updated 7/19/2004 10:07:46 AM ET 2004-07-19T14:07:46

Guest: Dominick Dunne, Lisa Bloom, Julia Levy, Samantha Ettus, Leslie Marshall, Jack Burkman, Jim Cramer 

JOE SCARBOROUGH HOST:  Tonight‘s top headline, Martha Stewart gets five months behind bars.  The real deal - her stint in the slammer only makes Martha, Inc. stronger.

Welcome to SCARBOROUGH COUNTRY, where no passport is required and only common sense is allowed.

A bumpy ride today for Martha Stewart.  She‘s sentenced to five months in prison, but her company‘s stock soars on the news.  Can Martha‘s empire survive her incarceration?

Then, Air America Radio got its report card today, and let‘s just say it wasn‘t at the top of its class.

Why aren‘t liberals on the radio able to succeed?  We‘ll be talking about that.

And will the Bush economy bring down the president this fall?  CNBC‘s Jim Cramer thinks so, and we‘re going to ask him why a little later on.

UNIDENTIFIED MALE:  From the press room to the courtroom to the halls of Congress, Joe Scarborough has seen it all.  Welcome to SCARBOROUGH COUNTRY.

SCARBOROUGH:  Well, Martha Stewart is headed for hard times.  It‘s time for the real deal.

Well, why is Martha Stewart going to jail, but singing?  Well probably because on the same day that Martha gets sentenced to five months in prison, her company‘s stock has floated upward 37 percent.

Now, the buying stampede earned Martha, Inc. over $90 million in a single day.  So let me get this straight.  On the same day Martha‘s thrown in jail, she rakes in close to a 100 million bucks.

Hey, if that‘s the world that we‘re living in now, I only have three words for you.  Lock me up.

I‘m not concerned that Martha, Inc. got even richer today.  I‘m upset that she was sentenced at all.  This case was supposed to be about securities fraud.  Remember that?

But the prosecutor spent tens of millions of dollars trying to nail her, and couldn‘t even make a single securities charge stick.  Instead, they relied on witnesses and jurors who get caught in damning lies, and put Martha Stewart away, not because of what she did, but because of who she was.

You know, I learned in law school that justice was supposed to be blind.  But in State v. Martha Stewart, old lady justice lifted her blindfold and nailed a defendant who should have never been tried.

But don‘t cry for the $90 million woman.  As she told the world shortly after her sentencing, “I shall return.”  And yes, Martha, that is today and tonight‘s real deal.

So, this is what Martha Stewart told the press right after finding out that she was headed for jail.

(BEGIN VIDEO CLIP)

MARTHA STEWART, FOUNDER, MARTHA STEWART LIVING OMNIMEDIA, INC.: 

Perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines.

Our magazines are great.  They deserve your support.  And whatever happened to me personally shouldn‘t have any effect whatsoever on the great company, Martha Stewart Living Omnimedia.

(END VIDEO CLIP)

SCARBOROUGH:  And, you know, she went on to say that those little Christmas balls that she makes out of pinecones and pixie dust that you can hang on the tree, those are great, too.

Martha, what was that about?

Anyway, NBC‘s chief legal correspondent joins us now with the latest - Dan.

DAN ABRAMS, NBC CHIEF LEGAL CORRESPONDENT:  Joe, I don‘t care what you hear from anyone, this was a great day for Martha Stewart.  You hear some of these hardcore Martha Stewart defenders saying, oh, we were hoping for probation.

No one was realistically hoping for probation.  This was as good as they could have hoped for.  There was a sentencing guidelines range here, as you know - 10 to 16 months.

Not only does she get the 10 months part of it, she gets half of it at home, half of it in a federal prison.  She‘s gotten to choose which prison she wanted.  The judge is going to recommend that prison.

She even got to choose which of her homes she gets to serve this in.  She‘s chosen her Bedford, New York, home.  And while she‘s there for that other five months, she‘ll be able to be out and about for 48 hours a week.  She‘ll be able to go to work and go to the store if she needs to, to go to religious services.

And maybe most importantly, the judge is saying, we‘ll let you go forward with your appeals, and won‘t even force you to serve the sentence right now.

So, bottom line is, this was a great day for Martha Stewart.  A lot of questions about whether she should have made the comments she did outside of court, but I don‘t think that‘s ultimately going to have any effect on her appeal - Joe.

SCARBOROUGH:  All right, Dan.  Thanks a lot.

Certainly not.  And I‘d be a little chipper, too, if I made $90 million in the same day that I was headed for - headed to the slammer.

Now, Dan was joined earlier by Dominick Dunne, who is a friend of Martha Stewart, and you was at the hearing today.

(BEGIN VIDEO)

DOMINICK DUNNE, FRIEND OF MARTHA STEWART, VANITY FAIR:  I was quite touched by her.  I mean, you know, she‘s been criticized all the way through for never breaking down.

It seemed to me - she didn‘t cry, but, I mean, she was sort of - her voice was choked.  There were sort of tears in her voice as she said it.  I thought that it was quite moving.

But then when she got outside, I didn‘t actually - I couldn‘t hear it as it was happening, but I subsequently have seen it.  And I hated the pitch that she did about the magazine and the thing - it was a whole different attitude outside.

But also, in the courtroom, the courtroom was filled.  People were standing in the back.  I mean, there was no gasping, nothing like that.

ABRAMS:  She sounds ready for prison.

DUNNE:  She does.

ABRAMS:  I mean - right?

DUNNE:  She does.

ABRAMS:  How do you think she‘ll handle it?

DUNNE:  Oh, I think she‘ll handle it well.  I mean, I think anything she takes on - and she‘ll take on prison, believe me.  And she‘ll probably end up, when she leaves in five months or four months, if she gets off early, I mean she‘ll probably be a very popular figure there, I‘m sure.

ABRAMS:  If you had some words of wisdom for Martha Stewart - if she said, “Dominick, what do I need to do now, in terms of my public perception and the way that I should move forward” - what would you say to her?

DUNNE:  I‘d say, “Go to jail.”

(END VIDEO)

SCARBOROUGH:  Well, that‘s what she‘s doing.  And I‘m joined now by “Court TV” anchor, Lisa Bloom.  We also have Julia Levy of the “New York Sun,” who has been following this through the entire trial.  And both were in the courtroom for Martha‘s sentencing.

Also with us is PR expert, Samantha Ettus, who will tell us if Martha‘s company will be living or dead by the end of this ordeal.

But Lisa Bloom, let‘s start with you.  I know you‘ve got to be giddy, along with everybody else.  It‘s been a great day for Martha Stewart.  Five months in prison, she makes $90 million.

A lot of people are still asking, though, should Martha go to jail for a securities violation, when the state never even charged her with securities fraud?

LISA BLOOM, ANCHOR, “COURT TV”:  Well, they did charge her with securities fraud, but that was thrown out before it went to the jury.  She has been convicted.

I‘m certainly not giddy.  I think it‘s interesting how the judge bent over backwards in every area where this judge had discretion.  She exercised it in favor of leniency for Martha Stewart.

SCARBOROUGH:  Why did she do that?

BLOOM:  Because she said that she thinks that Martha Stewart has suffered enough.  That was one reason.

She said that she‘s received 1,500 letters from Martha‘s supporters, each and every one of which Judge Cedarbaum said that she had read.  And she felt that Martha should get the lowest possible sentence as a result.

And, you know, I‘ve got to tell you something.  Most federal defendants are not treated this way.  Martha Stewart does not have to go through any drug testing.  Martha Stewart may not have to have an electronic bracelet in her home.  The judge said she might reconsider on that issue.

But most importantly, she‘s out on bail, Joe, until her appeal is decided.  That could be years.  That gives Martha Stewart‘s lawyers an incentive to ask for every continuance and every delay, and to put off the inevitable, which I think is losing that appeal.

But it could be years before she goes to jail, as a result of that gift to her by Judge Cedarbaum.

SCARBOROUGH:  Now, sounding like the governor of California, Martha promised this on the courthouse steps earlier today.

(BEGIN VIDEO CLIP)

STEWART:  And I‘ll be back.  I will be back.  Whatever I have to do in the next few months, I hope the months go by quickly.  I‘m used to all kinds of hard work, as you know, and I‘m not afraid.  I‘m not afraid whatsoever.

(END VIDEO CLIP)

SCARBOROUGH:  Julia Levy, you spoke to the lawyers after today‘s sentencing.  What did they tell you?

JULIA LEVY, REPORTER, “NEW YORK SUN”:  Her appeals lawyer told me that he plans to argue in probably November, and they‘ll probably be making the decision by spring, he estimated.  But, as Lisa said, anything could happen going forward.

SCARBOROUGH:  You know, Julia, you‘ve been following this case very closely for the “New York Sun.”  Were you surprised by Martha Stewart‘s cocky performance?  I mean, it was a cocky performance on the courthouse steps after finding out that she was going to jail.

LEVY:  Well, there is really no precedent for her performance, because she hasn‘t opened her mouth through the whole trial.

But I guess she said, coming out of the courtroom, to reporters, that she wasn‘t surprised by the sentence.  So I suppose she had prepared herself for it.

And she is known, I guess, as a pretty cocky person.  So, no, I guess I wasn‘t.  But I guess the ad min - the pitch was a little bit extreme, I thought.

SCARBOROUGH:  I think so.  “Buy my magazines.”  Buy my fruit rollups, buy - yes.

BLOOM:  And, Joe, let‘s keep in mind who is the by far, overwhelmingly, number one shareholder in Martha Stewart Living Omnimedia.  That‘s Martha Stewart.

So, she‘s talking about lining her own pockets, as she stands on the courthouse steps on the day that she is sentenced for a felony conviction.

Talk about a woman who just does not get it.

SCARBOROUGH:  Apparently not.  Now, Martha did say earlier today, also, that she was sorry for the pain that was caused by her actions.  Let‘s take a listen.

(BEGIN VIDEO CLIP)

STEWART:  More than 200 people have lost their jobs at my company as a result of this situation.  I want them to know how very, very sorry I am, for them and their families.

(END VIDEO CLIP)

SCARBOROUGH:  Samantha, let me bring you in here.  You‘re a PR expert.  Do you think the American people are going to buy her apology?  And is that going to help her company?

SAMANTHA ETTUS, FOUNDER & PRESIDENT, ETTUS MEDIA MANAGEMENT:  I think right now the company and everyone involved with Martha Stewart is just excited that there is some idea that they‘re moving forward and that life will begin again for the company.

There‘s a lot of depth there.  Sharon Patrick, the CEO, is definitely moving ahead full force with their plans.  And the company has done surprisingly well, given what‘s happened.

SCARBOROUGH:  You know, well, tell me.  If you were Martha‘s PR adviser, PR expert - and I take it, judging from today‘s performance, that Martha is her own adviser - what would you have said to her after she went out saying, buy my magazine, help me out, invest in this company, we‘re coming back?

ETTUS:  Well, if you look at the history of how Martha has behaved since she was first accused, she initially handled it very poorly, in that she effectively went into hiding, which is never a good idea when you‘re maintaining your innocence, because she acted as though she was guilty.

In the last few months I‘ve actually been impressed with how she‘s behaved, because she acted as though she was leading a normal life again, appearing at events.  That was a good move on her part, because if she‘s going to maintain her innocence, she has to act innocent.

On the courthouse steps, I don‘t think it was as bad as some people are saying it was.  I think in many ways, she‘s been obviously very humbled by this experience.

And relatively - it was a relatively humble speech in some ways, when you think about the fact that she was talking about jail time.  It‘s hard to be very cocky when you talk about going to jail.

SCARBOROUGH:  All right.  Stay with us, because we‘re going to have a lot more with you, the rest of our panel, talking about Martha Stewart.  We‘re going to show you the numbers that Martha, Inc. made today and what that means to Martha Stewart personally.

And later, Al Franken‘s Air America still only has a handful of stations, and the ratings that came out today were about as bad as my high school grades.

Is it time to admit that there‘s just no room for liberal talk radio? 

We‘re going to be debating that in just a little bit, so don‘t go away.

(COMMERCIAL BREAK)

SCARBOROUGH:  We‘re back with Lisa Bloom, Julia Levy and Samantha Ettus talking about Martha Stewart.

You know - let me go to you right now, Lisa Bloom.  If not contrite, Martha appears at least to be prepared for prison.  Let‘s take a listen to what she said.

(BEGIN VIDEO CLIP)

STEWART:  Whatever I have to do in the next few months, I hope the months go by quickly.  I‘m used to all kinds of hard work, as you know, and I‘m not afraid.  I‘m not afraid whatsoever.

I‘m just very, very sorry that it‘s come to this, that a small, personal matter has been able to be blown out of all proportion, and with such venom and such gore.  I mean, it‘s just terrible.

(END VIDEO CLIP)

SCARBOROUGH:  Lisa Bloom, do you agree this is a small personal matter that was blown out of proportion because of venom and hatred and gore?

BLOOM:  I haven‘t seen any venom or gore.  Martha Stewart made the oddest statements today.  There was that one.  There was her statement, I was shoved and almost suffocated.

She said in court, it‘s like oil spreading across a vast landscape.

Sometimes I wonder what she was actually talking about.  This was just a simple, criminal matter.  It was a small crime.  She got the lowest possible sentence.

You know, this is not an epic battle of Martha Stewart versus the world.  This was Martha Stewart facing up to the consequences for her bad behavior.  Simple as that.

SCARBOROUGH:  I want to show all of you some facts and figures that came out today.  You know, a lot of people do believe that Martha appeared arrogant today.

But Wall Street didn‘t think so.  After hearing news about her five month sentence and Martha‘s statements on the courthouse steps, Martha Stewart Living Omnimedia‘s stock jumped 31 percent, earning her company $95 million in one day.

Samantha Ettus, I certainly don‘t agree with the PR move she made, but obviously, Wall Street did.  Why?

ETTUS:  Well, you have to admit that the end is in sight for this company in terms of bad times.  This was the worst of it, and it‘s finally coming to a head.

And I think, once she serves, it‘s pretty much behind her.  America loves a comeback story.  And this - we‘re watching a comeback story right now.

And when you look at the - the sentiment on Wall Street is that she‘s gotten through this period, and the company has survived.  And once she‘s out, the company can only increase in terms of sales and getting advertisers back to the magazines and the television show.

SCARBOROUGH:  That‘s remarkable.  You know, Martha talked about the ordeal that she went through, and this is what she said.

(BEGIN VIDEO CLIP)

STEWART:  I have been shoved and almost suffocated to death during that time, all the while more concerned about the wellbeing of others than for myself, more hurt for them and for their losses than for my own, more worried for their futures than the future of Martha Stewart the person.

(END VIDEO CLIP)

SCARBOROUGH:  Julia, you sat in close proximity to Martha Stewart the person.  You followed Martha Stewart the person throughout this entire trial.

Do you buy that line?  That she was almost choked and suffocated by her caring for other people - caring for other people more than herself?

LEVY:  It‘s hard to tell.  I mean, she wasn‘t going out and hugging people in the audience.  She might have been doing it privately.  I don‘t know.

But it seems like - I mean, her lawyer was arguing today for leniency, saying, if you convict her, her company is going to go away, her company is going to be destroyed.  It wasn‘t today.  That was pretty obvious.

She said she was sorry.  I don‘t know if she - it‘s hard to read her, really.  I don‘t know ...

SCARBOROUGH:  Yes, but it certainly was a much, much different tack today than what we‘ve seen throughout this entire process, hasn‘t it been?

LEVY:  It‘s been very different.  I mean, as I said before, during the entire trial she said “hello” a couple of times, and that was it.  And today she gave this entire speech that she had written out on a piece of white paper, which she read in court and then read part of outside the courthouse, and then sort of went off in this ad pitch.

So, I don‘t know what moved her today to do this, but it was definitely a departure from before.

BLOOM:  So, you ...

SCARBOROUGH:  Lisa Bloom, what ...

BLOOM:  So, you never hear her say that she‘s sorry for her behavior. 

She says she‘s sorry for the situation.

What she means is, she‘s sorry that she was prosecuted.  She‘s sorry that all of this has happened.

She‘s not sorry for the mistakes that she made.  She‘s sorry for the media interest in the case and she‘s sorry that she got caught.

SCARBOROUGH:  Well, what kind of impact is this statement going to have?  She goes out on the courthouse steps.  She makes these very melodramatic statements.

BLOOM:  Yes.

SCARBOROUGH:  On the same day her stock rises $95 million.

BLOOM:  Yes.

SCARBOROUGH:  I would guess that the judge that‘s reviewing this for appeal is not going to take all of this very favorably.  I mean, it certainly can‘t help her case going down the road, can it?

BLOOM:  Well, as a matter of fact, none of this will be relevant to the case on appeal, because the appeal is decided based on the courtroom record, not what happens outside the courtroom.

Martha Stewart has to know that once she‘s sentenced, she can pretty much say what she likes, and it‘s not going to affect that appeal.

But I think her behavior today was rather odd.  I think she didn‘t express any remorse.  She‘s clearly never going to express any remorse.

But one thing that‘s very, very helpful to Martha Stewart is that her split sentence means that she can conduct business during the portion of her sentence where she‘s subject to home confinement.  You cannot hold a job or practice a business from a penitentiary.

So, only five months, for only that short period of time will Martha Stewart be barred from participating in her business.  Once she‘s at her home, she can get back to work, and I think the stock market reflects the confidence investors have in her ability to do that, pretty shortly.

SCARBOROUGH:  And Samantha, we‘ll give you the last word.  What should Martha Stewart do moving forward to make sure that her company continues to grow and that this is just a blip on the radar screen as it pertains to her company?

ETTUS:  Well, first of all, five months in a corporate life cycle is a blink of an eye.  It really is.

And so, when she finishes serving, she‘s going to be back in full force.  And I think that everything‘s going to be aligned to go her way.  This is going to be a success story.

SCARBOROUGH:  All right.  Thanks so much.  I certainly appreciate all of you for being with us.  Lisa Bloom, Julia Levy and Samantha Ettus - thank you so much.

BLOOM:  Thanks, Joe.

ETTUS:  Thank you.

SCARBOROUGH:  All right.  Coming up, does Rush Limbaugh need to watch his back, now that Air America is hanging around?  If today‘s ratings are any indication, the answer is “no.”

But why doesn‘t liberal talk radio work?  We‘re going to be talking about it and debating it, coming up next.

(COMMERCIAL BREAK)

CONTESSA BREWER, MSNBC HEADLINE NEWS:  Hello, I‘m Contessa Brewer with the headlines.

The FBI‘s weekly bulletin to law enforcement agencies warns Al Qaeda may try to recruit non-Arabs to carry out attacks inside the U.S.  According to the bureau, Al Qaeda especially wants U.S. citizens or legal residents.  Of special concern, people with ties to Islamic extremist groups in North Africa and South Asia, or people who have traveled there.

Meanwhile, the undersecretary for homeland security warns massive security threats for the political conventions this summer could have a downside.  He tells AP Radio, terrorists might target locations outside the convention cities to distract from the events in Boston and New York.  As of yet, officials say there have been no credible threats.

Crisis in the Gaza Strip after a recent wave of kidnappings, including four freed French citizens and a Palestinian police chief.  Two senior Palestinian security officials have resigned.  The Palestinian prime minister called an emergency session on the future of his government.

Now back to SCARBOROUGH COUNTRY.

UNIDENTIFIED MALE:  From the press room to the court room to the halls of Congress, Joe Scarborough has seen it all.  Welcome back to SCARBOROUGH COUNTRY.

SCARBOROUGH:  Hey, welcome back to our show.

Now, four months ago, Al Franken took to the air waves saying his radio network, Air America, was the left‘s answer to Rush Limbaugh.  But judging from his ratings released today, El Rushbo has very little to worry about.

I‘m joined now by radio talk show host, Leslie Marshall, and Republican strategist, Jack Burkman.

Leslie, first let me ask you.  You know, these were the real ratings for Air America.  They were released today.  Let‘s look and see how the networks stack up.

In New York, Air America drew 1.7, while Rush Limbaugh‘s WABC drew a 4.8.

Tell me, why isn‘t Air America catching on right now?  I know they‘ve had a lot of business and economic problems.  But does this have to do with a business model?  Or does it have to do with the fact that they get people in radio that don‘t do radio?

LESLIE MARSHALL, RADIO TALK SHOW HOST:  Well, OK, Joe.  I said this a few months on your show.

First of all, yes.  This isn‘t about liberals, and it isn‘t about this network.

First of all, Rush Limbaugh is not on a conservative network.  WABC has historically had better ratings, as far as I know, my 17 years of talk radio, than WLIB.  So, one, it‘s positioning.

Two, it‘s marketing.  And I don‘t think marketing all of these people as, quote, liberal talk show hosts on a liberal network.

And what you said at the onset, which is that these really aren‘t talk show hosts.  The way people get syndicated, Joe, and you know it.  I‘ve been syndicated.  I was the youngest person syndicated.  Big deal.  Put that on my tombstone.

Does that make you a success?  Rush Limbaugh started in a market and did very well.  He did well in Sacramento.  They pushed him out into syndication.

Larry King did that, moved to television.  The list can go on and on.

SCARBOROUGH:  And, Leslie, they did it slow ...

MARSHALL:  These people don‘t ...

SCARBOROUGH:  ... they did it ...

MARSHALL:  ... these people don‘t have a ratings track record in a local market and, in a sense, haven‘t earned their position, except for name recognition ...

SCARBOROUGH:  And, Leslie, ...

MARSHALL:  ... and value ...

SCARBOROUGH:  ... they‘ve done it all at once instead of doing it slowly.  I mean, ...

MARSHALL:  Yes.

SCARBOROUGH:  ... tell our viewers, if you will, just how stupid - and I‘ll get to you in a second, Jack - I don‘t want to say it‘s stupid, but let‘s say, how radical the concept is that you‘re going to come in and say, you know what?  We‘re going to start an entire radio network.

We‘re going to go out across the country.  We‘re going to buy up radio stations.  We‘re going to create this great, liberal radio network and make millions and millions of dollars, and elect John Kerry.

Can you explain just how implausible that theory, that business theory is?  It‘s asinine, isn‘t it?  You‘re laughing.  Admit, that‘s the stupidest damn marketing strategy for a radio network that you‘ve ever heard of, isn‘t it?

You can say yes.  It‘s OK.  It won‘t hurt you.

JACK BURKMAN, REPUBLICAN STRATEGIST:  Ask and answered.

LESLIE MARSHALL, RADIO TALK SHOW HOST:  I‘m going to say yes.  I‘m hesitating to saying another name.  There was a young woman out here on television who I remember once watching.  I am a fan of hers.  She is a comedian who said that she was going to kick Jay Leno‘s butt and David Letterman.  And she is not on anymore. 

I have always taught to be humble and go in and really do great work.  And if you do, the people will watch or will listen.  The ratings will follow.  You will be a success, and then somebody will syndicate you whether it‘s radio or TV.  You are right, Joe.  They did this all at once and unless you really can put your money where your mouth is, don‘t put your mouth out there. 

SCARBOROUGH:  That is what Al Franken did.  That‘s what a lot of people did.  It is important for everybody to remember, Rush Limbaugh didn‘t start in 300 or 400 markets.  He started in Sacramento, California.  Nobody knew who he was, and he won them over fan by fan.  It was like a grassroots campaign.  It caught fire.  Jack Burkman, you have been predicting the failure of this radio network from the beginning.  Why?

BURKMAN:  Well, I guess I have an undue proclivity for black and white realities.  But here you have another one.  Products failing because there‘s no public demand for them.  Why does a certain brand of paper towels go away?  Or a certain brand of soap go away?  Why are Bill Scarborough and Bill O‘Reilly tearing up the airways?  Because there is a demand for the products.  People like them, and like their ideology. 

Air America is failing for one reason, it has nothing to do with   structure or how they went into it.  I mean sure.  Al Franken is a terrible face for it.  I couldn‘t imagine the person who was silly enough to make Al Franken the face of the network.  A person with no political or policy experience.

But, it‘s failing for one reason and one reason only, and that is there‘s no public demand for it.  The country is moving right.  What people like Leslie are not admitting is even people like John Kerry; everybody is ashamed of calling themselves a liberal.  I don‘t even think Leslie would call herself liberal.  John Kerry...

MARSHALL:  I‘m going to do it right now.

BURKMAN:  Well then you are bolder.  You‘re bolder and more honest than most people in your party.

MARSHALL:  I‘m going to tell you why, because I don‘t agree with you even   though that is your job to be a strategist, and I will tell you why.  You may say well, I don‘t know who you are.  I had a good run on an ABC satellite network out of New York City for two years.  I was the number one female at night in the country.  When the network went, I went.

There is a person across town on this competitor station who is a liberal.  Is on national television and his show is doing very well.  He is paired with somebody else you know that you haven‘t mentioned named Sean Hannity.  It is not.  I don‘t agree with you about liberal and conservative.  I‘ll tell you.  Not only am I proud to say I‘m a liberal, but obviously...

SCARBOROUGH:  You are an anomaly, Leslie.

(CROSSTALK)

MARSHALL:  No, I‘m not.  Nearly half of the country is liberal.  Talk radio listeners are predominantly conservative. 

BURKMAN:  Leslie if talk radio...

(CROSSTALK)

SCARBOROUGH:  Hey, listen.  Hold on.  I hate to play traffic cop, but I‘m going to have to.  Jack Burkman, your turn.  Go.

BURKMAN:  Well, you know Joe, there‘s so many myths with all this.  The country is supersaturated with liberal media.  Part of it is—and Tom Daschle and all the Democrats got together in the big democratic caucus and they said we need Air America.  We need liberal media.  By god the whole media is liberal.  You‘ve got FOX news.  You‘ve got this show.  There are a few cable outposts fighting the good fight. 

Other than that I mean, Dan Rather, Peter Jennings the whole—the morning shows.  Everything.  The whole market is super saturated with nothing but fiercely liberal programming.  The idea that we need more liberal programming is almost a colossal joke. 

SCARBOROUGH:  All right.  Leslie, I‘m going to let you respond.  But first, I want you to also listen to what the editor and publisher of the radio talk show “Industry‘s Bible” said.  He said Air America was a disaster waiting to happen.  And this is what Editor Michael Harrison said:

“They had no business plan in terms ,in terms of radio, outside of a political quest that had nothing to do with the radio.  No one tunes into a network.  No one wants a station to be exclusively one topic.”

Leslie, I think we have all agreed on that.  But you seem to be saying

here tonight that there is room for conservatives and liberals on the same

radio   network.  Respond to what Jack Burkman is saying.  Because he‘s

saying   that‘s not the case in 2004.

                MARSHALL:  I don‘t agree.  I mean, I‘m not Rush Limbaugh.  I‘m

certainly not his age.  Give me some time.  But quite frankly, there are many of us.  If a station is willing to put on a person, whether they are a liberal or conservative, a civil libertarian, a reformist, a Green Party, or a moderate or somebody who is just a darn good talk show host, that person will get ratings, and the people will listen, and they will buy the   products and the advertisers will come.  And they will be a success.

BURKMAN:  Radio stations, let me tell you something.  I know a lot of radio   executives.  And they would put on dogs, cats, and monkeys if they could get ratings.  It is not about...

MARSHALL:  True.

BURKMAN:  You are arguing there is some type of structural bias, or the stations have a structural bias.  That‘s true with a handful of stations.  If these stations thought they could sell liberal hosts, they would put dogs and cats in the chair and let them broadcast.  All they want are ratings.  They want the books.  You know what radio is about.  It is even worse than television in that regard in some respects.  It‘s numbers, numbers, numbers.  Whatever sells, they‘ll sell.  The reason they don‘t have liberal hosts is they don‘t sell.

MARSHALL:  I don‘t agree. 

SCARBOROUGH:  Leslie, explain to viewers out there why the only two names—if you went on -- 10 years ago if you said, who is the top person in radio, they may say Rush Limbaugh.  And of course I think Larry King was at the end of his mutual radio network deal.  It used to be Larry King.  Rush Limbaugh took it over.  But you ask people today, 2004.  Who are the big names in talk radio?  They are going to tell you it‘s going to be Rush Limbaugh, Sean Hannity.

MARSHALL:  Dr. Laura. 

SCARBOROUGH:  Dr. Laura.  Another conservative.  You are not going to hear liberals in let‘s say the top five, top 10.  Why is that?  Explain that. 

MARSHALL:  Well, first of all, we are not given the opportunity.  I don‘t even—I don‘t know how honest I can be. 

SCARBOROUGH:  Be really honest.  Go ahead. 

MARSHALL:  No.  There won‘t be any wardrobe removal, I promise.  The radio and television networks that my agents are currently sitting down talking   to, don‘t know what to do because they like me in the way I do it, but “I‘m a liberal.”  Where do you put the liberal?  And quite frankly, there is --   and I don‘t want to say an agenda, but there is a set up.  And I have been doing talk radio for 17 years. 

I have been told to my face—I already have a liberal on the station.  I already have a woman on the station.  A woman and a liberal at the same time from the left coast, from L.A.  I‘m telling you, look at the breakdown.  You have to look at facts.  You are the strategist, Jack.  Look at the facts.

How many stations are there?  How many liberals are on each of those stations?  Let‘s go further.  How many women that are liberals are on each of those stations if you‘re asking me personally?  Television, you say it‘s a liberal media.  How many liberals are hosting shows on this network?  How many are hosting shows on the competitor, and all the major networks?  Please.  Enlighten me on this. 

BURKMAN:  I‘ll enlighten you.  Look at the morning shows.  Look at “The Today Show.”  Look at CBS “The Early Show.”

MARSHALL:  Those are news.  News and talk are two different things.

BURKMAN:  But those are very liberal programs with very few conservative voices.  Look at CNN.  My goodness gracious.  All you have to do is flip through the tube and you can see it.  You say why are there so few?  You say OK, you are a liberal host who is trying to succeed.  Maybe you will succeed.  The point is, there aren‘t many of you.  Yes, there are a few.  But why are there so few?  There are so few because there is no public demand for your product.

SCARBOROUGH:  All right.  Jack Burkman, we are going to have to leave it there.  Leslie Marshall, as always, thanks for being with us.  We greatly appreciate it.

Now still to come, CNBC‘s Jim Kramer says he thinks President Bush is

going to be searching the want ads come November.  And he is going to be

here to tell us why.  Plus the match up of President Bush and John Kerry

should make for   great debate this is fall, but   how do presidential

debates today differ from those in the   past?  You‘re going to be

surprised.  We‘ll tell you, so stick around.

ANNOUNCER:  Tonight‘s SCARBOROUGH COUNTRY challenge.  Who was the first third party candidate to appear in a presidential debate?  Was it A) George Wallace, B) Ross Perot, or C) John Anderson?  The answer, coming up.

(COMMERCIAL BREAK) 

ANNOUNCER:  In tonight‘s SCARBOROUGH COUNTY Challenge we asked, who was the first third party candidate to appear in a presidential debate?  The answer is C) John Anderson.  In 1980, the league of women voters sponsored a debate and invited Ronald Reagan, Jimmy Carter, and John Anderson.  Seeing Anderson as a threat, Carter refused to participate.  Reagan and Anderson ended up debating without Carter.  Now back to Joe.

SCARBOROUGH:  Did I tell you that?  Am I (UNINTELLIGIBLE) whiz kid or what?  How about my music?  Do you go home at night and dance to that music?  That is some good stuff, Evan, yes. 

All right.  Hey, I‘m just your average Joe, and I‘ve got issues.  First of all, I‘ve got issues with John Kerry as you know.  Whoopi Goldberg got canned by Slim-Fast because she made some sort of off-colored jokes at a John Kerry fundraiser last week. 

She made sexual suggestive jokes and called the President “a thug.”  Now, Whoopi‘s “R” rated performance helped earn John Kerry‘s campaign $7.5 million in one night.  Maybe that‘s why Kerry blissfully told the Manhattan audience that Whoopi and the other performers calling the President a murderer and a thug were the best that America had to offer.  The “New York Post” reported that “Kerry told the crowd that every single performer on the bill had conveyed to you the heart and the soul of our country.” 

Now, forget for a minute that any political candidate would lavish such praise on performers who is so viciously attack the sitting president of the United States, and called him a killer and a thug.  What adds insult to injury is the fact that the same candidate flip flopped the next day when   the lurid performances drew fire from the media and the Bush campaign. 

Now, if you‘re going to praise Whoopi on the night she helped you raise $7.5 million, and then at least pretend you remember her name the next morning.  After all, these performers had a first amendment right to say   their piece about the President.  But if John Kerry really thinks that that hate speech is the “heart and soul of America,” then the Broomen (ph) billionaire is more isolated from middle America than even I thought.

Next issue, the NAACP‘s hate speech.  As we have been reporting over the past week the NAACP spending the past four years equating George Bush to neo-Nazis who murder old black men, and comparing his political philosophy to that of slaveholders.  NAACP chairman Julian Bond also compared the President‘s cabinet to the Taliban.  One of the most tyrannical regimes in modern world history.

So why does the IRS still give this unambiguously political attack operation tax-exempt status?  No one doubts that the NAACP is nakedly partisan.  The group‘s increasingly radical leaders are little more than   shields for the Democratic Party.  So why do the feds give the NAACP a free pass?  And why are Americans united for separation of church and state   now fighting to take away Jerry Falwell‘s tax-exempt status?

They‘ve got to know.  If Falwell‘s tax-exempt status goes away, then so too, will hundreds of African American churches across America who are often used for Democratic outreach operations every four years. 

As the NAACP goes, there is no question that their actions, their ad campaigns, and their acid-laced remarks should require the Internal Revenue Service to strip them of their tax-free status once and for all.

And finally, I‘ve got issues with Barbie.  That‘s right.  Barbie.  The folks at Mattel first brought you Barbie to little girls everywhere nearly half a century ago.  Back then Barbie was good, clean, wholesome fun, even if she dated that creepy Ken guy.  Well, say goodbye to  all-American Barbie, because this summer the girl next door is getting into S&M.  

Mattel introduced Cat Woman Barbie, compliments of Halley Barry dressing up in leather and whips.  Or should I say Meow?  Mattel‘s freaky little Barbie is still being marketed to little girls everywhere.  But this year‘s model features a whip, ripped pants, and a small zip off top.  Not a great message to send to your preteen girl.  Unless of course, you want your preteen girl to dress like a slutty sex diva.  

I have no issue with Halle Barry dressing up in leather and whips, because Halle Barry is—well, she‘s Halle Barry.  But Mattel‘s marketing move is    crass.  And it further corrodes our young kids‘ culture.  It‘s just plain wrong.  Mattel, you should be embarrassed.  Take the Barbie dolls off the market.

Now, President Bush should be in a position to win in a landslide this fall.  Iraq is on the mend.  Two intelligent reports validate his reasons for going to war.  And the economy is roaring back.  But my next guest doesn‘t think the President has a chance of being re-elected.  I asked CNBC‘s Jim Cramer if the Bush-Cheney ticket was a lock. 

JIM CRAMER, CNBC HOST, KUDLOW & CRAMER:  It hit me right in the sore spot.  It was a lock and I don‘t think it is anymore.  Unless Dick Cheney is removed from the ticket, it will not be a lock.  

SCARBOROUGH:  I want to read something you have recently have written.  “Bush will be forced out in November and a new man will be president, a man who may not be better for the stock market, but one who arguably not be   worse if simply because a gridlocked government is better than the drunken spending and the no-vision team we have in now.”  Explain. 

CRAMER:  A lot of people are fed up.  A lot of people don‘t believe that these guys have any plan beyond making rich people even richer.  I‘ve been a big beneficiary, so I‘m thrilled.  Thank you, President Bush.  But it is time to get serious.  The spending levels are so absurd that even people, who I regard as being conservative Republicans on the social agenda, are getting appalled on Wall Street about what they regard as being   recklessness.   

SCARBOROUGH:  The question is, at what point do these huge deficits, does the huge—does the record-breaking national debt, at what point does that drive up interest rates so much that it causes the economy to slow down,  tax revenues coming into the federal government to slow down, and for the deficit and the debt to explode even more? 

CRAMER:  Look, I think that can happen.  I don‘t want to be a Gene Sterling (ph) here, a smart guy, love the guy.  But he has been saying we should be at four, five, six  percent for three years.  We never had that.  The 10-year is at 4.5.  We haven‘t seen the explosion in interest rates up. 

What I‘m saying is that we have also not had people step forward and say I want to own stocks.  I want to own stocks.  They don‘t want to own stocks,   because stocks are the ultimate long dated assets.  And people are losing confidence in the future.  It‘s not being expressed in the bond market as much as it is being expressed in the stock market.  

SCARBOROUGH:  And you are saying that is because of reckless spending of Capital Hill and the White House?  

CRAMER: I think it‘s a belief that maybe if you get a Democrat in there, at least nothing will happen.  We‘ll go back to the days when nothing happened out of Washington.  We didn‘t have to worry about it.  Right now we feel very focused on it.  We feel that there is not a single bill gets vetoed.  I had to think that President Bush, at one time I thought that he was fabulous for the stock market.  Right now we are in indecision time.  That is not good for anybody.  But I have to tell you.  I don‘t think the market goes down on a Kerry election anymore.  

SCARBOROUGH:  Just so I can tell my audience what you are talking about, George W. Bush to date has not vetoed a single spending bill, hasn‘t vetoed a single  appropriations bill.  He‘s vetoed absolutely nothing  that‘s come across his desk.  He signed everything while the deficit and the debt have   reached record levels. 

The question is, will Wall Street care enough?  Will the voters care enough to send a message to congress and to the White House that they need to be more fiscally  conservative in the future, and need to act like the party of Reagan says they‘re going to act? 

CRAMER:  First of all, I back the tax cuts.  I backed the dividend tax

cut.  These were all great.  I thought that they were going to be

accompanied by a cut in spending.  Now I look like a (UNINTELLIGIBLE),

Democrat who    fought to the bank with this guy. 

                Yesterday I saw a dollar bill that has    Lawrence Summer‘s signature

on it.  This is a guy.  Bring him back.  I‘m fed up.  Can‘t you get your guy to do a veto of like a highway bill or something?  Would that be so hard? 

SCARBOROUGH:  It‘s absolutely unbelievable.  You go back.  You look at the spending on so many different bills.  Look at the farm subsidy bill a few years ago.  Absolutely outrageous.  I am telling you if Bill Clinton in the 1990‘s had tried to pass some of these spending bills, the Republican congress would have lynched him.  They would have run him out of town on the rail. 

And yet this—and you know what?  I don‘t blame this all on George W. Bush.  I blame this on the Republican congress that is sitting there meekly  and saying the President wants it, so we‘re going to give it to  him. 

CRAMER:  I have to say no.  This is the Presidency where only John Deere goes up.  Tired of it. 

SCARBOROUGH:  All right.  Thanks a lot, Jim Cramer.  We certainly appreciate you being with us.

CRAMER:  Good to see you.  

SCARBOROUGH:  And still to come, John Kerry has already agreed to a

series of presidential debates.  But now the ball is in the President‘s

court.  Tonight, here‘s the deal.  We‘re going to take a look back at some

of the highlights and not so tough highlights in the long history of

presidential    debates.  That‘s when SCARBOROUGH COUNTRY returns. 

                (COMMERCIAL BREAK) 

                SCARBOROUGH:  All right.  Coming to a TV near you this fall a great

American tradition.  The presidential debates.  Now, historians debate these pillars of democracy all the way back to those days of 1960? 

That‘s right.  Today‘s presidential debates have nearly no history behind them all.  Now of course, I know what you are saying.  What about the Lincoln-Douglass debates? 

Those debates, held back in the 1800‘s were actually senatorial

debates    for an Illinois senate race.  So in tonight‘s “Here‘s The Deal,”

we‘re going to tell you why presidential debates are basically a creation

of the   television age.  

                The first head-to-head presidential debate between the two major party

candidates didn‘t take place until 1960.  This memorable debate pitted    Republican Richard Nixon against Democratic Senator John F. Kennedy.  And a lot of people still believe this is the debate that made the difference.  It got John Kennedy elected president.  

There were a few primary debates held before then, but the idea for a presidential debate didn‘t come about until Senator Blair Moody suggested in it 1952.  In fact, early presidential candidates were looked down upon if they did any direct campaigning for votes. 

William Henry Harrison was the first candidate to actually stomp for his own election in 1840.  And television created a demand for presidential debates.  But between 1960-1976, there were none.  Lyndon Johnson refused a debate during the 1964 campaign.  And Richard Nixon learned his lesson from 1960.  He would not debate in 1968 or 1972.  

As for this year‘s debates, John Kerry has agreed to a series of three debates starting in September, and President Bush is expected to give his approval to that series of debates very soon.  Now, for more information on the dates and the locations of this year‘s debates, you can log onto msnbc.com. 

And make sure not to miss our show on Monday when rocker Gene Simmons of Kiss takes on Michael Moore‘s movie “Fahrenheit 9/11.”  Simmons says more is betraying our country with his lies (ph).  We‘ll talk to him on Monday.  But you have a good weekend.  Good night. 

END   

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