A hundred and eighteen
years after England sent Oscar Wilde to prison for the crime of loving men
too much, the House of Commons voted overwhelmingly this week to approve a
bill legalizing same-sex marriage.

The historic vote was cast after a six-hour debate, the highlight of
which was a speech delivered by David Lammy, a Labor MP, first elected to
parliament at the age of 27. He shares some biographical points with
Barack Obama. He was raised by a single mother and he made racial history
at Harvard Law School.

President Obama was, of course, the first African-American president
of the Harvard Law Review. And David Lammy was the first black Britain to
study a Master`s in law at the Harvard Law School, after having already
graduated from law school in London.

His time studying American law obviously helped him frame the issue of
marriage equality.

(BEGIN VIDEO CLIP)

DAVID LAMMY, BRITISH MEMBER OF PARLIAMENT: It is, in the end of an
organic journey from criminality to equality, for the gay community that
began over a half century ago. This change is right. This change is
necessary. And the time is now.

And there are still those who say that this is all unnecessary. Why
do we need gay marriage when we already have civil partnerships, they say?
They are the same, separate but equal, they claim.

Let me speak frankly. Separate but equal is a fraud. Separate but
equal is the language that tried to push Rosa Parks to the back of the bus.
Separate but equal is the motive that determined that black and white
people could not possibly drink from the same water fountain, eat at the
same table, or use the same toilets.

Separate but equal are the words that justified sending black children
to different schools from their white peers, schools that would fail them
and condemn them to a life of poverty.

It is an excerpt from the phrase book of the segregationists and the
racists. It is the same statement, the same ideas and the same delusion
that we borrowed in this country to say that women could vote but only if
they were married and only when they were over 30.

It is the same naivete that gave way for my dad, being a citizen when
he arrived here in 1956, but refused by landlords and proclaimed, no
blacks, no Irish, no dogs. It entrenched who we were, who our friends
could be and what our lives could become.

This is not separate but equal. It is separate and discriminated,
separate and oppressed, separate and browbeaten, separate and subjugated.
Separate is not equal, so let us be rid of it.

Because as long as there is one rule for us and another for them, we
allow the barriers to -- of acceptance to go unchallenged. As long as our
statute books suggest that love between two men or two women is unworthy of
being recognized through marriage, we allow the rot of homophobia to
fester.

(END VIDEO CLIP)

O`DONNELL: Oscar Wilde was released from prison at the age of 42. He
moved to Paris, where he lived in poverty and died at the age of 46. In
prison, he wrote, "society, as we have constituted it, will have no place
for me, has none to offer. But nature, whose sweet rains fall on unjust
and just alike, will have clefts in the rocks where I may hide and secret
valleys in whose silence I may weep undisturbed."

Tonight in England, Oscar Wilde would not have to hide in clefts in
the rocks and would not have to weep in secret valleys.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RICK SANTORUM, FORMER PRESIDENTIAL CANDIDATE: President Obama once
said he wants everybody in America to go to college. What a snob.

One of my supporters said, this is my Second Amendment vest, the right
to bear arms. You like it? Come on.

UNIDENTIFIED FEMALE: I like it.

(END VIDEO CLIP)

O`DONNELL: Remember that guy? He`s back.

(BEGIN VIDEO CLIP)

GRETA VAN SUSTEREN, FOX NEWS ANCHOR: Quick question, decided on 2016
yet? Are you going to run for president?

SANTORUM: I`m open to that. We have the chairman of the party here.
So he`ll -- I don`t want to announce in front of him. But we`ve been
talking. And I`ll be talking to a lot of other folks. And we`re certainly
open to looking at 2016.

VAN SUSTEREN: So it`s definitely not a no?

SANTORUM: Definitely not a no.

(END VIDEO CLIP)

O`DONNELL: Joining me now, someone else who is open to looking at
2016, Ana Marie Cox, columnist for "The Guardian." There he is with his
Second Amendment vest, as he calls it. It looks like Rick Santorum is
getting ready to run for vice president once again.

ANA MARIE COX, "THE GUARDIAN": Well, you know, what does the GOP need
except for someone who is violently -- I say virulently against women`s
reproductive rights and virulently for the Second Amendment? Because those
things are really working for them right now.

I think that Rick Santorum`s campaign is kind of a bad memory for a
lot of the people who are looking at the GOP and trying to figure out its
future. You know, as someone who reports on some of the more interesting
fringes of the GOP, I mean, I welcome him to the race.

And I think it`s important to say that he is doing this. He is a true
believer. Santorum believes that he is -- you know, this is a mission of
his to compete in these arenas, and that he is acting on faith in a lot of
ways. And I kind of don`t want to make fun of that. But at the same time,
as someone who would like to see a vibrant opposition party, I don`t know
if Rick Santorum is what the GOP needs right now.

O`DONNELL: Let`s take a look at the guy who everyone thinks is the
leader of the vibrant opposition leader, Marco Rubio. Let`s listen to what
he had to say.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: I really believe that if I do the best
job I can in the Senate, then in a couple of years I`ll be in a position to
make a decision about whether I want to run for re-election, you know,
leave politics and give someone else a shot, or run for some other
position. If I were thinking about things like that, it would limit my
ability to take on important issues. It would affect how I stake out
positions on different issues in a way that necessarily isn`t going to be
productive for the people that I represent, who deserve to have a senator
focused on them, not on himself and his future.

(END VIDEO CLIP)

O`DONNELL: Ana Marie, they may have their youngest front-runner ever.

COX: It is true. He is definitely the future of the party. I think,
however, it`s interesting that he`s the future of the party and he`s sort
of an undefined candidate in a lot of ways. I think he`s a very bright
guy. I think he has made a lot of smart moves. And one of the smart moves
he`s made is been able to sort of be embraced by the Tea Party but in sort
of a guy hug, like a pat on the back kind of hug.

Like he`s not really moving in too far. He`s been able to maintain a
kind of moderate stance on some issues. He hasn`t alienated the vast
majority of GOP voters who do not identify with the Tea Party. But if he`s
going to actually run for president, he`s going to have to, you know, at
least reach out to those voters, it looks like, because for the time being,
those Tea Party voters are where the energy of the party is.

There hasn`t been a -- the GOP has not found a way to sort of activate
the large majority of people in this country who consider themselves
perhaps considerate moderates. So it`s interesting to watch him. Like I
said, I think he`s a very bright guy. I think that he brings a lot to the
table. But he seems to be moving rightward. Some of the things he`s said
in public these days do sort of indicate that he`s already positioning
himself to appeal to that base, which you have to do, I guess.

O`DONNELL: Ana Marie Cox gets tonight`s LAST WORD. Thanks, Ana
Marie,

COX: Thank you.

O`DONNELL: "THE ED SHOW" is up next.

END

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