updated 3/6/2013 11:37:18 AM ET 2013-03-06T16:37:18

THE RACHEL MADDOW SHOW
March 5, 2013

Guests: Joseph Stiglitz, Frank Rich, Nicolle Wallace


ED SCHULTZ, "THE ED SHOW" HOST: Elizabeth Colbert-Busch, great to
have you with us. Best of luck to you. We`ll visit again. Thank you.

And that is "THE ED SHOW." I`m Ed Schultz.

THE RACHEL MADDOW SHOW starts right now.

Good evening, Rachel.

RACHEL MADDOW, HOST: Good evening, Ed. Thank you, my friend.

SCHULTZ: You bet.

MADDOW: And thanks to you at home for joining us on a news day in
which it does not seem possible that all of these things happened on the
same day. Today is the day that the Dow set an all-time record high, all-
time.

Today is also the day that Hugo Chavez died.

Today, the United States government said we might conceivably use
drone strikes to kill people inside the United States. They also said
today the last drone strikes in Pakistan were not done by us. Who were
they done by then?

Today, Arkansas teetered on the edge of doing something outrageously
unconstitutional.

Today, an MSNBC host`s book came out.

Today, Jeb Bush`s new book also came out, although the MSNBC host is
not disavowing her book already the way Jeb Bush is disavowing his book the
day it first went on sale.

North Korea threatened to restart the Korean War today, the one from
the 1950s.

The anti-gun trafficking bill got introduced in the Senate today.

A second giant sinkhole, a second one, opened up in Tampa today.

This is a nutso day in the news, just in terms of the sheer amount of
news that happened today. And we will get to as much of it as possible
this hour.

But we need to start tonight with the aforementioned record.

(BEGIN VIDEO CLIP)

ANNOUNCER: This is an NBC News special report.

BRIAN WILLIAMS, NBC NEWS ANCHOR: Good day from New York.

And let`s go downtown, Lower Manhattan, where moments ago on the floor
of the New York Stock Exchange, the Dow Jones Industrial Average closed at
an all-time high. There is the number. Remember, there is some
fluctuation as the day draws on.

Sue Herera is on the floor of the exchange.

Sue, this has been a long road since `07.

SUE HERERA, NBC NEWS CORRESPONDENT: It has certainly been a long
road, Brian, but it was a very, very strong day today, and it is a day for
the record books.

(END VIDEO CLIP)

MADDOW: The Dow Jones today hit its all-time record high. It hit its
highest number ever during the course of the day, and then it closed at its
highest number ever, in the 116-year history of that index existing.

The Dow, of course, is not a generic indicator of the health of the
economy. It`s not even a generic indicator of the health of the markets,
broadly speaking. It is just a snapshot of 30 blue chip stock.

But it is the thing that honestly we think of generically as the
market. And it is a real indicator of how we`re doing in some ways, and it
is important enough to us that when it hits a record, NBC News breaks into
local programming across the country to alert the nation in this special
report that there has been a new record high.

And if you are someone who sees national news mostly in terms of
national politics, it can be incongruous, to see all the champagne corks
popping on Wall Street today, while Washington spent the day today
continuing to punch itself in the face with this unsolved sequester thing,
which, of course, follows us punching ourselves in the face with the fiscal
cliff thing, and which proceeds us punching ourselves in the face with the
government shutdown looming within the month. And then the next punch in
face is scheduled for after that one, that will be another debt ceiling
fight.

When it comes to politics about money, Washington has never been more
even quixotically self-defeating and dumb than they are right now. And I
say that as a term of art -- dumb -- because we have just enacted a
voluntary new fiscal policy that both sides call dumb and even disastrous.
And it was voluntary, and we did it anyway.

But Wall Street is psyched anyway. And apparently, they have reason
to be if you read from their "holy scripture", which, of course, is
corporate profits. Corporate profits are and have been a very happy story
during our current supposedly socialist administration.

President Obama takes over, right, during the Great Recession. So
this is the valley of corporate despair. But since then, corporate profits
have just gone up and up and up. For a hot minute last summer, the
financial press warned us that the fun was over, that record corporate
profits would not last, but then, after that, hey, look, they lasted, and
then some.

By the December report, we hit a new record -- a new new record.
Corporate profits at a new all-time high, by the latest quarter for which
we`ve got the data. America`s corporations showed in that quarter the
largest after-tax profit in the history of our nation, right?

The problem with that is that success is not necessarily redounding to
the humans who make up our nation. Here is a really big issue for our
country. Here is what corporate profits have been doing over time, four
decades, basically over my lifeline. That`s the red line there.

And the blue line there is how working American humans have done at
the same time. This is their slice of the pie. One is going up, and that
is not helping the other one go up.

There are those who would argue that corporations are people, my
friend, and corporations doing well helps people. And there are a certain
number of people who benefit from corporations doing particularly awesome
in the way they are now, people who are, for example, directors of
corporations or shareholders. They, of course, are happy to see their
share prices and the value of the company go up. People who are executives
at those corporations, for them, these really have been great times.

But for everybody else -- no.

And so we are faced with really big, bold-faced, bright easy-to-
remember headlines about who we are as a country on days like this. But
the headlines fit together in a way that feels off. On the one hand, we`ve
got the Dow hitting an all-time record high today. Wall Street at an all-
time record high, corporate profits at an all-time record high.

And that success is not helping the average American. All of that
success is essentially being captured by corporations themselves and by the
very richest people in the country who continue to do exceedingly well.
And we sense that the fact that that might be working out for them and not
for everybody else might be a big defining problem for us as a country. At
least we kind of sense it.

If you poll on this matter, on this issue, you get something
interesting. If you ask Americans how they think the wealth of this
country ought to be distributed, if you asked Americans how they think we
ought to divide everything up in this country, how wealth ought to be
divided, you get an answer that looks like this.

The bright yellow on the left, those are the richest people in the
country. So, they do have the largest share. Orange is the second
richest, red is the middle. The gray block all the way on the right is the
poorest group of Americans.

This is how we think capitalism ought to divide wealth in our country.
Yes, the rich are going to be richer than everybody else. But this is how
everybody else will share in the spoils of our American capitalist output.
That`s the American consensus, what it ought to be.

And we know that this is not exactly true. If you ask Americans --
well, how do you see life actually as being? Americans will tell you,
well, the country doesn`t look the way I want it to look. What I think the
country looks like is this. We think that the rich, the yellow one on the
left there, they have more than their share, but we think it`s not exactly
the way we want it to be. But this is how we imagine it to be.

Now if you want to look at what the chart actually is, if you want to
look at how wealth actually is divided in the country, this is the truth.
This is the truth of how unequal we are as a country. This is the way that
wealth is divided.

Again, the top 20 percent there is on yellow. You can`t even see the
little gray bar. It`s been squeezed off the right.

The richest folks in right yellow in real life take up more than half
the chart because they`ve got way more than half the money. The blue is
shoved off to the side. And the poorest folks, the gray block, they almost
do not register.

This is not how we think should it be or how we imagine it to be, this
is how it is.

So on this day when this is true, right, when we just hit the all-time
record high in the Dow, why is this huge and worsening inequality problem
that we`ve got happening? Is this happening because we did something wrong
as a country? Could we fix this problem if we wanted to? And do we even
want to fix it?

Joining us now are two guests whose expertise on the politics of this
and on the economics of this issue are rather unsurpassed.

Joseph Stiglitz is a Nobel Prize-winning economist. He is author of
"The Price of Inequality: How Today`s Divided Society Endangers Our
Future."

And Frank Rich is "New York Magazine`s" writer-at-large. His latest
column is called "Lipstick on an Elephant." It looks at Republican
rebranding efforts and the future of that party.

Gentlemen, thank you both for being here. I very rarely talk to two
people at once, but I really wanted to with you both.

Professor Stiglitz, I want to start with you. Why is why is this
happening? Why do we have such pronounced inequality in the face of what
looks like some bottom line significant economic success?

JOSEPH STIGLITZ, NOBEL PRIZE-WINNING ECONOMIST: Well, what`s going on
in the stock market right now is very simple. The economy is not doing
very well. That`s why the Fed is keeping interest rates very low and looks
like it`s going to keep interest rates very low.

So that means the cost of capital to firms is very low. Unemployment
is high. That drives down wages. And the two of those together means high
corporate profits, as your chart showed.

So, in a way, what we`re seeing here as the interest rate is low,
stock market goes up, bonds are not doing very well, people, older people,
for instance, who depend on interest from T-bills, doing terribly. So, all
of this is a picture actually not of success, but a picture of an economy
not doing very well.

And when you look at those corporate -- the profits of American, you
know, the blue chip that constitute the Dow, many of those, most of those
have a large fraction of profits overseas. And China, emerging markets,
they`re doing relatively well, much better than the United States.

And so, they can be doing well by creating jobs abroad. But
meanwhile, the American economy is not doing well.

MADDOW: Frank, whether or not anybody tried to make these divergent
outcomes happen, is the outcome that we`ve got with high corporate profits
and American people by and large not sharing in it at all -- is this a
predictable outcome of the kind of policies that we have pursued?

FRANK RICH, NEW YORK MAGAZINE: Yes, it absolutely is. And it seems
to worsen by the day. We have a government, and both parties I might add,
that sort of stack towards corporate welfare, breaks for corporations.
Republicans take a looser line than the Democrats.

But just in today`s "New York Times" on the front page, the
investigative piece showed state and local governments in blue states and
red states are floating tax-exempt bonds not to underwrite public works. I
mean, some of them do underwrite public works.

But Goldman Sachs and Bank of America office towers, the Chevron
Corporation, which had a profit of well over $20 billion last year, one of
the most successful companies as measured by the bottom line in the world,
we have governments -- our governments, local and state and federal just
marching in lockstep with this corporate America and sweeten the breaks for
them every step of the way.

MADDOW: And they are described as job creators. But we`re not just
talking to wealthy people. We`re talking about even corporations as job
creators, that they need to get so much policy preference because that does
redound to helping the average American by the creation jobs.

RICH: It`s not working.

MADDOW: There is no connection between --

(CROSSTALK)

STIGLITZ: No. And one of the things, you talked about who owns all
those shares that are doing very well.

MADDOW: Yes.

STIGLITZ: One of the striking things is in the last third of a
century, 97 percent of the increase in capital income went to the top 5
percent -- 97 percent went to the top 5 percent.

MADDOW: Wow.

STIGLITZ: You know, that chart that you showed how it`s concentrated,
if you look at the capital income, it`s much more concentrated. Let me
give you another number that shows how bad things are. In the three years,
2007-2010, the median wealth, the wealth of those in the middle in the
United States declined by almost 40 percent.

So while the shareholders and these companies are doing very well,
most Americans are seeing their wealth diminish.

MADDOW: Could this be fixed by policy? Could this -- Frank, I`ll ask
you. Are policies that fix this being debated? And, Professor Stiglitz,
do you see the U.S. government as having policies within its reach that
could make a significant difference?

RICH: I don`t see any policies except around the fringes that are
being debated. It seems to me completely status quo.

And, in a way, what you talked about at the top of the show about the
dysfunction in Washington, it`s such a sideshow. Not only is it
dysfunctional, incompetent and beside the point. I should say everyone is
punching themselves in the face, but it`s almost like, you know, a circus
to distract people from actually discussing and debating policies that
really neither party wants to put on the table because essentially they
have the same corporate backers. The smartest corporations in American
politics are those that give to both parties.

And so, yes, we have a little bit of Wall Street reform. We have talk
about tax reform, but we`re not really debating tax reform. We`re just in
gridlock.

MADDOW: If we had the political wherewithal to get there, are there
policies that could make a difference?

STIGLITZ: Absolutely. In fact, in the last chapter of my book, I
describe 21 policies that would really make a very big difference.

Let me just give you one interesting one. Switzerland fought to be
controlled by, you know, wealthy people, just had a referendum, and that
reflects very much the views that you were -- gave in that chart. They
voted to cap bonuses. They said bonuses have gotten out of control.

We know that we are a place where people go with wealth. But we think
it`s gotten out of control even in our country.

MADDOW: And then all the corporate executives fled Switzerland in
terror, right? Now none of them live there anymore?

(LAUGHTER)

STIGLITZ: So, that`s exactly the point. We could change corporate
governance rule, say, what they have, say and pay, the corporate leaders
are taking increasingly large share of the corporate pie for themselves,
leaving less for workers.

Financial sector -- all those abuses that went on in the financial
sector, it was moving money from poor and average Americans up to financial
executives.

Monopolies, you know, they don`t -- monopolies make money by
contracting output, not by making the size of our national pie bigger.

Education, you know, if most Americans are going to do well, it`s
going to be through increasing productivity. But we`re under-investing in
education.

So you look at the tax laws in the United States, we tax speculators
at less than half the rate that we tax people who work for a living. When
you do that, what do you do? You encourage gambling and speculation. You
don`t lead to a stronger economy.

MADDOW: Frank, as we pivot sort of from policy toward both sides
already looking at 2014, this president has a record of overseeing
spectacular gains in corporate profits and no gains on the inequality
issues that he talks about so much.

Is there an opening for a Republican populist here that the Democrats
should be worried about from the right, or should they only worry about
their left flank on this?

RICH: I wish there were competition in the political marketplace, and
they could be worried from the right. Yes, there would be an opening for a
Teddy Roosevelt, that kind of Republican populist.

But look at that party. I mean, they don`t even know how to find the
key to the men`s room at this point. So they`re not going to muster a
strong challenge.

So it`s interesting. A few conservative pundits are talking about
policies that might benefit the middle class, serious tax reform. But as
they themselves admit, they don`t have any champion in the political arena
to fight for these.

STIGLITZ: But one of the problems of the gridlock in the United
States is the Tea Party movement. And one of the reasons for the Tea Party
is anger, I think, over the problems of inequality where they say the
government is helping the bankers and look what is happening to our wages.
It`s understandable.

RICH: Well, I`ve long felt that the Tea Party and the Occupy
movement, even though they hated each other, were two sides of the same
coin, and both reflected that anger. And neither party has addressed that
anger.

MADDOW: Exactly. And they`re both exploiting an opening both parties
to try to make progress on those issues.

Nobel Prize-winning economist Joseph Stiglitz, "New York Magazine"
writer-at-large Fran Rich, thank you both very much for this discussion.

Professor Stiglitz, will you come back and talk about the book again
when it officially comes out?

STIGLITZ: Yes.

MADDOW: All right. Thanks.

(LAUGHTER)

MADDOW: All right. Venezuela`s President Hugo Chavez has died.

The United States is a step closer to having a new CIA director.

And Republicans in Washington and across the country have finally
eschewed super conservative social causes to focus on job growth.

Two of those are true. The third one I made up for a fact.

Stay tuned.

(COMMERCIAL BREAK)

MADDOW: Three months after he was sworn into office in April 2009,
President Obama embarked on one of his first oversees trips. The president
traveled south to Trinidad and Tobago to attend the fifth annual Summit of
the Americas. Three months after he was sworn in, April `09, and it`s the
new president`s first chance to engage with his fellow world leaders in the
western hemisphere.

It was all going along sort of swimmingly until this happened.

(BEGIN VIDEO CLIP)

REPORTER: In a meeting with the leaders of 12 South American country,
President Obama sounded conciliatory.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have a lot to learn,
and I`m very much looking forward to listening.

REPORTER: But the meeting turned into yet another Hugo Chavez photo
op. Venezuela`s leader launched what appeared to be a publicity stunt, a
presidential gift, a book written nearly 40 years ago about how European
and American policies have hurt Latin America.

(END VIDEO CLIP)

MADDOW: Welcome to your relationship with Venezuela, new Mr.
President. Enjoy your stay.

It`s not like the new president then could not see this sort of thing
happening from Hugo Chavez. At the time, President Chavez had just
recently expelled America`s ambassador to his country, insisting that the
ambassador was plotting a coup to oust Mr. Chavez from office.

Mr. Chavez held a televised rally after sending the American
ambassador home, telling a throng of supporters, quote, "Go to hell a
hundred times, bleeping Yankees."

Well, Hugo Chavez died today at the age of 58. He lost a two-year
battle with an undisclosed form of cancer, and the United States lost a man
who had positioned himself for more than a decade now as America`s chief
foe in its own hemisphere.

During his 14 years in power, Hugo Chavez maintained a provocative and
at times cartoonishly oppositional stance when it comes to his relationship
with the U.S. government.

He buddied up ostentatiously, of course, with the Castro brothers in
Cuba. He allayed himself with Mahmoud Ahmadinejad, the president of Iran.
He signed giant oil contracts with the Chinese government. He bought
weapons and fighter jets from the Russians.

Hugo Chavez, while he was in power, while he was still a player on the
world stage, became in this country almost a figure of fun for playing up
his opposition to American leaders in very over-the-top ways, particularly
when it came to former President George W. Bush.

(BEGIN VIDEO CLIP)

HUGO CHAVEZ, VENEZUELAN PRESIDENT (through translator): The devil
came here yesterday. Yesterday, the devil came here. Right here. Right
here. And it smells of sulfur still today.

(END VIDEO CLIP)

MADDOW: That was in 2006. Hugo Chavez referring to President George
W. Bush as the devil during a speech at the U.N. General Assembly.

Because Mr. Chavez positioned himself as U.S. enemy number one in the
Western hemisphere, Mr. Chavez often got denounced in political terms in
this country as a tyrant, as a tyrant and a dictator and a South American
strongman thug.

Now that he is dead, there is a real question of whether that U.S.
image of Venezuela, and whether Venezuela`s image of us dies with Hugo
Chavez.

I mean, Venezuela is a serious country in the world stage. It is
sitting on the world`s largest proven oil reserves. It has more oil than
even Saudi Arabia does, and that is in part what makes Hugo Chavez more
than just a vitriolic leader who hated America. All of that oil gave him
real power and influence, not just in his own country but around the world.

What happens to all of that oil now and that oil-related power now
that Hugo Chavez is not in charge of it anymore? How much of his over-the-
top opposition to the United States government was real, and how much of it
was for show?

The political posturing around Hugo Chavez, the screaming about sulfur
and the devil and all of that, in a way it obscures how seriously we have
been able to think about his legacy, both in terms of whether or not he
really was the tyrant that American politicians have denounced him for
being, and whether or not him dying could potentially change American
influence in the world or the balance of power in our own hemisphere.

In case you`re wondering what happens next, in case you`re wondering
if our relationship with Venezuela is going to get any less wacky any time
soon now that he is gone, consider that the man who is expected to replace
Hugo Chavez, the country`s current vice president, said today he believes
that foreign imperialists, aka, the United States, killed Hugo Chavez,
poisoned Hugo Chavez with the cancer that he ultimately died from.

Venezuela`s vice president made that statement shortly after -- you
guessed it -- expelling two U.S. diplomats from the country.

So there is that for setting the tone.

Joining us now is Pulitzer Prize-winning columnist for "The Washington
Post" and MSNBC political analyst Eugene Robinson. Eugene covered
Venezuela for the post in the `90s when he was working at "The Post`s"
bureau in Buenos Aires.

Gene, thanks for being here tonight. It`s great to have you here.

EUGENE ROBINSON, THE WASHINGTON POST: It`s great to be here, Rachel.

MADDOW: Do you think that Hugo Chavez was effectively the monster
that he was made out to be in this country? He was obviously cartoonishly
oppositional to us, but that led to some cartoonish caricaturing of him
too, didn`t it?

ROBINSON: Well, it did. He was sui generis, first of all. He was --
there was nobody quite like him, charismatic, he could act like a buffoon.
But he was very smart and -- obviously, and tenacious and determined.

Was he a tyrant? You should remember he was democratically elected
president of Venezuela three times, with healthy majorities. So -- it is
very clear that he had popular support.

Why did he have popular support? Because for many, many years, for
many decades, the poor of Venezuela had been ignored by a corrupt political
class and business class that essentially lived very well on the proceeds
of all that oil, allowing none of to it trickle down, or so little to
trickle down that the slums of Caracas were just horrible places, violent
places seething with anger.

And what Chavez could do was connect with those people. And give them
hope, and then give them actual benefits in the form of health clinics and
educational service they never had before. He paid attention to people who
had been the left behinds, and they rewarded him with their very loyal
support.

MADDOW: In terms of the criticism directed towards Chavez as being
essentially somebody who did not advance freedom in his country, even as he
did advance economic populist aims, what do you make of those criticisms?

ROBINSON: Well, they have some merit. He leaned on, coerced,
threatening to shot down, at times did shut down independent press voices
and media voices. He was a -- he ridiculed his political opponents in the
most vile ways.

He gerrymandered the election districts in a way -- of course, where
have we heard that before? That happens elsewhere as well. But he did do
it in a particularly egregious way in Venezuela to aid in his electoral
prospects. He didn`t want to leave anything to chance.

So, no, he was not what we would call a lover of democracy as we would
like to see it practiced.

MADDOW: As a leader who is, as you said, sui generis, and who was so
much larger than life and was so dominant in the politics of that country,
and in a country that has so much oil, when you look ahead to what comes
after Hugo Chavez, do you see a period of chaos or do you feel like there
is a way to predict what is going to happen next there?

ROBINSON: Well, first of all, let`s hope it`s not chaos. When chaos
happens in Venezuela, it`s really bad. Worse than in most places that I
covered in Latin America.

Something about Venezuela, you know, when there is a riot, there was a
big one in the early `90s that they called the Caracaso in which dozens and
dozens of people were killed. So that could be bad. I don`t necessarily
predict that, though.

What I do think we know is nobody can be Hugo Chavez. It`s very clear
that the vice president, Nicolas Maduro is his anointed successor. I
believe he returned to Venezuela from Cuba where Chavez returned to
Venezuela from Cuba where he was getting cancer treatment, in part to die
in Venezuela, but also in so doing to essentially pass along the torch to
Maduro. We don`t know him the way we know Chavez, but we know that he is
associated with the faction of Chavez`s movement that is more closely
aligned with Cuba.

So this may signal a continuation of a very close Venezuela/Cuba
relationship. That doesn`t bode particularly well for any sort of kumbaya
warming with the United States.

MADDOW: It`s fascinating. I mean, he was a fascinating figure. The
potential transition in his wake is going to be amazing to watch.

ROBINSON: Very -- in person a very bright and quick and witty person.
A man of contradictions.

MADDOW: Pulitzer Prize-winning columnist Eugene Robinson of "The
Washington Post," the only person I know who has met Hugo Chavez -- Gene,
thank you for helping us understand this tonight. I really appreciate it.

ROBINSON: Happy to be here.

MADDOW: All right. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: Hey, in terms of whether or not we`re going to avert the next
self-imposed fiscal disaster in Washington, House Republicans today
introduced a new short-term budget to forestall that next crisis. Among
other things in their new short-term budget, they have banned federal
funding for ACORN. ACORN, the community organizing group that already does
not exist because Congress killed it years ago. Republicans now this year
are still prioritizing defunding the corpse of that organization.
Priorities.

More ahead. Stay with us.

(COMMERCIAL BREAK)

MADDOW: There is something slightly inexplicable going on in the
great state of Arkansas right now. The Republican-controlled legislature
in Arkansas has just passed back-to-back unconstitutional bans on abortion.
You can`t ban abortion. Roe v. Wade, right?

Well, Arkansas` Democrat Governor Mike Beebe vetoed both of the bans.
Not so much because he is pro-choice. He actually has a mixed record on
the subject. He has vetoed the bills because, dude, they are blatantly
unconstitutional.

Quote, "The adoption of blatantly unconstitutional laws can be very
costly to the taxpayers of our state." Well, today after already
overriding the governor`s veto of the first ban, the Arkansas Senate voted
to override the second even stricter abortion ban. If the House also votes
to override the veto, the ACLU naturally has already promised that costly
lawsuit that the governor was talking about in his veto messages.

Nonetheless, the Republican-led legislature is poised to commit the
state of Arkansas to spend a huge amount of money defending itself in a
lawsuit, the filing of which is a forgone conclusion. And quite frankly,
it is all but a forgone conclusion that the state will lose that lawsuit.

So what they`ve done here is essentially make a bonfire of taxpayer
money. That`s about to happen in Arkansas. Also, the legislature can go
on record as having tried to illegally ban abortion, even though they all
know that is not a thing they are allowed to do.

Apparently nothing is a waste of money when it comes to making the
same point ever more emphatically in anti-abortion Republican politics.

We`re also waiting this week on action from South Dakota`s Republican
governor on an almost equally ridiculous anti-abortion bill that passed
through that state`s legislature. South Dakota already has a law in the
books that will force women into the longest in the nation delay for having
an abortion.

Now, the legislature in its wisdom has passed a measure to augment the
waiting period. So the clock doesn`t start ticking on the forced delay if
the day in question is a weekend or a holiday. The whole justification for
forcing women to wait is that women are too dumb to understand what an
abortion is on their own, and they need to be forced by the state to sit
and wait and think about it for 72 hours. But apparently all that state
mandated sitting and thinking is banned on days when the bank is closed.

So, in your real life, you are still waiting on weekends and holidays,
of course. But the state government refuses to acknowledge that you are
doing so. It`s like if you were sentenced to prison time, and when the
warden went home at the end of the business day, the state would stop
counting the time you`re in prison against your sentence. Not because
you`re not in prison after business hours, but because the warden isn`t
there to observe you being there. He is home. Business day is over.

Again, that has passed both the House and the Senate in South Dakota.
It was due to land on the governor`s desk this week. So far, the
governor`s office is not saying whether or not he`ll sign it, but he does
say he has been supportive of the concept of a longer waiting period.

That`s some of what`s happening in the states where Republicans are
running things.

Federally, you`re at least seeing a different message about Republican
governance. "Roll Call" newspaper writing this week about Senate
Republicans` comeback strategy for the next elections, a major piece of
which is avoiding, so-called, Todd Akin moments. The new head of the NRSC
saying the Todd Akin-y Republican campaigns of last election cycle, quote,
"not only infected themselves, they infected all the rest of the
campaigns."

So they will be training Senate candidates now not to say creepy
things about forcing rain victims to bear their rapist`s child.

But basically, the idea here is that social issues are not the party`s
future. Social issues are the Republican Party`s past, not the future.
And that does seem to be what pretty much everybody think, at least in the
Beltway that is the common wisdom diagnosis.

The problem is, it`s really not what is going on in the party outside
the Beltway. I mean, take the marquee social issue of gay rights on which
the Republican Party is supposedly having this big change of heart, right?
I mean, there is definitely sufficient evidence to justify the kind of
headlines we`ve seen recently about the Republican Party diversifying its
previously uniformly anti-gay stance.

But there ought to be a sub-headline under that headline, or maybe a
paragraph in the body of the story underneath that headline that
acknowledges the really important detail in this shift in the Republican
Party. And the really important detail there is that apparently applies
almost exclusively to retirees.

The big story of the week on Republicans` turnaround on gay rights
revolves around Ken Mehlman, the now openly gay former George W. Bush aide
and campaign manager who recruited dozens and dozen of other Republicans to
sign on to a legal brief to be submitted to the Supreme Court arguing for a
constitutional right to equal marriage.

Ken Mehlman did, in fact, get a mess of Republicans to sign on in
support of gay marriage. But out of the roughly 130 Republican
signatories, exactly two are currently holding federal elected office, and
exactly zero are sitting governors, and exactly zero are sitting U.S.
senators.

Among the many former office holders is Tom Ridge, former Pennsylvania
governor, George W. Bush`s first secretary of homeland security. Tom
Ridge, just as an example, he signed the letter arguing for gay marriage.

But, you know, Tom Ridge no longer holds elected office. He no longer
makes policy on marriage, gay or otherwise. And when he did, when he was
governor of Pennsylvania, Tom Ridge, in fact, signed into law that state`s
own ban on same-sex marriage.

What he did in office is one thing. What you`re doing now that you`re
freed from office is the new thing.

What is actually happening in the party right now? Are the politics
on social issues changing for the whole party, or are they only changing
among the retired class? The Republicans who are no longer making policy.
Where are all the elected?

Joining us now is Nicolle Wallace, former communications director for
the George W. Bush administration, former senior advisor for the
McCain/Palin campaign. Nicolle is one of the Republicans who signed the
brief in support of same-sex marriage rights.

Nicolle, thank you for being here.

NICOLLE WALLACE, FORMER GEORGE W. BUSH COMMUNICATIONS DIRECTOR: Thank
you for having me.

MADDOW: I miss you since you went elsewhere.

WALLACE: I miss being here, now that I`m elsewhere.

MADDOW: I know. You should come back. There, I said it.

Only two Republicans who are currently holding elected office have
signed on to this brief, with more than 100 other prominent Republicans.
Where are all the elected?

WALLACE: We have to start somewhere. And I think that each President
Obama has seen the shift in his own position come about very quickly. He
did not run for reelection for with the position he announced last week.

So, the politics are shifting faster than anyone can decipher. And
so, I think you have to assume people are doing what they think is the
right thing to do here, because I think the politics of this moment are
indiscernible.

I couldn`t tell you what they are. I couldn`t tell -- we don`t know
what the universe of voters is going to look like in the next presidential
campaign. But if they -- if they, you know, include a lot of people under
40, it`s indiscernible to say that this is an issue that would hurt a
candidate. I`m not sure that`s true anymore.

So, I don`t think that the motives for supporting this position, this
brief, this friend of the court brief, that a lot of my former colleagues
and I have signed I think represents folks that sign on for three different
reasons.

One, Ted Olson is one of the most respected legal minds on the right.
And he is partnered with David Boies, who is famous for a lot of things,
but one of them for representing Al Gore in the recount. They have made
this argument that even someone like me who is not a lawyer can understand,
that the Equal Protection Clause means that you -- that everyone is
entitled to equal protection under our laws. And you can`t have a separate
set of laws for a class of people. You can`t deny people access to
marriage because they want to have a same-sex marriage. You can`t have
different rules for different classes of people.

The other thing is Republicans, I think, traditionally had ideas about
marriage because they so revered the institution. And if you so revere the
institution of marriage, then shouldn`t you want every family to have
access to marriage?

MADDOW: People wanting to get into the institution.

WALLACE: Right. Let everybody in.

MADDOW: Yes.

WALLACE: Because a marriage creates the kind of families that if
you`re a conservative, you think create the kind of neighborhoods that
create the kind of society that we want. So, it is a truly conservative
stance. And I think Ken Mehlman has been a wonderful, you know, person to
articulate these sort of conservative ideals in this legal framework.

I`d say the third class of people who signed on are people who may be
-- have always been supportive of marriage equality, but maybe were guilty
of being too quiet about that support.

So I think this brief brought together people in all three buckets.
And, you know, nobody is walking around asking for a ribbon for coming
around to what is obviously the more enlightened position and one that I
think is the future direction of this country.

But I think it is significant that even before the Obama White House
announced its position, which is very similar to that expressed in the
Republican friend of the court brief. But I think it is an interesting
coalition emerging. I think it is where anybody under 40 tends to view
these issues.

MADDOW: Except if you`re a Republican elected official.

Like I understand your whole argument about why the argument is
effective in conservative circles. And I understand the whole argument
about how increasing visibility on the right of people being willing to say
they`re for this works and sort of builds momentum on these issues.

But what is the bulwark that is stopping all of those forces from
working on people who are elected? What`s the force in other direction?

WALLACE: Look, some people simply disagree. And, I mean, I think
there are some debates.

MADDOW: All but two elected House Republicans?

WALLACE: I have to say some people disagree. I mean some people just
--

MADDOW: Sure.

WALLACE: -- hold the position that marriage is between a man and a
woman. And out of respect for people who disagree with me, I mean, that is
a different point of view that is still represented in the Republican
Party.

But I think we have to wait and see. I think we have to wait and see
how the Supreme Court rules. I think that if Prop 8 is overturned, I think
states may be reluctant to pass bans on same-sex marriage for some of the
same reasons that you just described in your piece about abortion rights.

But I think we have to wait and see. And I think that if you believe
that this is a moment, and I imagine that`s why we`re here talking about
it, this is a moment, I think we have to wait and see if there are more
sitting elected officials who are in the Republican Party who come around
to this view. I hope so.

MADDOW: What we need to do is we need to get somebody in silhouette
with their voice disguised who will tell us that they are pro-gay rights,
but they can`t say so because. We need somebody --

WALLACE: And I`d like to understand because, because I couldn`t tell
you. I really think that there is no single issue in American politics on
either side in which the politics are churning and changing so quickly.

MADDOW: That`s right.

WALLACE: Because I don`t think that -- I think there is political
liability on both sides here. And I think that if you`re someone running
in the state where there are voters under 40 that you`re trying to court, I
think it`s a liability to be on the other side of this one.

So I think you have to assume that people on both sides of the issue
in both parties, there are Democrats who oppose same-sex marriage.

MADDOW: Sure, they`re just moving faster.

WALLACE: They`re moving a little faster. They have the leadership
from the White House, and that always creates more momentum. The president
still leads his party in places where they haven`t been before. So that is
significant for the Democrats.

But I think Ken Mehlman and Ted Olson are leading our party to places
we haven`t been before. And I think that`s a very good thing.

MADDOW: Some day, Ken Mehlman will talk to me about it on television.

WALLACE: I think so.

MADDOW: Some day.

WALLACE: I think so.

MADDOW: Nicolle Wallace, former communications director for the
George W. Bush administration, former senior adviser to McCain/Palin --
again, I miss you.

WALLACE: Thank you. It`s really fun to be back. Thank you.

MADDOW: All right. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: It was big news today that got maybe a little submarined
under all the other big news. Big news today about President Obama`s
choice to head the CIA. It was also big news about a promise that the
president made in the State of the Union. Hold on. That story`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So in the months ahead,
I will continue to engage Congress to ensure not only that our targeting,
detention, and prosecution of terrorists remains consistent with our laws
and system of checks and balances, but that our efforts are even more
transparent to the American people and to the world.

(END VIDEO CLIP)

MADDOW: Exactly a month ago, NBC`s Michael Isikoff had a big scoop
related to the CIA. For years, people had been trying to pry out of the
administration the reasoning for why it`s supposedly legal for the CIA to
kill a U.S. citizen overseas using a drone.

Mr. Isikoff was the first person to get ahold some of that reasoning
when he obtained this summary of the administration`s legal arguments.
After that, some senators were allowed to go a step further when the
president decided to show them the intelligence committee, specifically, a
couple of legal memos advising the president about his legal ability to use
drones.

With the senators happy to have that much, but dissatisfied that it
was not enough, those senators on the intelligence committee pushed for
more. And today, they got what they wanted. As of today, they get to see,
apparently, more of the Justice Department`s legal opinions about so-called
targeted killing of Americans. The senators get to see more memos and,
crucially, their staff members get to read them as well.

This is progress. When the president pledged in the State of the
Union more transparency on this issue, this is more transparency.

It helped that senators of both parties essentially made John
Brennan`s nomination to run the CIA contingent on getting that
transparency, but they did get it. And accordingly, John Brennan today got
a 12-3 vote out of that committee, which means his nomination to run the
CIA goes to the Senate floor and he`ll probably get confirmed to run the
agency by the end of the week.

And lest there be any doubt about the connection between John
Brennan`s nomination and our government killing people with drones, in "The
New York Times" today, in a crazy story where three U.S. officials say that
the last reported drone strikes in Pakistan were not by us, the most
interesting, unresolved question, of course, is, well, who did them if it
wasn`t us?

But the other revelation is that some analysts in this field believe
there have not been any U.S. drone strikes in Pakistan or Yemen since early
January, specifically because John Brennan`s been busy, because he was
nominated to run the CIA in early January. So he`s essentially been too
busy since then to keep droning the heck out of Yemen and Pakistan.

Well, if drone strikes rise and fall with how busy John Brennan is, if
he gets confirmed as CIA director the day after tomorrow, should we expect
the drone pace to then pick back up?

Maybe or maybe not.

Last week, former White House Press Secretary Robert Gibbs said
something on this show that I don`t think got enough attention. He said
that John Brennan believes when it comes to drone strikes that they should
be handled by the military and not by the super secretive CIA.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, FORMER WHITE HOUSE PRESS SECRETARY: I think what John
believes is, when we need to deal with any aspect of military activities,
those military activities should be conducted by the Pentagon. And I think
that, again, is a change in the program, because, again, John understands
where we are is just not sustainable.

(END VIDEO CLIP)

MADDOW: That`s a big deal. If it is true that the new CIA director
doesn`t think the CIA should be killing people with drones, that the
military should be doing it instead, that`s a big deal. But you know what
would be a bigger deal? Is if the president agreed with that.

(BEGIN VIDEO CLIP)

MADDOW: Should we see the president`s nomination of John Brennan to
run the CIA as a sign that the president agrees with that and that that
change is going to happen?

GIBBS: I believe so.

(END VIDEO CLIP)

MADDOW: The nomination of John Brennan should be seen as a sign that
President Obama may take drones out of the hands of the CIA and put them
under the control of the military. That would make drone strikes like
normal war and not the secretive, unaccountable, denied truth that they are
right now.

If that is what this nomination means, and this nomination goes
forward by the end of the week, our whole country is going to change in
terms of how accountable our current war is to "We, the People," to whom it
is supposed to be accountable. Exclamation point.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL."

Have a great night.

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

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