updated 9/24/2013 11:25:05 AM ET 2013-09-24T15:25:05

THE LAST WORD WITH LAWRENCE O`DONNELL
September 23, 2013

Guests: Jason Zengerle, Robert Reich; Jacob Kornbluth; Sandy Phillips;
Lonnie Phillips


LAWRENCE O`DONNELL, HOST: There is finally bipartisan consensus in
Washington on exactly one thing -- Ted Cruz.

(BEGIN VIDEOTAPE)

SEN. TED CRUZ (R), TEXAS: There is a tendency in this town towards
brinksmanship.

UNIDENTIFIED FEMALE: Here we go again.

What are the odds there is a government shut down.

A government shut down is over a week away.

CRUZ: No American wants a government shut down.

ANDREA MITCHELL, MSNBC ANCHOR: Members of Congress still say that
they think a government shut down next week can be avoided.

SEN. TOM COBURN (R), OKLAHOMA: We`re not about to shut the government
down.

SEN. CHARLES SCHUMER (D), NEW YORK: We will about a shutdown.

CHUCK TODD, MSNBC ANCHOR: But nobody can explain how it can be
prevented.

UNIDENTIFIED MALE: So, here we are.

UNIDENTIFIED FEMALE: For a third year in row.

UNIDENTIFIED MALE: They`re trying to hold both parties hostage.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: There should be no
conversation about shutting the government down.

Our goal is not to shut down the government.

That`s not the goal.

Our goal is to keep the government open.

As simple as that.

I have said it thousands and thousands of times.

UNIDENTIFIED MALE: The current strategy appears to be a lot like the
old strategy.

CRUZ: There is a tendency in this town towards brinksmanship.

UNIDENTIFIED FEMALE: Senator Ted Cruz, I can`t really explain Ted
Cruz.

UNIDENTIFIED FEMALE: It`s not going down without a fight.

MITCHELL: Tell me why. What is it that Ted Cruz has done --

CHRIS WALLACE, FOX NEWS: I think it`s fair to say that you have
ticked off a whole bunch.

MITCHELL: -- to alienate just about everyone in his own party.

WALLACE: You have gotten into this fight without an end dog.

MITCHEL: He is the dog who caught the car.

UNIDENTIFIED FEMALE: Rather mindboggling, needless to say.

UNIDENTIFIED MALE: He doesn`t really care.

UNIDENTIFIED FEMALE: He`s not going to have to suffer the
consequences.

UNIDENTIFIED MALE: Screw what collateral damage there is.

SCHUMER: Ted Cruz has climbed out on a limb.

UNIDENTIFIED FEMALE: Undeterred by wisdom, strategy, and reality.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I understand his great
persuasive talents in speaking.

WALLACE: Senator?

SCHUMER: Ted Cruz is out there on that limb and it`s getting sawed
off.

(END VIDEOTAPE)

O`DONNELL: Tonight we have an answer to the question America has been
wondering about for weeks now -- how stupid is Ted Cruz. The answer is,
Ted Cruz now wants to show his support for the House bill that defunds
Obamacare by filibustering the bill when it comes up for a vote in the
Senate.

That`s right. Senator Ted Cruz was for the bill before he decided to
filibuster the bill. And he is so wildly out-of-control stupid, he is
insisting that blocking the bill is the very best way to support the bill.

(BEGIN VIDEO CLIP)

WALLACE: The problem is that you would be blocking a bill which you
actually support which would fund the government but defund Obamacare. So,
how are you going to get other Republican senators on board to block a bill
that you support?

CRUZ: Well, let`s be clear. Last week`s vote was a tremendous
victory. Just a few weeks ago, no pundit in Washington thought it was
possible we would see the vote we saw on Friday. Last week, the House of
Representatives voted to defund Obamacare. And now, next week, as you
note, the fight moves to the Senate.

And I think next week is a time for party unity. I think next week,
all Senate Republicans, I hope, should come together and support the House
bill. Next in my view, Senate Republicans should stand united to stop
Harry Reid from changing the House bill and in particular, from inserting
the funding for Obamacare with 51 votes.

WALLACE: It`s Senate Rule 22, which has been around for year. It`s
part of the Senate rules and it says after you end -- you allow debate,
after you take cloture, that you can pass an amendment by a simple
majority. That`s the rule.

(END VIDEO CLIP)

O`DONNELL: Chris Wallace is correct, of course. Passing amendments
in the Senate only takes 51 votes, which is why Harry Reid`s plan is to
bring up the House passed bill to continue funding the government while
defunding Obamacare. And having brought that bill up for debate on the
Senate floor, Harry Reid would then offer the first amendment to that bill
which would restore complete funding of Obamacare and that amendment will,
of course, pass with at least 51 Democratic votes.

This is just one of many, many reasons people have been trying to tell
Ted Cruz for weeks now that the defund Obamacare crusade is hopeless.
There were always be 51 votes in the Senate to preserve the funding for
Obamacare.

Every one everyone else in the Senate understands that.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I can tell you that, in the United
States Senate, we will not repeal or defund Obamacare. We will not. And
to think we can is not rational.

COBURN: Tactics and strategies ought to be based on what the real
world is and we do not have the political power to do this.

(END VIDEO CLIP)

O`DONNELL: Rand Paul told "The National Review", "I don`t think the
president will sign any legislation to defund Obamacare, and neither will
the Senate pass any legislation to defund Obamacare."

The senior senator from Texas who has the senior partner in the Senate
has issued a statement saying his junior partner is crazy. The exact
wording of the statement is, "Senator Cornyn will support the House bill
that defunds Obamacare."

That is Senator Cornyn`s way of saying Ted Cruz is barking mad.

The Republican leader in the Senate who is being challenged on his
right by a Tea Party crazy in Kentucky still hasn`t himself gone crazy
enough to support the Ted Cruz strategy of trying to block the House bill
in the Senate. Mitch McConnell`s office issued this statement, "Senator
McConnell supports the House Republicans bill and would not vote to block
it since it defunds Obamacare."

Joining me now is Ezra Klein, columnist for "The Washington Post" and
an MSNBC analyst, and economist Jared Bernstein, a senior fellow at the
Center on Budget and Policy Priorities and an MSNBC analyst.

Ezra, it is tempting for those freshman senators to come into town and
say, oh, I know better than everybody. They say it can`t be done. That,
of course, I think I have a way of doing it. So there is Ted Cruz trying
to outsmart everyone and it seems like he`s painted himself into a
ridiculous corner.

EZRA KLEIN, WASHINGTON POST: You and I disagree on this a little bit.
You`re completely right. He is not going to get this done. Ted Cruz has
completely outsmarted everybody. He just got a huge boost in the 2016
presidential election, and that is playing for here.

He has come out with a strategy, which is very bad for Republican
Party, which is very bad for actually the effort to Obamacare, right? I
mean, if you launch Obamacare on October 1st, during government shutdown
and things go wrong, all of the sudden, the Democrats don`t get blamed for
them anymore, you do because people will say, well, things probably
wouldn`t be going wrong if you had kept the federal government open.

So, he managed to this trick of coming up with something that was bad
for his party, bad for his actual cause, and yet because it`s not actually
going to happen, other Republicans will take a bullet for it actually
happening and he will come out looking like the one true conservative who
wasn`t willing to give up the faith. And when he goes to Iowa in 2015 and
2016, he will remind them of that every moment.

O`DONNELL: And when he loses his campaign for president, he will also
say that it didn`t work for that either.

Let`s listen to his explanation to Chris Wallace when Chris Wallace
asked him the hard question about actual votes. And the only thing that
matters in the Senate or in the House is exactly how many votes do you have
on your side.

(BEGIN VIDEO CLIP)

WALLACE: You need 41 votes. You`re one vote, you need 40 other
Republican senators to go with you to block consideration of the House bill
in the Senate. How many votes do you have right now, Senator?

CRUZ: Well, we don`t know right now and this week, we`ll determine.

(END VIDEO CLIP)

O`DONNELL: So, Jared Bernstein, there`s the leader of the revolution,
has no idea how many votes he has. What we know is he does not have the 41
votes, nothing close to it. He will never come close to it, and I`m not
sure that the Republicans have a very strong history of nominating the
craziest person who runs for president in their group.

JARED BERNSTEIN, MSNBC CONTRIBUTOR: Right. I mean, I think the
Calgary cruiser here has got himself in a very difficult corner. If Ezra
is right, and he`s simply playing to primary voters, so be it.

But, of course, there is a lot that happens between now and then.
It`s getting a little difficult to see how we avoid a government shut-down
unless once this thing does get pinged back to the House, Speaker Boehner
allows a vote to go forward and pass with a lot of Democrats.

Now, that is certainly possible. It`s one way we could avoid a shut
down and a breach of the debt ceiling, but it`s hard to be optimistic about
that scenario right now.

O`DONNELL: Chris Wallace asked a great question about what is his end
game. Let`s listen to his answer.

(BEGIN VIDEO CLIP)

WALLACE: Senator, here`s the question everyone on both sides is
asking in Washington, which is -- what`s your end game. What`s your end
game? Because the government is going to shut down a week from Monday.

CRUZ: Well, I don`t want the government to shut down. The American
people don`t want the government to shut down. I don`t think that Harry
Reid and President Obama should shut down the government.

Listen, if that happens, if Harry Reid kills this bill in the Senate,
I think the House should hold its ground and begin passing smaller
continuing resolutions one department at a time. It should start with
continuing resolution focused on the military. Fund the military and send
it over and let`s see if Harry Reid is willing to shut down the military
just because he wants to force Obamacare on the American people.

(END VIDEO CLIP)

O`DONNELL: Ezra, how`s that for an end game? One continuing
resolution at a time on each department?

KLEIN: Yes, that`s quite an end game. It`s worth noting, too, that
because of the insane way the Senate rules work, if Cruz is going to
filibuster going forward, it doesn`t mean he`s got the votes to sustain it.
As you say, no way he`s getting 40, but he can cause a little bit of
problem. That means given the long time it takes to just vote to break a
filibuster, they will have the votes to that, they wouldn`t actually be
able to vote to pass the actual C.R. until Sunday.

So then on Sunday, you send it back to the House and then the House
has to come up with a number, dozen I think, of continuing resolutions.
The government shutdown will begin on Tuesday, by the way. So, you are
sending this back to the House on Sunday. They`ll probably take it up on
Monday. They`re supposed to break this thing apart, begin passing defense
in one by one, how are you going to pass one by one through the incredibly
slow molasses of U.S. Senate by Tuesday.

And if you don`t pass it by Tuesday, then the government has shut
down, and then Ted Cruz`s strategy has not worked because then he is
actually about to get blamed for a huge debacle for the Republican Party.

O`DONNELL: Jared Bernstein, how do you see this playing out?

BERNSTEIN: Well, first of all, let me just say, listening to that
last clip you played by Ted Cruz reminded me of my 11-year-old daughter
when she was 7 or 8 and she had a friend come over and they would make up
the rules to a game they were going to play.

O`DONNELL: Yes.

BERNSTEIN: It has an ad hoc quality that had nothing to do with
procedure.

I think the only way this works, it`s actually possible for a bill to
get back to the House even if it`s on Sunday that a week from today, next
Monday on the 30th, the last day of the fiscal year, that the House votes
for a clean C.R. with budget levels that continue at their current level of
funding. But again, the only way you do that is if Speaker Boehner I think
is willing to take the vote, perhaps breaking what`s called the Hastert
rule, meaning he may not get even a majority of the majority.

Now, that`s kind of a question whether Speaker Boehner is open to
doing something that supports the nation and the economy right now or
keeping his job. And I know that anyone knows the answer to that.

O`DONNELL: There are CNBC poll the question of do you support
defunding Obamacare if it means shutting down the government? There are 19
percent with Ted Cruz on that, 59 percent against. Among independents it`s
worse for Ted Cruz`s presidential hopes, 14 percent yes, shut it down, 65
percent say no.

Ezra Klein, no real surprise in that poll, I don`t think.

KLEIN: No, not a huge surprise, although I think Jared is right to
say that probably the numbers are higher among Republican members of the
House. And I think it`s important.

The thing that is going to be happening in the House this weekend,
this is really incredible to be watching, is one of the ways Boehner is
going to support to pass a clean C.R., so there isn`t a shut down is they
are going to pass a debt ceiling bill this week in the House that raises
the debt limit. And alongside raising the debt limit delays Obamacare for
a year, does it grab by of other stuff like Keystone XL.

And what Boehner is trying to do is convince his members that no, no,
no. Don`t do this government shut down thing. Wait on this -- we`ll have
a much bigger fight over the debt ceiling. This is, by the way, a more
irresponsible fight than the one that Ted Cruz is threatening. I assume
Ted Cruz will support Boehner on this irresponsible fight, too.

But defaulting on the dead even temporarily is just dramatic worse,
much more catastrophic in the economy than shutting down the government for
a period of time. And for Boehner to be moving his people over to that
fight and to be climbing into a position that he can`t climb back down
from, no one in Washington really seems to have a good answer, unlike on
the continuing resolution, for how the debt ceiling fight resolves itself
without any problem.

Now, eventually, it will probably resolve itself, with a little bit of
market turbulence. But if they get that wrong, the results are truly
catastrophic. And the fact that Boehner is hyping that up in order to get
this little jam is really, really worrying.

O`DONNELL: Ezra Klein and Jared Bernstein, thanks very much for
joining us tonight.

KLEIN: Thank you.

BERNSTEIN: Thank you.

O`DONNELL: Coming up, an exclusive interview with the man who wrote
the new profile of Ted Cruz that everybody is talking about today, "GQ"
profile entitled "Understanding Ted Cruz, the distinguished whacko bird
from Texas."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: I think Congress should never exempt
themselves from the law. But then, again, I think John Roberts, you know,
he loves Obamacare so much.

UNIDENTIFIED MALE: Supreme Court justice.

PAUL: He should get it. Right now, he is getting a federal employee
subsidy. He is not part of Obamacare, so he makes the rest of America who
I think convoluted constitutional logic, he makes us get it but he is
exempt.

(END VIDEO CLIP)

O`DONNELL: OK, FOX News. Listen up -- no one is making everyone get
Obamacare health insurance. Only about 15 million people will get
Obamacare health insurance. The law specifically allows and assumes that
everyone else in America who already has health insurance will continue
using the health insurance that they already have.

No one in government was exempted from Obamacare because no one in
government was supposed to be included in Obamacare because people in
government already have health insurance. Employer provided health
insurance.

Obamacare is about helping people get insurance who do not already
have it. Obamacare is designed to have no effect on people who already
have health insurance like Chief Justice John Roberts.

But asking Rand Paul to understand or add, and/or admit any of that is
asking way too much, because Rand Paul, like most Republicans, just can`t
resist lying about Obamacare.

Up next, Republicans are now so afraid of Ted Cruz that they are
actually sending opposition research against him to FOX News.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WALLACE: As soon we listed Ted Cruz as our featured guest this week,
I got unsolicited research and questions not from Democrats but from top
Republicans who -- to hammer Cruz. Why are Republicans so angry at Ted
Cruz?

(END VIDEO CLIP)

O`DONNELL: In a "GQ" article entitled "The distinguished whacko bird
from Texas," Jason Zengerle writes that Ted Cruz has come to the reluctant
but unavoidable conclusion that he is more intelligent, more principled,
more right in both senses of the word than pretty much everyone else in our
nation`s capital.

Joining me now for THE LAST WORD exclusive is the author of that
piece, Jason Zengerle. He is now a senior staff writer for "Politico
Magazine".

Jason, when is "Politico Magazine" coming out? Few weeks away, months
away?

JASON ZENGERLE, POLITICO MAGAZINE: Stay tuned. You will find out
pretty soon.

O`DONNELL: OK, it`s coming.

So that quote that you have there about Cruz`s view of himself, I
mean, this is your writing. He has come to the reluctant but unavoidable
conclusion that he is simply more intelligent, more principled, more right.
That seems to reek from him in everything he does in the Senate.

ZENGERLE: Yes, he does not lack self confidence.

I mean, he has a resume that should give him a fair amount of self-
confidence, though. You know, pretty much every step of his career he has
been an elite practitioner of whatever he`s been doing. So, I think, you
know, he has arrived in the Senate and he feels he`s going to be just as
comfortable there as he has been everywhere else.

O`DONNELL: But you do record a setback -- a career setback that he
had in this article. You talk about his work on President Bush`s first --
George W. Bush`s election campaign and how he expected something big from
the administration, something fitting, his view of himself. And he did not
get that.

And my reading of your article is that he didn`t get a good job in the
Bush administration based largely on personality issues that people had
with him?

ZENGERLE: Yes. I think happened during the bush campaign is not that
dissimilar from what happened now. I think he performed at a fairly high
level. He was young. He got a very important job in the policy shop on
the campaign. He had this very impressive legal background so during the
recount in Florida, he was involved in that. He did a very good job by all
accounts.

But throughout the course of the campaign, his attitude rubbed people
the wrong way. He was very arrogant. He was very ambitious. And when it
came time to sort of divvy up the spoils, and staffers got their various
jobs in the administration, he did not wind up in the White House. He got
sent to the Federal Trade Commission because I think personally, he just
insulted a lot of people just by his mannerisms.

O`DONNELL: In your piece, you write, so far, Cruz has proposed no
major legislation and has shown little interest in changing that, stopping
bad things, Cruz told me, is a significant public service.

That seems to be the statue he wants built to himself. I stop stuff.

ZENGERLE: For right now. I mean, I think that`s the thing that has
been so puzzling about him to some of his admirers. You know, he does have
a lot of admirers amongst sort of conservative think tank types because he
is a guy who is very smart. He has been very engaged in kind of
intellectual arguments in the Republican Party, in the conservative
movement for a long time.

But since he started running for office, since he kind of left his
legal career and started actually becoming, you know, a politician, these
people haven`t sent that side of him. I mean, I don`t know if it`s really
fair to say he is dumbing himself down, but he is not engaging in these
debates that other people are.

And, you know, he probably could. He brings a lot to the table
intellectually, but I think he has made the political calculation that it
is not really advantageous for him to engage in those debates.

O`DONNELL: Yes. You say in the piece that the man hailed as the Tea
Party intellectual has deployed that powerful intellect-only sparingly
since arriving in Washington, has most ambitious proposal is to abolish the
IRS. Then you quote someone saying, "He`s smart enough to know that it`s
entirely cynical thing to do.

Jason, I have been sitting here watching him and I am unconvinced that
he is smart enough to know anything. I am going by his public record and I
have heard few senators with a steady stream of stupidity on a daily basis
in the Senate.

ZENGERLE: You know, I think, you know, not necessarily have to do
this. But if you go back and you read his Princeton thesis, if you go back
and you talk to colleagues of his at that law school who might have
disliked him personally but certainly respected his intelligence. If you
go and you read the transcripts of his oral arguments in front of the
Supreme Court, he is a very bright guy. He`s very persuasive.

I don`t necessarily think that`s the Ted Cruz you`re seeing right now.
I mean, you`re seeing glimpses of it here and there. But he`s very smart.
He`s very talented. I think people are wrong to underestimate him at this
moment.

I think what Ezra was saying in your first segment is actually right.
I mean, this is, you can argue this is very damaging for the Republican
Party. It`s damaging for the government. But whether it`s good for Ted
Cruz in terms of his political prospects come 2016, I think there is the
possibility that`s the case.

O`DONNELL: Jason, I use a different score card for lawyers than I do
for senators and a different score card for surgeons than I do for
senators. And I think you can be very good at all of the other jobs you
have mentioned and be very bad at being a senator. And based on the public
evidence that I have so far, he is functioning as an abject moron as a
senator and none of his academic achievements in the past make that shine
any brighter.

It`s the stupidest Senate career I have seen at such a short time,
possibly ever.

ZENGERLE: He has definitely made a splash. I think he has a
different idea of what is happening in Washington right now. I think if he
sees Washington as completely broken, he sees -- he believes nothing is
going to get done. So, I think he has made the conclusion, why try?

When you look at someone like Marco Rubio, who spent the first half of
this year trying to do, you know, bipartisan immigration reform, look at
what that Rubio, it just got him the enmity of all of the people that he
will need to vote for him in the 2016 GOP primary. I think Cruz is saying
why bother with that?

And, you know, I think that might be the wrong calculation, but that
seems to be the calculation he`s made.

O`DONNELL: Jason Zengerle, thanks very much for joining us. Thank
you.

ZENGERLE: Thank you.

Coming up, Robert Reich is a movie star. OK, a documentary star,
anyway. And he will tell us all about it.

And later, President Obama on what we need to learn from other
countries. That`s in the rewrite.

(COMEMRCIAL BREAK)

O`DONNELL: The siege of a shopping mall in Nairobi is finally over,
according to Kenya`s interior ministry. The Kenyan government claims it is
now in control of the Westgate mall and all of the hostages are now free.
The attackers are believed to be from the Islamist terror group al Shabaab,
which is mostly based in neighboring Somalia.

The attackers believed to be retaliation for Kenya, sending troops as
part of an African Union force to stabilize the Somali government and stop
an uprising. Kenyan officials believe some of the attackers are from
countries other than Somalia, even the United States and United Kingdom.

President Obama offered American support to Kenya, calling the country
a regional pillar of stability.

Up next, Robert Reich joins me to explain why the U.S. income gap has
gotten so big and why that is so bad for America.

(COMMERCIAL BREAK)

O`DONNELL: In the spotlight, inequality for all. As lawmakers in
Washington threat on the appeal the affordable care act and vote to cut
nearly $40 billion from food stamps, many people are in the worst struggle
of their lives economically forgotten by those lawmakers.

Last week, the census bureau released new data finding that adjusted
for inflation today is median income of $51, 017 is not much different from
what it was in 1989 when it was $51,681. Just a little less.

Today`s median income is down nine percent from its peak of $56,080 in
1999. This despite economic growth and new million new jobs. In the

New documentary, "Inequality for all" which hits theaters Friday,
Former Clinton labor secretary Robert Reich takes an in-depth look at the
causes of our wealth gap.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER CLINTON LABOR SECRETARY: Contrary to popular
mythology, globalization and technology have not reduced the number of jobs
available to Americans. These transformations have reduced their pay.

It is not just that wages are stagnant, but when you take into
considerations rising costs. Rising costs of rents or homes, dramatically
increasing costs of health care, the rising cost of child care and the
higher cost of education rising much faster than inflation. Take all of
these into consideration and you find that it`s much worse than just
stagnating wages. It`s basically middle class families often with two wage
earners working harder and harder and harder and getting nowhere.

(END VIDEO CLIP)

O`DONNELL: Joining me now, Robert Reich, public policy professor at
the University of California, Berkley and Jacob Kornbluth, the director of
inequality for all.

Robert Reich, you made a reference to the international effects of
labor. To what extent is this an international phenomenon and the American
worker, the price of American labor is in some ways competing with the
price of labor in other countries and that drives down the American price?

REICH: Yes. There is obviously an effect, Lawrence, from
globalization but also technological change. I mean, manufacturing is
coming back to the United States but not many manufacturing jobs because
that old assembly line is being replaced by numerically controlled
computerized machine tools and robotics. So, we are saying that technology
is also reducing wages for people who don`t have the right education, the
right connections who are not basically in a position to add value to the
global economy.

What I want to emphasize and the person sitting next to me is the
genius behind this film. It sounds like a down beat film. It`s actually
an upbeat film. I mean, it -- out attempt was to be a positive and to
create a sense of hope for people. I mean, a lot of people are so
disillusioned with the economy, their jobs, with politics. I think they
need to understand that, historically, we have bounced back. We have take
p back the economy. We have taken back politics. We have saved capitalism
from its own excesses.

O`DONNELL: Jacob, what got you interested in this subject. What made
you decide you wanted to make a documentary in this area.

JACOB KORNBLUTH, DIRECTOR, INEQUALITY FOR ALL RIGHT,: Well, first of
all, I felt it personally. I was suffering through a lot of the economic
challenges that all of the middle class in America are suffering from and
me and my friends were talking about it. And I felt like I was desperate
to have a story that explained it to me.

At some point, maybe, four years ago, I just got fed up. I decided
that I`m a film maker. What I can do to be active and do something about
this is make a film. So, luckily, I knew the professor Reich to my right
over here.

REICH: Call me Bob.

KORNBLUTH: -- who I knew Bob and I started asking him some questions
about question I had about the economy and sort of explaining it to me in a
way that it sort of stepped out of the usual partisan fights and sort of
gave me some information that I could make sense of what`s happening to
America and what`s happening to my own personal financial situation.

O`DONNELL: Go ahead.

REICH: Lawrence, it is interesting. He is being way too modest. I
mean, he came to me two years ago. He said I really want to make a film
about widening inequality, about the effect of all of this on our politics,
democracy on our economy. And you know, I want to put into film cinematic
form a lot of the things that you have been saying for years. And I
thought, you are crazy. I mean, you know, how is that going to be
entertaining enough to get people to see it and absorbs.

KORNBLUTH: It is true that I only got him to participate in the film
because he didn`t know what he was getting into.

But it was important. I knew that nobody was explaining it to people
like me. I feel like this film puts the concepts of income and inequality
and a context that anybody can understand, It makes it accessible and it
actually works as a piece of cinema. You go into a theater and turn out
the lights and it feels like you have gone to see not just an issue-driven
film but a film of any kind. It`s a fun movie to watch and anybody can get
it. Even people who don`t normally think they know economics and politics
or care so much to follow these issues will get something out of this film.

O`DONNELL: Bob, in my experience, in courses that teach these kinds
of facts, economics course, they really the professors feel the obligation
basically of just presenting you with a photograph, a statistical
photograph of here is where we are and maybe a sequence of them. Here is
where we have been. But, you take on the much bigger challenge that I
think most professors shy away from which is what do we do about it and
what can we be optimistic about? And that seems to me to be the most
challenging question in the situation.

REICH: Well, the film does take that on, Lawrence. And it`s kind of
we talked about it as if, you know, it is inconvenience truth for the
economy and middle class, but it is more than inconvenient. I have great
respect for Al Gore, but I`m funnier than Al Gore.

O`DONNELL: Yes. Absolutely much, it is true.

REICH: And that may be a fairly low bar right there. But, it is
important as you have just said it`s important that people understand this
issue, understand why it is hurting the economy, hurting our democracy,
hurting so many people and what can one about it.

This is not a zero sum game in which, you know, the rich and the bad
guys and the only way we can change the situation is by taking money away
from the rich and giving it to the middle class and the poor. Actually,
the rich in this country would do better with a smaller share of a rapidly
growing economy than they are doing right now, with the large share with
economy that is almost dead in the water because nobody has the purchasing
power to keep it going.

KORNBLUTH: And if I could add, I thought what we really needed was to
step out of the normal way of people understand this. Because this is the
issue of our times to me. This issue of widening income and inequality.
I`m 40 years old. My entire life has been the story of this have I growing
and growing. And I didn`t really understand that until I made this movie.

My friends all say the rich are just getting richer and the poor are
getting poorer and that`s normal but in this film we get to see that this
is an emergency right now. We are at a really crisis point for our
country.

O`DONNELL: Robert Reich and Jacob Kornbluth, thank you both very much
for joining me tonight.

REICH: Thanks, Lawrence.

KORNBLUTH: Thank you.

O`DONNELL: Coming up, President Obama rewrites what is now the new
normal in America, well-armed mass murderers.

(COMMERCIAL BREAK)

O`DONNELL: Here is the "New Yorker`s" new cover. And yes, that is
breaking bad Bryan Cranston, entering the lab only to find a much worse guy
is already there. The artist who did that cover, Barry Blitt (ph), said
seems like there is never a shortage of real life villains to make even the
most conscious free fictional character look comic in comparison. Walter
Wipe (ph) will never look common to me. The rewrite is next.

(COMMERCIAL BREAK)

O`DONNELL: President Obama spoke at another memorial service for the
victims of yet another mass murder this weekend in Washington where the
president tried to comfort the families of the 12 people murdered in last
week`s Navy Yard massacre. The president did something that presidents
rarely do. He cited other countries that have handled a problem better
than we have.

He talked about countries that rewrote their laws in the aftermath of
mass shootings so they would not have to endure such tragedies again.
President Obama remains one of the people in Washington who refuses to give
up hope that we will one day take a step towards sanity to make it more
difficult for mass murderers to get their hands on America`s weapons of
mass destruction.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These families have
endured a shattering tragedy. It ought to be a shock to all of us as a
nation and as a people. It ought to obsess us. It ought to lead to some
sort of transformation. That`s what happened in another countries when
they experienced similar tragedies, in the United Kingdom, in Australia.

When a single mass shooting occurred in most countries, they
understood that there was nothing ordinary about this kind of carnage.
They endured great heartbreak, but they also immobilized and they changed.
And mass shootings became a great (INAUDIBLE).

And yet, here in the United States, after round of clock coverage on
cable news, after the heartbreaking interviews with families, after all of
the speeches and all pundits and all the commentary, nothing happens.

Sometimes I fear there is a creeping resignation that these tragedies
are just somehow the way it is. That this is somehow the new normal. We
can`t accept this. No other advanced nation endures this kind of violence.
None.

Here in America, the murder rate is three times what it is in other
developed nations. The murder rate with guns is ten times what it is in
other developed nations. And there is nothing inevitable about it. We
Americans are not more violent people than folks in other countries. We`re
not inherently more prone to mental health problems.

The main difference that sets out nation apart, what makes us
susceptible to so many mass shootings is that we don`t do enough. We don`t
take the basic common sense actions to keep guns out of the hands of
criminals and dangerous people. What`s different in America is easy to get
your hands on a gun and a lot of us know this.

But the politics are difficult. As we saw again this week. And that
is sometimes where the resignation comes from. The sense that our politics
are frozen and that nothing will change. I cannot accept that. I do not
accept that we cannot find a common sense way to preserve our traditions
including our basic second amendment freedoms and rights of law abiding gun
owners while at the same time reducing the gun violence that unleashes so
much mayhem on a regular basis. And it may not happen tomorrow and it may
not happen next week, may not happen next month, but it will happen.

Our tears are not enough. Our words and our prayers are not enough.
If we really want to honor these 12 men and women, if we really want to be
a country where we can go to work and go to school and walk our streets
free from senseless violence, without so many lives being stolen by a
bullet from a gun, then we`re going to have to change. We are going to
have to change.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We cannot stop every act of senseless violence. We cannot
know every evil that lurks in troubled minds. But if we can prevent even
one tragedy like this, save even one life, spare other family what these
families are going through, surely we have an obligation to try. I fear
there is a creeping resignation that these tragedies are somehow the way it
is. That this is somehow the new normal. We can`t accept this.

(END VIDEO CLIP)

O`DONNELL: The day after the massacre at the Navy yard in Washington,
Sandy Phillips was in Washington calling on Congress to take action. She
was speaking from her tragic experience as the parent of one of the 12
people gunned down in the Aurora, Colorado movie theater shooting in 2012.

(BEGIN VIDEO CLIP)

SANDY PHILLIPS, BRADY CAMPAIGN ADVOCATE: It took six votes over seven
years to get the initial Brady law passed and Sarah and Jim Brady didn`t
give up. And those of us who are involved, and unfortunately, our numbers
are growing, we are not giving up. It will happen.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Sandy Phillips, along with her husband,
Lonnie Phillips there, both advocates for the Brady campaign to prevent gun
violence.

Sandy, first of all, to both of you, I am very, very sorry for your
loss of your daughter? And that`s the reason you`re in this dialogue
tonight and will continue to be in it. And I have to imagine that given
the loss that you have been through, the idea that you may have to campaign
for this for years, will always feel worth it?

SANDY PHILLIPS: Absolutely. We know that this is something that
happened over night-like. We said yesterday, it took six votes over seven
years to get the initial Brady bill passed. We know that bill needs to be
included online sales and gun show loopholes still exist. So, we will
finish the job. It will take time. But we see -- we feel a shift in the
momentum. And the president`s words really spoke to the country yesterday
and that gives us hope.

O`DONNELL: Lonnie, the president, I think, one important thing that
president said was we will never be able to stop every single senseless act
of violence. And that is something that the NRA always likes to throw up
there alone. You know, you can`t stop every one of these things.

Well, that, both sides agree on that. You can`t stop every one of
these things. And what the president seems to be talking about is how easy
do we want to make it for mass murderers to act on their impulses with the
best equipment in the world?

LONNIE PHILLIPS, BRADY CAMPAIGN ADVOCATE: Well, you`re right. We
can`t stop them all. But we can stop a lot of them. Twenty years ago,
Brady enacted some laws to start background checks and we just need to
expand on those. We had a laws that within three voted in the senate that
we almost did that with the (INAUDIBLE) bill. Background checks that cover
online sales and gun shows would stop 40 percent more of the guns that are
sold to people that need to have guns.

SANDY PHILLIPS: You know, we already know that the background checks
work that are already in place because it stopped 2.1 million purchasers
who shouldn`t own guns from getting their hand in guns. That`s a huge
numbers. And when you stop and think 2.1 million people.

O`DONNELL: I think we just lost our connection to our guests, Sandy
Phillips and Lonnie Phil.ips. And do -- now we`re telling -- do we have
them back? We don`t have them. OK.

But I do think -- I think we have one more piece of what President
Obama had to say yesterday in memorial service in Washington. Let`s listen
to that.

(BEGIN VIDEO CLIP)

OBAMA: By now though, it should be clear that the change we need will
not come from Washington even when tragedy strikes Washington. Change will
come the only way it ever has come and that`s from the American people. So
the question now is not whether as Americans we care in moments of tragedy,
clearly we care. Our hearts are broken again. And we care so deeply about
these families. But the question is do we care enough?

(END VIDEO CLIP)

O`DONNELL: Do we care enough? That is the question the president
left us with yesterday.

Sandy and Lonnie Phillips certainly care enough too especially because
of the tragedy they have been through.

I want to thank them for joining us tonight. I`m sorry that our
connection to them broke down.

Chris Hayes is up next.

CHRIS HAYES, MSNBC HOST, ALL IN WITH CHRIS HAYES: Good evening from
New York. I`m Chris Hayes.

Tonight on "All In," Republican senator Ted Cruz is quickly becoming
notorious in Washington for being hated by everyone except himself.

Also tonight, the latest on the terrorist attack in Kenya. Just a few
hours ago, Kenyan officials said that after three days, the siege was
finally over.

Plus, a blockbuster expose of the Clintons, a piece I`m sure the
Clintons wish had never been written about a guy they`d rather you not know
about. The author of that book will be here. Those stories are ahead.

But first, we begin with the great Ted Cruz backlash of 2013.
Tonight, minority leader Mitch McConnell announced he will not support Ted
Cruz`s long shot strategy to filibuster the budget resolution in the U.S.
senate.

END

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