updated 2/13/2014 3:53:00 PM ET 2014-02-13T20:53:00

ALL IN with CHRIS HAYES
February 12, 2014

Guests: Tom Perez, Ron Unz, David Cay Johnston, Kay Hagan, Lisa Bloom, Hakeem Jeffries

CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris
Hayes. Back in the host seat, good to see you.

Tonight, hundreds of thousands of minimum workers got a raise. And
the entire political world is on notice to just how powerful that simple
idea is.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So, today, I`m issuing
an executive order requiring federal contractors to pay their employees a
fair wage of at least $10.10 an hour, $10.10 an hour.

(CHEERS AND APPLAUSE)

HAYES (voice-over): Today, the president made good on his promise to
raise the minimum wage for federal contractors, signing an executive order
giving thousands of workers a pay increase from $7.25 to $10.10 an hour.

OBAMA: I`m going to do what I can. Congress should do what it needs
to do. I will not give up on this fight no matter how long it takes.

HAYES: But this moment was not inevitable. The president was pushed
to act by a movement that did not start in Washington, a movement that is
sweeping across the United States.

(CHANTING)

HAYES: Over the past year, hundreds of low wage workers across dozens
of cities have taken to the streets demanding higher wages. They succeeded
in putting low wage work front and center nationally. In New Jersey, the
same voters who overwhelmingly elected Chris Christie last year, also voted
to raise the state`s minimum wage, along with four other state legislators.
Just today, the West Virginia House voted to increase the minimum wage to
$8.57 in that state.

And, right now, lawmakers in over 30 states have introduced bills that
would raise the minimum wage. Why? Americans support it by a wide margin.
Seventy-one percent of registered voters support raising the minimum wage,
including a majority of Republicans.

The minimum wage is set to be one of the most politically potent
issues of 2014. In Kentucky, a very red state, Democrat Alison Lundergan
Grimes who is fighting to take out Senate Minority Leader Mitch McConnell
is making an important part of her campaign.

ALISON LUNDERGAN GRIMES (D-KY), SEN. CANDIDATE: I believe increasing
minimum wage it`s not just the minimum wage, it`s a living wage.

HAYES: In December, she blasted out in an e-mail why Mitch McConnell
wouldn`t stand with Kentucky families doesn`t make any sense to me.

SEN. MITCH MCCONNELL (D-KY), MINORITY LEADER: The minimum wage
increase is not done in conjunction with some kind of incentives for the
businesses. Not to lay off employees, they`re going to dramatically
increase unemployment.

HAYES: She`s running against a Republican in a red state.

And in California, a very blue state, a conservative activist is also
pushing to raise the minimum wage. Ron Unz, a registered Republican, is
arguing its time for taxpayers to stop subsidizing corporations who pay
their employees on livable wages. He`s pushing to get the minimum wage
ballot in that state.

The minimum wages is the rarest of political issues, a good policy
supported by a majority of Americans in red states and in blue states
across the partisan divide. The only question is when Congress will catch
up.

(END VIDEOTAPE)

HAYES: Ron Unz, as we just mentioned, will join me in a minute.

But, first, joining me now is the secretary of labor, Tom Perez.

And, Mr. Secretary, the big question I think today is, why now? Why
was this a moment for the president to act today?

TOM PEREZ, SECRETARY OF LABOR: Well, I think the president has
demonstrated an immense amount of patience on this issue. People are
working hard and falling further behind. We need to raise the minimum
wage.

And what the president said very clearly today is the federal
government is going to set an example, we`re going to practice what we
preach. We`re going to continue to work with congress, to try to get
Congress to raise the minimum wage and catch up with the American people.
But in the meantime, we`re going to make sure the federal contractors pay
$10.10 an hour, and that`s what he did today.

HAYES: There was concern initially about whether all workers would be
included in this, particularly workers with disabilities. It seemed at
first that quite a few workers would be left out. In the final order
issued today, a lot of those workers were included.

What can you tell me about the discussion around that particular
issue?

PEREZ: Well, again, we think that raising the minimum wage is the
right thing to do, it`s the smart thing to do, it`s the efficient thing to
do. I`ve done a lot of work on behalf of people with disabilities, and
they bring so much to the table they ought to get $10.10 an hour too. And
that`s exactly what the president said in the executive order that he
issued today. And I`m very proud of that.

HAYES: The minimum wage for tipped workers has lagged even behind the
minimum wage for other service employees. It`s been the same place, if I`m
not mistaken, for 20 years. Senator Sherrod Brown of Ohio, along with a
number of others, are introducing legislation.

What is the White House`s stance on raising minimum wage for tipped
employees?

PEREZ: It absolutely has to happen. And it`s replicated in today`s
executive order. I mean, the reality is that tipped workers are three
times as likely to be living in poverty.

By the way, tipped workers are disproportionately women, one in seven
are on food stamps. Many tipped workers by the time you deduct taxes, have
a paycheck of zero. So, they`re trying to live entirely on their tips.
It`s supposed to snow here tonight.

When you`re working at a diner, and it`s snowing, not a lot of people
come through the door. And that`s cost -- that`s money you don`t get back.

HAYES: One thing you`ll hear from conservatives in arguing against
this is they`ll say something like, well, this is arbitrary, the
government`s setting a wage, why not set it at $15, $20 an hour? How do
you respond to that? How do you respond that this is the right amount at
this time?

PEREZ: Well, I started out with what we saw in the Fair Labor
Standards Act which was passed 75 years ago, and Congress then made a value
statement that has been reaffirmed over decades that people who work hard
should be rewarded. Hard work should be rewarded with a fair wage. And
over the course of the decades, Republicans and Democrats came together to
raise the minimum wage.

$10.10 is not something that was plucked out of thin air. $10.10
allows a family of four, when you take into account the earned income tax
credit to get above the poverty line again.

No one who works a full time job should have to live in poverty. And
I speak to so many people, I was in New Jersey, in Jersey City, a week or
so ago, talking to folks who were working at Newark Airport. They haven`t
gotten a raise in years, until the voters gave them a raise.

And they were talking about how, I don`t want to be on food stamps any
more, I want to be self-sustaining, they talk about the dignity of work,
they talk about the choices they have to make between medicine and food.

That`s not America. We can do better than that. Americans deserve a
raise, Chris. Tip workers deserve a raise. Everyone deserves a raise here
above -- so that we have the basic dignity of work in which we reward work,
and we don`t subsidize business models that force people into food stamps,
forced into other public benefits. That`s not who we are.

HAYES: Secretary of Labor Tom Perez, always a pleasure. Thank you so
much.

PEREZ: Always a pleasure.

HAYES: Joining me now is Ron Unz, the former publisher of the
"American Conservative Magazine." He was at the White House today as
President Obama signed the minimum wage executive order.

And, Ron, I`ve been following very closely your campaign to sell
conservatives on raising the minimum wage. Give me the elevator pitch.
I`m a conservative billionaire, you and I end up at the same conference.
What`s your pitch for why I should be behind a minimum wage increase?

RON UNZ, FORMER PUBLISHER, AMERICAN CONSERVATIVE MAGAZINE: Well, it`s
a very simple idea. Right now, the government spends over $250 billion
every year on social welfare programs for the working poor -- people who
work but can`t afford to survive on their paychecks. If we raise the
minimum wage to a reasonable level, all those costs will be cut, and the
taxpayers will save money.

I think it makes much more sense for businesses to pay their own
workers rather than to shift the burden to the American taxpayer.

HAYES: What`s interesting is that we`ve seen a bipartisan push over
the years, it`s almost a bipartisan push in policy to do precisely the
opposite, which is basically to say, we`re going to let the labor market be
what it is. But we will come up with things like the earned income tax
credit. We see the expansion of food stamps in order to keep people afloat
at the bottom of the wage scale.

You`re saying that`s the wrong approach?

UNZ: Exactly. That`s because I`m a conservative.

The EITC, and these other programs are essentially welfare programs.
The idea is that you send checks to poor people to make them somewhat less
poor. I think it makes much more sense for workers to get a reasonable
paycheck so the taxpayer doesn`t have to make up the difference.

And what`s really outrageous is that Marco Rubio and a number of other
prominent Republicans are saying that the solution to America`s poverty
problem right now is more government welfare. That`s not what the
Republican Party advocated when I originally became a Republican under
Ronald Reagan.

HAYES: So, are you getting any traction with fellow conservatives on
this? Because I -- what I`ve seen actually is I think some kind of
consensus around minimum wage at least politically really disintegrates
during this particular fight.

UNZ: I think we`re making a lot of progress. Take for example, the
most prominent conservative on TV, Bill O`Reilly. Just a couple weeks ago,
he endorsed the $10 an hour minimum wage that`s proposed in Congress by the
Democrats.

Phyllis Schlafly, an iconic conservative figure, came out a column
saying exactly the same thing, we should raise the minimum wage so as to
reduce social welfare spending.

A prominent economic writer for "National Review" said exactly the
same thing and endorsed the $12 an hour minimum wage I`m proposing.

A lot of the conservatives I`ve been talking to on talk radio and
prominent figures in California, when the idea is explained to them in
those terms, they suddenly see it makes a lot of sense. Businesses should
stand on their own two feet rather than forcing the taxpayer to make up the
difference.

HAYES: Explain that idea, right, because what I think the push back
you get, particularly from the business class and particularly from the
restaurant owners who Lord knows, they are lobbied to the hilt on this
issue on Capitol Hill, is that this is -- you know, this is big government
telling people what to pay their workers.

UNZ: Well, how many of those business owners are saying that we
should cut social welfare spending that the taxpayer is providing? None of
them. They would view that as heartless.

They`re willing to give away other people`s money, but not their own.
They should pay their own workers. If they can`t survive in a free market
system, then perhaps a different business should take their place.

HAYES: One of the things we`ve seen actually is that when you look at
earning projections from Wall Street analysts for Walmart, for instance,
things like the $5 billion food stamp cut, the hunger cliff, which we cover
on the show, shows up in what Wall Street analysts say about the
profitability of Walmart. Because so much of Walmart`s revenue is coming
from food stamp money and other government subsidies to low wage workers.

UNZ: Exactly. If you take the case of Walmart, the studies have been
done show that you could -- Walmart could accommodate a $12 an hour minimum
wage by simply raising their prices 1.1 percent one time. The average
Walmart shopper would pay an extra $12 per year, and that would allow
Walmart to cover the costs of an extra $12 an hour minimum wage.

I think a higher minimum wage makes much more sense for America, and
gets us back to where we were in the late 1960s at the peak of our post war
prosperity.

HAYES: You know, the irony here is, I spent a lot of time talking on
this show and other reportorial capacity to low wage, minimum wage workers.
And they make the same conservative case you do, which is that people would
rather earn a wage they could feed their family and pay their rent on, then
get things like food stamps and the earned income tax credit.

UNZ: Exactly. It`s strange today that we have the Democrats, we have
President Obama saying we should make work pay more, which would
automatically reduce social welfare spending because the workers are less
poor.

Meanwhile, it`s the Republicans who say that the solution to our
poverty problems is more welfare.

HAYES: Yes.

UNZ: And I don`t think that`s a popular answer.

HAYES: Ron Unz, I`m going to be following this. You`ve got a ballot
initiative you`re trying to get on the ballot in 2014 in California. I`d
love to have you back to talk about that. It`s great pleasure having you
on.

UNZ: Hey, that sounds great.

HAYES: All right. Coming up, Chris Christie seeks to rehabilitate
his image by speaking out about GWB. Well, the other GWB.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Every Republican took for
granted that George W. Bush was there, he was grossly underappreciated by
his own party and by the country as a politician.

(END VIDEO CLIP)

HAYES: World`s smallest violin playing for George W. Bush, that`s
next. Stay with us.

(COMMERCIAL BREAK)

HAYES: Michael Dunn shot and killed Jordan Davis, African-American
teenager, in a Florida parking lot after an argument over loud music.

(BEGIN VIDEO CLPI)

JOHN GUY, PROSECUTOR: You thought everybody in the car was a thug or
a gangster, right?

MICHAEL DUNN, ACCUSED OF MURDER: After the behavior, yes, I did.

GUY: You didn`t call 911?

DUNN: I didn`t call police until the following morning.

GUY: You called the pizza man, right?

(END VIDEO CLIP)

HAYES: We`ll have the latest on the trial and Dunn`s stand your
grounds self-defense argument while we await a verdict. Stick around.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHRISTIE: I think that the problem we have is an opportunity gap.
Not an income equality gap.

And I think that one of the big discussions in conversations over the
course of the next two years in national politics is going to be, do you
want mediocrity or do you want greatness? You want income equality?
That`s mediocrity. Everybody can have an equal mediocre salary. That`s
what we can afford.

Or do you want the opportunity for greatness?

(END VIDEO CLIP)

HAYES: New Jersey Governor Chris Christie speaking yesterday at the
Economic Club of Chicago, doing two things simultaneously, touting the free
market as an opportunity for all, while dismissing New York Mayor Bill de
Blasio`s landslide victory, focused heavily on that city`s problems with
economic inequality as a larger shift in the country`s politics.

But inequality is not an abstraction to the governor of New Jersey.
Indeed, according to the legal services of New Jersey which assesses the
state`s poverty figures, the percentages and numbers of people living in
poverty have increased each year since 2007, culminating in record highs in
2011, and approaching a level last experienced in New Jersey more than 50
years ago. That was all, of course, before the storm.

Christie was officially in Chicago to raise money for Republican
candidates for statehouses across the country, which he did to the tune of
a million dollars. Still, I think it`s fair to say that New Jersey`s
Republican Party is still worried. Today, they sent a letter to potential
donors basically saying, well, this network`s, quote, "witch hunt", their
word, of Chris Christie, should be an incentive to donate money.

It reads in part, quote, "It`s time to stand up to MSNBC, the liberal
media and their attacks. You have stood with Governor Christie before, and
we ask that you reaffirm your support today. The people of New Jersey
deserve better than the partisan witch hunt they`re currently witnessing on
television every night."

Christie`s future, as you can tell from that letter, increasingly
hangs on whether he can get conservatives to rally around him.

So, there he was yesterday in his role as the head of the Republican
Governors Association, speaking to a roomful of business leaders,
castigating the class warriors who are whining about inequality.

Joining me now David Cay Johnson, Syracuse law professor, editor of
"Divided: The Perils of Our Growing Inequality".

David, here`s my feeling about Christie`s comments yesterday and about
conservatives talking about inequality in general. I far prefer the
honesty of Chris Christie yesterday in which he said, stop whining, do you
want mediocrity or greatness? To the kind of disingenuous, oh, we actually
really do care about people at the bottom, that you sometimes get when
conservatives talk about inequality.

If you`re going to do, do it the Chris Christie way. Stick by your
guns, say basically screw the people at the bottom, embrace Ayn Rand.

DAVID CAY JOHNSTON, SYRACUSE UNIVERSITY: Well, here`s my problem with
Chris Christie. Nobody, Chris, who is a player in this area, has been
arguing for equal income. Nobody.

HAYES: Exactly.

JOHNSTON: It`s a false meme. And furthermore, he doesn`t have the
Founding Fathers on his side. My piece in "Newsweek" right now is about
how the Founding Fathers, Jefferson, Washington, Madison, Adams, the
others, all wrote that what they feared would doom our country was extreme
inequality. And they wrote it again and again, they put it into a 1792
law.

It`s very clear that they felt that extreme inequality would doom this
grand experiment in self-governance.

So, one thing I guess we can say about Chris Christie is he`s trying
to fill in the holes in the plot line of the fictional story he`s been out
selling by diverting our attention somewhere else, is he certainly wouldn`t
want us to go back and look at what the founders in this country said about
inequality.

HAYES: It`s good you say that, because there`s this condescension in
this whole thing, whiny liberals or lefties that worry about this.

Here is the way he characterized this debate. Take a listen.

(BEGIN VIDEO CLIP)

CHRISTIE: Greatness is going to be based upon your intellect, your
hard work, your creativity. And government can play a role in helping to
create that opportunity. But not in being the perpetual referee of what
sounds like a fight between my 13-year-old son and my 10-year-old daughter.
You did this for him, that`s not fair. Well, that`s not fair, I want this
to be fair. I grew up in an America that said life isn`t fair.

(END VIDEO CLIP)

HAYES: You know, where do I start on this? The idea that Chris
Christie`s going to tell the low wage workers in America, the people in
poverty, the people who are struggling to make ends meet, that they are
acting like 13-year-olds or 10-year-olds arguing over a toy in the back
seat.

JOHNSTON: Well, he`s also saying it`s their fault.

HAYES: That`s right.

JOHNSTON: My new book "Divided", which is an anthology, I`m the
editor of it. In it, what we do is show from people from Plutarch and Adam
Smith, to Elizabeth Warren, and Joe Stiglitz and Paul Krugman, that there`s
a whole system here you have to look at. Income inequality is just the way
we can view this, but there`s education inequality, there`s environmental
hazards, there`s family and the inability of parents to spend time raising
their children, because they need two incomes and maybe three or four
incomes at the current wage levels we have.

So, there are all these structural things that keep people at the
bottom. And that`s got to be central to the debate. That what we have in
America is a system of upward redistribution. You heard me say this
before, it`s not trickle down, it`s Amazon up.

HAYES: Yes, and I also want to focus on this idea that -- in the
first club when he talked about opportunity, because to me, this word
opportunity is like the waste band in an old pair of sweat pants. It`s
getting stretched so much that it basically means nothing, right? It`s a
deficit, a word you use to signify whatever policy you want beforehand.
And that goes to left and the right, right?

When people start talking about opportunity, they are officially
talking nonsense, because the word has no meaning, right? It`s not like
our country has any policies that actually are committed to something that
looks like equality of opportunity, because if we actually took that idea
seriously, we would be a vastly more redistributed state than we are right
now.

JOHNSTON: Well, and we wouldn`t be doing things like -- virtually all
the stock options and stock grants in this country go to the top two
percent of people at corporations. Even though employee stock owned
companies are more profitable, more durable and more efficient. You don`t
see broad stock ownership at companies.

When I went to college, college was free. Now, it`s a barrier. If
you`re poor, you can`t go to college.

HAYES: Yes.

JOHNSTON: There`s no possible way for you in many circumstances,
including getting to the campus. So, we need to recognize we`ve created a
system that is perpetuating and reinforcing holding people down and it`s
making us poorer.

HAYES: And, finally, the one thing he did say yesterday that I
thought was correct, was he basically said, George W. Bush is the most
politically successful Republican national candidate in recent memory, and
we could all talk about what kind of disaster that presidency was.

But the funny thing is, he`s actually right on the politics. The only
guy to win a national popular vote in the last five elections for the
Republicans was George W. Bush.

JOHNSTON: Yes. I think, though, the most important thing, especially
in terms of inequality, remember about George Bush, is that one in 1,000
families got 12 1/2 percent of the tax cuts. If you adjust for the incomes
we had, because he said he was going to make us all better off than we were
in 2000, in the last 12 years, we`ve gotten about 12.5 years of income.

HAYES: David Cay Johnston, thank you very much.

All right. The Democratic senator who is being targeted with millions
of dollars in negative ads from a Koch brothers-backed group will join me,
next.

(COMMERCIAL BREAK)

HAYES: Election Day is more than eight months away. The filing
deadline for primary candidates hasn`t even passed, and yet, $8.2 million
has already been spent in one single race, in an effort to defeat one
single incumbent senator.

Democrat Kay Hagan was elected to the U.S. Senate in North Carolina in
2008, the same year Barack Obama surprised a lot of people by carrying that
state. But ever since those victories, North Carolina has been lurching to
the right. In the 2010 midterms, Republicans won control of the state
House and Senate, for the first time in more than a century. And in 2012,
Republican Pat McCrory won the governor`s race, ending two decades of
Democratic control.

And now, with the Republicans control of the entire legislature and
the governor`s mansion, the state has become a laboratory of conservative
policy. From anti-abortion measures designed to shut down clinics, to
suppressive new voting restrictions, to blocking Medicaid expansion, to
slashing unemployment benefits, to cutting taxes for millionaires and
raising taxes on poor people -- you heard that right. This is North
Carolina under Republican control, the backdrop for one of the most hotly
contested U.S. Senate races this year, the one between Kay Hagan and an as
yet undetermined Republican.

And the outside spending group founded by the billionaire Koch
brothers is so determined to drive Democrats to extinction in North
Carolina, they`ve been campaigning against Kay Hagan for months now, to the
tune of $8.2 million. Political reporting today, the Koch brothers
spending adds up to more than all Democratic groups in the country
combined.

Joining me now from Washington, D.C., is Senator Kay Hagan of North
Carolina.

Senator, my first question to you on this evening has to be -- is
everything OK down in North Carolina? Because we are seeing some pictures
of the storm that has all of us a bit worried?

SEN. KAY HAGAN (D), NORTH CAROLINA: Well, I`m hoping that all of your
viewers in North Carolina are safe, off the roads and in their warm homes
able to watch this show, because you have certainly laid out the horrible
agenda that our current legislature has been put forward in my great state.

HAYES: Why are they coming after you so hard? I got to say --
there`s a lot of candidates. There`s a lot of races this cycle. The money
has flocked to going after you. What`s so special about you, Senator, that
that they`re coming after you so hard?

HAGAN: What I think is really interesting is that the people in North
Carolina are not going to let the billionaire Koch brothers buy this seat.

My state, as you said, is being flooded with millions of dollars, from
this outside interest group. They have opposed the bipartisan farm bill
that is extremely important to the agricultural sector in my state. They
opposed the bipartisan budget bill that turned off sequestration.

At the same time, they have gotten tax cuts for the wealthy and put
that burden on 80 percent of our middle-class families, increasing their
taxes. These are not policies that North Carolinians want and they`re not
going to be fooled by this outside money.

HAYES: The biggest thing they have been running ads against you on,
of course, is the health care law, the Affordable Care Act, Obamacare. How
much of a role do you think that plays in this? I mean, obviously, the
ads, if you just look at the ads, they think this is the key to defeating
you is hammer you on Obamacare. How are you going to deal with that in the
campaign?

HAGAN: Well, there`s several things going on here.

First is, the people in North Carolina have the fifth highest sign-up
on the exchanges. After Florida, New York, California, and Texas, it`s
North Carolina, so they`re very interested in this. But what my opponents
want to do, they want to take us back to a time where if you had a
preexisting condition, you are out of luck, you couldn`t get health care.

If you got sick, you could have -- you could lose your health care.
Women automatically paid more than men. And the seniors were paying a lot
more for prescription drugs. This is what all of my opponents want to do,
and it is not what the people of North Carolina want.

HAYES: The question for you, is that a winning issue? Is that an
issue you could lead on? Do you envision yourself, for instance, running
your own ads on Obamacare in the next eight months?

HAGAN: I think what we want to show is that the Affordable Care Act
is something whose time has come. It`s going to really change how the cost
of health care will not have these huge increases that we have been seeing
every year.

And you know what my opponents want to do? They want to personally
get involved in the health care decisions especially of women. Every one
of my opponents to date has said that the state has the authority to ban
contraception. I can guarantee you that`s what women will not want to have
to hear.

HAYES: One of your likely opponents, one of the people who is running
against you in the primary, is, I believe, the speaker of the House in
North Carolina. He has been a key engineer of that raft of legislation we
talked about in the intro. How much do you foresee the general context of
the Republican policies at the state level factoring in your race?

HAGAN: I think it just shows the special interest friends that Thom
Tillis has and who`s he`s been looking for.

When you look at the fact that they have cut taxes for the wealthy,
put that burden on 80 percent of middle class, they have cut a half a
billion dollars from education, they have slashed unemployment insurance,
they have frozen teacher pay, these are issues that have gotten so many
people in North Carolina riled up, and obviously they don`t want these
policies to carry through at the federal level, and they want to be sure
that Thom Tillis is not elected.

HAYES: There are about 82,000 tons of coal ash that spilled into a
river in North Carolina. There`s some troubling reports about when the
spill was first reported, when it was reported to the public, whether it`s
being cleared up. Are you confident that Governor Pat McCrory, who has a
long relationship with the company that spilled that, is doing all he can
and telling the public all it needs to know about that spill?

HAGAN: You know, I am concerned.

First of all, we have got to be sure that now that the leakage had
stopped, we have got to be sure that the cleanup is undertaken immediately,
and we have got to be sure that 36 other coal ash ponds are protected.

One of the things that really concerns me is through the budget cuts
that we have seen in North Carolina, the water containment issue area from
the department of environment has actually been cut 23 percent. There will
be 23 percent fewer employees than there were three years ago.

And that is very troubling to me. And so I think that we need to be
sure that the federal and state regulators are working together to be sure
to test the water, to be truthful, up front and have immediate response to
the public when they see something wrong.

HAYES: Senator Kay Hagan of North Carolina, the state that managed to
cancel its big basketball game tonight because of the snow, that`s how you
know how bad it is.

HAGAN: What a disappointment.

HAYES: I know. Well, I hope everyone gets home safe. Thank you very
much, Senator.

HAGAN: Thank you, Chris.

HAYES: All right. Once again, we are awaiting a jury`s verdict after
a man fatally shot an African-American teenager in Florida and claimed
self-defense. All eyes on the Sunshine State next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: When I was yelling and screaming
about Sandy aid in January of 2013, both at my party and at my own, it
wasn`t because I needed a few extra bucks to balance the budget. It`s
because every dollar that we have been shorted will have an impact on the
lives of the people of my state.

(END VIDEO CLIP)

HAYES: We here at ALL IN have been tracking closely the way in which
Sandy funding has been distributed.

And, in New Jersey, there have been accusations of corruption,
mismanagement and general malfeasance. There`s been a shocking racial
disparity in the state`s distribution of Sandy aid, with African-Americans
and Latinos being rejected at twice the rate of white applicants.

Overall, there`s a broad sense among many that this has been, well, a
disaster in its own right. And Governor Christie has not made it easy to
keep track of Sandy funds. He vetoed a bill requiring Sandy oversight,
calling it redundant and wasteful. Housing advocates have had to sue his
administration in order to find out how the state has been awarding Sandy
grants.

Now, minutes ago, a Sandy recovery funds hearing in Newark, New
Jersey, just wrapped up. It is the second of three hearings the Christie
administration has scheduled on how it should allocate the next round of
federal funds.

People in that state are still hurting. They have a lot of questions.
And our producers are there documenting every second of the event. We will
bring you a full report tomorrow.

(COMMERCIAL BREAK)

HAYES: For the second time in less than a year, all eyes are on
Florida today, as jurors begin to deliberate another killing of a young
black man whose killer is pleading self-defense because he says he felt his
life was at stake.

The defendant, 47-year-old Michael Dunn, a software engineer, stopped
at a convenience store in Jacksonville, Florida, with his girlfriend in
November of 2012. He pulled his vehicle next to a red Durango SUV which he
said was playing thumping music.

Four teenagers were in that Durango SUV, including a 17-year-old
student named Jordan Davis. They initially turned down the music, but Dunn
says it was later turned back up, and the confrontation escalated. This is
where we arrive at some key and highly disputed points.

Dunn says the Davis verbally threatened his life. Dunn also says he
saw Davis pull up an object that looked like the barrel of a shotgun.

(BEGIN VIDEO CLIP)

MICHAEL DUNN, DEFENDANT: And I saw sticking above like the windowsill
about four inches of a barrel. It was a thick enough profile. It was to
my eye a .12-gauge, maybe .20.

(END VIDEO CLIP)

HAYES: Dunn retrieved his 9.-millimeter handgun from his glove
compartment and fired 10 shots, many of those shots going into the Durango
SUV.

Davis was struck in the back and groin by three of those bullets and
died a short time later. Dunn`s girlfriend, Rhonda Rouer, said she was in
the store and didn`t see the shooting, got back in the car after leaving
the store. They drove off and went back to the hotel, where they had been
staying.

Dunn didn`t call the police and didn`t turn himself in until the next
day. There were no weapons found in the Durango SUV. And on this key
point, the defendant`s claim that he saw the barrel of the gun in his
testimony was directly contradicted by his fiancee.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Did the defendant ever tell you he saw a gun in
that red SUV?

RHONDA ROUER, FIANCEE OF MICHAEL DUNN: No.

UNIDENTIFIED FEMALE: Did the defendant ever tell you that he saw a
weapon of any kind in that SUV?

ROUER: No.

UNIDENTIFIED FEMALE: There was no mention of a stick?

ROUER: No.

UNIDENTIFIED FEMALE: There was no mention of a shotgun?

ROUER: No.

UNIDENTIFIED FEMALE: There was no mention of a barrel?

ROUER: No.

UNIDENTIFIED FEMALE: There was no mention of a lead pipe?

ROUER: No.

UNIDENTIFIED FEMALE: Back in the hotel room, Ms. Rouer, that same
night, did the defendant ever tell you that he saw the boys with a firearm?

ROUER: No.

UNIDENTIFIED FEMALE: Did he ever tell you that he saw the boys with a
weapon?

ROUER: No.

(END VIDEO CLIP)

HAYES: Dunn is charged with first-degree murder of Mr. Davis and
three counts of attempted murder, the other three teenagers in that Durango
SUV.

Jurors have ended deliberations for the day. They will reconvene
tomorrow at 10:00 a.m. And right now, a whole lot of people across the
country are bracing themselves for the possibility of another not guilty
verdict just seven months after George Zimmerman was acquitted of second-
degree murder and manslaughter charges in the killing of Trayvon Martin.

Joining me now is Lisa Bloom, legal analyst for Avvo.com and author of
the forthcoming book "Suspicion Nation: The Inside Story of the Trayvon
Martin Injustice and Why We Continue to Repeat It." That subtitle seems
particularly germane.

Lisa, what`s going to happen here? I know you can`t predict the
future, but you have been watching this trial very closely. It just seems
like the facts on their face are so damning, the testimony has been so
damning. What is your thinking about which way this is headed in?

LISA BLOOM, LEGAL ANALYST, AVVO.COM: Well, there are a lot of
similarities, including two of the prosecutors from the Trayvon Martin case
prosecuted this case.

And, as in that case, they have been afraid to talk about race in that
courtroom. Race is a key element of this case, including, this is a
defendant who wrote explicitly racist letters from prison. He said, "The
more I get to know those people," referring to African-Americans, "the more
prejudiced I become."

I have been a civil rights lawyer for decades. It`s very rare you get
an explicit statement like that from someone. Well, they had it here, and
they didn`t use it, because they don`t like to talk about race in these
courtrooms. I think that`s a problem.

On the other hand, those who are looking for a conviction against
Michael Dunn can take heart from the fact that the facts here were
different. For one thing there, were a number of witnesses to the shooting
who testified. There was the girlfriend you just played who said, he
didn`t tell me he saw a gun for 12 days.

That`s very damning for him. Now he says there was a gun, of course,
that`s why he shot. No gun was ever found. I think there are some
significant differences here that could lead for a conviction for Michael
Dunn.

HAYES: I just want to read -- since you mentioned the letter, I want
to read one little excerpt of one of these letters. "It`s spooky how
racist everyone is up here and how biased toward blacks the courts are.
The jail is full of blacks and they all act like thugs."

He goes on to say: "This may sound a bit radical. But if more people
would arm themselves and kill these `expletive` idiots when they`re
threatening you, eventually, they may take the hint and change their
behavior."

That was not entered into evidence in the court.

Can you clarify something for me, Lisa, that has been baffling me in
this trial? And it baffled me a bit in Trayvon Martin. Is the defense and
the relationship to the stand your ground law and the specific test that
has to be, the threshold that has to be met for a self-defense argument --
it seems to me crazy that it can just be that anyone`s paranoid state of
mind essentially gives them carte blanche to shoot someone if they feel
threatened.

BLOOM: Right.

HAYES: There has to be some standard or test that`s higher than that.

BLOOM: Yes.

And the reason you`re confused is because the prosecution did such a
poor job explaining that in the Zimmerman case, and I think they did a poor
job in this case as well. The law in Florida, as it is in most places, is
you have to be in reasonable fear of imminent great bodily injury or death.

Now, all three of those must be met. Your fear must be reasonable.
Michael Dunn said he was in a panic. If I were the prosecution, I would
have made a lot out of that, because panic is not reasonable. Imminent
great bodily injury or death, something`s going to happen to you right
away, not that you`re upset because this kid mouthed off to you, not that
you`re upset because he played loud music when you told him not to, but
imminent great bodily injury or death.

Now, we know that Michael Dunn shot 10 shots at that car, including a
couple of shots when the car was driving away. We know that the jury asked
to see the videotape surveillance tape tonight before they broke for the
day. I think that`s because the shots go, three shots, there`s a pause,
then four shots, then quite a long pause, then three more shots.

The prosecution argued that he could form premeditation during those
pauses. In other words, maybe he shot initially in self-defense.

HAYES: Right.

BLOOM: But why does he keep shooting? Why does he shoot as the car
is driving away? That sure sounds like murder or attempted murder.

HAYES: And the other real key difference here in terms of the facts
between the Zimmerman case and this case is the behavior afterwards. Of
course, you remember that Zimmerman was talking to the police right away
after Trayvon Martin`s death. He went back with the police the next day,
and walked them through.

Here, Dunn drives off and literally drives off to a hotel and orders
pizza.

BLOOM: Yes, and drinks wine with his girlfriend.

And he says he was still afraid of them. If he`s still afraid, why
doesn`t he call the police? He never called the police. It doesn`t make a
lot of sense. He said that they were gangsters. He thought that they were
still after him.

Words, by the way, gangsters and thugs, I think those are code words
for the N-word coming out of this man`s mouth. But his story really
doesn`t add up. It sounds like consciousness of guilt.

In an American courtroom, when you shoot someone and then you flee,
consciousness of guilt can be inferred from that behavior. That`s what the
prosecution argued.

HAYES: Lisa Bloom, always, always appreciate your analysis, clarify
things for me immensely every time. Thank you very much.

BLOOM: Thank you.

HAYES: We will dive into the meaning of those phrases like thug music
ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: OK. But it was (INAUDIBLE) thug music, right?

DUNN: That`s who -- what Rhonda characterized. I don`t recall saying
that.

UNIDENTIFIED MALE: You don`t recall saying, I hate that thug music?

DUNN: No. If I would have said anything, I would have called it rap
crap.

(END VIDEO CLIP)

HAYES: Joining me now, Congressman Hakeem Jeffries of New York, and
director of Africana studies at Lehigh University Dr. James Peterson, who
is also an MSNBC contributor.

Great to have you here.

James, you have been following this trial very closely.

JAMES PETERSON, MSNBC CONTRIBUTOR: Yes.

HAYES: And what strikes me about this is the point at which this
interaction starts is similar to dozens of interactions I have witnessed in
a million different locales, on subways, at gas stations, at 7-Elevens,,
and then -- well, and then...

PETERSON: People have been screaming for people to turn down rap
music and hip-hop since the `80s.

HAYES: Yes, exactly.

PETERSON: It doesn`t always result in someone`s loss of life.

HAYES: No.

PETERSON: And I think we have to look at Michael Dunn here.

And, again, I`m glad you guys talk about the letters, because the
letters reveal some real racialized thinking. How ironic is this that this
guy thinks that the system is biased in favor of black...

HAYES: The court system.

PETERSON: The court system is biased in favor of blacks, when in
reality there is no metric, not in sentencing, not in anywhere in the
criminal justice system, where blacks are biased again. Right?

HAYES: As someone who has to go back to your district, Congressman,
right, and you -- you stand in for the state, right? You`re the
representative.

And my sense in New York City and the Bronx in the 1980s particularly,
people in the neighborhoods I grew up in just had no trust in the system,
like zero trust that they were going to get a fair shake. And then high-
profile cases happen like the ones that we saw last year, Trayvon Martin,
and this high-profile case.

What do we say to people that say, basically, I think the game is
rigged, I think the entire court system is biased against me, and I think
every stereotype society has of me is enshrined in law?

REP. HAKEEM JEFFRIES (D), NEW YORK: Well, it`s tough, because it`s
like a Yogi Berra moment. It`s deja vu all over again.

We just went through this. It was a very traumatic experience for
people in the communities that I represent all over the country who have a
deeply held suspicion that African-American young men in particular are
treated differently by the criminal justice system.

(CROSSTALK)

JEFFRIES: And there`s empirical evidence that bears that out, their
own personal experiences and own empirical evidence.

HAYES: That`s right.

JEFFRIES: Now, in this particular instance, one of the most troubling
aspects of the case is that this really should be an open-and-shut matter.

There was no gun, there was no imminent threat of violence. The only
reason we`re in this situation where there`s suspense as to what the jury
may arrive at is because of the stand your ground law. And that is part of
the problem that we confront from a public policy standpoint, that you have
got a feeling of mistreatment institutionalized in law to perhaps legalized
vigilantism in some instances. That was the case with Zimmerman.
Hopefully, it the be the case with Dunn.

HAYES: But, in some ways, I think that part of the issue here is the
law, right, but part of the issue is much deeper than the law of
necessarily stand your ground, because you can go to -- you can look at
racial disparities, for instance, in death sentences based on the color of
the victim, right, which apply broadly, right?

PETERSON: That`s right.

HAYES: There`s all sorts of ways in which the criminal justice is
just shot through at every single juncture.

PETERSON: With racial bias.

And this is the thing. When you have these expansive sort of self-
defense laws, they can`t -- that`s why in the previous segment, you`re
like, well, how do you even -- what`s the threshold? We can`t have a sort
of sensible conversation about the threshold is to defend oneself unless we
have a serious conversation about how racial bias informs all those kinds
of decisions.

And we are just not having this conversation. We don`t even want to
talk about race in this courtroom.

JEFFRIES: And what the law is doing in this particular instance is
allowing for subjective bias perhaps to be elevated to be a legitimate
defense.

PETERSON: That`s right. And that`s the problem.

HAYES: And that is what is so perverse.

When people say, well, I -- if someone says, well, I honestly feared
for my life, well, it`s possible you honestly had completely erroneous,
racialized stereotypes of that person, and the honesty of your racial
baggage shouldn`t be exculpatory. Right? That`s what seems so perverse.

PETERSON: It`s not. But it is and it has been.

And the thing is, we`re not going to be able to overcome the
challenges in the criminal justice system unless we confront the sort of
pervasiveness of racial bias in our society.

HAYES: Part of what came out of the Trayvon Martin trial is that the
president`s sort of amazing moment when he came out on that Friday and he
talked off-script about his reaction to that verdict.

And he talked about young men of color particularly. And he dropped a
line in the State of the Union about initiatives and young men of color.
There was an article in "The Washington Post" about him sort of quietly
attending these groups.

What kind of -- what do you want to see come out of that initiative?

JEFFRIES: Well, I think it`s important that the president has now
decided to focus on this issue with precision, all right, because not
everyone who finds themselves in a difficult position is open and available
to having a one-size-fit-all approach.

And young men of color, disconnected, disenfranchised in many
instances, subjected to the biases of the criminal justice system, do need
a targeted effort in order to help elevate them and provide them with the
ability to pursue the American dream in the same way that others have.

And so what we would like to see from the president is not just a
targeted approach, but resources dedicated to trying to deal with the
particularized problem that he himself so eloquently identified post-
Trayvon Martin. And now we`re glad that we`re beginning to see
administrative effort put behind those words.

HAYES: It also seems like one of these places where, it`s like, if
the expectation is always you`re a thug because the person on the other
side of the glass hears your music, it`s easy to start thinking like, well,
then it doesn`t actually matter what I do, right, because if no matter what
I do on this side of the glass playing my music, I`m a thug to you out
there, it becomes very easy to stop caring about what you actually...

(CROSSTALK)

PETERSON: It does.

And you`re describing the mentality of too many young people in
America right now, because the system time and time again just sort of
presents them with a lack of options.

And in lack of options, you can sort of make those kinds of
conclusions and you can be right. So, the Zimmerman trial sort of
reinscribes those things. And hopefully we will have a different outcome
here. But there are too many of these big trials that we look at, and we
sort of lose sight of some of the everyday things that are going on, where
people are sort of making these connection between race and bias and
injustice in our society.

HAYES: Congressman Hakeem Jeffries and MSNBC contributor Dr. James
Peterson, thank you, gentlemen, both.

PETERSON: Thanks.

HAYES: That is ALL IN for this evening.

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

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