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'The Rachel Maddow Show' for Wednesday, October 14, 2009

Read the transcript to the Wednesday show


October 14, 2009



Guest Host: Alison Stewart

Guests: Wendell Potter, Richard Trumka, Dave Weigel, Barney Frank, Sarah Haskins, Kent Jones

ALISON STEWART, GUEST HOST: Good evening, Keith. That's a lot of giggling for grown men going on over there.

KEITH OLBERMANN, HOST, "COUNTDOWN": Yes. And they were laughing, too.

STEWART: Thank you, everybody, for staying with us. Rachel is still not feeling 100 percent. But she's told us she's hoping to be back soon.

In the meantime, there is a fort to hold down.

It was a scary day to be a big insurance company, thanks to Senator Harry Reid; a maddening day to be a taxpayer, thanks to bailed out Wall Street banks; and a tough day to be a Republican leader, thanks to the tea party wing of the GOP; a sad day to be a size four, thanks to a fashion mogul; and a very wet day to be a British school child, thanks to some fairly sadistic U.K. drivers.

Wendell Potter as well as AFL-CIO President Richard Trumka, Congressman Barney Frank and the "Washington Independent's" Dave Weigel, and a cast of several more will join us this hour.

But we begin tonight with a major escalation in the fight over health reform, not between the two political parties, but between one party and one very big business. Senate Democrats today officially broke what looked like an uneasy truce and took their fight straight at the insurance industry.

We'll put it another way. Democrats just played Popeye to the insurance companies' Bluto. They stuffed down some spinach and said they might-just might-hit the big guy right in the kisser. They did that by threatening to end a 64-year-old law that gives the insurance industry a special antitrust exemption that allows insurers to be regulated by states, not the federal government.

Critics have long charged that, practically speaking, the law means that the insurance industry is allowed to rack up huge profits by essentially fixing pricing.

Today, Senate Majority Leader Harry Reid had this to say about that.


SEN. HARRY REID (D), MAJORITY LEADER: The insurance companies have become so large they dominate an entire region of the country. They not only damage general businesses, they prevent insurance companies from starting up. They've become so dominant that they dictate business practices.


STEWART: Mr. Reid spoke as a witness at a judiciary committee hearing in favor of the proposed tough new regulations.

Senator Charles Schumer of New York, a guest on this program last night, said the move against the insurance industry was not payback for the industry's now mostly debunk report saying health care reform would mean higher insurance premiums. So, it's just a coincidence, right?


SEN. CHARLES SCHUMER (D), NEW YORK: I guess the insurance industry is stirring the pot and saying it's retaliation for them being off the reservation. So this is a long standing issue because-maybe because the insurance industry blundered so badly on Monday, it gives us greater opportunity to pass this, but it's long been out there as something we care about.


STEWART: So Senator Schumer also said that he wants the antitrust provision to be included in the final health reform bill that comes out of the Senate. But will the Democrats tough talk actually translate into a victory over the insurance lobby in the form of real health care reform?

Joining us now is Wendell Potter, former insurance executive-turned-whistleblower.

Wendell, thank you so much for coming into the studio tonight.


STEWART: First of all, I want to talk about this legislation from

1945, the McCarran-Ferguson Act. What would-attacking this legislation

what would that really do?

POTTER: Well, what it could do is maybe possibly inject more competition into the health insurance industry. This law, this exemption has enabled the big insurers to become very, very dominant in most of our markets throughout the country. In Alabama and North Dakota, for example, Blue Cross Blue Shield plans have about 90 percent of the share-of the market share there. And every market in the country, there's a domination of one or two major companies.

This makes it almost impossible for smaller competitors to come into a market. In fact, the idea of creating co-ops to compete against these big insurers that Senator Conrad of North Dakota has suggested, they wouldn't have a chance of competing against the big guy like Blue Cross Blue Shield in North Dakota.

STEWART: Now, there have been attempts, earlier attempts to take in this law, even earlier this year. Do you think this is a time it might actually be successful?

POTTER: I think it might because-thanks to the health insurance industry, whether or not the timing is coincidence or not, it's kind of irrelevant. This could be the time because we really are talking about reforming the system in ways that really could benefit consumers. This is a great opportunity to do something like that and this is something that should be done-should have been done previously. So, why not take it on right now?

And, you know, the health insurance industry doesn't enjoy a lot of popular support and I think as we saw the reaction to their bogus report the other day. And by the way, another bogus number that they throw out, the insurance industry says that they represent about 13 companies, this is AHIP. That's a bogus number. They aren't nearly that many numbers of AHIP. So, they can't count right.

STEWART: So, how do they get that number?

POTTER: They get that number by counting subsidiaries of some of the big companies, like CIGNA and WellPoint, and they double count some. And sometimes, they count vendors. So, they're perpetuating the myth of competition when there really is very little competition.

STEWART: All right. So, let's say this antitrust legislation really gets some steam, gets some momentum going. Take me inside the conference room of insurance company X, what's going on? What's being discussed?

POTTER: What's going on is the discussion of health care reform in general and they listen a lot to financial analysts and to their big shareholders. And that's why I'm pretty sure that AHIP came out with that bogus report in the first place, because they were getting pressure from the shareholders. What are you going to do about this? Can't you get Congress to restore those very terrible penalties that were in those original finance committee bills?

They're hoping that they can get through this like they have every other health care reform debate.


STEWART: So, lobbyist on the line five?

POTTER: Oh, absolutely.

STEWART: On the speed dial?

POTTER: Absolutely. Not just the lobbyists, the legions of lobbyists.

STEWART: Senator Schumer is trying to attach this antitrust legislation to the health reform bill. Does that make it more or less likely to pass in your opinion?

POTTER: It could make it more likely, because I think it would enjoy a lot of support, particularly among Democrats. Of course, Republicans who are allied with the industry, who have-many of them shills for the industry anyway, will balk at it-will try to knock it out of the bill if it is inserted in there. But I think there would be a good chance.

STEWART: It sounds like it's a relatively inexpensive way to take a giant step in health reform.

POTTER: It would be. It would go along right.

STEWART: We're all talking about costs all the time.

POTTER: That's right. You know, we already have a lot of consolidation in the industry that has been enabled partly by this legislation and lacks attention on the part of the Justice Department over the last eight years. So, that's one of the reasons why we have this consolidation.

But the health insurance industry enjoys a lot of exemptions from regulation, the ERISA laws of some years ago give the insurance industry and employers a lot of protection, and it exempts a lot of the plans from state regulation.

STEWART: Wendell Potter, former head of public relations for CIGNA, thank you so much for joining us this evening.

POTTER: Thank you. Thank you, Alison.

STEWART: It's not an accident that the Democrats are using the idea of increased competition as a weapon against the insurance companies. It is a potentially very effective weapon. It is plain old common sense. It is easier for a business to make money when there's less competition, which is why the so-called public option is anathema to the insurance industry.

Last night on this show, Senator Chuck Schumer made news by putting pressure on Majority Leader Harry Reid to protect the public option in the Senate's final health reform bill.

Today, a new heat came in the form of a full-page newspaper ad taken in today's "Washington Post," "USA Today" and other D.C. newspapers. The ad was taken out by 27 labor unions including the AFL-CIO. It applauds reform efforts in Congress, but says, quote, "We aren't there yet." It refers to the proposals that came out of the Senate Finance Committee yesterday as, quote, "deeply flawed" and called the public option essential to reform.

Joining us now is Richard Trumka, president of the AFL-CIO.

Thanks for being in the studio.

RICHARD TRUMKA, PRESIDENT, AFL-CIO: Thanks, Alison. Thanks for having me on.

STEWART: I want you to confirm or I want to be able to speak to something that's been widely reported, that Rahm Emanuel has spoken out to the unions and asked you not to speak out publicly against health care reform, but didn't include the public option. Did that actually happen?

TRUMKA: No. He didn't ask us not to speak out or do an ad. We quibbled over a few words in the ad. But there was never any attempt to say don't do this or don't do that, that didn't happen.

STEWART: Any pressure to take up his ad from inside your organization?

TRUMKA: No, not really. I mean, nobody said to us, "Don't take out the ad," because they knew we were going to do it. And it was our members' best interest. And this administration has never operated that way with us. They have never said don't do this or don't do that. We operate, sort of, in respect for one another.

STEWART: Let's talk about the public option. Is it a make or break issue?

TRUMKA: Absolutely.


TRUMKA: Well, because, there's-right now, as your last guest said, American insurance companies have a stranglehold on the health care industry. In 90 percent of the markets, they're called highly-concentrated or there's one or two companies that control them. And as a result, profits have gone up 1,000 percent and premiums have gone up 300 percent.

The only way to hold them accountable is to create competition, and the only way you can create competition is with a robust public option. When you do that, they'll face competition and they'll bring prices down.

We'll save at least $100 billion in the process.

STEWART: And so, why is that-tell me why this affects your union members directly? I mean, I understand why that affects the average person, but someone who's not in the union might not understand why that affects union members?

TRUMKA: Our union members get health care from their employers generally. And the more our employers have to pay, the less competitive we are. If we have to compete with people around the world, it becomes more difficult. Moreover, we shouldn't be wasting money on things, no matter what the thing is, and we don't want our employers to spend an extra $100 billion on health care that we can get for $100 billion less that we can actually share.

STEWART: So, that ad is a very powerful statement. It says you folks mean business.

TRUMKA: Yes, we do.

STEWART: That you're very, very serious about this.

So, how are you going to put this into action? Are you going to target-well, maybe target is too harsh a word-but are you going to focus on specific members of Congress? How are you going to go about making sure what you want happens?

TRUMKA: Well, let me tell you what we did in just the last week. We brought in members from 27 different states and they held over 100 meetings with senators just this week. We had 42,000 handwritten letters delivered to those senators and we made 30,000 calls in to those senators' offices. You will see that increase as time goes on because we are closer than we've ever been to getting real health care reform, but we're not there yet. We still have a ways to go and the model that we're dealing with is a flawed model.

STEWART: So, here's a provocative question. The amount of work and effort that you folks are putting into it, are you all that different from lobbyists from the insurance companies who are worried about their workers and their bottom line?

TRUMKA: Well, I guess, we're talking about the American public. Public option will save every American out there premiums on their health care. Requiring employers to pay their fair share will save about $200 billion and drive down cost for everybody out there. And arguing that there should be no taxes on working family because they negotiated health care or they have health care is in everybody's best interest.

So, while we're not speaking for the insurance companies, we're not speaking for more profit, we're speaking to save money for the American worker and the American citizen.

STEWART: Now, we should point out that not all unions signed on to your ad. The SEIU did not sign on to that particular advertisement. Why not? Is there a difference of opinion between the unions that did sign on and some of the unions that didn't? And what is that difference?

TRUMKA: I don't think there was. First of all, the SEIU is not a part of the AFL-CIO. This was an AFL-CIO effort. So, they weren't part of that.

I don't think there's any difference when it comes to health care. They agree that we need a public option. They agree that every employer ought to pay their fair share, and they agree that there shouldn't be any taxes. We're just not getting around to people and being there (ph), going to 70-some unions and getting everybody to sign on in the process.

STEWART: Are you optimistic about this health care reform?

TRUMKA: Yes, I am, because the American people are demanding it. And I think anybody who votes against it or tries to block it or tries to do things that will help insurance companies, I think, is going to pay the price at the polls. I think they ought to understand that their job is not to make insurance companies happy; it's to make Americans healthy. That's their job. That's why we sent them there.

And I think, ultimately, we're going to get a health care bill that really is real health care. It's going to have a robust public option. It will require all employers to pay their fair share and I think it will not tax working Americans.

STEWART: All right, we shall see. Richard Trumka, president of the AFL-CIO-thank you for coming into the studio tonight.

TRUMKA: Thanks for having me on. I really appreciate it.

STEWART: Are you getting a bonus this year? I didn't think so. Workers on Wall Street are-really, really big bonuses, bigger than they got before the banking system collapsed and we bailed them out. Congressman Barney Frank joins us next.

Plus, the tea bag wing of the Republican Party has turned its considerable hostility on the rest of the party. We'll tackle that story in a little bit.

Stay with us.


STEWART: Once again, the cheese stands alone. The chairman of the investment group bidding for St. Louis Rams football team released this statement late this afternoon, announcing that rush Limbaugh was the cheese. Well, he didn't say that exactly. Dave Checketts did say this, quote, "It has become clear that Limbaugh's involvement in our group has become a complication and a distraction to our intentions; endangering our bid to keep the team in St. Louis. As such, we have decided to move forward without him and hope it will eventually lead to a successful conclusion."

Reportedly some NFL players and at least one owner didn't take too kindly to Mr. Limbaugh's participation, given some of his commentary on things like race relations. So, it appears Mr. Limbaugh will have more time to devote to his radio show.

That's all I got to say, the story is (INAUDIBLE).


STEWART: Welcome back. I'm Alison Stewart, in for Rachel.

A lot of interesting things happens today. The Dow hit 10,000.

Professional wrestler, Captain Lou, died.

And a civil war started. OK, not exactly a civil war, but something more akin to teenaged girls in a clique at that moment when they inevitably turn on each other, and, you know, when that happens, it can get ugly.

October 14th, 2009 has turned out to be a really, really bad day to be an elected Republican. Take Republican Senator Olympia Snowe of Maine, who, yesterday, was the lone Republican on the Senate Finance Committee to vote in favor of sending the health reform bill out of committee. She didn't vote for the health reform bill. She voted to move the process along.

For her efforts, Senator Snowe has become the next target of the far right. The blog RedState launched an online campaign to send five-pound bags of rock salt to Snowe's Senate office. Get it? What happens to Snowe when you throw rock salt on it? According to the blog, quote, "Olympia Snowe has sold out the country so we should melt her."

Olympia Snowe isn't the first moderate Republican under attack from the right-wing blog. She's just the latest. The founder of the RedState blog started a Facebook group called "Not one penny to the National Republican Senatorial Committee." Why? Because the NRSC is supporting moderate Republican Governor Charlie Crist in Florida.

And it's not just perceived moderates who are now under attack from their own party. It's the more conservative Republicans, like John Boehner, the top-ranking Republican in the House of Representatives. Yesterday, Mr. Boehner found himself under attack in his own state by fellow Republican and in general, nice guy, Mike Huckabee. Huckabee described Republicans like Boehner, who voted for the Wall Street bailout, as, quote, "phony Republicans, people that don't have any convictions."

This anger towards Republicans by Republicans played out a very dramatic YouTube fashion earlier this week, as Republican Senator Lindsey Graham of South Carolina faced off against a crowd of conservatives at a town hall event in Greenville.


UNIDENTIFIED MALE: When are you going to announce that you've switched parties?


SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA: I'm not going to leave the Republican Party, I'm going to grow it.



UNIDENTIFIED MALE: Ron Paul will grow it. Ron Paul will grow it.

Oh, yes!

UNIDENTIFIED MALE: Ron Paul is a real conservative.

UNIDENTIFIED MALE: Ron Paul is the only conservative.

GRAHAM: I'm not going to let it be a club. I'm not going to let it be hijacked by Ron Paul.

UNIDENTIFIED MALE: You're the one that hijacked it.

GRAHAM: How many people are pro-life? I'll put my record in pro-life politics against anybody in this country.

UNIDENTIFIED MALE: Sotomayor? Sotomayor! Sotomayor!

UNIDENTIFIED MALE: What about Sotomayor?


GRAHAM: I'm going to find people in Maine, Delaware, Illinois, and other places.



STEWART: Fired up, engaging in proverbial hair-pulling and wedges amongst themselves. Strange behavior for a clique that wants to rule the school again soon.

Joining us now is Dave Weigel, reporter from the "Washington Independent" who has been following some of this Republican infighting.

Hi, Dave, nice to see you.

DAVE WEIGEL, WASHINGTON INDEPENDENT: Hey, thanks for having me, Alison.

STEWART: Now, Senator Lindsey Graham isn't exactly what you would call a very moderate Republican. He's voted with the Republican Party 91 percent of the time. So, why does he have a big target on his forehead right now?

WEIGEL: Well, this isn't new for Lindsey Graham. This is something he loves to do. I have been in the room when Lindsey Graham sort of unbidden has gone after Ron Paul supporters. And Ron Paul, remember, before he was an icon of opposing the Federal Reserve, was known in national politics for opposing the Iraq war.

So, Graham's been doing this for a while. I see the beginnings here, not to read too much into this, but of a split between the conservative base and Republicans who have been enjoying this tea party support. I mean, Graham is not going to go along with the base on immigration, or on a couple other issues. So, while Graham will vote with them on taxes and spending, this is-we're starting to see some of the issues that might break the coalition up here.

STEWART: Yes. Some Republicans, egged on the teabaggery of last spring, or at least didn't call him out or do anything to call him down. And over the summer, at the health care reform meetings, the same scenario played out. Have the chickens come home to roost? Are the chickens now wanting to run the coup?

WEIGEL: Republicans have always been taken flack from tea party activists when they tried to co-op the movement. Michael Steele, you'll remember, wanted to speak at the April 15th Chicago tea party and the activists there told him he couldn't come.

A number of Republicans say they weren't-they were not allowed to speak at tea party events. And when the Republican Governors Association which then was led by Mark Sanford, fellow South Carolinian-I don't know what it is with that state-when he called a conference call, a new "Tea Party 2.0," they balked at that.

I mean, these are-you can go back and look at who's organizing a movement and who's taking advantage of it. But these tea party activists, a lot of them were Ron Paul supporters who don't agree with the Republican Party, and still have very stark memories of the party spending the country into oblivion, passing TARP, passing Medicare Part D.

I don't think it should be surprising when they rebel or when they stand up and yell at guys like Lindsey Graham.

STEWART: You've written about Tea Party Patriots, kind of turning on sister (ph) organization, the Tea Party Express, because the Tea Party Express have been infiltrated-I guess on their word-by Republican strategists and candidates. Is the movement itself fragmenting?

WEIGEL: Well, Tea Party Express is an interesting example of a Republican group of Republican strategists who are running this thing that was trying to ride the momentum of what they saw as a new popular movement. So they launched-they launched early on in this, but they were-if you look at their FEC reports, the money that was going to Tea Party Express was going to pay for Sal Russo's consulting firm. He's a Republican strategist.

And they were never comfortable with this. I mean, there's actually a rival tea party bus tour that didn't get as much attention. There's actually a split between a founding member of Tea Party Patriots who's removed from the board for joining this thing.

So, again, here, I'd say, you can portray this as a Republican-a Republican movement, a movement that's going to maybe help elect Republicans in 2010. But this is made up of a lot of conservative activists who are untamable, who are like cats that refuse to be herd. In fact, that's one of the ways Mark Williams of the Tea Party Express referred to them and they took offense at that. They liked being unherdable cats.

STEWART: So, where do Republicans like Lindsey Graham and House Republican Leader John Boehner go from here?

WEIGEL: I think they're going to be-they're going to be surprised in how much blowback they get when the focus in Washington changes from health care again, every-everyone in-from top to bottom in the Republican Party, agrees on that, to a climate change bill to immigration reform, and I think the next time there's an opening on the court. They've got an active conservative base again, that's something they didn't have in 2008, that's something they missed frankly, but the conservative base that's rising up is not going to go blindly along with Republicans.

STEWART: And they're not going to-and they're not going to go away.

WEIGEL: No, they're not going to.

STEWART: Dave Weigel, reporter for the "Washington Independent"-thanks a lot for stopping by tonight.

WEIGEL: Thank you so much for having me.

STEWART: It's been a really tough year for most of the bank accounts in America, but not so bad for the bank accounts on Wall Street. Up next:

Congressman Barney Frank walks us through a pretty maddening day of news about bonuses in the banking business.

And later on, a top-tier model claims she was fired by Ralph Lauren for being too fat at 120 pounds and nearly six feet tall. Pictures are coming up, along with Current TV's Sarah Haskins. Stick around.

But first, "One More Thing," about the blemishes on the face of the Republican Party right now. Yesterday, we told you about the brand spanking new redesigned Republican National Committee Web site, Among the many embarrassing features on the site that day, and one that caused the reaction, seriously, was Chairman Michael Steele's blog called "What Up." Not a lot apparently, because, today, the name of his blog has been changed to "Change the Game." Good grammar triumphs again.


STEWART: Now, if you ever doubted the idea there are two Americas, maybe today's headlines could change your mind. One America sits about 4 ½ miles south of me, in Manhattan's financial district. And the other America is just about everywhere else.

In the America right down the street there, the Dow Jones' 30 industrials topped 10,000 points today for the first time in a year when the average was spiraling downward. Nothing wrong with some health and stability in the financial markets.

But there was other Wall Street news that was a little tougher to judge today. According to a new "Wall Street Journal" analysis of new securities filings, top banks and security firms are planning to pay their employees more than they did in 2007 - about $140 billion more.

Among the firms handing its employees huge gift-wrapped compensation packages are several which received billions of dollars in taxpayer money just last year. "The Wall Street Journal" predicts that Goldman-Sachs will dole out $743,000 in compensation per employee. That is double last year's total and up 12 percent from 2007 before the whole world melted down.

The White House had this to say about the report today.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president has continued to push his legislation for Say on Pay. We can't go back to the type of pay structure that incentivized wild speculation like we had before this economic collapse.


STEWART: And the America without the Wall Street address, unemployment is at 9.8 percent. And the "New York Times" reported today that, quote, "Pay cuts are occurring more frequently than at any time since the Great Depression." So it looks as if American taxpayers got stuck with the bill for an over-the-top party on Wall Street to which most of us were not invited despite paying for the cash bar.

And the picture is that simple, wasn't the government supposed to prevent this kind of Robin Hood in reverse situation?

Joining us now to help clarify some of this, we hope, is a man who knows much more about it than most people, certainly more about it than I do, Congressman Barney Frank, Democrat of Massachusetts, the chairman of the House Financial Services Committee. Mr. Chairman, thank you for joining us this evening.


COMMITTEE: You're welcome Alison.

STEWART: What's your reaction to the Wall Street report?

FRANK: Well, it's not surprising. We have been pushing legislation. In fact, the House passed legislation in August. In fact, I have been kind of frustrated because in the focus on health care and climate change, people didn't notice this.

Let me go back and say in 2006 when the Democrats were still in the minority, we first began to push what's called Say on Pay and raise the question of the pay. And let me make this point at the outset. There were two problems with it.

First of all, it's very large - excessive, I believe, overall. But secondly, the way it's structured is even worse because it gives a perverse incentive. If you are one of the top decision makers there and you take on the risks and the risks pay off, you get a lot of money.

But if you take a risk and the risk blows up, you don't lose any money. In other words, we give people the ability to take risks with everybody's money but their own. And there's a wide agreement that this risk structure is one of the reasons that we get in trouble. People take too many risks.

So we tried this in 2007 and in August of this year, just before the congressional break. We passed a bill that had two aspects, one Say on Pay which we just referred to. Say on Pay says the shareholders should vote on what the top executives get.

The problem is it's now set by the board of directors. And the board of directors and the top executives are friends. They work together. The notion of one day a year they say, "OK, you'll be labor and I'll be management." That just doesn't work.

STEWART: They're just too cozy?

FRANK: Without question. And by the way, there has to be a good working relationship there, but they shouldn't be - avoid setting the pay so (UNINTELLIGIBLE). And I hope the Senate will adopt this - Say on Pay which says, and we tried to do this frankly in 2006 and 2007.

We finally have a president who's supportive. I hope we can make it more. The shareholders should have to vote. Some of these companies are paying far too much in total at the expense of the shareholders.

Secondly, we are instructed in this bill, all of the regulators of any financial institution, the banks, the bank regulators, the Security Exchange Commission, to put rules in. And we made this an order to them - do not allow the kind of bonus structure where they have an incentive to take a lot of risks because if the risk pays off, they make a lot of money and if the risk fails they don't lose anything.

And it's even been the case where if the risk appears to pay off within a short period of time, they make a bunch of money. And if it later turns sour, they don't have to give any of it back.

So that's not just a problem of equity; that's a problem of there

not being the right set of rules. And the last point I would make is this

I'm a supporter as many in the House are, of a surtax on very wealthy people.

We should probably be restraining this. But secondly, this is why a surtax on the very wealthy ought to go forward. This is a way in which we can make up for some of the problems of having to pay for health care. So this kind of extraordinary wealth, if those people were taxed a small percentage, they wouldn't notice.

STEWART: I wonder if there was a missed opportunity for the banks that took federal money and then paid it back. I wonder, why weren't they put on some kind of probation?

FRANK: Well, I don't know what you mean by probation. With regard to pay, they are under some restraints. We had this problem - when we passed the TARP, the Bush administration said, and I think correctly that we ought to do something or there would be an even worst economic bailout.

We said so the secretary of Treasury, we want you to restrain

compensation for those who get it. Unfortunately, it's very hard to make

people do things. The Bush administration refused. The Obama

administration, to his credit, has put in a pay czar and he has started to

put some restrictions -

STEWART: Is he effective? Is he going to be effective?

FRANK: Yes. He's a very bright guy and he is having an impact now.

As a matter of fact, Citi Corp ...

STEWART: How? I'm sorry.

FRANK: Citi Corp just sold one of its branches because they were about to pay a very large bonus to a guy and he wasn't going to allow it. But the point that I'm making is our legislation, the way it works is if they pay the TARP money back then they're free of the restraints.

I don't think the point is to only to those that got TARP money, many of which are paying it back. The point is that we have to put this on everybody.

STEWART: Everybody -

FRANK: And that's all legislation. And I'm hoping now - look, I wish

this hadn't happened. But it gives, I hope, momentum to two things we want

to do in the House. First of all, increase taxation on some of these

people, people making millions. By the way -

STEWART: OK. Tax the very rich and what's the second one? Because we're running out of time.

FRANK: The second one is to put rules in place and let the shareholder vote so they can hold down the total because it's coming out of their pockets and to have them regulated and say you cannot have these one-way bonuses. Heads they win, tails they breakeven, because that's leads them to take too many risks. Not only do they get too much money from a rational standpoint, but they take too many risks and that's what endangers the society.

STEWART: Too much risks. Congressman Barney Frank, Democrat of Massachusetts, chairman of the House Financial Services Committee. Thanks a lot.

FRANK: You're welcome.

STEWART: "Dear students at Texas A & M, just because President Obama is speaking on campus doesn't mean you get to act like a bunch of yahoos. Sincerely, President George Herbert Walker Bush." More on that actually which we just paraphrased, coming up.


STEWART: Imagine you're a titan of fashion. You look fantastic, by the way. Now, would you fire this model for being too fat to fit your clothes? She says Ralph Lauren did. The host of Current TV's "Target Women," Sarah Haskins has something to say about it. That's later.

And what do Louisville Kentucky and butt tattoos have in common? Kent Jones connects the dots. Good luck to him on that.

But first a few holy mackerel stories in today's news. Right now, at this very moment, President Obama is considering whether or not to send 40,000 or 50,000 or 60,000 more troops to fight and possibly die in Afghanistan.

And while that decision is being made, there is something you should know about the way we will learn and be informed about this war. The U.S. military has changed its rules. It has banned pictures of slain servicemen and women, those killed in action.

However, the rule does not apply across the board to all military casualties in both wars, Iraq and Afghanistan. In fact, it doesn't even apply to all military casualties in just Afghanistan. Quote, "Based on a review of other embed agreements, the ban appears to be unique to the U.S. operation in eastern Afghanistan."

The common wisdom explanation for the ban is the case of Lance Corporal Joshua Bernard, a young man whose death in Afghanistan in August was photograph by the Associated Press.

A bit of a firestorm ensued when the A.P. published the pictures despite his family's objections. It's unclear why the change in the rules now eight years into the war.

Next, former President George H.W. Bush has invited President Obama to speak at his presidential library at Texas A & M University on Friday. The topic, community service.

President Obama has accepted the invitation which made President Bush 41 very pleased. And seems to want things go smoothly, if you know what I mean. Mr. Bush has written an open letter to the whole Aggie family encouraging civility and good behavior during President Obama's visit.

Quote, "To my fellow members of the Texas A & M family: This is not about politics. This is about the importance of service to our communities and our country. I sincerely hope and believe it will serve as a point of Aggie pride for many years to come."

In other words, please, oh, please, don't embarrass me. (UNINTELLIGIBLE) displays of anti-Obamaism may not fit in with the elder Mr. Bush's vision of the day's civility exchange. To be fair, the folks at Texas A & M really only get that (UNINTELLIGIBLE) when their football team plays the Texas Longhorns.

And finally, a very odd trend is making a big splash across the pond. They are known at the happy splashers. They are some twisted Brits who like to drive really fast into the puddles and soak poor unsuspecting children standing by the side of the road. Here's proof.


UNIDENTIFIED MALE: Here we go, ready to drench the kids. Go to the hill, bus stop. Coming up. Here we go, here we go. Yes. Yes. That was brilliant. Awesome.


STEWART: Now the police are investigating the circumstances of this particular happy splashing. But the woman driving the car - her name is Carrie Collard(ph) and she claims the kids asked her to splash them.

So as a person on TV, I think I'm required to say the following, kids and grown up kids, do not try this at home or in a pothole near you.


STEWART: Yesterday, we brought you the news of the new Michelle Obama action figure. Today, we have an action figure update. The sales of Minnesota Republican Congresswoman Michele Bachmann's action figure indicate that she is not quite ready for the big doll stage, at least according the toymakers at "" They are the folks that brought you the Sarah Palin doll. More on that in a minute.

The Bachmann action figure goes for $34.95 and they have sold only 50 since it was made available on September 25th. The CEO of Hero Builders said, quote, "I'll tell you this - she's no Sarah Palin."

Now, the company sold nearly 10,000 Sarah Palin dolls within 24 hours of her debut. Full disclosure, one version of that doll featured Mrs. Palin wearing a micro-miniskirt and a thigh holster. So you betcha it sold low.


STEWART: First, they Photoshopped her to the point of looking like an anime cartoon - giant head, skinny little body. Now, model Filippa Hamilton says the Ralph Lauren company fired her for being fat.


FILIPPA HAMILTON, MODEL: They said I couldn't fit in the clothes anymore.

UNIDENTIFIED FEMALE: They said to you?

HAMILTON: Yes. Not to me directly, but to my agency, yes.

UNIDENTIFIED FEMALE: Oh, so could you fit into the clothes anymore?

HAMILTON: I could fit in the clothes, yes.

UNIDENTIFIED FEMALE: So you didn't understand this.


UNIDENTIFIED FEMALE: So you're saying the clear impression was given to you is that they fired you, you say, because you were too large?

HAMILTON: Because I was too large, yes.


STEWART: Apparently being 5'10" and weighing 120 pounds qualifies you as too large at some fashion houses. Of course, any human woman looks too large compared to Ralph Lauren's Photoshopped version of Ms. Hamilton, which had, as "" observed and Rachel reported last week made her torso smaller than her head, the ratio so ridiculous that when our graphics people did the same thing to Rachel, she ended up looking like this.

Oh, my. Ralph Lauren eventually apologized for the Photoshopping and promised to take steps to, quote, "ensure the caliber of our artwork represents the brand appropriately." A promise presumably made after the second example of Ralph Lauren Photoshop work was spotted in a window display in Australia.

Here now is Sarah Haskins, host of Current TV's "Target Women."

Sarah, thanks for being with us.

SARAH HASKINS, HOST, "TARGET WOMEN": Thank you for having me. I'm glad you invited me because I'm a super-fashion expert.

STEWART: And you're also an expert on how women are targeted and how advertisers and businesses seem to know exactly what we want at all times.


STEWART: Is Ralph Lauren on track? Do women want to have big heads and tiny, little bodies?

HASKINS: I've always wanted fit more easily through difficult places.

Yes,, like you needed just a big head and like a small body to fit through.

But Ralph Lauren is just playing the game with everyone else.

I think this incident primarily explains to me why Ralph Lauren fired me, which is at 5'10" and 150 pounds, I'm way too fat.

STEWART: I think you look fine for the record. I'm not flirting with you or anything.

HASKINS: See, not Ralph Lauren.

STEWART: I'll start my own line. In your profession, women targeting opinion, any possibility such extreme Photoshopping was just a mistake by an overeager art director?

HASKINS: No. I sincerely doubt that. I think someone was certainly encouraging them to do that. I mean, it's not completely outside of the realm of what happens with fashion Photoshopping anyway. So although it's a kind of crazy example, it's certainly a wild symptom of the disease.

STEWART: To be fair, we should get Ralph Lauren's side of this. When asked why they fired this model, they said, quote, "We regret that our relationship has ended as a result of her inability to meet the obligations under her contract with us." Can you translate that for me?

HASKINS: I've tried to translate it as best I can into what I know about model contracts, which is a ton. But she did say on the "Today" show interview you played a clip from that she was always on time. So I think besides that, I don't - they said she couldn't fit into the clothes, and I assume they mean the new line of Ralph Lauren onesies.

STEWART: Sarah Haskins, host of current TV's "Target Women."

Onesies. Thanks for your time tonight.

HASKINS: Thank you. Take care.

STEWART: Coming up on "COUNTDOWN" - Keith gets a real treat - the chance to interview three of the members of Monty Python's flying circus.

And next on this show - luring tourists to your own town with Viagra.

Kent Jones investigates.

But, first, one more thing about women being attacked for their weight. Actress Nicole Eggert has recently been ridiculed in the tabloids for not keeping her "Baywatch" shape from the '90s. So she decided to fire back with this video appearance at ""


UNIDENTIFIED MALE: She could be the last girl I ever kiss. No girl may ever kiss me.

UNIDENTIFIED MALE: You know what? I bet you wouldn't get some girl to kiss you right now.

UNIDENTIFIED MALE: I don't think so.

UNIDENTIFIED MALE: Friend, all we have to do is pretend to drown and a perfect 10 lifeguard is going to come running right up to us and save you and give you mouth to mouth.


UNIDENTIFIED MALE: No, no, no, we're good. We're good.



EGGERT: What's wrong?

UNIDENTIFIED MALE: Resume your life-guarding duty somewhere else.

Please go back up to the stand. Please.

EGGERT: Just because I'm fat?

UNIDENTIFIED MALE: No, no. Definitely not because of that.

UNIDENTIFIED MALE: We scared you and we're sorry.

EGGERT: You know, that's really mean, you guys. I was going to save your life. You know how shallow that is? Yes, I'm a real woman. And you know, real women gain weight.


STEWART: And like the occasional carb. Mmm. Carb.


STEWART: We turn now to our Kentucky tourism correspondent Kent Jones. Hi, Kent.

KENT JONES, POP CULTURIST: Hi, Alison. The city of Louisville, Kentucky is trying to lure some tourists into their town and trying to get young hipsters to move in there.

So they've got a brand-new ad campaign that they're trying out.

They're calling the place the "Possibilities City." Check it out.


UNIDENTIFIED MALE: There's a guy in Oblivion, Ohio, who wants to get out really bad. He wants to set his ambitions free in a thriving cosmopolitan city. He wants to live it up, get a great job, get a girl with a tattoo on her butt and feel at home and jazzed at the same time.

Problem is, he knows all of that is impossible in Ohio. Won't you help save his life? Support the campaign to share Louisville.

JONES (voice-over): Wow, must be a drag to live in Oblivion, Ohio, being happened behind chin-link fences and no ladies with butt tattoos. Not like Louisville, which is apparently butt tattoo heaven. Here's one for a slightly older demo.

UNIDENTIFIED MALE: You know that feeling when the mood is right but the city is wrong. Louisville can help you enjoy a longer lasting, more satisfying recreational, occupational and personal experience. Ask your doctor if your heart is healthy enough to stand all of these possibilities.

Side effects may include nonstop smiling, an inflated sense of well-being, and a sudden loss of inhibitions. Happiness lasting more than four hours is perfectly normal and does not require the assistance of a physician.

JONES: Four hours, hello. Take that, Ohio. Shockingly, some residents of Louisville, the city that brought us Muhammad Ali, the Kentucky Derby, and the Louisville Slugger don't think the best way to promote their town is by goofing on erectile dysfunction.

On the other hand, the lead creative consultant on the ad campaign said, "If you don't take some risks with the message, they will just be forgotten." He's got a point. What if they just go for it and do something like this.

TEXT: Louisville, possibility city, more butt tattoos than Ohio.

STEWART: So is the message move to Louisville, and you'll get busy?

JONES: It certainly seems that way. I mean, We're not saying that

won't happen. I mean, you know -

STEWART: Kent, thanks.

JONES: Sure.

STEWART: And thank you for watching tonight. I'm Alison Stewart, in tonight for Rachel. "COUNTDOWN" with Keith Olbermann starts now.



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