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'The Rachel Maddow Show'for Friday, April 10, 2009

Read the transcript to the Friday show

Guest: Adam Davidson, Alex Blumberg, James Staples, Kal Penn

RACHEL MADDOW, HOST:  And thank you at home for staying with us for the next hour.

It has been more than 60 hours since armed pirate as attacked a U.S.-flagged ship and took an American mariner hostage.  What started as a holy mackerel story is now an increasingly tense, riveting standoff between a small group of armed criminals and the United States Navy.

Tonight, four Somali pirates continue to hold American captain, Richard Phillips, of Vermont hostage on a small lifeboat.  Phillips made one unsuccessful effort to escape from the pirates.  He is back in their custody and the pirates have issued ransom demands.

There are two Navy destroyers on scene right now.  And tonight, the U.S. Navy says it is moving a third warship into the same area.  That would be the USS Boxer, an amphibious assault ship that carries a mobile hospital and some two dozen helicopters and planes.  Now, with the addition of the USS Boxer, the Navy will have lots and lots and lots of firepower trained on an isolated area of the open ocean about 300 miles off the coast of Somalia.

Captain Phillips and the pirates remain on that small, 28-foot, semi-enclosed lifeboat.  The USS Bainbridge Navy destroyer stationed a few hundred yards away, the USS Halliburton is monitoring the situation nearby as well, and, as I said, the USS Boxer with its fleet of helicopters is now on the way.

How do these situations typically resolve themselves?  Well, if history is any guide, there are a few different ways they work out.  One government has decided to deal with piracy by using military commando-style raids.  That would be the French.  Actually, they‘ve done it three times in the past few years.

The first time, the French military captured a group of pirates after their French hostages had been freed.  The second time, 30 French commandos freed two French hostages on board a yacht during a midnight night-vision aided lightning raid.  The third time, remarkably, was today.  The French Navy surrounded a 47-foot sailboat that pirates had seized on Saturday.  On the sailboat, pirates were holding five hostages, four adults and one child.  After days of unsuccessful negotiations, the French Navy stormed the boat, killing one of the five hostages and two of the pirates.

The French seem to be the only ones adopting this commando strategy so far.  The results, well, you just heard them.  Mixed.

The most common way that pirate hijackings get resolved is that the pirates ask for and receive ransom payments—big ones.  Incredibly that also happened today.  A Norwegian shipping company agreed to pay a group of Somali pirates $2.4 million in exchange for the release of their tanker and its 27-member crew.

This ransom for release sort of thing has happened a lot recently and it happened quite dramatically back in February.  You might recall pirates releasing a Ukrainian ship that was carrying 33 Russian tanks after the ship‘s owner agreed to pay them $3.2 million.  Those $3.2 million were delivered—you see there—by parachute.

Today, we learned the pirates holding Captain Phillips also want to get paid.  They made a ransom demand of $2 million.

The “Associated Press” reports that in the past two years, there‘s only one known instance of pirates giving up a ship without getting money for it.  That was the case of a ship from Yemen that was hijacked last year.  The pirates first demanded $2 million for that ship; they ended up releasing it without collecting any ransom because local tribal elders intervened in that situation.

So, if that‘s what we know about so far, about how these things get resolved, if past is any prologue—these would generally be the options.  One, you agree to a ransom; two, you storm the ship; or, three, somehow use forces back on land in Somalia to appeal to the religious or clan-based affiliations of the pirates.

Well, Captain Phillips attempted a fourth type of resolution in the middle of the night last night.  He jumped overboard and tried to swim to the U.S. Navy destroyer that was a few hundred yards away.  They pirates reportedly fired their AK-47s and one of them jumped into the water to grab him.  The captain was caught and brought back to the lifeboat.  He was seen moving about the lifeboat and talking after the escape attempt.

So, it is thought that he was unharmed while he was being recaptured.  But there have been no radio or satellite phone discussions that we know of with the captain since then.

Now, there‘s word that the pirates have their own idea for a resolution to this crisis, and it is not a good one.  They have told colleagues back on shore in Somalia that they have a plan, and their plan is to bring Captain Phillips to Somalia, to bring him ashore, to give themselves a better chance at escape when the ordeal is over and to retain the chance of getting a ransom for Captain Phillips.

In order to get Captain Phillips ashore, they, of course, will need backup.  In this case, that means more pirated hijacked vessels with more hostages on board to the scene of where they are holding Captain Phillips.  The latest reports from the area say that four vessels under pirate control are on their way to the scene, including a massive pirated German container ship that was seized earlier this month.  In addition to itself being a valuable ship and itself holding a number of foreign hostages, the German container ship is also now being described as a pirate mother ship, a ship repurposed by the pirates to be a sort of home base on the open seas, hosting more pirates, more pirate skips and more weapons on board.

As the pirates plot their strategy and try to muster strength in numbers, three massive armed U.S. Navy ships, four pirates, and one American hostage are all waiting.  Day three.

Joining us now is Captain James Staples.  He is a former classmate and friend of Captain Richard Phillips.  He often sails the same waters we are discussing now off the east coast of Africa.

Captain Staples, thank you so much for joining us tonight.


Good evening, Rachael.

MADDOW:  I understand that you and Captain Phillips have had some of the same training about how to avert and cope with situations like this.  How do you imagine that he‘s holding up right now?

STAPLES:  I‘m sure that he‘s staying very strong and very positive through this whole incident.

MADDOW:  What kind of training have you had?  Has that been through your union?  Has that been through certification courses?  What sort of training have you been through?

STAPLES:  That‘s correct.  We get a training course down at the maritime institute in Baltimore and you get certified in a security class.

MADDOW:  When you have taken security classes like that, to learn to deal with situations like that, what do they teach but how to avert a situation like this from happening in the first place, how to keep pirates from boarding your vessel?

STAPLES:  Generally, we try to be vigilant with our watch system that we put on board with using more people, more eyes on deck, looking out for these people, speed of the ship, putting out fire hoses, things like that.

MADDOW:  When you say fire hoses, that means the fire equipment that‘s on board your ship to put out on-board fires, but you use it essentially as a weapon against the pirate ships?

STAPLES:  No, it‘s used as a deterrent with the water spray going over the side of the vessel, in hopes they won‘t come along side.

MADDOW:  When you learned that Captain Phillips had jumped overboard, that he tried to make that attempt to escape, given your training and what you know of him just as a friend, was that—does that surprise you?  Can you imagine what his strategy was there?

STAPLES:  No, and knowing Ritchie Phillips, that does not surprise me at all.  He‘s that type of guy.  It just shows me that he‘s still being vigilant and strong and he‘s thinking, and he hasn‘t surrendered himself to anybody, and he‘s not going to give up until he gets out of the situation safely.

MADDOW:  Do you know anything about what these lifeboats are like?  We understand it‘s an enclosed lifeboat.  It‘s about 28-feet long.  It‘s initially stocked with about 10 days‘ worth of food and water.  Can you imagine what the conditions might be like, having been on that lifeboat now for this amount of time?

STAPLES:  That‘s absolutely correct.  They are (INAUDIBLE), they‘re usually a rigid fiberglass boat.  They‘re uncomfortable to be in.  There‘s no cushions or padding.  There‘s no lavatories.

They‘re made for survival.  They‘re a last ditch resort if you have to abandon the vessel, and be saved by another ship.  This is—this is the type of boat you‘d like to get into.  But it‘s not a pleasure-type craft.  It‘s something you would not want to spend a lot of time in.

MADDOW:  Captain Staples, I know that you just returned from this part of the world in January.  You‘re quite familiar with these waters.

When you‘re out there, do you feel like or have you felt like in recent years that the threat of piracy has become worse and that the tactics for trying to avert instances like this have gotten more advanced?  Have people been learning from this situation?

STAPLES:  Well, absolutely.  The Somalia coast has gotten dramatically worse the last few years.  We used to have to fight the pirates usually in the southeastern part of the world, mostly in Malacca.  But generally there, they just came in board and they were just thieves and they take what they wanted and then leave.  This is a whole different venture for these pirates, knowing that they can hold people for ransom.

MADDOW:  And thinking about the—thinking about this standoff between this tiny boat, which obviously has no fuel, has no power, the other pirated vessels on the way there, and then these massive U.S. Navy ships.  From what you understand about these seas, these areas, and what the Navy is capable of in these giant vessels, do you think that they‘ll be able to stop the pirates from getting Captain Phillips ashore?  The prospect of him being brought on land in Somalia just seems incredibly scary.

STAPLES:  Actually, that‘s not my area of expertise.  That‘s better left to the expert that, this is what they do.  I really don‘t know the tactics that they use for something like that.

MADDOW:  Well, let me ask you about the overall principle that there will be Navy—that there are Navy ships there trying to protect merchant vessels from piracy.  I understand there‘s been a flotilla, an international flotilla of about 12 to 16 ships in these seas, not for very long, for a few months, a U.S.-backed effort to try to deter these pirates.  Is there anything that you think that they should be doing that they‘re not doing?  Should there be a bigger presence?  Is that presence worth it?

STAPLES:  Well, absolutely, it‘s worth it.  It gives you a comfortable feeling, knowing that there are military vessels in the area and they can come to your aid as fast as possible.

MADDOW:  Last question for you, Captain Staples.  I know that you‘re planning to ship out to this area again next month.  Will you do anything different, I guess, this time than you have in the past?  Does this change your feelings about the next mission you‘re about to take on?

STAPLES:  You‘re always trying to do something different because these guys are always changing their tactics.  So, they‘re now getting these ships for the south as we see, and they‘re not being up in the Gulf of Aden right now.  And—so you‘re always trying to change your tactics, just so they‘re not used to what you‘re doing.  You‘re always trying something new.

MADDOW:  Captain James Staples, former classmate and current friend of Captain Richard Phillips, who tonight remains a hostage in the Indian Ocean, thank you so much for your time tonight, sir.

STAPLES:  Thank you very much.

MADDOW:  OK.  A man named Kal Penn is a prominent political activist who recently agreed to join the Obama administration as an associate director in the White House Office of Public Liaison.  Previously he portrayed a stoner with the munchies in “Harold and Kumar Go to White Castle.”  Hey, things change.  I used to work at a place called Espresso Bongo.

Kal Penn joins me right here next.

And later: The future of the Republican Party and teabagging.  I‘m sorry we have to go there again.  Sorry.





UNIDENTIFIED MALE:  He‘s not a terrorist, he‘s just—he‘s just an idiot.

UNIDENTIFIED MALE:  This is just a bong.

UNIDENTIFIED MALE:  He says he‘s got a bomb!


UNIDENTIFIED MALE:  Dude, this is weed.

UNIDENTIFIED MALE:  That‘s Alabama kush.  That‘s some of the finest.


UNIDENTIFIED MALE:  I know.  I laced it with bow (ph).  It knocks you out and keeps you going at the same time.  Pow!



UNIDENTIFIED MALE:  Get up.  We‘re going to White Castle.


MADDOW:  Actually, forget White Castle, we are going to the White House after Kal Penn is defying the safer work proclivities of the character Kumar, who he memorably portrayed in “Harold and Kumar Go to White Castle,” and “Harold and Kumar Escape from Guantanamo Bay.”

In the midst of a high-flying acting career that has also seen him in everything from “The Namesake” to “24,” to “Superman Returns” to “House,” he is leaving acting, at least temporarily, to become the associate director of the White House Office of Public Liaison for President Obama.  Kal Penn joins me here in studio tonight.

Mr. Penn, thank you for being here.

KAL PENN, ACTOR:  Thank you.

MADDOW:  Congratulations on your new gig.

PENN:  Thank you.  And thanks for having me on.

MADDOW:  When do you start?

PENN:  Start date is to be determined.  In fact, the only reason that this has sort of become a little story is because of my character on “House” came to a demise this past Monday and people sort of started asking, why did you leave the show, and we figured, you know, better be honest instead of making people think there was some drama going on.

MADDOW:  I was wondering if it was the other way around, is that you knew you were already going, but you had to wait until you were dead on TV.

PENN:  No, no, no.  That came after, that to find a way to rid me off the show.

MADDOW:  That would be a very awkward thing if that became the template for how you got a job at the White House.

PENN:  Definitely.

MADDOW:  You‘re also the only White House appointee who‘s—with the scoop came from “Entertainment Weekly” that you had the gig.

PENN:  Yes.  That‘s probably true.


MADDOW:  What do you hope to achieve as—in this big shift in your life.  You‘re going to be associate director of the White House Office of Public Liaison.  Do you understand totally what the job description is yet?

PENN:  Yes.  And that office in particular has several folks working there.  It‘s a team.  They collectively—the point collectively is to make sure that every American has a seat at the table, so to speak.  And they‘re the proverbial front door to the White House.

The reason that interested me so much is that I had the chance to work for the last two years on the Obama campaign on the arts policy committee, reaching out to folks.  We had the chance to go to 26 states on behalf of the president.  And in every single one, folks didn‘t really seem to have political affiliations, Democrat versus Republican, as much as they did have concerns about actual issues—energy, education, the arts, health care.

So, it‘s an honor to have the chance to serve in that capacity.  And I‘m going to be heading up the point person for the arts communities and the Asian-American and Pacific Islander communities.

MADDOW:  And does “art communities” mean Hollywood, or does arts communities mean .

PENN:  No.  Arts communities means arts communities, not Hollywood.  There are a number of arts communities all over the country.  A lot of them were affected extremely and negatively by the last eight years.  The stimulus package affects some of them now.  The NEA was part of this and there are regional arts groups that are involved in things like education and after school programs.

So, it‘s definitely not Hollywood.

MADDOW:  Well, there could be—Hollywood could be included there.

PENN:  Sure.

MADDOW:  I mean, this is a—among other things—this is a big change in life course.  I imagine this is a big pay cut.

PENN:  It is.

MADDOW:  You are at a point in your acting career where your trajectory is definitely like this, and not like this or like this.

PENN:  Right.

MADDOW:  I imagine it was a hard decision.  But now that I‘m meeting you, it‘s sort of—you‘re not giving me that vibe.


PENN:  I mean, you know, it was something that was sort of incremental in the sense that I was always interested in public service.  In college, I majored in sociology and studied film.  And all the public service stuff I would do tended to be on the side, kind of discreetly.  I don‘t know why.  That‘s just the kind of the way it was.

My grandparents were a big influence on my life.  They marched with Gandhi and the Indian independence movement.  And those were the stories I heard growing up at the dinner table.  So, it wasn‘t—as you should have jumped (ph) as I think it might seem to folks who might only know from the characters I‘ve played, because it‘s been a passion of mine for a while and it‘s the greatest honor to have a chance to serve in this administration.

MADDOW:  You talk about it as public service not as politics.

PENN:  Right.

MADDOW:  What‘s the difference?

PENN:  Well, I—the thing that drew me to this was public service.  It was the feeling and the knowledge that President Obama is transcending the left versus right divide.  And most of the folks whom I met on the campaign trail believe that I‘m politically an independent and I‘ve admittedly voted for Republicans and Democrats both, and I think there‘s a big difference between a politician and a statesman.  And I find that President Obama is a statesman, not just a politician.

MADDOW:  In terms of making this transition into public service, do you ever regret playing Kumar?  I mean, because no matter how serious an issue you‘re talking about, anybody under the age of 35 or anybody prurient and immature like me, is going to imagine, you know, like that sex scene between you and the giant bag of pot, you know what I mean there (ph)?


PENN:  Well, it‘s an interesting question, and the way that I would answer that is, you know, everyone seems to know that Superman doesn‘t really fly in real life.

MADDOW:  Right.

PENN:  And Anthony Hopkins presumably didn‘t actually eat people.  And, you know, when Daffy Duck gets hit on the head by that big anvil several times, he still walks away.

MADDOW:  Right.

PENN:  We know that‘s fake.  But for some reason, this particular character, folks seems to always ask about but only when I‘m doing an interview.

I‘ll give you an example.  Those 26 states we went to during the campaign, I was wondering whether, you know, when we would do rallies for college students or outreach for community groups, if that issue would come up and it never did.  And I think that‘s because folks around the country are in such dire straits right now, they‘re really concerned about the job market, they‘re concerned about the economy and health care, and that‘s what they‘re asking about, not about frivolous films.

MADDOW:  Frivolous films.


MADDOW:  No regrets?

PENN:  No.  Look, I enjoyed being an actor but there‘s a time to have fun and there‘s a time to be serious, and I think the time now is to be serious.

MADDOW:  I know that you‘ve taught at Penn, is that right?

PENN:  Yes.

MADDOW:  You attended UCLA and Stanford?

PENN:  That‘s right.

MADDOW:  And your family, as you‘ve said, going way back, has been politically active, involved in public service things.  Are they really psyched about this turn in your career?  Are they very happy about the new, serious public Kal Penn?

PENN:  They‘re excited.  They were excited that I got to play a doctor on “House.”  That was step one in being taken seriously career-wise.


MADDOW:  Right.

PENN:  But, you know, they were very supportive of the Asian American cause that I was teaching and the research that I was doing.  And this is another step where I think my parents are very proud and I‘m very happy for that.

MADDOW:  What are you doing now before you get to the White House?

PENN:  There are a lot of things to wrap up.  You know, I just—literally just last week finished, you know, this episode of “House” that aired.  So there are still a couple of things pending related to that.  There‘s a home that I have to figure out what to do with.  I have to find an apartment in D.C., things like that.

MADDOW:  There‘s—one of the—of the apartments in the Watergate Building that was used in the Watergate break-in where they handed off the hush money to burglars.  It‘s for sale in Craigslist.

PENN:  I‘m looking for a rental, though.  Do you know anybody with .

MADDOW:  I‘ll keep my eye on the Watergate site.



MADDOW:  Kal, good luck to you.

PENN:  Thank you very much.  Thanks for having me on.

MADDOW:  Actor Kal Penn soon to be associate director in the White House Office of Public Liaison.

All right.  Solutions to the current economic crisis, a little—admittedly—confusing.  Have you been confused—have you been confounded by Republican governors who have rejected stimulus cash, even though their states desperately need it?  Well, you are in luck.  The host from NPR‘s “Planet Money” will be here in a moment to tell us things that you can then repeat to other people to make it seem like you are an economics genius.


MADDOW:  How dare the federal government raise taxes on rich people and cut taxes for everybody else.  Revolt.  Outrage.  Socialism.  Socialism.

In just a moment, we will give the conservative tea parties a lump or two.

But first, it‘s time for a couple of holy mackerel stories in today‘s news.

“The New York Times” reporting that the Bush administration is planning a reunion—already.  Next week in Dallas, the former president will host Condoleezza Rice and Karen Hughes and Dan Bartlett and the Michael Gerson, the speechwriter and two other former Bush administration officials who I guarantee you do not remember and have not heard of for a reunion.  A dinner and a day-long discussion about the George W. Bush Policy Institute.

All right.  That‘s not fair.  The two other people known to be attending the meeting are Mark Dybul, D-Y-B-U-L.  He became head of the president‘s global AIDS program after the previous guy running that program got named in the D.C. madam prostitution scandal.  Also a person named Yuval Levin, who served as a domestic policy aide.

At least as far as “The New York Times” reports, that‘s the complete list.  That‘s the Bush reunion.  Rice, Hughes, Bartlett, Gerson and those two other people.  That‘s at least who we know to be left in George W.  Bush‘s corner after eight years as president.

The former vice president, Dick Cheney, explicitly will not be there.  They‘ve been fighting.  But no Rumsfeld?  No John Ashcroft?  No Alberto Gonzales?  No Harriet Miers?

The former president has apparently found at least one new mind to meld with since leaving office.  He has been working on his memoirs with the help of a 27-year-old named Christopher Michael.  Just 80 days out of office, Bush and his 27-year-old friend have reportedly already churned out 45,000 words.

If he keeps up this pace by the end of the year, his book will be over 600 pages long.  And he will have stayed very, very busy writing about himself, which seems good.  Maybe we can get him a deal for a multi-volume encyclopedia on himself.  Stay busy.

Finally, last night on the show, we talked about the same-sex marriage group, the anti-same-sex marriage group, the National Organization for Marriage.  They‘ve been running a new multimillion dollar ad campaign warning about how scary it is for straight people that gay people might some day have the same legal rights as them.

The Human Rights Campaign, a gay rights group, got a hold of footage of actors auditioning to the said scared straight people, and they posted the audition footage online to great comedic effect.  Now, the National Organization for Marriage has decided to keep the inadvertently hilarious momentum funny thing going, by launching a new initiative, a campaign they‘re calling “2 Million for Marriage.”  But they don‘t want you to refer to it as “2 Million for Marriage.”  They are much more 21st century than that, and they would prefer that you call it “2M4M.”

M4M.  Have you ever read personals ads?  Have you ever just browsed through Craigslist?  Have you ever, I don‘t know, Googled M4M—or the anti-gay marriage group?  If you don‘t know what the abbreviation “M4M” stands for—I do not want to spoil your Googling fun, but here‘s the hint, the related search that Google suggests is for the Web site manhunt.

You know, maybe these folks should just join up with the teabaggers.


RACHEL MADDOW, HOST:  Forget worrying about a run on the banks.  Nothing says economy in crisis like a run on the job fair.  The “Nashua Telegraph Newspaper” in Nashua, New Hampshire reports today on a statewide jobs fair that advertised 1,000 jobs available. 

They expected a big turnout and they arranged bus transit from a nearby mall for about 600 people per hour.  Instead, more than 10,000 people showed up in the first two hours.  And that doesn‘t count the people who turned back when they saw the crowds and the lines. 

The event eventually had to be shut down early, as lines of job seekers snaked across the campus of Southern New Hampshire University.  And people hoping to get on those shuttle buses from the parking lots of the mall of New Hampshire brought both sides of Route 293 to a debilitating stand still. 

So welcome to today‘s visual representation our imperiled economy and the still-rising unemployment rate.  That rate is one of the things that everybody seems to get about this economic crisis.  Amid a complicated amalgam of bad economic problems and all the different proposals being floated to fix those problems, unemployment is pretty simple. 

It‘s a thoroughly uncomplicated, easy-to-understand one that has been kicking the country in the teeth since this current economic meltdown was just a twinkle in the old downturn‘s eye. 

Of all the economic tools President Obama and his team have employed in the past few months, the one most specifically tailored to counteracting unemployment has of course been the stimulus bill.

Republican governors like Alaska‘s Sarah Palin, Louisiana‘s Bobby Jindal and South Carolina‘s Mark Sanford have been trying to make political hay by standing up against the stimulus bill. 

But now they‘re finding it politically impossible to actually, literally turn down all the cash.  “‘s” Ben Smith reports that all three have now submitted letters to the White House saying they would please like to be eligible for those federal funds that they‘ve been railing about. 

Trying to save face, Gov. Sanford‘s political allies have paid for a video in which the governor defends his stance, sort of, against the stimulus.  


MARK SANFORD ®, GOVERNOR OF SOUTH CAROLINA:  Going further into debt will not solve the problem created by too much debt.  


MADDOW:  Though he‘s against the stimulus money, he‘ll probably be accepting anyway because it will worsen this economic crisis that was created by debt.  The crisis we‘re in is because of debt.  Really? 

Joining us now, Adam Davidson and Alex Blumberg, hosts of the “Planet Money” podcast from NPR, two non-economists, relatively normal reporter guys known for explaining the economy and the current crisis to other regular people in an understandable way.  Gentlemen, thank you for being on the show tonight.  

ADAM DAVIDSON, NPR CORRESPONDENT:  Thank you for having us.

MADDOW:  I hope I did not bother you by calling you relatively normal.  Governor Mark Sanford says this economic crisis was created by debt.  I don‘t get that.  Is he right? 

DAVIDSON:  Yes.  He‘s right about that.  


DAVIDSON:  Basically, over the last 10 years, the world changed a lot.  One of the ways the world changed was the U.S. consumers got into so much more debt than they had ever gotten into before - well, in a long time.  A lot of that was household, you know, buying homes, a lot of it was credit card debt and other things like that.  And that certainly created the conditions for the crisis.  It doesn‘t explain the whole crisis, but it‘s a reasonable explanation.  

MADDOW:  He means though that it‘s the national deficit, I think.  

ALEX BLUMBERG, NPR CORRESPONDENT:  Oh, I don‘t know what he means.  It‘s hard to tell what kind of debt he was talking about.  There‘s all different kinds of debt.  

MADDOW:  Right.  

BLUMBERG:  If I can take a moment and talk about my favorite chart that I‘ve seen recently? 

MADDOW:  Please.  

BLUMBERG:  I know this is the kind of show where you can do that, right?  I was talking to a finance professor at Columbia and he showed me his favorite chart, which has now become our favorite chart, which is a chart of household debt in this country over the last 100 years. 

And household debt is like everything that you owe on your credit card, on your mortgage, and on your car -everything.  And if you add up everything that everybody owes in the country and put it all together, that‘s what household debt is.  And then this chart was a percentage of GDP. 


BLUMBERG:  So the chart is sort of like goes up and up and up and up over the decades.  And then at like - it crests.  It goes sharply up in the 2000s.  It crests at 2007 at 100 percent of GDP, which means every - we, collectively as a nation - this is not corporate debt, this is not government debt.  We, collectively, as people owe $13 trillion on our cars and credit cards, 100 percent of GDP.  Last time that happened - 1929. 

MADDOW:  Oh, when something else bad happens.  


MADDOW:  Is there any way it can be argued - and I‘m thinking about the tea parties now, which I‘ll be talking about again in just a moment after you guys are safely out of the room.  Because I‘m worried that I‘m going bust out talking about it like I did last time. 

Is there any way in which the idea of the government running a deficit or accumulating debt into the extent that they did during - I don‘t know - the Bush administration or say, during the Clinton years when there was a surplus.  Is there any way that can be blamed for the crisis that we‘re in? 

DAVIDSON:  I don‘t think that can be blamed for - yes, there is a way it can be blamed.  

MADDOW:  Do it.  

DAVIDSON:  I‘m thinking it through.  I mean, another of the ways in which the world changed that made this whole crisis happen is the specific nature of our debt.  We were, as a nation, spending about 3 to 6 percent, depending on the year, more than we as a nation made. 

‘               And that is adding everything - the companies, the government, the people.  And we were borrowing that money famously from China, from Japan, from other places and that created a distortion in how money moved around the world. 

And it‘s a little complicated to explain right now, but it basically created a distortion that inflated this debt bubble that then burst and we‘re now paying the price. 

BLUMBERG:  So if you want to get really mad, have you to blame the systemically-created debt distortion.  

DAVIDSON:  You have to blame - yes, China and Japan and America and consumers and the banks.  

MADDOW:  And in finance economics, where debt became something that was the basis of trading and all sorts of financial engineering, is something else that people who are worried about the economic crisis but don‘t understand about a lot about economics - a lot about economics worry about, too.  What about deregulation in the financial industry? 

What about the different things that could be traded that couldn‘t be traded before, different types of institutions that couldn‘t exist before that did exist after deregulation in the ‘90s? 

BLUMBERG:  This is something that - I mean, it‘s really hard to like, point a finger at like this.  I mean, you can find people who will do that, who will say it was this deregulation at this moment that caused this crisis. 

We‘re not those people, I‘m afraid.  But I think there is - there was a number of financial instruments that were created that became very popular.  They weren‘t created but they became very, very popular in the late ‘90s, early 2000s, that weren‘t looked at very closely. 

And maybe if somebody had been looking at them more closely, some of these problems could have been solved, probably.  

MADDOW:  And looked at, meaning policed? 

DAVIDSON:  Potentially.  I mean, I think what Alex and I often say is, it‘s not so much that there was too little regulation.  It‘s that there is too uneven regulation.  There were partly - running a bank, you are really, really regulated. 

There‘s this idea that, you know, Ronald Reagan just made banks go crazy - do whatever you want.  It‘s not like that at all.  Running a bank is tough.  You have a lot, a lot, a lot of rules.  But running an investment bank or hedge fund is very easy.  You have very few rules.  I mean, I‘m sure it‘s hard to do as far as the government is concerned.

And it was this mismatch where you have like, really heavy regulation in one area and no regulation or very little in another area.  That creates distortions, too.  So it‘s not so much more or less, but more even and maybe smarter regulations.  

MADDOW:  Well, it seems like that would also be the problem when have you consumer banks, investment banks and insurance companies all becoming the same institution and you can sort of internally trade your level of risks and regulation.  

DAVIDSON:  I think that‘s the story a lot of people are saying ...


DAVIDSON:  ... that there is this decision in, you know, 1998, 1999 to repeal Glass-Steagall.  I think the evidence isn‘t persuasive that that was sort of a - that was the one cause, like Alex was saying.  I think, you know, that‘s one factor among a lot of factors. 

BLUMBERG:  But there is, I mean, you know - there is a sense that like

there was a sector of the financial services industry where you could -

where you could take on excessive leverage, where there wasn‘t very much

regulation.  And that is a lot of - that‘s where a lot bad of things did

happen, you know.  I mean, the credit default swap arena that did bring

down AIG, that did sort of pile on problems that is costing us -  

MADDOW:  Mortgage tax securities, too? 

DAVIDSON:  No, I think mortgage tax securities are - honestly, I think they are a wonderful thing.  They should be around for a long time.  

BLUMBERG:  Yes, mortgage tax securities were around for a long time.  And they, by themselves, did not do this.  But it was the sort of - it was the craziness that went - there were certain banks that went crazy with them.  But the idea isn‘t that bad.  

MADDOW:  So all the things that I thought were usefully explanatory in terms of what‘s happened, in terms of not making the mistakes again, you‘ve now told me don‘t apply at all. 

DAVIDSON:  I‘m saying they don‘t apply.

MADDOW:  They don‘t apply at all.  They don‘t explain anything.  But I don‘t understand what does explain (UNINTELLIGIBLE).  

DAVIDSON:  No, no.  I spent the day by coincidence with this fabulous cancer researcher at Yale and he was explaining to me how a cell becomes cancerous.  And things happen badly in cells all the time.  Two things, four things or five things happen badly, the body knows how to deal with it. 

It‘s when six or 10 or 12 things happen that you get runaway cancer.  And I think that‘s this kind of crisis.  We try and explain it as simply as possible, but unfortunately, it isn‘t a simple story. 

It‘s a lot - a lot of different things happened that caused this cancer - I guess I‘ll go for it.  And you know, I think for us, you know, picking like, “Oh, it‘s these Democrats or these Republicans or this decision point or this moment, if only - if only they knew, it‘s not like that.”

It‘s for 20 years, all the people in charge of our economy from journalists to regulators to politicians to people overseas did not - they all did a bunch of things that seemed like a decent idea at the time, and it led to this crisis.  And unfortunately it‘s not - it‘s that simply not simple.  

MADDOW:  The way out of this is everybody shouldn‘t do things that seem like a reasonable way forward.  It‘s - yes. 

DAVIDSON:  There are villains but it‘s mostly a villain-less - or single villain-less story. 

MADDOW:  Adam Davidson, Alex Blumberg, hosts of “The Planet Money” podcast from NPR, thank you for coming in.  I feel much worse than when I started talking to you, but I don‘t know why.

You can hear more from Alex and Adam when they make their debut on “Meet the Press” this Sunday on NBC.  Wear a Snuggie.  Check local listings for times. 

All right.  Coming up on “COUNTDOWN” Hillary Clinton‘s latest attempt to recoup her campaign losses - she‘s raffling off dates with her husband. 

Next on this show, fire up the kettle, more tea bagging coming up.


MADDOW:  Last night on this program I was joined by Ana Marie Cox for a rather difficult discussion about teabagging.  Conservative activists and Fox News Channel teaming up to organize protest actions that include sending tea bags to members of Congress pledging to teabag the White House. 


UNIDENTIFIED MALE:  They‘re going to try and send tea bags to D.C. - D.C.  teabag the White House.  Teabag the fools in D.C.


MADDOW:  At the risk of saying the “teabag” more than my conscience can bear, there are two remaining points here that I would hope to still be able to clear up. 

First, in our last discussion of this topic, we reported that

Republican Party Chair Michael Steele had asked to speak at a teabagging Chicago planned for next week. 

We reported that because the organizer of the Chicago teabagging posted online his response to Mr. Steele, telling Mr. Steele that, no, he would not be allowed to speak.  Mr. Steele is now denying that he ever asked to speak at the Chicago teabagging.  He says he was just sending a heads-up that he was going to be in the area. 

In other words, it‘s a “he said, he said” at this point.  And who am I to get into the middle of a fight between a pseudo-revolutionary right-wing teabagging organizer and the head of the Republican Party? 

The second point is a larger point about the overall purpose of the teabagging protests.  This is not just political anthropology.  At least a dozen ambitious Republican members of Congress have signed on to appear at these events. 

The unofficial Republican Party media outlet, Fox News Channel, has explicitly endorsed these events.  Unless John Boehner or Michael Steele are secretly much more popular than they appear to be, these events organized around the idea of teabagging seem to be the only real sign of energy, the only real sign of life on the political right. 

If we are to retain our two-party political system and this teabagging movement is the nucleus from which the post-McCain, post-George Bush Republican Party is going to regenerate, is this is where the action is, it‘s worth knowing what for, right, what it‘s about.  It‘s worth taking a glimpse at the future of the Republican Party. 

The Tax Day protests, of course, have not happened yet so we can‘t look at those for evidence.  But there have been previous teabagging events in February.  What can they tell us about how the GOP will find its way out of exile? 

A few themes emerge.  Theme number one?  Down with Obama.  The down with Obama theme is evident not only in the outright denunciations of Obama like these folks‘ signs and t-shirts in Ft. Worth.  But also in the theories about the president subscribed to by teabaggers.  A man not sympathetic to them in Cleveland shot this footage at their Cleveland teabagging February 27th rally.  


UNIDENTIFIED MALE:  Do you think Barack Obama was born in the United States? 

UNIDENTIFIED MALE:  I - Kenya, wasn‘t he? 

UNIDENTIFIED FEMALE:  I don‘t know for sure. 

UNIDENTIFIED MALE:  I don‘t know. 

UNIDENTIFIED MALE:  You don‘t think he was born in the United States? 


UNIDENTIFIED MALE:  No, positively not.  


UNIDENTIFIED MALE:  positively.  

UNIDENTIFIED MALE:  Chances are he‘s not.  

UNIDENTIFIED FEMALE:  I don‘t - I‘m not sure on that, to be honest. 

UNIDENTIFIED MALE:  No, I think he was - I think he‘s a Kenyan.  


MADDOW:  That‘s theme number one - Obama‘s not actually president.  He‘s not even American.  Down with Obama.  The second discernible theme, oddly, a dislike of the Federal Reserve.  You know, Ben Bernanke, Alan Greenspan thing, the central national bank? 


UNIDENTIFIED MALE:  I want to print some money.  The Federal Reserve does it, why can‘t I? 


MADDOW:  You see a lot of Ron Paul signage and slogans at the teabagging events thus far which is often very closely linked to the “I hate the feds” sentiment.  So that‘s discernible theme number two, down with the Federal Reserve. 

Let‘s just have, you know, private banks like Citigroup and stuff.  That will be much more stable.  Discernible theme number three?  Taxes - not like Boston Tea Party, the whole taxation without representation thing, just no to taxes full stop. 

This is, “Taxation with representation ain‘t so hot either.”  And the other one, “Taxation with representation sucks, too!”  This is the message that‘s being sold most aggressively about what the great conservative teabagging protests of 2009 - the idea is that they‘re against taxes.  That‘s mostly what they are for. 

You can buy lawn signs that say, “Taxed enough already.”  Get it?  T-E-A - tea.  There are t-shirts, bumper stickers - “taxed enough already.”  The outrage, “Our taxes are outrageous.  We will evoke the spirit of the American colonists who seceded - who seceded from the tyrannical government that taxed them so unjustly.  These Obama tax policies are just unconscionable.” 

You know what Obama‘s done to taxes in the less than three months he‘s been in office?  He‘s passed the biggest middle class tax cut in American history.  Honestly, these protests are organized around the principle of “taxed enough already” and they are protesting now?  Right after taxes just got cut for everyone making less than a $250,000 a year? 

Maybe all these folks are outraged because the tax rate for people who make more than a $250,000 a year is going to back what it was under Bill Clinton.  That‘s the outrage?  Remember how much the rich suffered under Clinton.  Never again.  Really? 

Maybe it‘s the outrage the debt and deficit are high.  But then wouldn‘t you have protested when George W. Bush turned hundreds of billions of dollars of surplus into a trillion dollar deficit and then the economy collapsed before he left office? 

Maybe it‘s outrage that Obama won the election.  Teabagging is an embarrassing word.  The idea of teabagging the White House is even more embarrassing.  This guy‘s sign says “Pork D.C.” 

Conservative writer Andrew Sullivan today suggested in the absence of any clear motive for protesting, the tea parties should be seen as tea tantrums instead.  Waiting further signs of rational motivation, I am inclined to agree. 


MADDOW:  Was that naked people? 

JONES:  Yes.  Naked pole vaulter there, Rachel.  Yes, running through the streets of Paris.  It happens.  You know, how they go.

MADDOW:  That‘s what happens.  Well it always in Easter week. 

JONES:  Yes.  It certainly does.  

MADDOW:  All right.

JONES:  Oh, we‘ve got plenty of weak-a-tude for you this week, Rachel.

MADDOW:  All right.  I‘m ready for it.

JONES:  First up the Easter warm-up of the weak.  The “Gainesville, Florida Sun” reports that three police officers were reprimanded for cruising through high crime areas off duty and throwing eggs. 

Why?  One said, quote, “to harass the prostitutes and the drug dealers.”  Very nice law enforcement there.  Were they trying to make a crime omelet?  Weak.  Weak. 

MADDOW:  Cops - off-duty cops going back to the scene of things they were policing as on-duty cops, armed with eggs this time.  

JONES:  Yes, just tossing off eggs.  Apparently, there was alcohol involved.  I know. 

MADDOW:  Now, that is hard to believe.  

JONES:  I mean, come on. 

MADDOW:  I know.

JONES:  Stop with the lies.  Next up, quote of the weak.  During testimony in the Texas statehouse, Republican Representative Betty Brown posed this question to voters of Asian dissent.  Quote, “Rather than everyone here having to learn Chinese - I understand it‘s a rather difficult language - do you think it would behoove you and your citizens to adopt a name that we could deal with more readily here?”  Unquote. 

Representative Brown, what is the Mandarin word for “weak?” 

MADDOW:  And her name is Betty Brown.

JONES:  Betty Brown.  I don‘t know how that goes over in China.

MADDOW:  She was born with a much more complicated name than I can imagine.

JONES:  Probably so.  I would certainly think so.

MADDOW:  She sure didn‘t start out with “Elizabeth was really, really hard for people to begin with.  I became Betty.  Can‘t you follow my lead?”  

JONES:  Can‘t you make things easier for us?  Terrific.  Next up tax deadbeats of the weak.  The “Los Angeles Times” reports that the State of California has released its annual list of taxpayers with the largest delinquent income tax bills.  On that list are Burt Reynolds, Dionne Warwick and Sinbad.  Pay your taxes, early ‘80s people.  Weak.

MADDOW:  They publicly release the names of people who haven‘t paid their taxes? 

JONES:  Yes.  Apparently, they do that every year.  

MADDOW:  Wow.  

JONES:  They have a list.  

MADDOW:  Does Sinbad have a last name? 

JONES:  Sinbad doesn‘t need a last name, OK?

MADDOW:  He files his state - Sinbad, Sinbad? 

JONES:  I file mine as just Kent, so you know - people know.  

MADDOW:  Well, that‘s a good idea.  I might start that.  I get it.  

JONES:  Finally, exercise gizmo of the weak.  This is the jump snap, a high-tech jump rope without the rope!  This thing counts your calories and makes a rope whipping nose when you twirl it and it even talks to you, but there‘s no rope! 

It‘s no rope.  These people are just twirling their hands and there is no rope and it costs $40 and there‘s no rope!  There‘s no rope!  Weak.  Incredibly weak.

MADDOW:  So the exercise is just going like this? 

JONES:  You just go like this, ooh.  

MADDOW:  I‘m doing it now.  

JONES:  I‘m feeling the burn.  This is terrific.  I‘m so glad not to go over through all the burden of actually stepping over a piece of cloth.  Come on, weak.

MADDOW:  All right.  Cocktail moment for you, Kent.  

JONES:  Oh, very nice.  

MADDOW:  The people who sell candy in this country ...

JONES:  Yes, yes.

MADDOW:  ... want us to know there is good statistical evidence about how Americans eat their chocolate Easter bunnies. 

JONES:  Which is Sunday. 

MADDOW:  Seventy-six percent of Americans eat the ears and the bunny first.

JONES:  Seventy-six?

MADDOW:  Seventy-six.  Five percent eat the feet.  Four percent eat the tail.

JONES:  Oh, my gosh.

MADDOW:  No word on the last 15 percent.  Four percent of people eat the tail - I don‘t get you. 

JONES:  It takes all kinds.

MADDOW:  Happy Easter.  Thanks for watching tonight.  We‘ll see you here Monday.  “COUNTDOWN” starts right now. 




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