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'The Rachel Maddow Show'for Tuesday, February 3

Read the transcript to the Tuesday show

Guest: Richard Engel, Lawrence O‘Donnell, Bernie Sanders, Kent Jones>

Spec: Politics; Elections; Government

RACHEL MADDOW, HOST:  Thank you, David.  That‘s very kind.  You did an awesome job hosting “COUNTDOWN,” and “1600” has been great recently.


MADDOW:  Congratulations.

Thank you at home for staying with us for next hour as well.

The press corps loses its mind today over Tom Daschle‘s withdrawing as the nominee for Health and Human Services.  President Obama today sides with Claire McCaskill and Bernie Sanders on limiting CEO pay under the bailout plan.

A new leaked plan emerges to try to keep our war in Afghanistan from ending up like the Soviet Union‘s war in Afghanistan.  Richard Engel will be joining us live tonight from the Middle East.  Senator Sanders will be joining us live tonight from Washington.  And we‘ve got important news about Americans playing badminton in Iran.  It‘s all to come this hour.

But first, former Senator Tom Daschle is now former secretary of Health and Human Services-nominee Tom Daschle.  Daschle failed to pay a fairly significant portion of his taxes properly or on time.  Barack Obama says he wants his administration to be all about accountability.  Some of Mr. Daschle‘s ties to the health care industry were going to be a little bit of a hassle anyway.  And so, all in all, the nomination did not work out—Daschle had to go and he‘s gone.

Mr. Daschle‘s announcement came after another Obama nominee, Nancy Killefer, withdrew from consideration for a new job called chief performance officer.  She withdrew because she had left less than $100,000 in taxes unpaid for some months some years ago.  The result—wall-to-wall banging headline coverage of Barack Obama‘s failed nominees!

Tom Daschle‘s name is mentioned 37 times in today‘s White House press briefing and the president‘s scheduled media blitz this evening to promote the stimulus had to start with his explanation of the speed bumps that he has hit on the road to a full cabinet.


PRES. BARACK OBAMA, UNITED STATES OF AMERICA:  I‘m frustrated with myself, with our team, but ultimately, you know, my job is to get this thing back on track because what we need to focus on is a deteriorating economy and getting people back to work.


MADDOW:  So, Tom Daschle had to withdraw as a nominee, as well as that other person, who was going to be in that job that doesn‘t exist now.  And this is obviously the end of the world.  You know, the way that Zoe Baird was the end of the world.  Oh, and Kimba Wood, remember when that world ended, too?

Do you remember those names?  Zoe Baird and Kimba Wood from the Clinton administration, from the ‘90s, you know, with the tech boom and impeachment and the government surplus and Kosovo—and remember Zoe Baird?  If you said vaguely, then congratulations.  You have just put today‘s Tom Daschle news in perspective.

On the one hand, we have a picture of Tom Daschle, an embarrassed politician who has withdrawn his name as the Health and Human Services-nominee.  On the other hand, we have perspective.  The city of Miami this week opened up 35 firefighter positions.  More than 1,200 Americans showed up to apply for those 35 jobs.  They camped out all weekend.

How about Circuit City going out of business, holding a job fair today for their own employees, both former and current?  And how about this?  This is in Austin, Texas, last week, 2,000 people showing up for a job fair there, more than the organizers had ever seen.

So, on the day when Ford announced that its January sales were down 40 percent, G.M. is down 49 percent, Ford would be the one that is better off among the Big Three.  On a day when California, the state of California, started paying its bills with IOUs instead of actual checks, why is everyone‘s hair on fire about Tom Daschle?

As senators expressed shock and we, the media, hyperventilated about the new HHS vacancy and Tom Daschle‘s tax delinquency, President Obama kept his eye on the ball, turning quickly in today‘s interviews from a mea culpa on Daschle to the issue that matters above all right now to all of us.


OBAMA:  We‘ve lost a million jobs in the last two months.  We can‘t afford another 4 million jobs lost this year.  And every economist I talk to projects that if we don‘t act quickly, we could end up seeing a much more severe situation than we are seeing right now.


MADDOW:  Ah, yes, the economy, which is in freefall—and I‘m not being hyperbolic.  We are in an economy that is in crisis.  We are in an economic crisis that requires economic life-saving measures from the government.  Not because of some Democratic campaign promise, not just according to liberals on TV shows, but also according to economists, just about all economists.

And not just TV show liberals and economists, but governors.  And not just any governors, but Republican governors—men and women whose jobs depend on how the economy goes, who have to balance budgets and lay people off.  California, as I said, is now paying in IOUs.

Vermont‘s Republican governor, Jim Douglas, met with President Obama yesterday to discuss the importance of the stimulus.  Other Republican governors including Arnold Schwarzenegger, Florida Governor Charlie Crist and Connecticut Governor Jodi Rell, have all signed on to a letter to put pressure on their own party senators to get a stimulus bill passed now.

And then there are those Republican senators who have decided to crusade against government spending to stimulate the economy, who have decided to crusade, in other words, against Econ 101.


SEN. DAVID VITTER, ® LOUISIANA:  This bill is enormous.  It‘s almost $1 trillion.  And as my colleague has said, “A trillion dollars truly is a terrible thing to waste.”

SEN. JON KYL, ® ARIZONA:  Rather than spend $1.3 trillion on this bill, we should be providing tax incentives that will create jobs.


MADDOW:  Tax incentives.  You know, the highest profile Republican of them all, Senator John McCain, had sent out an e-mail to his presidential campaign‘s database of supporters.  He‘s calling on Americans to say no to the stimulus, calling on people to sign a petition against the stimulus plan.

The big Republican alternative is a comparatively very small bill, less than $500 billion total, about two-thirds of which is made up of tax cuts.  Not because any serious economist actually thinks that tax cuts will help, that they will provide what the economy in crisis needs right now, but apparently—well, just because.

You know, there are only 21 Republican governors now out of 50 states. 

Obama got a higher share of the popular vote than any Democrat since 1964. 

The Democratic majorities in Congress are historically speaking, massive.  Republicans have lost ground in state legislatures in each of the last three elections.

The gap between the number of Americans who told the Gallup Poll they are Democrats last week, and there‘s comparatively number of Americans who said they are Republicans, that gap hasn‘t been this large in 26 years.  We‘ve got a really big crisis in our hands as a country.

Is it really that important to bend over backwards to try to make the Republicans in Congress happy right now?

Joining us now is MSNBC political analyst, Lawrence O‘Donnell.

Lawrence, thank you so much for being on the show tonight.  It‘s nice to see you.


MADDOW:  Is there a political risk for congressional Republicans to be seen as opposing the stimulus plan?

O‘DONNELL:  If they are perceived as being in opposition, you just say no, that can be a problem.  But they are offering alternatives in the Senate.  They will be offering amendments in the Senate.

So, Republicans—and they did in the House—and so, Republicans are going to be able to come away from this, those who don‘t vote for it, saying, “I was for a different kind of stimulus.”  If, two years from now, the stimulus looks to have been—looks like something that was worth voting for, they‘ll just say, “Well, I had these quibbles with it.”

If, on the other hand, you know, a year from now, the stimulus looks like something that didn‘t work and is perceived as a large waste of money, then the Republicans are going to be very happy to be able to say, “I didn‘t vote for the Obama stimulus.”  And at that point, they might not mention that they voted for another form of stimulus even.

But, you‘re very right about the size of the stimulus that‘s being offered in the alternative by Republicans.  It‘s, by any description, just too small to be called a stimulus.  But voters will not be checking with economists when they are hearing these arguments a couple of years from now in the congressional election.

MADDOW:  And Republicans, thus far, are not putting forward very nuanced political messages about this.  We saw the newly-elected chair of the Republican National Committee, Michael Steele, went to the House Republican retreat this weekend and said, “That goose egg you put on the president‘s desk was a beautiful thing.”  We had leading Republican senators saying that they hoped that Republican senators might give zero votes on this just like House Republicans did.

Whether or not they going to be offering constructive amendments here, doesn‘t seem to be part of their political messaging, their political messaging seems to be a big NO.

O‘DONNELL:  Yes, and you will notice that they tend to cling to provisions that are no longer in the bill.  You know, they‘ll talk a great deal about how awful it was that someone wanted to repair the National Mall after the inauguration—never mind that that actually is stimulus spending as virtually all government spending is in this situation.  But it‘s been taken out of the bill; you still hear about it.  Mitch McConnell mentioned it today.  He had the good grace at some point to mention that yes, it has been removed from the bill.


O‘DONNELL:  And so, I actually think, strategically, that Obama, in his need to fulfill his campaign promise of working with Republicans—which I think was a genuine promise and he meant it genuinely—I think strategically, they made the mistake of compromising too much with hypothetical Republicans early on.  Meaning—they offered a very large tax cut segment of this bill, about 1/3, as their opening offer to Republicans without having a single Republican say ahead of time, “I will vote for it if you put in 1/3 of it as tax cuts.”

And so, now, they find themselves having put in more tax cuts than Democrats wanted with—and getting Republican votes for it.  From this point forward, they should not be compromising with hypothetical Republicans.  The compromise should only be with specific Republican senators who say, “I will vote for it if you do X.”  Only then should the Democrats consider doing X.

MADDOW:  Because then they also have that great—the great other side of all deal-making, which is being able to call people on not following through on their promises if they have to explicitly make them.

On the issue of the media coverage of this and image wars about this, broadly speaking, there have been more Republicans than Democrats on TV talking about the stimulus.  Do you think that the Republicans, through smart media strategy, have been having an impact on this debate that‘s out of proportion to their actual legislative power here?

O‘DONNELL:  Yes, I think they have been handling their position in the minority very well and they do have to avoid looking at obstructionist, which at this point in the Senate, they really don‘t have the strength to be obstructionists.  I don‘t think it‘s going to be that hard to get to 60 votes on this thing.

And so, they are doing those—you know, they are picking out those examples, you know, like the sod on the Mall, even though it‘s been taken out of the bill, and trying to highlight those things and say, “This is what‘s wrong with the bill.”  That‘s the best way to play it on a giant bill like this.

As the president pointed out today very accurately, no more than—actually, less than 1 percent of the bill has been cited as wasteful spending by anyone in the entire discussion.  And they‘re just saying about 1 percent of it as being wasteful, and most of that stuff that has been cited as being wasteful has been taken out.  And so, they‘re kind of fighting, you know, the fight of last month now.  But it strategically makes sense for them, especially until you get to the point of final passage.

No vote on this counts until it‘s coming out of a conference committee and the House and the Senate are voting on final passage.  That‘s the moment when Republican senators will look at it and say, “Do I want to be on board with this thing?  I‘m running in two years in a state that is tending Democrat,” like, say, Arlen Specter.  Does Specter want to be on this bill?  He doesn‘t really have to decide that until final passage.

MADDOW:  Lawrence O‘Donnell, MSNBC political analyst—thank you for your time tonight.  I feel like we have a new textbook definition of spin versus substance on this thing, that 1 percent threshold.  Thanks, Lawrence.


O‘DONNELL:  Thanks, Rachel.

MADDOW:  Now, I love it when this happens.  Last night on this program, Senator Claire McCaskill of Missouri told us that she wants a cap on executive pay for companies that are taking government bailout money.  And then today, President Obama told NBC‘s Brian Williams, “Let‘s do it.” 

Claire McCaskill shoots, Claire McCaskill scores.

Ahead: One of the senators who floated this idea from the very beginning of this debate about the bailout, Bernie Sanders, will be joining us live.

And coming up: NBC‘s Richard Engel has news from Iraq and Afghanistan and life during wartime.  He joins us live from Baghdad next.

But first, we commit here on the show to check in regularly with the GOP in exile.


MADDOW:  The brand-spanking new chairman of the Republican National Committee, the aforementioned Michael Steele is off and running at the face of his party in exile, which is bad news for economic literacy and economic history.  While trying out his talking points and that derailing the economic stimulus bill now in Congress, Mr. Steele said, quote, “Not in the history of mankind has the government ever created a job.”

Not in the history of mankind?  So, like, between 1935 and 1943 when the Works Progress Administration built or built up 125,000 public buildings and 8,000 parks and 800 airports and enough roads to circle the globe two dozen times—those weren‘t jobs?  What were those—hobbies?  And while we‘re on the subject, Mr. Steele, what kind of job was that whole lieutenant governor gig you had in Maryland?  Kind of seemed like a sweet deal.


MADDOW:  Afghanistan is landlocked, which means that anything that isn‘t flown into Afghanistan has to get there over land.  And more than ¾ of the stuff that gets into NATO forces who are serving in Afghanistan goes by land through Pakistan and through the Khyber Pass, and more specifically, over one particular bridge on the Khyber Pass.  At least it did until today when militants blew up that bridge, making it more urgent for the U.S. and NATO allies to find new supply routes into Soviet-demise-tan, I mean, Afghanistan.

While the Taliban was busy knocking out our supply route today, someone at the Pentagon was busy leaking to a classified report written by the Joints Chief of Staff.  In it, the Pentagon‘s top brass reportedly recommend that President Obama scale back American ambitions in Afghanistan.  The report reportedly suggests focusing on eliminating Taliban and al Qaeda safe havens rather than prioritizing the much bigger progress of that old lasting democracy and robust Afghan economy idea.

With U.S. troops about to drawdown in Iraq and nearly to double their number in Afghanistan, are wars in both countries need more than a once-over?  So, it‘s time for THE RACHEL MADDOW SHOW special series on President Obama‘s cleanup mission: Scrub, Rinse, Repeat—because this is going to take a while.

On Saturday, provincial elections were held in Iraq without a major attack, the most relatively peaceful vote since the fall of Saddam Hussein in 2003.  NBC‘s Richard Engel, whom we will be speaking to shortly from Baghdad, earlier today, interviewed the top U.S. commander in Iraq, Lieutenant General Raymond Odierno.  He suggested that troops would be coming home and soon.


GEN. RAYMOND ODIERNO, COMMANDER OF MULTINATIONAL FORCE IN IRAQ:  You know, I‘ve had a good session with the president.  We had a chance to lay out to him what‘s going on here in Iraq.  I mean, I think we all know it‘s time for us to reduce our force structure here in 2009.  And so, yes, I made some recommendations for the force reductions.


MADDOW:  Joining us now live from Baghdad is Richard Engel, who is NBC News‘ chief foreign correspondent.

Richard, thank you for coming on the show tonight.

RICHARD ENGEL, NBC NEWS CHIEF FOREIGN CORRESPONDENT:  It is my pleasure, Rachel.  How are you?

MADDOW:  I‘m great.  How can you characterize the comments of General Odierno today about the prospects for U.S. troop numbers in Iraq?  What is he saying?

ENGEL:  He was giving a very encouraging sign.  He‘s saying not only are they considering making recommendations for troop withdrawals, he said that he has already made his recommendation.  He is now just waiting for an announcement to come from Washington about the exact size and how that troop reduction will take place.  But this was the first time we‘d heard a definitive statement from the man, the top commander in Iraq, saying troop numbers are not likely to go down but they‘re going down and he supports it.

MADDOW:  General Odierno, of course, is not CentCom commander.  He is the top U.S. commander in Iraq.  He has responsibility only for what happens in Iraq.  But do you get the sense in talking to top military brass that they are considering the up-scaling of resources into Afghanistan at the same time and in conjunction with the scaling back of resources and manpower in Iraq?

ENGEL:  That is absolutely what they‘re going to do.  I have been told that troops will be diverted, and that has already happened.  Troops that were supposed to come to Iraq are going to be shifted over to Afghanistan.

They‘ve made it pretty clear that they don‘t want to take anyone straight out of Iraq, someone who‘s in uniform serving here and ship them off to Bagram Air Base in Afghanistan, that they need to go back, be retrained, and reequipped.  But we are definitely seeing a general shift down here and over to Afghanistan.

MADDOW:  Richard, covering the elections over this weekend in Iraq, you have spent a lot of time in Iraq over the past few years.  You were there even before the initial bombing in 2003.  Can you contrast for us—compare and contrast—what it‘s like to be there now?  What it was like to see those elections compared to what it has been like in Iraq?

ENGEL:  It feels like we‘re back in 2003.  And violence levels now, according to General Odierno, are about where they were in June, July of 2003.  And they‘ve been that way for the last 10 weeks.

In that spring and summer of 2003, we were able to go around this country at will.  We could drive where we wanted in 2003.  I was driving my own car in Iraq going anywhere in the country.  And that‘s what it feels like very much now.

For the last several days, I went to a market.  I was buying sweets.  You could see people out on the streets, women wearing jewelry.  That wasn‘t happening a few months ago, a few—certainly not a year and a half ago.

And the election day was a very—very nice day out.  There weren‘t even big crowds.  There were people coming out voting but there was no pushing and shoving.  The police were out on the streets.  U.S. troops were very far back.  It was—it was not the kind of scene we‘ve seen—that Iraq has been exposed to in ‘06, ‘07, when things here were at the peak of the violence.

MADDOW:  Richard, I know that you have very good contacts in the military and among civilian leader advising the military at times like this.  Do you get the sense after we‘ve seen this “Politico” report about the forthcoming Joints Chief of Staff recommendations to President Obama—do you get the sense that there are competing camps about what to do in Afghanistan?  That there are some people who are arguing for a very large troop presence there, perhaps hundreds of thousands of troops and other people who are arguing for a smaller, more limited mission?

ENGEL:  I haven‘t heard about hundreds of thousands of troops, but I certainly do know that there is a general debate about what to do with Afghanistan.  And we‘re going to see several statements coming out probably in the next several days about the exact number of troops that should go in there as part of the surge and it ranges from 12,000 to 30,000.  But more troops are going into Afghanistan.

And what we‘re generally trying to see, there is some consensus, is a scaling back of the mission, a scaling back of the ideology, taking the idea that the United States is going to make Afghanistan into a democracy, it is going to make it into a modern, successful nation.

What we are seeing now in the leaks that have come out today and in interviews that I‘ve done over the last—not just the last several days but last several weeks, is what they believe is a more realistic mission, that trying to lower the violence, contain the drug smuggling, the opium smuggling in there, opening the border routes and not focus on ideology, but more focused on trying to make it at least a stabling, if somewhat backwards state—a stable but somewhat backwards state.

MADDOW:  Richard Engel—I hear you.  Richard Engel, NBC News chief foreign correspondent, live tonight from Baghdad—Richard, it‘s always great to have you on the show.  Good night.  Stay safe.

ENGEL:  Thanks.

MADDOW:  I should also mention that I have inadvertently demoted General Odierno.  I said Lieutenant General Odierno, he‘s, of course, is just General Odierno and he‘s not the kind of guy you want to have that sort of conflict with.

We had one of the all-time great finales last week when Illinois ex-Governor Rod Blagojevich was impeached and removed from office.  He grandstanded, he mugged the reporters, he spoke Spanish, roll credits, head for the parking lot, right?  Why is Mr. Blagojevich appearing on like 50 TV shows tonight?  This thing just won‘t die!

A little later on, we present “night of the living head,” if you dare.


MADDOW:  Coming up: President Obama puts the kibosh on executive salaries over a hall million from companies taking bailout money.  Fat camps, prepare to diet.

First up, though, some underreported holy mackerel stories in today‘s news beginning in Iran.  Iran today said that they launched a homemade satellite into orbit.  Iran‘s vociferous little president, Mahmoud Ahmadinejad, went on state-run television and said, “Dear Iranian nation, your children have placed the first indigenous satellite into orbit.  With God‘s help and the desire for justice and peace, the official presence of the Islamic Republic was registered in space.”

The BBC also quotes Ahmadinejad as saying that the satellite was launched into orbit to spread, quote, “monotheism, peace and justice.”  So if it‘s a clear night where you are tonight and you see a little new mechanical-moving blip in the sky, Mahmoud Ahmadinejad wants you to see that blip and think monotheism.

This is sort of a bad news/good news story actually.  The bad news is obvious, Iran wants to up its military capacity, specifically—even if you leave aside the issue of nukes—Iran wants really long-range missiles.

They say that their longest-range missiles now can go about 1,200 miles, and yes, Israel is within 1,200 miles of Tehran.  But they know they would really get themselves some attention if their missiles could go further even than that, say, to part of Europe.

In order to get their missiles to go more than 1,200 miles, the Iranians need to master their staging process.  You know how in rockets there are stages; that‘s what they need to figure out.  If they successfully put a satellite in orbit today, that might mean that Iran has mastered the staging process, which might mean that their halfway home to getting really long-range missiles.  That is the bad news.

That‘s why it‘s bad news that Iran says it launched a satellite today. 

The good news is that Iran lies all the time about its missiles especially.  Remember last summer they said they launched a whole big mess of long-range missiles.  Like today they even released photographic proof of that missile launch.

Here‘s the photo, in fact, that they released last summer that supposedly very impressive scary missile launch.  Check out how this photo is totally photo shopped.  They just duplicated the same missile all over the picture.  Their photo shopping is worst than the North Koreans.

So that is the potential silver lining for this otherwise worrying news today.  The silver lining here is that they might be total BS artists and, of course, we all hope that they are.

In other Iran news today, you know that the United States cut off diplomatic ties with Iran 30 years ago, right, since the Iranian militants took dozens of Americans hostage at the U.S. embassy in Tehran for more than a year in 1979.  We have not had a working embassy there.  We don‘t have official diplomatic relations.

But in 2006, we restarted people-to-people exchanges with Iran.  Not leader-to-leader but regular civilian to regular civilian or more accurately, athlete-to-athlete.  In the past couple of years, in an effort to promote US/Iranian relations, we have sent 20 American wrestlers to compete in Iran and Iran has sent about 75 water polo players and basketball players and ping-pong players—table tennis players over here.

As of today, we have also sent our National Women‘s Badminton team to Iran.  And in other news, hey we have a national women‘s badminton‘s team.  We have sent eight players along with four coaches and managers.  It‘s the first American/Iranian sports exchange since Obama has been President.

One spot of awkwardness for this trip is that the Iranian government enforces a religious dress code for women, so women even while playing high-level sports are expected to cover their hair and to wear clothing that hides the shape of their bodies.

As if badminton isn‘t hard enough already.  How are America‘s women badminton players is going to cope with that kind of physical restriction?  They‘re not.  Loophole alert, the Iranian government has decided to make the Iranian/American badminton matches women only.

No male spectators will be allowed.  No male spectators means no requirement to try play sports in a giant restricted form of the scathing garments.  So, yes.

One programming note here, if any friends or family members of the traveling women‘s badminton team are watching this show right now, we here at “The Rachel Maddow Show” would love to hear how the trip went when the team comes home.

And on this show, obviously, you can wear whatever you want.


MADDOW:  Bad news for mortgage and insurance officials, well, more bad news on top of the whole housing crisis, credit crunch, economic meltdown thing.  But actually this is bad news for a very specific group of mortgage and insurance workers, the ones who work for Wells Fargo and were about to get to go on a really fancy work-related expenses-paid conference in Vegas.

Now their trip is off.  The Associated Press noticed a bunch of rooms reserved in swanky Vegas hotels and discovered that despite being bailed out to the tune of $25 billion taxpayers, executives at Wells Fargo were still—still planning expensive trips for their staff.

The appropriate amount of outrage ensued from lawmakers and people who pay taxes and Wells Fargo canceled the Vegas outing.  Although, while they were at it, the company spokesperson also went after the Associated Press‘s reporting saying, it‘s not a junket, it is a recognition event for hard-working team members.

Noted, a recognition event in Vegas.  Like you do.

So another day, another maddening story about what bailed-out executives think is an acceptable expense now that they are funded with public money, now that they have been bailed out.

Consider also the Bank of America Super Bowl party, the Morgan Stanley Florida resort retreats, the Citigroup corporate jet business and John Thain‘s famous office remodeling.

But now the CEOs‘ gone wild gig may be up, or at least it‘s one step closer to being up.  CNBC is reporting that President Obama will tomorrow announce a new rule that will mandate a $500,000 salary cap for executives of companies receiving TARP bailout money.

The funny thing about this new rule, way back in October of last year when the TARP bill was first passed by Congress, somebody else was waving the red card even then about executive compensation.  That somebody was Independent Vermont Senator Bernie Sanders, who said this before voting against the bailout.


SEN. BERNIE SANDERS, (I) VERMONT:  This bill does not effectively deal with the issue of executive compensation and golden parachutes.  Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.


MADDOW:  Ladies and gentlemen, the Cassandra of TARP.  Shortly after that prescient speech, Senator Sanders proposed a bill appropriately dubbed the “Stop the Greed on Wall Street Act” that would have capped executive pay for TARP recipient CEOs at $400,000.

Now, no one pay a ton of attention to Senator Sanders‘ proposal back then.  It did not change the debate.  But now, the only question is just how effective will the president‘s version of the Bernie Sanders rule be?

Independent Senator Bernie Sanders of Vermont joins us now.  Sir, thank you very much for coming on the show tonight, Senator.


MADDOW:  First of all, I have to say congratulations.  Way back in the fall you were the only senator to propose legislation limiting executive pay in the bailout.  The new president was apparently listening or at least he just started listening.  Do you feel vindicated here? 

SANDERS:  I think it‘s really a good step forward, Rachel, but we have to go a little bit further.  There‘s no stopping these guys on Wall Street.  They really live in their own world, as you just pointed out.

What I worry about is the CEO will resign, become the assistant CEO, the janitor will become the CEO and assistant will make $200 million.  What our legislation did is said that anybody who works for a company that received TARP funds could not get more than $400,000 and the reason we said $400,000 is that‘s what the President of the United States makes.

MADDOW:  We are looking closely at this to try to figure out where the loopholes might be here.  Because we know these executives have been great at finding those loopholes.  CNBC points out they‘re not sure if the cap includes bonuses as well. 

SANDERS:  Right.

MADDOW:  If the bonus issue isn‘t settled, if the job title issue isn‘t settled, does that mean that this just won‘t be effective?  Or is something better than nothing?

SANDERS:  I think, it is better than nothing.  I think the president is sending a message to Wall Street.

I got to tell you, Rachel, on Sunday I held two town meetings in Vermont.  We had 800 people out at the meetings.  People are so angry, they are so furious that a handful of Wall Street executives, 10 or 15 major financial institutions through their greed, through their irresponsibility and probably through illegal behavior have caused intense suffering, loss of jobs for huge numbers of American people and plunged us into a very, very deep recession.

Now receiving hundreds of billions of dollars in taxpayer money, they say oh, thank you very much, taxpayers.  We really do appreciate it.  We‘re not going to tell you how we‘re spending the money.  And, of course, we are going to continue to give out large bonuses.  We‘re going to buy planes.  We‘re going to have big parties.

The people in this country are outraged up to here.  We need some real fundamental change about the way Wall Street does business.

MADDOW:  If this executive pay cap can be done well, can be done without loopholes and it works, what‘s next on the agenda, do you think, in terms of making sure that the bailout money that is already committed, the bailout money is already out flowing can be used in a less exploitive, less immoral way?

SANDERS:  Rachel, the problem with this issue is that it‘s so big that nobody can get their hands on it.  It is not just $700 billion.  As you know, the Fed has lent out $2.5 trillion.  The president is probably going to ask for more TARP money.  The fed, we think, is going to lend out trillions more.

What we need to do, among many things, is we need to figure out a way that we do more than get back to where we were a couple of years ago by making the financial institutions stable.  If the taxpayers in this country are putting such a huge amount of money into financial institutions, we need financial institutions that are going to be beholden to the needs of order Americans and not go back to where we were.

For example, just one example, right now we‘re bailing out banks which are charging American taxpayers 25 percent or 30 percent interest rates on their credit cards.  Does that make sense to anybody?  We are giving banks money and they are not telling us how they are spending it.  We are trying to loosen up credit in America.  They‘re not doing it.  We have to tackle this issue in a very fundamental way.

Second of all, we‘re working on this, we need a real investigation.  A real investigation to find out who is responsible for this crisis, and we need to see if the American criminal justice system—and I‘m not sure that it is—is really capable of putting in jail these multi-zillionaires, these masters of the universe, who have caused such an incredible crisis for America.  But we need a thorough investigation.

We have proposed that the TARP Oversight Committee, led by a woman named Elizabeth Warren, who‘s doing a great job, lead that investigation.  Get to the root of this problem.  Find out what has gone on, if there has been illegal behavior and how we reform the system in a very fundamental way.

MADDOW:  Senator Sanders, one last quick question, your colleagues in the senate now and President Obama are now on board with what you proposed earlier about capping executive pay.  Are you getting any early support now for this call for perhaps a criminal investigation into the cause of this crisis?

SANDERS:  It‘s going to be a tough one, Rachel, because this really goes to the people who have enormous power on top.  Both political parties have been involved in the deregulation efforts.  It‘s going to be tough but we‘re going to push as hard as we can to hold those people accountable who have caused these terrible problems.

MADDOW:  You always do.  Senator Bernie Sanders of Vermont, thank you so much for your time tonight, sir.  I really appreciate it.

SANDERS:  Thanks you.

MADDOW:  It‘s not over, the hair, the poetry, the eerie confidence in the face of impeachment.  Rod Blagojevich may have died politically but he walks again among the networks—a zombie preying on innocent airtime.  It‘s night of the living head, and it‘s coming up next.  Run for your lives.


MADDOW:  Americans love horror movies: fancy ones like “Psycho,” culty ones like “Blair Witch Project,” campy ones, funny ones.  Did you ever see “When a Stranger Calls”?  The horror flick never goes out of style.

The latest evidence that Americans love horror movies is honestly the never-ending saga of former Illinois governor Rod Blagojevich.  Call it “Night of the Living Head.”  And like most great genre pictures it has been playing out over and over on our TVs for about eight weeks now; sequel after horrifying sequel after frightening, farcical, self-referential sequel.  But I think though that it‘s finally over as of tonight.

To my count, the former governor‘s post impeachment media tour that kicked off today would constitute “Night of the Living Head 7.”  Now, at the beginning, this was a great movie to sit back and watch.

I mean, who could forget the original, right?  Patrick Fitzgerald coming on to proclaim that Lincoln himself would roll over in his grave if he knew the extent of the misconduct.  The dramatic re-enactment of Governor F-Word‘s wire tapped phone calls.


PATRICK FITZGERALD, U.S. ATTORNEY:  Quote, “It‘s a bleeping valuable thing, you just don‘t give it away for nothing,” closed quote.


MADDOW:  This was horrifyingly entertaining stuff in a weird sort of way.  Nobody could wait for the sequel, right?  I mean, sure, the original is always the best one.  Who remembers anything good about Caddieshack 2?

But we wanted that sequel.  We—as the public and as the media demanded it.  Boy did we get it.

Do you remember “Night of the Living Head 2?  Featuring a Spandex Rod Blagojevich running through the winter snow playing coy with the press; this one will actually be underrated by history.  Non-speaking Blagojevich in spandex in the snow, say what you want about the lack of drama but the world had never seen a sitting governor in that kind of Lycra doing that kind of thing.

Then there was “Night of the Living Head 3” where the villain defends himself from false attacks by quoting Richard Kipling.  At that point we swore we were done, the series had officially jumped to shark until the zombie gained the upper hand and sucked us right back in.

In “Night of the Living Head 4” Blago flexed his muscles and appointed Roland Burris to the United States Senate.  That was a good one.  That was like the exception that proves the rule.  That was like Godfather 2 where maybe the sequel was even better than the original.

But in retrospect, historians and cinephiles will mark “Night of the Living Head 5” as the turning point, the zenith, the beginning of the end.  This is where we witnessed the zombie‘s inevitable and desperate fall from power.  The media blitz in which this TV show you‘re watching now made a brief cameo appearance.


ROD BLAGOJEVICH, OUSTED GOVERNOR OF ILLINOIS:  I consider myself the anti-Nixon.  Remember during Watergate Richard Nixon fought every step of the way to keep his tapes from being heard.  I want just the opposite.  I want them all heard now right away so the whole story can be heard.


MADDOW:  That all led to what probably should have been the final chapter, “Night of the Living Head 6,” impeachment day as the slow demise played out in a painful dramatic—what we thought of—as the closing scene.


BLAGOJEVICH:  Hey, let me ask you a question.  If I asked you to come and cover me if I want to say anything, will you do it?  Will you?  People in the Latino community -- [speaking in Spanish]


MADDOW:  Si se puede.  Of course, the zombie speaks inspirational Spanish leaving us with the possibility of, yes, another sequel.  That sequel came quicker than we thought.  “Night of the Living Head 7” which came out today; the zombie incredibly comes back to life drawing strength from the only thing that keeps him alive—TV airtime.

But you know the saying about the seventh sequel?  You really have seen it all before.  Same plot lines as the previous one, same uninspired acting, same everything, right down to the exact script.


BLAGOJEVICH:  I want everybody and anybody that I talk to about the senate seat to tell the truth and to say it under oath and that includes U.S. Senators like Dick Durbin, Harry Reid, Senator Menendez, former Congressman Rahm Emanuel who all had a chance to be governor in a big state, to give all of our kids health care, give all of our senior citizens free public transportation, give all uninsured women mammograms and pap smears so they can save their lives.


MADDOW:  Ok.  Honestly, this is a horror series that should now be over.

Give him credit.  The Blagojevich franchise had way more legs than most of these things, there will almost certainly be “Night of the Living Head 8.”  Don‘t forget, we still have the trial ahead of us.  And I‘m sure we will watch that one, too and eat too much popcorn.

But here is the thing to remember, as you watch all of these horror show sequels.  While they are entertaining and escapist and occasionally scream-inducing, there is something legitimately scary about “Night of the Living Head.”  That political zombie, at whose expense we‘ve had quite a bit of fun, at whom popcorn has been thrown.  The actual horror to this horror series is that Rod Blagojevich appointed one of your 100 United States senators.  He has a legacy in all of our lives.  He got the last laugh.

All right, maybe not the last laugh, “Night of the Living Head 8” will be out sooner than we expected.  Stay tuned.

Coming up on “Countdown” tonight, Karl Rove cooperating with a federal investigation?  Why now?  Jonathan Turley will be weighing in.

Coming up next on this show, I‘ll get just enough pop culture from my friend Kent Jones.  Tonight, Harry Potter and the Legion of Honor? 


MADDOW:  Now it‘s time for “Just Enough” with my friend Kent Jones. 

Hi, Kent.  What have you got?


Well, today is National Carrot Day.  You know what that means?  It‘s Rachel on the Martha Stewart Show, very nice.  You almost never make carrot soup on this show.  Do I have to beg?

MADDOW:  Look how bad I am with the spoon.  It‘s like I‘m beating the soup to death.

JONES:  Next up, the Steelers celebrated their Super Bowl 43 victory today with a parade through the cold streets of Pittsburgh.  Here‘s QB “Big Ben” Roethlisberger.



You guys are the best fans in all of sports, bar none.


JONES:  Dude, when you go to Disney World, buy a new hat.  I‘m begging you.

Next up, “Harry Potter” author, J.K. Rowling, was inducted into the French Legion of Honor today in Paris by President Nicolas Sarkozy then he asked her for a loan.  Very “expecto” awkward.

Finally speaking of bad economy, the restaurant in London has decided that for the next their customers can pay whatever they want for their meals, nice financially but tough ethically.  Would you like some guilt with your $2 steak, a twinge of conscience, a spoonful of regret perhaps? 

MADDOW:  Bring me a bucket.

JONES:  Bring me a bucket.

MADDOW:  Thank you, Kent.  Appreciate it.

Thank you for watching tonight.  We‘ll see you here tomorrow night.  Until then you can e-mail us,  We do actually read all of your e-mails.  You can also check out our podcast, go to iTunes or to  You can also hear me coast to coast on Air America radio although my show is now in the morning instead of the evening.

“Countdown” with Keith Olbermann starts right now.

Good night.



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