updated 1/6/2014 12:24:30 PM ET 2014-01-06T17:24:30

MELISSA HARRIS-PERRY
December 21, 2013

Guests: Paul Raushenbush, Michael Peppard, Anthea Butler, Matt Abbott, Avik Roy, Lawrence Mishel, Carmen Wong Ulrich, Lisa Cook, Michael Lynn

JOY REID, GUEST HOST: This morning, my question. Did Bobby Jindal forget
the whole stupid party thing?

Plus, President Obama goes bull with a surprise move.

And, 15 percent, 18 percent, or 20 percent? How big should you tip? And
is how much you tip connected to race?

But, first, if you`re excited for Christmas this year, just imagine if you
were the first one -- if you were having your first one as the pope.

(MUSIC)

REID: Good morning. I`m Joy Reid, in for Melissa Harris-Perry.

Four days from now, the former Cardinal Jorge Bergoglio will mark his
Christmas as Pope Francis, with masses and a Christmas address in St.
Peter`s Square. He`s already been celebrating. Last week the pope sent
Christmas gifts to 2,000 impoverished immigrants living in the shelter near
the Vatican. Simple gifts that included prepaid phone cards and postage
stamps to help the immigrants get in touch with their families. He also
delivered a Christmas message urging Christians to treat the holiday as an
occasion for humility and to serve the poor. A familiar note for this
pontiff. In other words, the pope has been busy. And it`s not all about
Christmas.

On Monday, Pope Francis shook up the Vatican`s important congregation of
bishops which determines who will be named as the leaders of regional and
local dioceses around the world. He removed Cardinal Raymond L. Burke, a
conservative who`s been outspoken in condemning abortion and same-sex
marriage and who recently criticized the pope for saying the church`s focus
should move away from those issues. the pope replaced him with a more
moderate Catholic, Cardinal Donald Wuerl of Washington, D.C. who also
happens to be more - have more on the ground experience with parishioners,
yet another signal that Pope Francis wants to change the tone of the
church.

On Tuesday, the pope celebrated his 77th birthday and invited a small group
of homeless men and one homeless dog to his birthday party. They shared
breakfast and a mass with the pope along with his household staff. And on
Wednesday, he celebrated his favorite Argentine soccer team`s tournament
win accepting their trophy and a jersey in St. Peter`s Square where he
continues to hold his weekly audiences outdoors despite the cold.

In order to accommodate, and he does that in order to accommodate the
massive crowds that come to see him. More than 1.5 million tickets have
been distributed to audiences just this year. Now, we seem to be
fascinated with this pope more and more every day. And I don`t just mean
"we here at "Nerdland," I mean the much bigger "We." Pope Francis has been
celebrated on "U.S. Magazine" covers. He was named "Time`s" person of the
year last week and was even the advocate`s person of the year, which is
quite a feat for the leader of a church that considers homosexuality to be
a sin. His approval rates are high in the U.S., about 62 percent among
non-Catholics and 92 percent among Catholics, higher than the previous
pope, Pope Benedict and even higher than the much beloved Pope John Paul
II. Even President Obama has expressed pope love invoking Francis in his
recent exhortation on inequality.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: You know, I think
Pope Francis is showing himself to be just an extraordinarily thoughtful
and soulful messenger of peace and justice.

(END VIDEO CLIP)

REID: Now, the relationship between popes and U.S. presidents has been
long and complicated and a lot more interesting than you might think. When
New York Governor Al Smith ran for president in 1928 on the Democratic
ticket, he was the first-ever presidential nominee who was a Catholic. And
the campaign against him was virulent, saying Smith would be beholden to
the pope and that he was, according to a leading protestant magazine of the
time, "a representative of the medieval Latin mentality of an undemocratic
hierarchy and a foreign potentate."

Smith lost. More than 30 years later, John F. Kennedy faced similar claims
of being a nefarious papist, but Kennedy actually pushed back. In a speech
to a group of protestant ministers in September of 1960, he said something
that sounds extraordinary today, that, quote, "I believe in an America that
is officially neither Catholic, protestant, nor Jewish, where no public
official either requests or accepts instructions on public policy from the
Pope, the National Council of Churches, or any other ecclesiastical source

And lucky for Kennedy, the Roman Catholic Church was changing. Pope John
XXIII had just announced he would convene a council to reform the church
and let some fresh air in and to restore unity between Protestants and
Catholics. He invited non-Catholic Christians, including Protestants to
attend. Now, after Kennedy`s presidency it became a matter of course that
U.S. presidents would meet the pope. Presidents Johnson, Nixon, Ford,
Carter, both Bushes, Clinton, and Obama have all met with the reigning
popes. And President Ronald Reagan may have had the most interesting
presidential-papal relationship of all. In 1982 Reagan and Pope John Paul
II formed a secret alliance to fight communism in the pope`s native Poland.
Together, the church and the United States funded and provided resources to
Solidarity, which was Poland`s underground anti-communist group. Reagan
and John Paul believed that if Poland became democratic other eastern
European countries would follow, undoing the influence of the Soviet Union.

President Obama has not met with Pope Francis yet, and although I doubt
we`ll see any secret alliances, the two already have a public alliance of
sorts on the subject of fighting poverty and inequality and even - wait for
it - spreading the wealth around a little bit. As the pope wrote recently,
"Not to share one`s wealth with the poor is to steal from them and to take
away their livelihood. It is not our own goods which we hold, but theirs."

And joining me now our senior religion writer - editor for "The Huffington
Post," the Reverend Paul Raushenbush, Professor of Religious Studies at
University of Pennsylvania Anthea Butler, professor of theology at Fordham
University Michael Peppard, and columnist for "Renew America", Michael C.
Abbott. Thank you all for being here.

UNIDENTIFIED FEMALE: My pleasure.

REID: I want to start just by throwing it out that, you know, we`ve heard
a lot of Pope Francis. His documents sound very compassionate and he is
actually really kind of a refreshing change for a lot of people who watch
the Catholic Church, become sort of the scold, right, on issues of
morality. But can we actually expect this pope to change policy within the
church?

MICHAEL PEPPARD, THEOLOGY PROF., FORDHAM UNIVERSITY: Well, that`s the
question we`ve all been asking for -ever since his election. I`d like to
focus a little bit on his style, though, to say that changes in style are
real changes. When we think about how we understand leadership, whether
it`s a teacher or a coach or a pastor, that, you know, you don`t think of a
teacher just as a curriculum, or a coach just as a playbook, you don`t
think of a pastor just as a set of doctrines. And so, I think that the
style is very, very important for the changes that might be - in the
future.

The gifts to the immigrants are a great example of this, because here is
someone who didn`t just give - let`s say a handout of food or water,
although that is a great thing, but specifically gave thoughtful gifts that
come out of his street smarts. So, what do immigrants want to encounter
people? Right? They want phone cards. They want foreign stamps. They
want a metro-card to get around. They want mobility that gives them a
human dignity of someone who really there - then can live there in Rome.
So I thought this very well into a culture of encounter, which is one of
this pope`s biggest phrases, that he was giving a gift that would enable
people to encounter their loved ones and to have some sense of family
stability even though they had immigrated to Rome.

So, in short, I think that the style changes are very, very real changes
when it`s a pastoral leader.

REID: Right. I mean - and there`s been some concern about this pope
perhaps moving away from some of the conservative doctrines that are
comfortable to conservative Catholics. But that notion of family stability
is kind of at the core of really, the conservative doctrines of the church,
that keeping the family together. I mean, families breaking apart is sort
of the root of all other problems in society.

MATT ABBOTT, COLUMNIST, RENEW AMERICA: That`s true. That`s very true.
And I do think that this pope recognizes the importance of the family, of
being able to reach out, being able to preach the gospel in a simple yet
thoughtful manner. And I really think he is not dismissing the moral
issues or their importance, but I think he`s really trying to say, you
know, we really should put an emphasis on this time of mercy, if you will,
divine mercy, this time of compassion, and I think that is something that`s
very appealing to many Catholics, including many young Catholics, many
young Catholics were very drawn to John Paul II because I also think he
had, you know, a very similar emphasis. Clearly, Pope Francis has a
certain charisma that many religious leaders don`t have.

REID: Right.

ABBOTT: And I think that really is something that`s been noticeable in
these past few months.

REID: And Paul, but, you know, the style changes are obviously important
and the tone of the church is attracting more people, but there are some
substantive changes too. Can you talk about the significance of actually
switching out some of these bishops in the Congregations of Bishops. What
that actually means for church policy?

PAUL RAUSHENBUSH, SENIOR HUFFINGTON POST: Well, again, it really is
important on who is appointing bishops, how it happens and also the tone
that they are - they themselves are taking. I don`t think there`s a lot of
difference in the positions that perhaps Cardinal Wuerl and Cardinal Burke
have. But one, you know, has suggested withholding communion from those
who disagree from him.

REID: Right.

RAUSHENBUSH: The other has opposed that idea. I really think it`s about,
like, OK, so how can we be more inclusive in this church and acknowledge
that people need to come in and, you know, feel this healing message. I
mean he wants to be out in the streets. He doesn`t want to keep people at
the door. And I think that`s the difference. And we should think about
this. Four times more people are coming to see this pope than the previous
pope. He`s the most talked-about person on the Internet of anybody.

REID: Artefact (ph).

RAUSHENBUSH: Not just on Twitter, but on the Internet.

REID: Right.

RAUSHENBUSH: He`s the most talked about person on Facebook. He`s, you
know, so this is - this is - he`s saying things that people need to hear.
Catholics and non-Catholics alike. He has been a voice for many people
around the world, and that`s exciting.

RAUSHENBUSH: And he`s saying things for these people good to hear, but
he`s also saying things really do challenge a lot of social doctrine and
conservative doctrine and then are really sort of in your face in the sense
of inequality, in the sense of poverty, in the sense of challenging
capitalism.

ANTHEA BUTLER, PROF., UNIV. OF PENNSYLVANIA: Yeah, no, exactly. And
what`s so interesting to me about this pope is that basically what he`s
talking about is traditional Catholic doctrine, about poverty. And when
you have Rush Limbaugh saying this is Marxist and everybody else confusing
him with socialism, I just laugh because I think, you know, the problem has
been is that what we`ve heard from the conference of Catholic bishops is
nothing but protestant evangelical doctrines about what not to do with your
body and we haven`t talked about what we`re going to do with people`s souls
and their everyday lives. And that`s what makes Pope Francis different.

REID: And I mean, that is the reality, right, that he is causing
discomfort by challenging. I mean, you had the U.S. Conference of Bishops
as Paul was mentioning, you had intimations that Catholic politicians who
don`t toe the line on certain political policies should not receive
communion. This feels like it`s going to be a different church from that.

ABBOTT: It does. It does. I know certainly Cardinal Burke was someone
who did take that position that, you know, abortion politicians should be
denied communion. Cardinal Wuerl is someone who has taken a different
approach and basically has said the Eucharist should not be used as a
weapon. That would appear to be Pope Francis` position as well.

REID: Yep.

ABBOTT: Although, you know, we haven`t heard him explicitly say so. But
clearly the move of removing Cardinal Burke from that position and
replacing him with Cardinal Wuerl, it is significant.

REID: Absolutely.

ABBOTT: And I think one can certainly draw that conclusion.

REID: OK, we`re going the start to draw some conclusions for it in just a
moment. So, stay right there. Up next, I want to follow up on what Anthea
was talking about and also what matt was talking about. On Rush Limbaugh
and on how conservatives are receiving this pope. Why does the pontiff
have a problem with being called -- not have a problem with being called a
Marxist?

(COMMERCIAL BREAK)

REID: So, now, of course, not everyone is as enamored as the Pope as we
are. Here`s radio host Rush Limbaugh earlier on his holiness.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH: The Pope here has now gone beyond Catholicism here and this
is purely political. I want to share with you some of this stuff. Pope
Francis attacked unfettered capitalism as a new tyranny. He beseeched
global leaders to fight poverty and growing inequality. This is just pure
Marxism coming out of the mouth of the Pope. There`s no such unfettered
capitalism that doesn`t exist anywhere.

(END VIDEO CLIP)

REID: OK, the Pope responded with his characteristic good will. Asked by
an Italian newspaper about how he felt about being called a Marxist by
ultraconservatives in the U.S., Francis said "the Marxist ideology is
wrong, but I have met many Marxists in my life who are good people, so I
don`t feel offended." So, Anthea, you know, I mean you did bring up Rush
earlier. The interesting kind of thing about this whole calling the Pope a
Marxist, besides the fact that it probably isn`t a good idea with the Lord,
to go after the Pope that way, if you are Rush Limbaugh, on the radio, is
that there actually is kind of a history to Marxism in the Latin-American
Church that kind of relates a little bit to Pope Francis. Can you explain?

BUTLER: Yes. Yes. I know we talk about liberation theology. I want to
go back to Father General Pedro Arrupe, who all I judge would be so happy
right now that I said his name out loud. We talked about the preferential
option for poor. And then later in the early `70s, what you have is this
whole lifting out of that to create liberation theology, with Gustavo
Gutierrez. But what Rush Limbaugh doesn`t understand is that this option
for the poor has always been there in the Catholic Church. It`s not
Marxism. And if he knew the history of, you know, Cardinal Bergoglio who
became Pope Francis, you would know that he didn`t not buy into the Marxist
piece of liberation theology.

So, first of all, Rush is just wrong. Second of all, you know, chief
amongst the sinners he should not cast stones at the man who - is the holy
man who would probably still embrace him if he would come to the Vatican.
An third, you know, what`s so wrong about going after capitalism and saying
that we should give something to the poor? This has been part of Catholic
theology, this has been part of protestant theology, and somehow something
has happened with these Tea Party folks and everybody else who have created
this other kind of Jesus, who is a prosperity Jesus, who is looking for,
you know, this bit capitalist idea, if you`re not rich, you don`t have the
blessings of god. What Pope Francis is doing is drawing us back to what
traditional teachings of Jesus Christ are all about.

REID: Absolutely. And Matt, and I think that is what sort of throws
people off. About people who are professed conservative Christians who
seem to be saying that Jesus sided with the money changers. I mean and so
what is wrong with the Pope saying, no, actually, he overturned the table
of the money changers?

ABBOTT: Yeah, I don`t think he`s incorrect at all about in his economic
outlook as it regards - relates to the church. In fact, the church of
course, you know, has always condemned communism, and socialism as wrong,
but also -- and this is something that John Paul II pointed out .

REID: That he actually tried to root out a lot of those elements - I mean
in terms of fighting against .

ABBOTT: Oh, absolutely. That and also the aspect of unbridled capitalism
and the problems with unbridled capitalism and therefore the need to kind
of find a middle way. And I think really that is something that Pope
Francis is trying to put out.

REID: So, then why do you suppose he is getting such a fight from the
right? I mean what he is saying is just sort of doctrine we found and it`s
common doctrine at the Catholic church, then what is it and what is the
margin for supposedly religious people to attack the pope for being on the
side of the poor?

RAUSHENBUSH: Well, I think it hasn`t been heard for a while and it hasn`t
been heard in such a relentless way. He talks about it just about every
week and he really - he points the finger at capitalism and says you have
to look at this. And what I think is interesting is you don`t have to be a
Marxist to critique capitalism. You know, in some ways we`re seeing -- and
with Rush Limbaugh and others -- an idolatry of capitalism.

REID: Right.

RAUSHENBUSH: And I think what Pope Francis is looking at is saying we have
to do better. We all as a nation, as a world have to do better because the
poorest among us are suffering. 30,000 people will die today of
starvation, extreme poverty. That`s a failure. And Pope Francis is naming
it. And a lot of us are saying thank you. No one is naming it. And I
would say certainly not President Obama and no other religious leader is
talking like this at such a high platform. And it`s refreshing for many of
us who have been trying to say this is what we should be focusing on.

REID: And Michael, I mean, isn`t that really a point that the Pope`s
power, right, because there`s the sort of separate religious figure. He
can bring us back to the doctrine of inequality and really resetting Jesus
as not the prosperity Jesus, but as the guy who is not on the side of the
capitalists, but who is on the side of the underprivileged.

PEPPARD: That`s right. Absolutely. Those of us who study the New
Testament and teach it like myself, we see an awful lot of Jesus in what`s
being taught here. Getting back to the Rush question for on second, I just
want to say, I think he doesn`t know anything about Catholic social
thought. I mean it`s 100 year`s tradition of this kind of stuff. So, I
don`t really personally think he is worth engaging. I think that what -
seriously, what Pope Francis has taken is the core Marxist critique, which
is that excessive concentrations of capital lead to exploitation and
dehumanization. That`s what he`s taking and saying that`s accurate, that
happens. We can see it. The global - I`m from the Global, he`s saying.
I`m watching it happen my whole life. And so, that critique does need to
be heard. Because getting back to John Paul II, the ideology that John
Paul II saw consuming the world was communism. Francis sees the ideology
consuming the world as being a free market capitalist idea that is becoming
a mind-set that governs everything. So the Catholic world view he`s trying
to say - he is trying to put forward is people are more than the sum total
of their economic indicators. They`re more than a sum total of market
forces. He`s trying to lead to humanization.

REID: And that sounds like a direct challenge, sort of the capitalist
ethos is almost a religion in this country.

Coming up next, the pope`s quest to save the planet.

(COMMERCIAL BREAK)

REID: The pope has connected his crusade to help the poor with another
call -- to protect the environment. He`s met with anti-fracking activists
and posed for photographs holding one of their anti-fracking t-shirts. In
his apostolic exhortation released last month, where Pope Francis wrote
that our global financial system is creating a growing gap between the
wealth of the few and the poverty of the many, he also wrote this - "in
this system, which tends to devour everything which stands in the way of
increased profits, whatever is fragile, like the environment, is
defenseless before the interests of a deified market which becomes the only
rule." So this is another interesting sort of area in which the pope,
Michael, is diverging from sort of the conservative I guess you could call
it political theology of the U.S. And there actually have been some hints
that the first encyclical the pope issues will be on the environment.

PEPPARD: That`s right. You stole one of my lines there. That`s good,
though, because you`re exactly right. And we can see this going back to
John Paul II with the gospel of life. There`s a little hint of a kind of a
consistent life ethic that starts to come out in the 1990s about
environmental awareness and fighting environmental degradation. But what`s
happened here with Pope Francis from his first inaugural homily, we start
to hear care for the poor, care for creation. Care for the poor, care for
creation. It was this refrain. I wrote a blog post for (inaudible)
magazine saying I couldn`t believe the amount of times the word creation
and environment kept coming up. And then when folks were asking out what
will the first encyclical be, the first single authored encyclical by Pope
Francis, people were saying is it going to be this beauty poperus (ph),
this blessed are the poor encyclical that we`ve heard about --

REID: And just for a second, explain what an encyclical is for those who
are not Catholic.

PEPPARD: Sure. An encyclical is a very long letter that is intended to be
read foremost by bishops of the church, but really by everyone. And it`s
the highest teaching function that`s not a counsel of the church, really.
It`s what we tend to look back over time to look at how papal thought
develops. So people asked the spokesman and the spokesman said, look, the
teachings on poverty are pretty well known in the Catholic Church and Pope
Benedict XVI just wrote this big thing about it. But where there`s really
an opening is ecology, and this is something this pope is really thinking
about, because environmental degradation disproportionately affects the
poor. And so that`s the connection for him.

REID: I just picture conservative heads exploding at seeing this pope with
an anti-fracking t-shirt, because of course fracking has become another one
of these sort of political doctrines in the U.S. Is this just another
thing that`s making conservative Catholics uncomfortable with this pope?

ABBOTT: I do. I mean, personally I think he has the common good at heart,
and that`s something he is trying to promote, and it`s something he should
promote. But definitely I think there are a number of conservative
Catholics that are looking at this as, well, he`s paying a lot of attention
to these liberal causes.

REID: But is the environment a liberal cause? That`s what I think is so
strange to people, right, this idea that protecting the poor, protecting
the environment is somehow a liberal cause rather than sort of a human
cause. I mean, it does seem odd I think when people look at it.

ABBOTT: It is. It is one of those thing where I think it has been kind of
lumped in, if you will, to the number of progressive or liberal causes.
However, with Pope Francis trying to look at the big picture of things,
and, you know, really trying to show that it isn`t necessarily, if you
will, something for liberals or something for conservatives, that this is
something that, you know, is important for society as a whole and important
for Christians, important for the church.

REID: How do you see it?

RAUSHENBUSH: I think it is interesting that this is not something that`s a
radical departure. Pope Benedict also talked about this a lot. But what`s
maybe a little different is the way Pope Francis is out there talking to
people who are involved in the issues and really kind of lending his
support to them.

REID: Right.

RAUSHENBUSH: And also really, going back to connecting it to if you waste
food, you are stealing from the poor. If you don`t recycle you are -- and
it`s this idea of what do we do with this idea that things are expendable,
are only there for consumption? I think that goes directly to concern for
the earth. And so I think it really is this culture of life you talked
about. But again it`s not at all a departure. What is different is that
he`s finding himself out in the people more. Pope Benedict was not out
with the people, and so that`s where the difference is. He`s in the mix.

REID: Last word.

BUTLER: I want to say something about reading this from an American
conservative Protestant lens. What has happened, and this is the reason
why, we read this as conservative evangelicals don`t like the ecology, they
don`t want to think about the earth or they don`t want to think about
creation. So when you hear Pope Francis say this stuff, you think this
can`t be right because the voices on the right have been so loud about this
stuff. Even though that evangelicals care about the earth. So I think
this is completely unbalanced in a certain kind of way, and that we have to
retemper (ph) our ears to hear what true Catholicism is in this country.
We can`t hear what it is because it`s been so tainted by the bishops and
everybody else sort of buying into sort of the evangelical mind-set of what
we needed to say the last 20 or 30 years. And that`s been the problem.

REID: I`m going to end that with an amen. All right, Paul Raushenbush,
Michael Peppard, and Matt Abbott, thank you very much. Anthea, I`ll see
you next hour. And up next, my letter of the week is date line, Louisiana.
But the recipient does not have a beard.

(COMMERCIAL BREAK)

REID: In next month`s GQ magazine, readers are treated to a very different
version of Louisiana duck hunters who star in A&E`s mega hit, feel-good
reality show "Duck Dynasty." Not the highly edited, apolitical portrayal of
a family who are all about eating squirrels and shooting ducks. Oh, no.
The "GQ" interview with "Duck Dynasty" patriarch Phil Robertson gave us all
the stuff that gets left on the cutting-room floor, raw and uncut.

Like this gem on growing up in Jim Crow Louisiana. "I never with my eyes
saw the mistreatment of any black person. They`re singing and happy. Pre-
entitlement, pre-welfare, you say, were they happy? They were godly. They
were happy. No one was singing the blues." Or his equating homosexuality
to a sin on par with bestiality and any manner of, quote, adulterers,
idolaters, male prostitutes, greedy, drunkards, slanderers and swindlers."

Now, a reality star saying or doing off-the-wall things shouldn`t come as
much of a surprise by now, but an elected official jumping in and high
fiving him? That is what you call political dynamite. So this week I`m
sending a letter to a guy who just blew himself to smithereens.

Dear Governor Bobby Jindal, it`s me, Joy. Mind if I call you Bobby? We`ve
corresponded with you so much here on the MHP show, I feel like we could be
familiar. By now, we`ve become pretty well acquainted, so I`ll just level
with you. Bobby, you`ve changed. Weren`t you the guy who after the GOP
shellacking in the 2012 election issued this mandate to your party going
forward?

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL, R-LOUISIANA: We`ve got to stop being the stupid party.
There`s no secret we had a number of Republicans that damaged the brand
this year with offensive and bizarre comments. I`m here to say we`ve had
enough of that.

(END VIDEO CLIP)

REID: Okay. Stop being stupid. Your words, Bobby, not mine. But then
this week, you went and dived right into the stupid when you felt the need
to issue a statement about A&E`s decision to suspend Phil Robertson saying,
"the politically correct crowd is tolerant of all viewpoints except those
they disagree with. This is a free country and everyone is entitled to
express their views. In fact, I remember when TV networks believed in the
First Amendment. It is a messed up situation when Miley Cyrus gets a laugh
and Phil Robertson gets suspended."

Bobby, you do know that the First Amendment to the Constitution does not
guarantee the inalienable right to be on a reality TV show, right? It`s
meant to protect the free speech of American citizens from being silenced
by an act of Congress. And A&E is a company, owned in part by other
larger, publicly traded companies. It does not in any way qualify as
Congress or the government or an agency of the state. Look it up. It`s
right there in the Bill of Rights, right at the top.

But you know who does count as the government, Bobby? You. And you just
used your position as governor of Louisiana to condemn a corporation for
making a business decision it deemed to be in the best interest of its
bottom line. And here I thought Republicans were supposed to be against
big government telling businesses what to do. Or is there an exception
when you`re the one doing the telling?

Besides, freedom of speech does not mean freedom from consequences. Phil
Robertson learned that lesson this week. And my guess is should you run
for president, round about two years from now, you will too. See, just
because we won`t ever hear Robertson`s comments on "Duck Dynasty" doesn`t
mean we haven`t heard them. And Bobby, let`s be clear, you just spoke out
in support of the guy who fondly recalls happy black people singing while
working in the Louisiana fields, and who equates LGBT Americans with people
who have sex with animals. So don`t be surprised if your words and his
words come back to haunt you in an opposition ad in 2016.

But, hey, maybe you can convince the American voters you were just
expressing your views. Once those voters are at the ballot box, I`m sure
they`ll be more than happy pi to exercise that same right and express their
views about you too. Sincerely, Joy.

(COMMERCIAL BREAK)

REID: Fed speak is complicated, but we do know this one thing. When
Federal Reserve Chairman Ben Bernanke speaks, Wall Street listens. Here he
is from Wednesday.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: The Federal Open Market Committee
concluded a two-day meeting earlier today. As you already know from our
statement, the committee decided starting next month to modestly reduce the
pace at which it is increasing the size of the Federal Reserve`s balance
sheet.

(END VIDEO CLIP)

REID: Yes. To modestly reduce the pace of blah, blah, blah, blah, blah.
OK. Ben Bernanke was trying to say that beginning in January, the Federal
Reserve will cut back on the stimulus money it`s been pumping out to prop
up the economy, but gradually. Really, really gradually. No one knew how
traders on Wall Street were going to react to this idea that Bernanke was
taking away part of their security blanket. But Wall Street actually liked
what it heard, a lot. The Dow Jones Industrial Average skyrocketed 150
points immediately after the policy announcement, and then closed at around
293 points up for the day. The S&P 500 gained nearly 30 points. And the
Nasdaq finished 46 points higher on Wednesday.

And while all of this is great news, particularly for stockholders, and as
a result of the Fed`s belief that our economy is doing better, the Fed is
taking a very, very slow approach when it comes to weaning our fragile
economy off the stimulus bottle. So what does this move say about where
the Fed thinks our economy is now, and more importantly where it is going?
At the table, Carmen Wong Ulrich, host of "Marketplace Money" on APM,
Lawrence Mishel, president of the Economic Policy Institute, Avik Roy,
senior fellow at the Manhattan Institute, and Lisa Cook, associate
professor of economics and international relations at Michigan State
University.

Lisa, I mean, Carmen, since I mangled your job description, I`m going to
you first. Go ahead and explain to us in real people terms what the Fed
did.

CARMEN WONG ULRICH, HOST, MARKETPLACE MONEY: I`ll explain what they did,
which is basically pulling back, right, on buying our own bonds, which
really kept interest rates low. But here is the thing. The reason why
Wall Street really reacted, one of the reasons, is the uncertainty
aversion. We don`t like to do things or take risks when we don`t have
enough information. So what Wall Street`s been doing is sitting back and
waiting for the Fed to say we`re going to raise rates, we`re going to keep
rates low, what are we going to do? There was no blueprint. Now Bernanke
says we`re going to parse back and here`s the schedule, so now Wall Street
can plan around this schedule, and that makes them happy, so there`s no
more aversion to that uncertainty to take more risks, and that`s exactly
what the Fed wants people to do, wants people to take risks, businesses and
Wall Street.

REID: And so, Lisa, what does that mean for the economy?

LISA COOK, MICHIGAN STATE UNIVERSITY: So banks have been holding on to
their reserves. It`s almost as if they were given these gift cards, right,
and they could use these gift cards, and they haven`t been using these gift
cards, and that`s why you haven`t seen inflation rising. Now, had they
been using the gift cards, there would have been money generated in the
economy, but we haven`t seen that yet. So this is where the latent
inflationary fears are coming from. If everybody used their gift cards,
you can imagine what happens.

See what happens with the credit cards at Target. Everybody uses them,
something bad is going to happen.

But I think that this is a gradual way to set expectations and to minimize
the uncertainty that business people don`t like. So small businesses,
medium sized businesses, all businesses need the lending that banks haven`t
been doing. We should anticipate that there should be greater growth going
forward. They`ve seen these signals. They wouldn`t do it unless they`ve
seen these signals already.

REID: And Larry.

LAWRENCE MISHEL, ECONOMIC POLICY INST.: I think it`s a mistake to
interpret this as a pulling back or about the stock market. This is about
we have enormous unemployment, way too high unemployment, and the Federal
Reserve board has many tools. It has said we are going to do everything we
can until we see unemployment drop. In fact, they`ve actually said --
called forward guidance -- they`re going to hold on to low interest rates
even longer than they said before. So this is maybe good for the stock
market, but even more it`s good for working families, where we really need
to get the, get jobs, get unemployment down.

What`s unfortunate in my view, speaking about economic policy, is all this
focus on the Federal Reserve board. But that is actually the weaker
institution for getting jobs and lowering the unemployment rate. What we
have on the sideline is Congress and the president, who are not offering
budget policy, which can actually move the dial a lot. The Federal Reserve
board will move it a little. What we really have on the sidelines is the
ability to spend money by the government, to create jobs and rapidly get
unemployment down, because as you know we`re not going to see full
employment for five to seven years. That`s outrageous.

REID: Let me just really quickly play -- Bernanke did talk about where he
does think unemployment will go. And it is moving in the right direction
in general, so let`s just play what Ben Bernanke said about his forecast
for 2015 and 2016. And then we`ll get reaction.

(BEGIN VIDEO CLIP)

BERNANKE: Participants (ph) see the unemployment rate, which was 7 percent
in November, as continuing to decline. The central tendency of the
projections has the unemployment rate falling to between 6.3 and 6.6
percent in the fourth quarter of 2014, and then to between 5.3 and 5.8
percent by the final quarter of 2016.

(END VIDEO CLIP)

REID: So it`s in the right direction, but to Larry`s point, what`s now
holding back the economy is not so much Fed policy, because Fed policy is
pushing in the direction of lower unemployment, it`s now a political
problem where we cannot get stimulus into the economy, and that`s because
conservatives in Congress are refusing to do their part. So can you
explain why, given all the statistics, given everything that the Fed is
doing, pushing the pedal to the metal slowly or pulling it off slowly, why
can`t we have the political will to do the other piece, to have Congress do
its part and stimulate the economy?

AVIK ROY, MANHATTAN INST.: Larry made the key point, which is the tapering
is getting all the headlines, but the key thing and the reason why Wall
Street was so happy was because Bernanke said we`re going to keep the
discount rate, the interest rates really low for a really long time even
when unemployment goes to 6.5 percent eventually. The thing is it`s not
clear that the Fed policy has actually had that much impact on
unemployment. It`s more these fiscal issues that are going to have more of
an impact. The Fed has made the banks really happy. The banks are making
enormous amounts of money. If you own a house, if you have real estate
holdings, if you own a stock, if you own bonds, you`re doing really well.
But it`s not --

REID: We`re doing - and all that`s happening while the Affordable Care Act
exists? How can that be? I thought it was supposed to destroy and kill the
economy. It sounds like you`re saying the economy is actually improving,
despite the president`s Obamacare.

ROY: I`m saying the investor class is very happy. What`s happening with
people at the lower end of the scale is a little different story. So
they`ll hopefully have better health care, but the impact on hiring is a
different matter, because of things like the employer mandate. So there
are things we can do to actually improve the degree to which employers have
an incentive to hire low-skilled workers.

(CROSSTALK)

REID: What is holding back businesses from using, as you said, using those
gift cards? Because it seems to be a disconnect. Businesses have more and
more profit, but they`re not spending that in terms of hiring.

COOK: Right. There are a couple things. If I can just go back to one
thing. One clip that wasn`t played was Ben Bernanke saying this is
extraordinarily tight fiscal policy for a recovery. This is unheard of.
This is undermining what would typically happen. So Larry put it in a
polite way, but he was saying this isn`t our job. This is extraordinary.
It`s an extraordinary experiment. Of course, macroeconomists like me are
excited, we are elated, we`re going to have decades of papers to write.
But that`s not the point. We need to get unemployment going - or
employment going and the economy going again. So to your point, why aren`t
businesses lending? So why would you lend if you can just sit still, wait
for everything to happen, your money is there, your gift card is there,
when you think the recovery is really happening, is picking up steam, then
you take out the gift card and you use it. But until then, you know, why
do anything else?

REID: Until the political will is there. OK, hold on. We`ll keep going
with this. Up next, of the 14 Federal Reserve policymaker who all gave
their predictions and forecasts of where the economy is going, there is one
who stands out as being right more than any other. Guess who she is?

(COMMERCIAL BREAK)

REID: Janet Yellen will have to wait just a little bit longer. While the
Senate voted yesterday to end the debate over her nomination, that came
after the body decided to move the final confirmation vote for Yellen as
the next chair of the Federal Reserve to January 6TH. She still expects to
be confirmed, which means she`ll become the first woman chair of the
Federal Reserve when she succeeds Ben Bernanke on February 1ST. And when
she does, the future of the U.S. economy will be in good hands or at least
forecasting that future will be.

Check out this fun fact. According to "The Wall Street Journal," which ran
a study analyzing 14 federal policymakers on their accuracy when it comes
to economic forecasts, the person who ranked highest on that list for
predictions made between 2009 and 2012 is none other than our very own
Janet Yellen. And the interesting thing about that was that her rate of
being correct was about 52 percent, 0.52, so it`s a very low bar for being
right all the time, but she was right more often than not. Lisa, she was a
mentor of yours. Tell us, what is so great about Janet Yellen? Why should
we be excited that she`ll be the next Fed chair?

COOK: Everything is great about Janet Yellen. That`s what I said last
time. And I`ll say it again. She is the person who is most prepared, the
most prepared person in history to be chair of the Fed. She`s had more
experience, 14 years at the Fed in the Federal Reserve system. And she`s
had different positions. She has been a research economist there, she was
there from 1977. Then she was president of the San Francisco Fed. And
then she was vice chair. So she`s helped to shape the current policy. So
I think that -- and of course her academic record is absolutely stellar,
and she was creating that academic record when I knew her at Berkeley. So
I think that this is a person who is more prepared than any other person
we`ve had in Fed history. And I really appreciate the fact that this may
happen one day.

(CROSSTALK)

ULRICH: She`s very human. And this is the very thing I think has been
missing. You say the divide between Wall Street and employment, a lot of
her research is really focused on economics, but the human reality of
economics, especially wages, right? And not having high wages and the
damage that does. So I`m just so excited to have somebody there who has
studied this and what it does to the economy and is not just looking to
Wall Street.

REID: And Larry, before, you were saying that, you know, there is this
sort of elephant in the room in American economic policy called austerity.
And what having a Fed chair who does care more about high wages means for
that debate, what do you think it means for that debate?

MISHEL: Well, one, let`s talk about what she`s going to do, not who she
is, and what she`s going to do is going to be good for working people. The
Federal Reserve board historically had done a lot for banks and bond
holders. What`s good about Janet Yellen is she`s going to focus on
unemployment. She`s going to use all the tools she has, and she`s also
going to try to limit bubbles through regulation, and she`s going to be a
truth teller. She already has been.

I went to a speech she made at the AFL-CIO earlier this year. That`s
unusual in and of itself. But she`s going to call out just like Bernanke
has about the fiscal policy being austere, and that`s not correct. Let`s
talk about that for a second. The one reason the economy grew very slowly
in 2013 is because we`ve had this austerity. It hurt growth by about 1.5
percentage points. One reason people are optimistic about 2014, is
austerity is only going to hurt 0.4 percent. So it`s going to -- the
austerity is going to stop beating up the economy as much. Therefore,
we`ll do a little bit better. But in fact we should have a situation where
we`re actually helping --

(CROSSTALK)

REID: We have a very short time. I do want Avik to answer for every
single conservative on earth. What is this obsession with austerity? It
has hurt the British economy. It has held back the U.S. economy. Why are
we still even talking about pursuing an austerity strategy, Paul Ryan and
others in Congress?

ROY: There`s different kinds of austerity. There`s a tax increase based
austerity and there is a spending cut based austerity. So the more it`s
driven by tax increases, the economic performance is harmed. I want to get
back to a point Larry said --

REID: But we`ve been doing spending cut austerity. I want to stay with
that point just for a second. We`ve been focusing on --

(CROSSTALK)

ROY: We have been. And our economic performance has been better. We`ve
had a recovery.

(CROSSTALK)

ROY: That`s where we disagree. But I want to say one thing about what
Larry said, is that Janet Yellen is going to tackle bubbles through
regulation. The Federal Reserve policy has been creating the bubble. The
reason why the stock market is doing so well, the bond market has been
doing so well, real estate has been doing so well is because of monetary
policy. Unfortunately, Janet Yellen`s philosophy is to really extend that.
And I think that`s what`s disappointing. The concern is that a lot of
people have about this policy.

REID: I`m sure there`s a lot of debate that people have with that point
you just made. But we do have to go to a break. Coming up, the
president`s bold surprise move that`s already changing lives. Another sign
of his inner progressive coming through. We`re going to have more
"Nerdland" at the top of the hour, and then these guys are going to debate
austerity in the break.

(COMMERCIAL BREAK)

REID: Welcome back. I`m Joy Reid, sitting in for Melissa Harris-Perry.

This week, we got to see the president get to do something he rarely does,
something with real implications on race and social policy -- something
he`s been criticized by some in the progressive community for not doing
often enough. In fact, until this week he`d only done it once before in
the five years of his presidency.

On Thursday, President Obama commuted the sentences of eight federal
inmates, all of whom were imprisoned thanks to mandatory drug sentencing
laws, which made crack cocaine offenses 100 times more punishable than
powder cocaine offenses. The president narrowed that gap by signing the
Fair Sentencing Act of 2010, but as he noted on Thursday the law only
affects new cases. So, for thousands of inmates, it came too late because
of a disparity in the law that is now recognized as unjust, they remain in
prison.

And perhaps no case is more indicative of just how unjust that law was than
case of one of those eight inmates who will now get to leave prison early.

Now, regular viewers of this show will recognize his name. It`s Clarence
Aaron.

Aaron, a one-time student-athlete at Southern University, was convicted and
sentenced in 1993 at age 24 for his nonviolent role in a drug deal
involving nine kilograms of cocaine and one kilogram of crack. It was his
first offense and he was neither the dealer, the supplier, nor the buyer of
the drugs. But he received three life sentences without parole from the
judge.

(BEGIN VIDEO CLIP)

CLARENCE AARON: When he said that, I was setting in my chair, and I was
thinking to myself, I say, "Where in the world do I suppose to start doing
three life sentences at? Where am I supposed to start at, in the middle,
at the end part of it, where?" I just couldn`t believe that this was
occurring to me.

(END VIDEO CLIP)

REID: Aaron first applied for commutation two years after that "Frontline"
interview. It was a good case, but it grew even better in 2008 when both
the new U.S. attorney for southern Alabama and even the judge who sentenced
Aaron started to advocate for commutation.

The person who could make that happen, however, was this guy, the U.S.
pardon attorney, Ronald Rodgers.

But according to a "ProPublica" report last year, Aaron`s case was
mishandled by Rodgers who failed to accurately convey the views of the U.S.
attorney and the judge. The "ProPublica" report prompted outrage and drew
national attention, including on this program to Aaron`s case. It also
earned the attention of President Obama, who in July of 2012 called for
Aaron`s case to be reviewed again.

Then, this Thursday, just over a week after the 20th anniversary of Aaron`s
conviction, the White House announced that he was one of eight nonviolent
drug offenders, seven black and one Latino, whose sentences would be
commuted. Aaron can go home in April.

In his official statement, the president said, quote, "commuting the
sentences of these eight Americans is an important step toward restoring
fundamental ideals of justice and fairness but it must not be the last."
That`s notable give than President Obama has the lowest clemency record in
recent history.

This week`s decision to commute the sentences of eight inmates brings the
total number of commutations to nine. Arguably this move won`t win the
president any political capital. It won`t boost his sagging approval
ratings or help the Democrats in the midterms. In other words, there`s
really no political margin in it for this president. But this is one of
those cases where we get to see the progressive President Barack Obama
shining through.

And joining me this morning, Dafna Linzer, managing editor for MSNBC.com
and the former senior reporter at "ProPublica", who broke this story about
Aaron`s botched commutation case in 2012. And also with her are: Anthea
Butler, professor of religious studies at the University of Pennsylvania,
Avik Roy, senior fellow at the Manhattan Institute, and Lisa Cook, economic
professor at Michigan State University.

And so, Dafna, I have to go to your first. Thank you so much for coming
in. You really did break this story and have been all over this story.
Walk us through how Clarence Aaron`s case actually came up again and how
this actually happened for him to get his freedom again.

DAFNA LINZER, MSNBC.COM: Sure. Well, I just love the way you introduced
him because he was, in fact, a wonderful case regardless. His sentence was
so shocking to so many people when it happened, and this was at the height
of the drug war when prosecutors were very eager to make examples of young
black men across the country, especially in places like Mobile, Alabama,
Baton Rouge, Louisiana. He was caught up in a conspiracy. And yet as you
said not the buyer, the user, the seller, the dealer, the supplier --

REID: He introduced people to each other.

LINZER: That`s right. He had two friends who were involved in the
conspiracy. He refused to snitch. That time, snitching was a device that
prosecutors were using to get people to turn against one another. Everyone
in the conspiracy turned against him.

He got three life sentences, which as I said was appalling. People saw
immediately this is a good case for commutation. This was early on. He
applied, he waited, the White House didn`t make any decision. The case
went back and forth, then a big turn in the case for him.

In 2008, the federal judge who sentenced him who was a Reagan appointee who
had seen years and years of the drug war failing in his court changed his
mind and said this guy needs to get out now. It`s been 15 years. It`s
enough.

REID: Can you explain Ronald Rodgers` role in this? He is the U.S. pardon
attorney. What was his role in stopping that from happening?

LINZER: Right. His role was to actually try to prevent all this from
occurring and he was incredibly successful. Regardless of the sentencing
judge, regardless of the support of the U.S. prosecutor, the U.S. attorney,
who was a Bush appointee, Ron Rodgers made a decision to withhold that
information from the White House to write that there was not the support
from the judge or from the U.S. attorney for an immediate commutation, and
recommended that Aaron stay in prison for longer. He needed longer to be
in a maximum security or a medium security facility. He needed to grow
older behind bars.

REID: Are there any consequences for that? I mean, it`s extraordinary
when you`re saying he essentially -- withholding information by a
prosecutor in a normal criminal case, there are potential consequences for
that. Are there any for Mr. Rodgers?

LINZER: Absolutely. The inspector general`s office went and did an
investigation of the story, confirmed all the findings, and wrote a
scathing report last year that said Ron Rodgers had failed to -- failed in
his duties inform the president of the United States. That`s a devastating
thing to say to somebody who is a government employee.

REID: Absolutely.

LINZER: The White House ordered a new review of the case of Clarence
Aaron, Ron Rodgers, and was not fired and remains there today. And
although President Obama has commuted the sentences of eight people this
week, Ron Rodgers has said no to 5,000 others during this president.

REID: I find this really extraordinary, Anthea, because obviously there is
the elephant in this particular room is race. Seven of the eight people
commuted were African-American, one Latino, crack cocaine sentences, which
are extraordinarily long compared to powder cocaine, which is also a racial
issue.

I mean, talk about what this means about the president diving back into
this thorny issue of race and disparity.

ANTHEA BUTLER, UPENN: Well, I think it means two things. One, I think it
means he is very concerned about that. I think between him and the Justice
Department, I think that hopefully by the time we see the end of the second
term, he will commute even more sentences because I think this is one place
where he could make, you know, make a sea change. And you can`t ignore
this with books like Michelle Alexander, the new Jim Crow. All of the
problems of people -- we have massive incarceration issues of people who
shouldn`t even be in the prison in the first place because they had one
rock, you know, and it didn`t make any sense.

I think the second thing, though, is really important when we talk about
Rodgers is that this is a chain of command. And if this is supposed to be
the one thing that the president does have as his total power and we have
this little underling person who has decide head wants to be judge and jury
and that he can lie to the president of the United States and have no
consequences for it? That is troubling to me.

So that means already that we have somebody in the pipeline who`s
preventing the president from making the kinds of choices he wants to make
because he has deemed that these people should not be in the pool to get --

(CROSSTALK)

REID: Is there any movement around having consequences, having Rodgers
held to account? Because it seems to me if you`re saying he`s holding
5,000 additional people`s cases from, you know, coming up for a pardon, it
does seem incredible that there`s no outside pressure being brought to bear
against him.

LINZER: The inspector general had recommended that the attorney general`s
office take some sort of action, some sort of action to reprimand him to
review his case. The Justice Department has not told me what that is, so I
don`t know where that stands. But he`s still there. And I do think that
there is, you know, a lot of problems in that office. You know, the reason
I got to Clarence Aaron`s case in the first place was because I embarked on
sort of an attempt to look at race and the effects of race in awarding
presidential pardons across the board.

Presidents really only get their information from this pardon offense.
They don`t know the race of any candidate they pardon but the pardon`s
office does. It turns out that the pardon`s office, because -- based on
their recommendations, presidents are pardoning whites by a factor of four.
If you are a white candidate, your chances of getting a pardon are four
times as likely, than all minorities combined. And that is because of the
information -- the pardon`s office is the one who actually knows that and
knows those statistics.

LINZER: That`s correct.

REID: And the president does not.

LINZER: That`s correct.

AVIK ROY, THE MANHATTAN INSTITUTE: It would be great to see the president
champion mandatory minimum sentencing reforms, because I bet you could get
a lot of Republican support from that. There`s been a lot of thawing on
the Republican conservative side around these inflexible sentencing laws
that prevent -- that create the cases.

LINZER: Right. There`s only bipartisan support for this. I think you see
just the results of these small moves this week.

There`s no backlash. There`s no political price the president has paid for
any of this. I think that this is something that actually makes presidents
feel good.

LISA COOK, MICHIGAN STATE UNIVERSITY: And it would help the economy -- 60
percent of those incarcerated are in for nonviolent offenses. This is
costing California $45,000 a year. It`s costing them $8,000 to support a
college student --

REID: Per person.

COOK: Per person, $9.6 billion a year for just incarceration.

This is an absolute dead weight loss. These are human beings that we`re
losing to the prison system. What are they learning? What are the skills
they`re coming out with? They can`t work, they can`t vote, they can`t
participate in society once they`ve come out.

So, this is really a problem that has to be fixed. It`s problem related to
lack of productivity in our economy.

REID: The incalculable cost in wasted lives.

All right. Dafna Linzer, thank you so much for being here. Excellent
reporting.

And you can read of Dafna`s reporting, of course, on MSNBC.com. And you`re
going to want to do that because she`s brilliant.

And, Anthea, I will see you later in the hour.

And when we come back, more signs that the president`s inner progressive is
flexing some muscle. It came at the top of this year in his press
conference on Friday, and I will show you that next.

(COMMERCIAL BREAK)

REID: We don`t have to speculate about President Obama`s priorities next
year. He laid out at least one of them at the very start of his last press
conference of the year yesterday -- the need to restore the jobless
benefits of the long-term unemployed that will expire next week.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Because Congress didn`t act,
more than 1 million of their constituents will lose a vital economic
lifeline at Christmastime, leaving a lot of job seekers without any source
of income at all. I think we`re a better country than that. We don`t
abandon each other when times are tough.

So, when Congress comes back to work, their first order of business should
be making this right.

(END VIDEO CLIP)

REID: And back with the panel, Carmen Wong Ulrich, host of "Marketplace
Money" -- I did it wrong twice! And Lawrence Mishel, president of Economic
Policy Institute.

So, I have to keep going because I keep mangling your job description.

So, Carmen, make for us the case for extending unemployment, the economic
case.

CARMEN WONG ULRICH, MARKETPLACE MONEY: OK, here`s the economic case. The
case against it is, oh, it costs $25 billion. Here`s the case for it. The
trouble is that all these folks will not have income not only just to pay
bills but basically to put into the economy. It supports the economy.
Think about it this way. Through 2014 another 5 million people will lose
these benefits.

What are they going to do? What are they going to spend money on if
they`re not? The Economic Policy Institute, for Larry`s work, let me give
you a rah-rah there, says projecting that we`ll lose another 300,000 jobs
because there`s just a simple economic theory that`s at work here when we
put money into people`s hands.

They`re part of the economy. They spend it. They`re in there. So, that
disappearing is huge. To add to all those who are long-term unemployed,
millions, to add to people who can`t find work, and don`t forget that
there`s -- for one job there are three applicants.

If the jobs existed -- well, then of course they`d get the work. They`re
not sitting on their butts. People are really trying to get some income
and it`s not there.

REID: And, Larry, isn`t it the case the lower the income the more of your
discretionary income you spend? You pretty much spend it all?

LAWRENCE MISHEL, ECONOMIC POLICY INSTITUTE: That`s why some of the topics
we`re going to talk about right now are a healthier economy than most when
the government spends money on unemployment insurance and food stamps.
Let`s describe the situation these unemployed people find themselves in.

Yes, there`s three applicants for every job opening. We have 7 percent
unemployment, 12.5 percent if you`re black, one out of five black workers
are unemployed or underemployed.

We have the fact that 7 percent unemployment is higher than the worst
moment of the last recession. This ratio, the 3-1 ratio of job openings to
the unemployed, of unemployed to the job openings, is worse at any point
during the last recession in the early 2000s.

And we have, you know, roughly 2.5 percent of the workforce unemployed more
than 27 weeks, which is some of the highest on record. And far double the
rate at which -- at any other point we`ve ever suspended having extended
unemployment benefits. It`s cruel, lack of compassion, and as my colleague
here says, really economically stupid.

REID: And the thing is, because once you`ve been unemployed for a long
time, it`s actually harder and harder to find a job, the longer those weeks
tick out. So, you are on long-term unemployment. By default it`s harder
to find a job.

COOK: Right, exactly. When you show up at an employer, the employer knows
you`ve e been out of work for some time. The employer is going to think
your skills have probably atrophied. You`ve been at home watching the
Flintstones. What do you know about your job?

So, it`s really hard to convince an employer that you`re up to date, you`re
in the game, that you have the will to work. I mean, it`s pervasive. And
this is just- it`s probably going to be a problem for some time.

REID: And yet, Avik, at these moments I turn to you, this is what Rand
Paul, who is, I guess you can call a libertarian, sort of conservative, Tea
Party conservative, had to say about this very issue about long-term
unemployment benefits. He said, quote, "I do support unemployment benefits
for the 26 weeks they`re paid for. If you extend it beyond that, you do a
disservice to these workers. When you allow people to be on unemployment
insurance for 99 weeks, you`re causing them to become part of this
perpetual unemployed group in our economy."

Huh?

ROY: Yes. So, that`s true. So, the longer -- just like you were talking
about, the longer people are on unemployment benefits and the longer
they`re out of the workforce, the less the employers are likely to hire
them. And employer surveys consistently show this.

REID: So, the answer is to cut off their entire income? How does that
help them find a job?

ROY: There are other federal programs who help people besides unemployment
benefits.

(CROSSTALK)

REID: Welfare rather than --

ROY: There are 32 anti-poverty programs sponsored by the federal
government, it spent over $1 trillion a year.

REID: I want to back up for a second because conservative doctrine is to
oppose those programs, too. Rand Paul and others, they`re not in favor of
what they consider welfare, but you`re saying take people off unemployment
insurance and put them on welfare.

ROY: Give them a better incentive to seek work and decrease the barriers
to hiring --

(CROSSTALK)

ROY: -- decrease the barriers to hiring that prevent people from actually
hiring people who are unemployed.

REID: I`m confused, how does putting somebody on a federal welfare program
give them more incentive to work than having them on unemployment
insurance? I don`t understand it.

ULRICH: Actually, you can only get the checks if you prove that you`re
looking for a job. If you don`t have --

ROY: Prove is a strong word. You have to check a box.

ULRICH: Yes, you have to check a box. But I`ll tell you this, if they
don`t, right, let`s say the benefits go out, they`re not accountable to
anybody, right? So, it actually encourages them to look for work.

The simple fact and common sense is, if you have one job for every three
people, either they`re going on welfare -- where are they going to go?

ROY: Yes, let`s get back to the economic point here. So, if you were on
unemployment insurance and then you get a job, you lose that benefit.
That`s what creates the disincentive to seek work. If the benefit is
consistent, regardless of whether you have a job or not, you have more of
an incentive to actually seek work.

REID: That doesn`t make rational sense. Go on.

COOK: It makes logical sense. The only thing that I would argue is that
this flies in the face of the facts.

Jesse Rothstein has this great paper on -- Jesse Rothstein at Berkeley --
has this great paper that shows that unemployment benefit extension does
not lead to unemployment. These people are not lazy.

It drives me crazy. Whatever it is.

(CROSSTALK)

COOK: -- with the latest data, with the latest data, the best work done,
flies in the face of empiricists.

REID: And I -- we have to go to break, but I do go back to the question of
what you are essentially saying is in order to incentivize somebody to seek
work, you have to cut off their entire income or put them on welfare. Or
put them on welfare, that doesn`t make sense. That doesn`t make sense, but
we`re going to keep talking.

Up next, things you can`t believe get said out loud. The congressman who
suggested that poor children, wait for it, should be made to sweep the
floors to earn their lunch.

(COMMERCIAL BREAK)

REID: Meet Jack Kingston of Georgia. He sat on the House Agricultural
Committee until 2012, a committee which does among other things the
national school lunch program. That program offers free lunches to
children and families at or below 130 percent of the federal poverty line
and reduced price lunches to children and families with income between 130
percent and 185 percent of the poverty level.

According to the U.S. Department of Agriculture, 18.9 million free lunches
were served in the 2013 fiscal year and another 2.6 million lunches were
served at a reduced cost. And it is that program that seeks to feed some
of the neediest in America that Congressman Kingston referred to when he
addressed the Jackson County Republican Party last Saturday and said this.

(BEGIN VIDEO CLIP)

REP. JACK KINGSTON (R), GEORGIA: But one of the things I`ve talked to the
secretary of agriculture about: why don`t you, you know, have the kids pay
a dime, pay a nickel to instill in them that there is, in fact, no such
thing as a free lunch? Or maybe sweep the floor of the cafeteria, and yes,
I understand that that would be an administrative problem, and I understand
that it would probably lose your money. But think what we would gain as a
society in getting people, getting the myth out of their head that there is
such a thing as a free lunch.

(END VIDEO CLIP)

REID: All right. Get the myth out of their heads that there`s such a
thing as a free lunch. The congressman then defended his comments on CNN.

(BEGIN VIDEO CLIP)

KINGSTON: This was not an indictment on anybody in a particular
socioeconomic group. This would be good for all children. I never did say
"poor kids."

(END VIDEO CLIP)

REID: Hear that, hear that everyone. He never said poor kids even though
the only kids eligible for that lunch program are poor kids. And it is
view points like that that make it so difficult to enact policies to help
poor people because far too many Republicans, believe that people who need
help, even little kids, are just looking for a free lunch.

The moocher theory of economics.

COOK: I understand it. I know where Jackson is. I grew up in the county
next to Jackson. This guy ought to be appalled, I`m shocked and appalled.
If you want to teach children that there is something else they can do, why
not teach them how to set up a lemonade stand?

If you want them to pay for something, teach them to be entrepreneurs. So,
I mean, I think it`s ridiculous that this was even proposed. But I think
even better would be to teach them, if you`re going to teach them
something, teach them how to be entrepreneurs and open up a lemonade stand.

Now, that`s not going to support their free lunch. But I understand his
principle. But this is absolutely extreme --

REID: But what about creating -- what about programs that help get their
families out of poverty so they didn`t need a free lunch? It is --

COOK: That would be optimal. That would be optimal.

But to make his point, doing it this way is just absurd.

REID: OK. I have to ask you this, Avik, because isn`t the reality that
the whole idea of child labor, as absurd as that was, there used to be
legal child labor in this country and the point of it wasn`t to teach kids
entrepreneurship and there wasn`t a free lunch, it was so businesses could
save money by employing children who they didn`t have to pay a lot, they
could put them in the factory and have them work and it was cheaper for the
employee. It`s about saving money. This whole principle -- Newt Gingrich
brought this up in the 2012 election cycle about kids sweeping the floor
for their lunch. This is about not wanting to pay unionized adult
janitors. Correct?

ROY: You know, I don`t think there`s anything wrong with kids mowing the
lawn and --

REID: In exchange for their lunch?

ROY: No. I`m not agreeing with Congressman Kingston on that at all. I`m
saying, in general, the idea of kids having some, you know, job like
delivering the paper in order to have allowance, that`s not sweatshops.
That is not what he`s talking about, I`m not defending what he`s talking
about. So, that`s my whole point, is that the general principle that kids
can learn about work, that`s great. I`m not sure the school lunch program
is the way to do it.

He admitted it would cost more. And the administrative bureaucracy to
create to administer what he`s talking about would be crazy.

So, it doesn`t make a lot of sense.

ULRICH: This ties into the unemployment we were just talking act, that
whole idea that a certain part of this country really thinks that poor
people are just sitting on their butts and they should be working and we`re
tired of supporting these people. And, in fact, we know that`s not
necessarily the case. We know that we need the unemployment benefits and
these kids need their lunch because what`s really much worse is an
uneducated population and those kids don`t eat, they don`t learn, and it
really makes things worse.

COOK: One of the best economic studies that has been done recently on
poverty suggests that I.Q. is lower when you don`t have enough to eat,
where there`s food insecurity. So, this suggests that, you know, so what
if they can`t come up with that nickel? That means that both society and
those individuals are going to be worse off because their I.Q.s are going
to be lower, they`re going to be less productive.

REID: Well, then, of course, also the fact they`re watching the rich kids
getting to eat while they have to sweep the floor for them and basically be
their (INAUDIBLE).

I`ve got to get Larry in here.

MISHEL: Well, you know if you really want to teach kids the value of work,
why don`t we make sure their parents all have a job? Why don`t we have the
government guarantee everybody who wants to work a job?

But I want to go back to the unemployment thing. We had an expert in North
Carolina, which is ground zero for stupid, cruel, economic policy. They
recently suspended a lot of unemployment benefits. They were kicked out of
the federal program.

What happened to their unemployment rate? What happened to their job
growth? Well, the fact is a lot of people don`t show up as unemployed
anymore, basically dropped out of the labor force.

If you calculate what happened, their unemployment rate, if you include the
people that left the labor force, went dramatically up. Their job growth
is way below average for the country. So the fact is that, you know,
getting people off of the unemployment benefits is not going to get them
employed. It may just get people to give up.

REID: But isn`t the point of this, I think, at the end of the day for
conservatives who are for cutting back these kind of benefit, it isn`t
about necessarily incentivizing work. It`s about wealthier people not
wanting to pay for this anymore. And it really doesn`t matter what happens
to the unemployed.

ROY: I think you`ve hit on one thing you`ve said before, there`s two kinds
of conservatives, there`s some more libertarian brand, which is hostility
to welfare programs on principle, and there a different kind of
conservativism, which is more of a reformist conservative, where people say
let`s have a safety net. Let`s just make sure it`s a lot more efficient
than the system we have, which is actually completely tangled with a lot of
waste and --

REID: Where are those conservatives? I only hear the ones --

ROY: Read "Forbes". You know, you`ll be hearing about it in the next
year.

REID: It is interesting, Carmen, because it does seem bad because the
economic -- it doesn`t work when it`s put in practice, as Larry just
demonstrated. When you actually practice this core of austerity, you don`t
get the result. So how do we get away from what I think is the fact that
this is just about not wanting to fund the programs come what may?

ULRICH: Well, absolutely. That is the whole fact. I mean, the idea of
starving people more, which is austerity or the economy, it does not work
and the idea of where will these people go? What will they do? Because we
have to accept that as a society, at the level that we are, this country,
that we need to support our people. If we do not, it is bad for us in the
long run.

And to think you can just say, sweep the floor, take these benefits away,
because you have to get a job. Really? One for every three applicants.
It`s not there.

And no one seems to be really grasping that. Add to these folks by the
way, who are going to lose benefit, all the people that are making
incredibly low poverty-level incomes as full-time workers, tell me that
isn`t a complete split of our society.

REID: It sounds like the hunger games. I`m just saying.

All right. Lawrence Mishel, thank you so much.

And up next, to tip or not to tip? And what that has to do with race.

(COMMERCIAL BREAK)

REID: It sounds exactly like what it is -- a CARE package. A little
parcel full of whatever you think might show your loved one away in the
military or at college or anywhere else that you care.

Make sense, right? Except that`s not why we have that phrase. It exists
because a group of American aid organizations banded together in the
aftermath of World War II to send supplies and food to the hungry people of
Germany and other parts of war-torn Europe. That group called itself the
Cooperative for American Remittances for Europe. Hence the boxes they
delivered were C-A-R-E, CARE packages.

While the charity group clearly chose its name for the acronym, making it
more of a back-ronym, a word interpreted as an acronym, a few common words
and phrases actually start off their etymological lives as acronyms. Like
the word laser. It began as an acronym for Lightweight Amplification by
Stimulated Emission of Radiation. And the word scuba, it began as an
acronym for Self-Contained Underwater Breathing Apparatus, but those are
rare.

As the debunking Web site snoeps.com takes great pains to point out only a
few common words truly have acronymic pedigrees, and those harken back from
the 20th century and later. But that doesn`t stop the recurring rumors
about words that sound like they could be an acronym, especially when the
rumored acronym seems to make sense.

Like the rumor that golf stands for gentlemen only, ladies forbidden. It
doesn`t.

Or the rumor that cop stands for constable on patrol. It doesn`t.

Or the rumor that newsstands for northeast southwest. Nope. Not true.

And probably one of the most prevalent rumors of all --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One theory on the origin of tipping is that the word
"tip" is an acronym for the phrase "to insure promptness."

UNIDENTIFIED MALE: To insure prompt service. Right? Isn`t that what it
stands for?

UNIDENTIFIED MALE: The year was 1754. The scene, a fleet street
coffeehouse in London where a bowl tastefully set in the middle of the
table read "to insure promptitude," T.I.P. Thus, the English word "tip"
was born.

(END VIDEO CLIP)

REID: OK. TIPS is an acronym for Treasury Inflation Protected Securities
and for Technical Information and Processing System and for Transjugular
Intrahepatic Portosystemic Shunt. But one thing TIPS is not is an acronym
for to insure prompt service, or to insure promptitude despite the fact I
used to think it was and really wanted it to be so.

The word was not born in a coffeehouse in 1754. It had been around far
while by then, even making an appearance in print as early as 1707 in the
George Farquhar comedy "The Beaux Stratagem", where one of the protagonists
while sharing his pickup techniques makes a reference to tipping the
verger, basically an usher, in order to get a good pew seat when wooing
women in a country church.

Back then, it was more of a bribe, kind of an up-front payment to get what
you want. Now, in modern-day America, it`s a ubiquitous extra payment for
almost every service, after every meal, drink, cabdrivers and doormen and,
of course, at the barbershop and the hair salon. We are expected to tip.

To add a gratuity for services rendered. But why do we do that? And is it
actually a bad thing? The argument for a ban on gratuities and tips is
next.

(COMMERCIAL BREAK)

REID: Across the country this week, newspapers and magazines vie to offer
readers solutions to one of most pressing problems of the holiday season --
tipping. Who should you tip, how much should you tip, and when should you
tip? It`s a conundrum.

Of course, the holiday tip is more like a gift. It`s something you do once
a year, like a bonus or thank you to people who work hard for you all year.
The kind of everyday tipping that goes on in bars and restaurants, those
places across America, that`s actually a big business, more than $40
billion worth of business every year.

And that just might be a terrible thing.

Joining me now from Ithaca, New York, is a man who has spent the last 30
years of his life studying exactly why and how we tip. Dr. Michael Lynn,
professor of consumer behavior at the Cornell University School of Hotel
Administration.

So, Michael, thank you for joining us. And I really do want to sort of
have you explain to us right off the bat kind of what are the biggest
factors in how we tip and why we tip? How big we tip and why?

MICHAEL LYNN, PROF. OF CONSUMER BEHAVIOR, CORNELL: OK. First off, thank
you for inviting me. The biggest factor -- the biggest predictor of
tipping in restaurant settings is bill size. And what that -- it explains
70 percent of the variance or differences in tips left by different dining
parties.

What that means is bill size explains twice as much as everything else
combined. Why does bill size explain so much? Because of the social norm
that says you`re supposed to tip 15 percent to 20 percent of the bill.

So the single by far overwhelming factor underlying people`s tipping are
social expectations and a desire to live up to those expectations.

REID: And I mean, so, Michael, given the fact it is a social norm, that
essentially the server is expecting a 15 percent to 20 percent tip, is
there actually any kind of real correlation between the size of the tip,
how much you tip, and the quality of the service you receive?

LYNN: Yes. There is a correlation. It`s statistically reliable but it`s
very small. Other studies have found, for example, that -- how sunny it is
outside has as big an impact on tips as the customers` own ratings of
service quality.

REID: And, you know, I have to get into a little bit of the topic of race
because I know there is an anxiety with a lot of African-Americans that:
(a), you`re going to be perceive as a small tipper or (b), if you are the
person providing the service, you know, that maybe you might not get as big
a tip.

And, actually, there are statistics that bear that out, that African-
Americans are tipped less whether they`re a cabdriver or server than non-
African-Americans black cabdrivers receive smaller tips on average than
white cabdrivers. This is true regardless of the race of the tipper,
meaning both black and white tippers give white drivers larger tips than
they do black drivers.

Why is that?

LYNN: Wow. I`m not 100 percent sure. Certainly it may be that you have
different explanations for this depending upon the race of the tipper.
Whites may tip other white service providers. It`s not just cabdrivers.
White waiters get better tips than black waiters also.

It could be that white customers simply feel a greater social rapport in
identifying with white servers better and leave a larger tip for that
reason. Obviously that doesn`t explain why black customers would also tip
a white server better. I`m really going well beyond the data here and
speculating, but certainly one of the ideas that has occurred to me is
blacks in this country on average tip less than whites. There`s simply a
lower standard of tipping in the black community than in the white
community.

And I wonder if when black customers are waited upon by black servers they
believe that that`s an OK to use a black standard of tipping, that simply
the community is more accepting of lower tips. And so, they think it`s
more acceptable OK to leave a smaller tip if they have a black server,
whereas when they have a white server, they know this white server`s going
to expect a whole lot more.

REID: Wow.

LYNN: Again, that`s speculation. But --

REID: It`s speculation. OK. Well, we actually have a couple African-
American people at the table and we`re going to talk to everybody on the
panel. But, Anthea, this is something that produces a lot of anxiety for a
lot-people. I mean, I know that I do tip very well, right? And I tip in
part because you have this perception that the person in a restaurant at
the salon, this is part of their income, it`s my obligation t do it.

But I think that`s a little bit too of saying I`m not just tipping for me
but for the next black person that comes in so, they won`t have that
expectation that, oh, OK, here comes a bad tipper.

BUTLER: I think there`s a lot of unconscious bias that happens in all of
this. I mean, unconscious bias happens for both African-Americans and
whites alike. So, when you see somebody, maybe I don`t have to give them
so much or whatever. So, I personally tip a lot because I have friends and
relative who is work in the hospitality industry and when you make $2 an
hour and the rest of that, you`ve got to put up with your tips and
everything, you realize how hard it is for people and you start to tip out
a lot more.

Plus, you don`t want people to do things to your food, OK? This is why I
tip. I don`t want anything happening to my food. I tip my bar tenders
really well. I want to make sure I get the right drink.

But I do think there`s a sense in which you see this unconscious bias when
you see a black person sit down in front of you at the table and you think
automatically, my tip is going to be less, I`m going to jack this up and
I`m really not care. That`s the thing you have to work with, this
unconscious bias that sort of drives an industry.

ULRICH: It`s not just a black thing. It`s a Latino thing, too, right?

So, the assumption is that that I will tip less. It really, really is.
So, the doorman in my building, we come from the same tribe, Dominican and
Puerto Ricans, right, of all colors, by the way. And I know they`re
expecting a small tip. You better believe I grease people`s palms all the
time, because there is some social utility to the sense that I want to
break a stereotype which I`ve done all my life to break those stereotypes.

So, this is one of those stereotypes. Plus, I put myself through school
waiting tables. I know how hard that work is and how much people need that
money.

If you work for it, of course you`ll get a big tip. But trust me, who am I
going to tip and how much, I want to make sure they realize I will tip them
well. I`m much more likely to tip them well because I want them to think
better of my people.

REID: I worked in the banquet service as well. I have understanding where
people come. So, I mean, Lisa, there is this other component of tipping
where it is prevalent in industries where people are paid very little,
their actual wages, particularly in the restaurant industry. So, in the
sense, has tipping become a crutch for the restaurant industry or
businesses to be able to get away with lower wages?

COOK: Well, sort of -- I mean, you know, there`s a bifurcation with
respect to the minimum wage. It`s $2.16 for the federal minimum wage where
there also tipping. So, this is -- I agree with Anthea. When I look at
these people I`m tipping, I`m thinking $2.16. They`ve got to make up the
rest. And they haven`t recovered yet from the financial crisis and
economic crisis.

People still are not flocking to restaurants except in Washington where
they never stopped going, it seems. But you`re making up for that. So,
you`re doing both the racial investment for the next person as you were
saying, but you`re also in my view, you`re making up for lost time.

REID: For lost wages and time.

COOK: And in real terms, that really hasn`t grown. So, we talk about
$10.10 (ph) not having been raised or the $7.25 not having been raised but
there`s been real deterioration.

REID: Well, unfortunately, I could talk about this all day.

All right. Thank you very much, Michael Lynn of Ithaca, coming from
Ithaca, sorry, Carmen Wong Ulrich, Anthea Butler, Avik Roy and Lisa Cook,
thank you all.

Up next, the pink helmet posse. Three little girls shredding just like the
boys.

(COMMERCIAL BREAK)

COOK: Is the Christmas pressure getting to you? Do you have some last
minute shopping to do for a young girl? Say one in the first or second
grade? Do you need that perfect idea for a present? Well, how about a
pink helmet and a skate board.

Meet 6-year-old Sierra and 7-year-olds Bella and Relz, collectively known
as the Pink Helmet Posse. These three young girls are taking skateboarding
-- taking the skateboarding scene by storm and proving that young girls can
be do everything the boys do.

With the help of their parents, this trio wearing this -- I`m sorry, this
tutu wearing trio have launched a blog and Instagram account to the spread
their message. On that Instagram account, other skaters can check out the
girls in action and on their Web site, pint size the skateboarders can
purchase boards that fit them. Smaller gear can be hard to come by.

By the time they`re teens, perhaps the potential for the Pink Helmet Posse
will have changed. But as of now, girls face a much tougher time than boys
getting air at the most competitive levels.

In 2013, at the X Games, 19 skate boarding events were held for men with
just three for women. The Pink Helmet Posse is doing their part to inspire
young girls to pick up skateboarding to help out of the playing field or
the half pipe. And as they put it on their Web site, we know it can be
intimidating but we`re here to show you that skate boarding is not just for
boys. Come skate with us. You don`t have to have a pink helmet, but which
think it looks pretty cute -- and so do we.

So, for promoting the inclusion of girls in skate boarding, Sierra, Bella
and Relz are our foot soldiers for the week. We`ve got our helmet. Maybe
next time Nerdland comes to California, we`ll come and join you.

And that`s our show for today.

Once again in for Melissa Harris-Perry, I`m Joy Reid. Thanks to you at
home for watching. I`ll see you tomorrow at 10:00 a.m. Eastern and we`re
going to rage against the machine. We`re going to go deep on the minimum
wage issue that`s been set up as one of the defining issues for the 2014
elections and as a political device that can actually be weaponized.

We`ll get into how that is tomorrow on MHP.

But, now, it`s time for a preview of "WEEKENDS WITH ALEX WITT" -- Alex.

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

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