'The Rachel Maddow Show' for Monday, February 28th, 2011

Guests: Jon Erpenbach, Robert Frank


RACHEL MADDOW, HOST:  Good evening, Lawrence.  Thank you very much for that.

And thanks to you at home for staying with us for the next hour.


If you are a person that uses e-mail on a regular to somewhat regular basis, then at some point, you have probably received an e-mail from somebody claiming to have some really, really, really, really amazing news for you—you are aligned to receive millions of dollars.  All you have to do in order to claim these untold millions of dollars is to wire the author of the e-mail a large sum of money.  You‘ve had one of these, right?  Wire the person a few hundred bucks and your millions will be on the way very soon.

These types of e-mails often arrive in your inbox from a sender claiming to be like a Nigerian prince or something, right?  The Nigerian prince e-mail scam thing is not only one of the greatest things to ever come out of the e-mail age, it has also set the standard for the whole frantic, disjointed “I need your money right now” e-mail genre.  And as of today, that genre has a new addition from the world of politics.

“As I write you now, the fat cat labor bosses are busy scrapping”—scrapping?  They say scrapping.  “Scrapping together millions of forced “dues” money to build a massive political war chest.”

“The D.C. labor bosses are going all in to hold the Senate in 2012 and to pave the way for forced unionization for government employees.”

“All of us are working harder than ever to stop labor union extremists from taking away our liberties and bankrupting our country.”

“Your most generous contribution will assure that we have resources necessary to go toe-to-toe with big labor union bosses.”

Love from Nigeria—except for the Nigeria part, it‘s an actual e-mail we received from our good friends at the National Republican Senatorial Committee, the NRSC, who apparently thinks that this show is a good Republican fundraising prospect.

The NRSC wrote to us to ask for our help to, as you can see here, defeat the unions in 2012.  That‘s what they think they‘re running against.

The National Republican Party is now being led by the man who used to

be chairman of the Republican Party in the great state of Wisconsin.  And

from the RNC and Republican Governors Association and now this, the

Republican Senate Committee, we‘re now seeing all these e-mails and Web

sites pleading with Republicans across the country to please get on board

this Wisconsin thing, please get on board this Scott Walker political

Republican gravy train—including these crazy Nigerian prince-style pleas

for money to stop unions from scrapping their dues or whatever they meant

by that.


The official Republican Party apparatus has decided to bet on Scott Walker in this fight in Wisconsin in a really big way.  Real, live, actual Republicans who have governing responsibility on the other hand—not so much.  The apparatus is on board.  The politicians are not.

When Scott Walker took what turned out to be a prank phone call from a man he thought was a conservative billionaire, oil and chemical baron named David Koch, one of the things Governor Scott Walker got really wrong in that call was the idea that Republican leaders all across the country were going to fall in line behind him.  They were going to follow his leadership on union-stripping.


GOV. SCOTT WALKER ®, WISCONSIN:  I talk to Kasich every day.  You know, John has got to stand firm in Ohio.  I think we do the same with Rick Scott in Florida.  I think, Snyder if he got a little more support probably could do that in Michigan.  Brian, the governor in Nevada, called me last night, said he was out in the Lincoln Day Circuit last two weekends and he was kidding me.  He‘s new as well as me.  He said, “Scott, don‘t come to Nevada, I would be afraid you would beat me running for governor.”  That‘s all they want to talk about is what are you doing to help the governor in Wisconsin.


MADDOW:  The last gentleman Governor Walker mentioned there was Brian Sandoval, the new Republican governor of Nevada.  According to Scott Walker, Sandoval is behind him all the way—unless, of course, you ask Governor Sandoval.

Here was the headline in “The Las Vegas Sun” last week: “Sandoval won‘t draw line over collective bargaining like Wisconsin governor.”

Scott Walker appears to have been wrong when he explained to his conservative billionaire, oil and chemical baron donor that all of these national Republicans were going to get behind him, that he was leading the way.

The other thing Scott Walker got wrong in that infamous phone call was what he thought was the dwindling nature of the protests that were forming at his door stop and that have so interested the nation.


WALKER:  We‘re actually hanging pretty tough.  You know, amazingly, there‘s a much smaller group of protesters, almost all of whom are in from other states today.  Sooner or later, the media stops finding them interesting.  The guys we‘ve got left are largely from out of state, and I keep dismissing it in all my press comments.


MADDOW:  Yes, all of those people out there in Wisconsin, they‘re all from other states.

Really?  Want to ask them?

Part of the reason Governor Walker and the Republicans think they are going to win in Wisconsin is because they keep thinking the protests are ending.  They keep thinking they‘re winding down.  They keep thinking that certainly the people of Wisconsin aren‘t certainly against them.

Here‘s the thing, though—last weekend, everybody in the country was bowled over—look at this—bowled over by the fact that 70,000 people turned out, this is last weekend, to protest against Scott Walker and the Republicans.  Seventy thousand!

This weekend, it was not 70,000 people.  This weekend police say it was bigger.  It was reportedly more like 100,000 people.  We are now in day 14 of these protests, and the protests are still getting bigger, not smaller.

Scott Walker sort of let the cat out of the bag last week on that prank phone call he thought he was having with David Koch.  He sort of let the cat out of the bag when he essentially admitted that Wisconsin Republicans are just counting on these protests going away.

From the looks of it, they are not going away.  And the longer this goes on, the less Governor Walker and Wisconsin Republicans have to stand on here.  The longer it goes on, the clearer it becomes that this whole fight is not about what they say it‘s about.  This whole fight is not about the budget.  This fight is about destroying the unions.  It‘s about corporate titans who give lots of money to Republicans and who can get them on the phone for 20 minutes in the middle of a crisis, guys like David Koch wanting to bust the unions, and it is about dismantling a key part of the Democratic base in terms of fundraising.

You want to see numbers from 2010 elections?  Right.  OK?  Unions are the only significant outside spending group that Democrats have to compete with the conservatives.

Union members also tend to support Democratic causes and they provide a good chunk of get-out-the-vote infrastructure that Democrats rely on to win elections.  The Republican Party, more than almost anything else, represents corporate interest.  The Democratic Party more than anything else represents people who work for corporate interests or people who represent something other than corporations.

The longer this goes on in Wisconsin, the longer this stretches out, the clearer it gets that this is not a fight about the budget.  At the outset, remember there was a strange fact that the specific unions that would be exempted from the new rules in Wisconsin, the unions that wouldn‘t get stripped, happened to be the unions that supported Scott Walker in the last election.  Hmm!

And there was the revelation that right around the same time, that he claimed the budget crisis, Governor Walker and state Republicans passed $140 million worth of tax giveaways for businesses.  Tax giveaways that were not paid for, they were just larded onto the state‘s deficit.

Hey, wait.  I thought this was because you were all so worried about the deficit.  Then as this thing went on longer, the unions offered to give the governor all of the financial concessions he had asked for, which if he were, in fact, just concerned about the deficit, would have meant that he won—game over.

But Governor Walker not only did not accept those concessions, he didn‘t even want to talk about them.  And now, today, as this keeps going on—comes the threat from Governor Walker that if he doesn‘t get what he wants by tomorrow, he may have to begin the process of laying off people, laying off state workers.

Why tomorrow?  Because tomorrow is the deadline for refinancing the state‘s debt.  That is a move as far as I can tell will add another $14 million onto Wisconsin‘s state deficit.

So, what‘s the reasoning here?  We have such a deficit problem that unless I can make it $14 million worse, the workers get it?  Hmm.

The longer this goes on, the clearer it gets that this is really not about what they say it‘s about.  This is really, really, really not about Wisconsin state budget.

This is partisan.  This is about Republicans winning elections.  This is about hamstringing Democrats so they can‘t win elections.  This is about the David Kochs of the world getting what they want and always wanted.  The longer this goes on, the clearer that gets.

And the bigger the protests get -- 100,000 people in Wisconsin this weekend.  These protests are not just a reflection that the governor is losing there.  These protests are part of the reason that he is losing.  And therefore, this weekend and today, the Walker administration has taken action to end the protests.

Wisconsin‘s Department of Administration is headed up by a Scott Walker appointee, set a deadline of 4:00 p.m. yesterday for the protesters to clear out of the state capitol.  As that 4:00 p.m. deadline approached and as a handful of protesters refused to go, local authorities decided that the protesters who remained would be allowed to stay in the capitol overnight.  That was last night.

But then today, as the capitol returned to normal business hours—sorry.  Everybody out of luck.  Protesters are locked out of Wisconsin capitol.  Scores of demonstrators waited outside to get in today.  They were ultimately denied entry by capitol police officers—shut out of the public building that they were told they would be allowed back into.



CROWD:  Our house!


CROWD:  Our house!


CROWD:  Our house!


MADDOW:  This is not a fight between the protesters and the police. 

Not only have police been among the protesters, not only has the Wisconsin

Professional Police Association said they are on the side of the

protesters, there‘s also the anecdotal evidence that keeps getting reported

about essentially solidarity between the police and the protesters here.


A chant reported this weekend in “The Wall Street Journal” of protesters shouting, “Thank you, cops, thank you cops.”

The protesters have gone out of their way to be respectful of law enforcement officials and their demands, and it appears to be mutual.  There was the situation of the capitol needing to be cleaned over the weekend.  Local authorities had said the capitol needed to be cleaned up.

“The Milwaukee Journal Sentinel” reports, quote, “Shortly before 8:00 p.m., a worker on a waxing machine polished the main floor of the rotunda. 

Dozens of demonstrators chanted: ‘Thank you, thank you.‘”

As massive as the protests have been in the last two weeks, there have been no significant arrests.  There have been no significant reports of violence.  On the contrary, law enforcement officials have at least twice now publicly thanked the protesters for their polite and decorous behavior.

An official with the agency that provides security for the capitol saying yesterday, quote, “Citizens who have joined rallies at the capitol over the last two weeks have been respectful and cooperative, and I extend my sincere thanks to them and to the protest organizers.”  A “thank you” letter from law enforcement.

When the cause you are fighting against is transparently hypocritical, when your opponent keeps showing himself to be operating in bad faith, large, organized, principled, nonviolent protests are almost unbeatable.

I‘m not talking about some kumbayah liberal vision of how I wish the world was or something.  I‘m not imagining here.  I‘m talking about tactics.  I‘m talking about political tactics.

When there are two sides in a political fight, and one of them has ruled out negotiation, and the other one is a large, organized, exclusively and scrupulously nonviolent movement that persists and that will not go away and that has public opinion on its side, there is almost nothing that can beat that.

Wisconsin, you are winning.  I will say that again.  Wisconsin, you are winning this fight.

There is a reason that after all of this time, your governor is not willing to negotiate.  He is not willing to talk at all.  But he is willing to kick you out of the capitol.

The physical presence of these demonstrators in Wisconsin is why Wisconsin is winning and the governor is losing.  He‘s getting desperate.  What happens next?


MADDOW:  Industry awards are nice, nice recognition for folks who‘ve usually worked really hard, a way to single out exceptional achievement.  It‘s nice.  Awards are nice.

Award shows however?  Hmm—tough.  Three hours to find out who won?  While they could be playing paper toss or glue hockey, or doing anything else in life no matter how pleasant or unpleasant.

My girlfriend Susan loves award shows.  My whole family loves award shows.  Oscar Sunday is like a Maddow family holiday that always has been.  I come from people who like award shows.  I respect people who liked award shows.

I wish I liked them, but I do not.  I do not watch them.  I do not go to them.  You cannot make me.

However, I am a huge politics dork.  So, I do love how crazy it makes anybody whenever politics intrudes on any award show‘s small talk.

Usually, politics only break out at an awards show if the country is starting a war, or if it‘s an election year, or if Michael Moore wins something.  But this year, it got political because of Wisconsin.  National Republicans and Republicans in Wisconsin are banking on the country siding with this stripping-union rights thing that they are doing.  They are either counting on that or they‘re counting on apathy and people not caring.

Surprise, you guys!


GARY RIZZO, ACADEMY AWARD WINNER:  We need to thank everybody at Warner Brothers post production.  And we need to thank all the hard-working boom operators and utility sound people that worked on the production crew -- union, of course.

WALLY PFISTER, ACADEMY AWARD WINNER:  Much thanks to Emma Nolan, to Warner Brothers, to my fantastic union crew.

UINIDENTIFIED MALE:  Did I hear you put the emphasis on my union crew?

PFISTER:  I did.  I did.  I think that what‘s going on in Wisconsin is kind of madness right now.  And I‘ve been a union member 30 years.  And what the union has given to me is security for my family.  They‘ve given me health care in a country that otherwise does not provide health care, and I think the unions are an important part of the middle class of America.

So, I stand strong behind any of the union members in this country and any other country, because all we‘re trying to do is get a decent wage and have medical care.


MADDOW:  Best cinematography, best sound mixing, and best shout out, in effect, to our next guest, and to the giant soul of the country political battle that he and his fellow Democrats appear to be winning right now in the great state of Wisconsin.  State Senator Jon Erpenbach, one of Wisconsin‘s 14 Democratic state senators who remain outside Wisconsin to deny Republicans the quorum they need to pass the governor‘s union-stripping bill.

Senator Erpenbach, it‘s great to have on the program again.  Thank you for your time.

STATE SEN. JON ERPENBACH (D), WISCONSIN:  Hey, Rachel.  How are you?

MADDOW:  I‘m good.

I wonder if it feels to you like you and Democrats and other people who are opposed to the governor‘s plan in your state, whether it feels to you like you‘re winning.  From here, my vantage point, it feels like you are.

ERPENBACH:  Well, it does, even from where I am—undisclosed location in Chicago—it feels like we‘re winning.  We feel very strong tonight about what we‘ve seen in Madison over the weekend and all over the state of Wisconsin, as a matter of fact.  I know, right now, there‘s about 1,000 people in Dodgeville, Wisconsin.  That‘s the Senate district for Senator Dale Schultz who‘s kind of on defense on this issue.

So, a lot of people are turning out, voicing their opinions.  And that makes all of us feel very good.

MADDOW:  I think part of the reason that it feels to me like you‘re winning is because I see the other side resorting to more extreme tactics that are hard to defend in the long run.  What‘s your understanding about the administration closing down the state capitol, keeping people out of that building now?

ERPENBACH:  That‘s actually very frustrating to go hear about, and actually more frustrating to watch on your show, I was watching ahead of time here.  The problem I‘ve got is this: it‘s a public building.  It‘s owned by the taxpayers of Wisconsin.  They‘re requiring IDs to get into the capitol, which is ridiculous.

I know State Representative Kelda Roys in my district would not show her ID.  She‘s an elected member of the state assembly and they wouldn‘t let her in.  They knew she was an elected member of the state assembly and they still wouldn‘t let her in.  I heard that they are bolting the windows down, which obviously have some fire code issues they need to deal with, but they‘re really closing that building down, and I don‘t know why.

Well, I do know why, but I‘d like to hear it—I‘d like to hear it officially.

MADDOW:  Well, if they—why do you think they are doing it?  And if they really can stop people by protesting by physically locking down the building, what practical effect do you think it will have?

ERPENBACH:  It won‘t.  I think they‘re doing it because they have seen the polls now.  They‘ve seen the polls on both sides of the aisle on this issue, and they are losing this debate.

Overwhelmingly, the people of the state of Wisconsin support collective bargaining rights.  That‘s clear in every poll.  Even a FOX poll had Wisconsinites supporting collective bargaining rights.

So, they‘re just trying to shut down the debate.

MADDOW:  We have been hearing that Republicans in the Senate are not only trying to block pay to you, to Democratic senators, they‘re also trying to block pay to your staffers.  Do you have any confirmation that‘s happening?

ERPENBACH:  No.  We‘ve heard about that.  They blocked access to, like, copier so the staffers can‘t do their jobs for the constituent that we represent, for example, in the 27th Senate district.  It‘s about as petty as petty gets, and it really distracts from the main issue that we‘re trying to deal with here, and that‘s a budget deficit.  And that‘s also closing the gap between the state of Wisconsin on the collective bargaining issues.

So, rather than actually spending constructive time on coming up with ideas in order to move us forward together, they‘re taking away copying right privileges.  It‘s a joke.

MADDOW:  Is that going to have any affect on whether or not you guys are able to stay away—you‘re able to stay and coordinate it, you‘re able to keep doing what you need to do to be able to make this time as constructive as possible?

ERPENBACH:  No, it‘s not going to have any affect because all of our staffers, and I know all of them in the capitol on the Democrat side, and a lot on the Republican side—all very dedicated hard workers.  We get calls in the office with constituent issues all the time and those are the people who actually handle it, and get the job done.  And they are very dedicated, very good on what they do.

MADDOW:  Governor Walker is now threatening layoff notices will have to go out, unless you come back.  He says the state will lose its chance to refinance some of the state‘s debt.  What‘s your reaction to that?

ERPENBACH:  Well, the governor—and I‘m just going to be frank here, Rachel, the governor is lying to the taxpayers of the state of Wisconsin.  He says we need to save $165 million, that‘s what will happen if we come back.  Truth be told is we have $165 million payment due in May on our debt.  The money has already been allocated to make that $165 million.

What Governor Walker is doing is taking that $165 million, balancing his budget with it, then bonding in the future to pay it off.  So, he‘s turning $165 million into about $200 million when all is said and done.

He is doing something he swore in his campaign he would never do.  He is kicking the can down the road.  And it‘s unbelievable that he‘s doing this and he actually thinks he can pull it over the eyes of the taxpayers in the state of Wisconsin.  But that‘s what he‘s doing.  He‘s borrowing to balance his budget.

MADDOW:  So, we tried to figure this out today in terms of the math.  As far as we can tell, the governor‘s refinance the debt plan will cost, as far as we can tell, maybe about—will cost the state $14 million more than the state would have to pay if they didn‘t refinance the debt.  Is that roughly your understanding?

ERPENBACH:  According to the Fiscal Bureau, it‘s about $29.5 from what I understand.  So, it‘s going to cost a lot more money.  But, again, what he‘s doing is he‘s doing something he swore in the campaign he would never do.  He‘s borrowing to balance his budget.  He‘s taking $165 million that the state of Wisconsin owes, he is taking, pulling it back, putting it in his budget, and he‘s borrowing to backfill the $165 million hole that‘s going to cost about $200 million in the end.

MADDOW:  Senator Erpenbach, are there any Republicans who are thinking about siding with Democrats on this issue?  That may be the way this ends at this point.

ERPENBACH:  Off the record?

MADDOW:  Well, except we‘re on TV.



ERPENBACH:  I know.  OK.  So, I can‘t speak for them.  But, off the record, yes, they are.

They‘re very concerned about a couple of things.  First of all, I know they approached the governor early onto try and make sure that he removed the collective bargaining.  He wouldn‘t do it.  So, they have all kind of held in line.

So far, Senator Schultz has done a great job in trying to come to compromise on this.  But, so far, publicly, they are holding tight.  But I know that they‘re under a lot of pressure.  They‘re actually under more pressure than we are.

MADDOW:  Wisconsin state senator, Democrat Jon Erpenbach, joining us from an undisclosed location that looks suspiciously like Chicago—

Senator Erpenbach, thank you very much for your time.

ERPENBACH:  All right.  Thank you, Rachel.

MADDOW:  Thank you.

That is—you know, that‘s every interviewer‘s dream.  The person who looks to you on television live and says, is this off the record?  Absolutely perfect.

All right.  At this point, I got to tell you, our Oscar‘s coverage for the evening is complete.  Our coverage of the reportedly buxom and reportedly blonde Ukrainian nurse at the center of international intrigue, however, that one still has some more room to run this hour.

Please standby.


MADDOW:  In the last elections, the Democratic Party and its candidates basically got walloped.  Shellacked is apparently the term of art.  I prefer walloped.

In the campaigning for the last elections, there was basically no debating about the Afghanistan war.  There was almost no fighting about gay rights—next to nothing about abortion, definitely wasn‘t about education either.

The last elections which did swing wide to the Republicans were supposedly all about jobs.  Everything was brought back to the economy, and everything the Democrats did between 2008 and 2010 from health reform to everything was labeled job-killing, no matter what it was, right?  President Obama ate job killing lunch and he wore job killing socks.  And Michelle Obama has well-toned job-killing arms and she grows job-killing vegetables in her job-killing garden.  Job-killing, job-killing, job-killing.

After winning the elections by saying that a lot, Republicans finally managed to stop focusing on abortion long enough to introduce their own down with spending economic plan.  Republicans voted on that plan, and the forecasts of what their plan would do are now finally starting to come in.

If you are a liberal or you are a Democrat or you are a centrist or you are someone who cares what words mean and you are looking for something that accurately call job killing, we have finally found that for you.  That‘s next.


MADDOW:  The Republican Speaker of the House, John Boehner, about two weeks ago, made everybody in politics collectively go - when he did this at a press conference. 



REPRESENTATIVES:  If some of those jobs are lost in this, so be it. 


MADDOW:  Mr. Speaker was responding to reports that his party‘s

economic plan would cost hundreds of thousands of American jobs.  His

response was -


BOEHNER:  So be it. 


MADDOW:  Ow.  At the federal level, Republicans want to be seen as the fiscally responsible political party.  They would like you to see Democrats as profligate and to see them instead as thrifty. 

They want you to think, regardless of all historical evidence, that if America just puts Republicans in charge, that would be good for the American economy.  That‘s how they would like it to be seen.  That is a great plan in the abstract. 

But here is what‘s happened since the Republicans won the last elections, and they have to stop talking about themselves in abstract complimentary terms and instead put forward a real plan of what they wanted to do. 

When House Republicans laid out their budget, their spending plan, a liberal group called the Economic Policy Institute forecast its impact on the nation‘s economy as follows.  They forecast that the Republican economic plan would reduce the number of jobs in the country by 800,000. 

The Republican budget, they said, would kill 800,000 jobs.  OK, yes, yes, but they‘re liberals.  How about Goldman Sachs?  Wall Street titan Goldman Sachs did a confidential report on the Republican spending bill for one of its clients.

The Goldman Sachs report was leaked.  We now know it found that Republican spending plan could knock as much as two percent off economic growth for the entire country.  Yes.  But that‘s Goldman Sachs, I guess? 

Now, here‘s a third.  This one comes from an economist who was an adviser to Republican presidential candidate John McCain, Mark Zandi.  He is an economist at Moody‘s.  Mr. Zandi‘s assessment of the Republican budge plan is that it will cost 400,000 jobs this year and 700,000 jobs by end of next year, and - but it will reduce economic growth by a half point just this year. 


BOEHNER:  If some of those jobs are lost in this, so be it. 


MADDOW:  I‘m not quite sure why this hasn‘t sunk in.  The Republicans‘ federal budget proposals are being forecast to slow down America‘s economic growth by a lot and to result in loss of hundreds of thousands of American jobs. 

The Republicans are not rebutting these forecasts.  They are not making a counterargument.  They sort of criticize or take potshots at some of the people who have made these assessments, but they really are not rebutting them at all. 

Today, at “Washington Monthly,” Steve Benen captured my thoughts on this exactly when he wrote, “How are we even having this conversation? 

I would genuinely love to know exactly how many American voters are

thinking, ‘You know, maybe what we need is higher unemployment, lower wages

and slower growth.  It is a good thing Republicans are working on this.‘” 

Yes, Steve, exactly.  And at the state level, it is even weirder and even worse than it is at the federal level.  In the final quarter of last year, OK, so in the fourth quarter of 2010, we had thought that our economy as a country was growing by 3.2 percent. 

On Friday, that got revised downward.  Actually, it turns out the economy did not do that well.  We grew by almost a half point less than that.  Oh.  Why did it get revised downward?  What happened?  State spending cuts.  State job cuts. 

We got the numbers about how much state and local governments cut spending and public sector jobs at the state and local level.  Public sector jobs.  Public sector jobs are real jobs. 

State cuts are dragging the entire nation‘s economy down.  They are not helping the economy.  They are hurting the economy.  Indiana governor Mitch Daniels was asked about it on NPR this morning. 

NPR‘s Steve Inskeep asked Gov. Daniels, quote, “I want to ask something that a lot of people are confronting right now as they deal with the federal deficit and as well as state and local deficits that need to be closed.  Are budget cuts, government budget cuts, worth it even if they end up seriously costing a lot of jobs right now?” 

Governor Daniels replied, quote, “The answer is yes.”  The question, “Are you OK with cutting jobs?”  The answer is, “Sure, why not?  Who needs jobs?” 


BOEHNER:  If some of those jobs are lost in this, so be it. 


MADDOW:  Republicans economic policies at the state level and at the federal level are for less economic growth and fewer jobs, so say the economists, so admits the Republican Party when you ask them about it. 

The Republican Party is not rebutting that what they are proposing is less economic growth for America and less jobs in America.  They are not rebutting it.  They are admitting it when pressed.  They‘re just counting on you not paying attention. 

The Associated Press, this weekend, interviewed a number of governors in D.C. for the National Governor‘s Association meeting, a number of them meeting with President Obama today. 

The A.P. noted in its article that Republican governors across the country are turning down money and undermining federal initiatives that are designed to create jobs. 

Republican governors fighting against are turning away from federal funding for everything from health reform to infrastructure to even education.  And the effect is real.  It means fewer jobs in their states.  It means fewer jobs in the country. 

It means less economic growth for America, less economic growth and less jobs for those states and for all of us.  If the most important thing heading into a president‘s re-election campaign is how the economy is doing, Republican economic policies right now are the strongest force pulling in the other direction against the economic recovery that we are finally starting to get. 

They are the strongest force pulling against recovery from inside politics.  The worse off the country economically, the worse President Obama‘s chances are for re-election. 

These economic decisions that Republican governors are making against jobs and against growth at the state level - they have such partisan implications that Republican Pennsylvania Governor Tom Corbett, at one point in his interview with the A.P., had to volunteer, quote, “It‘s not a conspiracy.”  I would almost feel better if it was. 

Joining us now is Robert Frank, professor of economics at Cornell University.  Professor Frank, thank you very much for your time.  I really appreciate it. 


MADDOW:  Speaker Boehner, Gov. Daniels essentially saying they are OK with public sector jobs going away, that those don‘t really matter to them.  Is there any economic difference between a public sector job and a private sector job? 

FRANK:  You know, you don‘t see any economy in the world that doesn‘t have a mix of the two types of jobs.  We need roads to drive our cars on.  We need schools to send our kids to.  Those are public sector jobs. 

We have private sector jobs, too.  The public sector jobs deliver good value, many of them.  They are a good use of taxpayer dollars.  And right now, when we‘re in a spending shortage recession, the last thing we should be doing is cutting spending on those kinds of jobs. 

MADDOW:  The Moody‘s analysis out today says it would be - the terms were counter productive and an unnecessary chance to cut spending too much right now before the economy has come back more robustly. 

Mr. Zandi - Dr. Zandi is not saying that spending shouldn‘t be cut in the long run.  He is saying it would be a bad idea to cut it now.  Why would that be? 

FRANK:  He‘s got his priorities straight.  The deficit is not an artificial problem.  We do need to deal with it, but it is a long-run problem.  The problem with the deficit is that we need to bring it down over the next 10 years to 15 years. 

What‘s imperative at the moment is to get the economy out of the recession, and the reason it is still in recession is that we don‘t have enough spending.  As we talked about before, the investors won‘t spend on investment.  They‘ve already got more capacity than they need. 

Consumers are still worried, they‘re not spending.  Government is the only actor on the scene with capacity to spend, and it has so many essential things it should be doing.  Roads are worn out.  Bridges are collapsing.  Dikes about to collapse and are going to inundate cities below them. 

There are lots of things we should be spending on right now.  The deficit is a problem for the months and years after the economy is back at full unemployment. 

MADDOW:  What about the idea though - I mean, the Republicans in the House have proposed about $61 billion worth of spending cuts.  As you say, the deficit is not a made-up problem.  It is worth thinking about that for the long run. 

Would the kinds of cuts that the Republicans are proposing have a significant impact on the deficit? 

FRANK:  No.  That‘s the sad thing.  The nonpartisan Congressional Budget Office projects that over the next four years, we‘re going to add $3.8 trillion to the deficit.  These $61 billion in cuts are just a drop in the bucket. 

Nobody thinks we can curb the deficit in the long run with cuts to domestic discretionary spending.  There‘s just not in the budget to do that.  And a lot of the cuts we‘re issuing now are going to make the deficit worse in the long run. 

We are cutting off funding for nutritional assistance to poor women with small children.  That‘s saving a dollar today at the expense of having to spend five extra dollars in a few years.  That‘s not good economics. 

MADDOW:  Is there - are there categories of spending out there that, economically speaking, are sort of a bargain?  If the government is looking to spend money that will have maximal economic benefit to the nation, what are the bargain types of spending out there? 

FRANK:  Oh, there are just some real low-hanging fruit, Rachel.  The Department of Transportation Nevada reports that they have a 10-mile stretch of Interstate 80.  It is in disrepair.  It would cost them $6 million to bring it up to good state of repair today if they did the work. 

That‘s because the workers who are needed to do the job are sitting idle.  They are unemployed.  The equipments in the yard are not doing anything.  The materials are cheaper than they‘ll ever be.  Interest rates to finance the project, very low. 

We could repair a 10-mile stretch of that interstate for $6 million.  If we wait two years, then that same repair job is going to cost us $30 million.  So how does that help us with the deficit if we postpone that kind of spending?  That makes the deficit worse.  It is a criminal misdiagnosis of the problem really. 

MADDOW:  Robert Frank, economics professor at Cornell University.  Appreciate your time helping us to understand this tonight, sir.  Thank you. 

FRANK:  Always a pleasure. 

MADDOW:  Thanks.  So there has been a lot of excellent coverage for the last couple weeks about the big political standoff in Wisconsin.  I happen to believe that this is about the future existence of the Democratic Party, and it is the sharpest relief that we have had in this country in a long time about why we have two different political parties, and what the difference is between them. 

Nobody has been on this story longer, or been doing it any better than my friend, Ed Schultz.  After our show starting at 10:00 eastern, Ed will be talking with a policeman that stood with the protesters in the capitol of Wisconsin, defying the governor‘s edict that everyone leave.  I‘ve been looking forward all day to seeing this interview.  It is up next on “THE ED SHOW.”  Please do not miss it. 

And despite some incredible difficulty and peril reporting on it, the situation on the ground in Libya, it‘s clear to everybody in the world with access to a TV or radio or a newspaper or the Internet machine, everybody in the world, except apparently Col. Muammar Gadhafi. 

The most deluded public statement you have heard in a very long time comes today from Tripoli, not from Beverly Hills.  That‘s next on this show.  We‘ll be right back.


MADDOW:  I have a logo to show you that will outrage you.  It will outrage you if you squint, if you like to blame Jews for everything, if you have forsaken your place in the community of nations and if you are way overdue to visit your optometrist.  The severe pixelization, just ahead.


MADDOW:  Before this revolution started in Libya, before these giant protests started, what looks and sounds and feels like a civil war, what do you remember Libya being in the news for recently? 

What was the last thing you read in the news about Libya?  Does the phrase “buxom Ukrainian nurse” ring a bell?  The signature pointless, salacious details to come out of WikiLeaks documents was a cable from embassy officials to Secretary of State Hillary Clinton stating that the leader of Libya, Muammar Gadhafi, was attended to constantly by and never traveled anywhere without a Ukrainian nurse described in the WikiLeaks cable as “buxom.”

Based on the famous “buxom Ukrainian nurse” cable, Reuters today gave us the weirdest anecdotal update on whether or not Gadhafi‘s regime is actually crumbling.  Local Reuters reporters, as stringers, I guess, went to this apartment building in Kiev, in Ukraine, where they found the woman purported to be Col. Gadhafi‘s buxom Ukrainian nurse. 

As you can see here, she‘s currently not with the Libyan leader at least today.  Does this mean that Gadhafi‘s regime has finally fallen apart?  If this were a trashy novel, the answer would be yes. 

But in fact, in just our big trashy world, these developments here are probably better signed.  First, in the initial days of the rebellion, several Libyan ministers resigned.  One of those was the justice minister. 

This weekend, from the second largest city in the country, which is in rebel hands, that former justice minister announced he was forming an interim government to lead, to govern the eastern part of the country. 

Whether or not he is successful, whether or not the opposition recognizes him as leader of that, remains to be seen.  If he is successful at forming a political coalition, he could have an actual organized army at his disposal. 

Defected military commanders and rebel leaders in the eastern part of the country have formed what they‘re calling the Libyan peoples army.  They are armed with whatever the former military commanders had at their disposal as well as weapons looted and confiscated from Gadhafi forces. 

And it‘s not just members of the armed forces who have defected and joined the opposition.  So, too, has Libya‘s largest oil producer, which is headquartered in that second largest city in Benghazi.

A company worker who is also a spokesperson for the local opposition said the Arabian Gulf Oil Company was no longer controlled by Libya‘s government.  He also said it had resumed exporting oil for the first time since the protests began. 

A tanker, loaded up with up to one million barrels of crude was ready to set sail to China.  The opposition also says it hopes to send another 600,000 barrels in the next few days. 

That said, the opposition will not be able to profit from the sales of those tankers full of oil.  Money earned by the company still goes directly into Libyan government accounts in Tripoli. 

If you live in Benghazi or in the surrounding areas, there is, as of right now, really only one way to get news about what is going on in the region and that is the brand, spanking new radio station, Voice of Free Libya. 

For over a week Voice of Free Libya has been broadcasting from a studio set up at the transmitter station of the old station from which a 27-year-old army officer named Muammar Gadhafi announced his successful coup in 1969. 

So the station where Gadhafi, in 1969, announced he was taking over that country is now that station - that exact station is now in anti-Gadhafi rebel hands.  The station broadcasts on three wavelengths once controlled by the government. 

One of them, the AM frequency, reportedly sometimes reaches the capital city of Tripoli.  In terms of the international response to the revolution in Libya, the United States has frozen $30 billion of the regime‘s assets - $30 billion. 

Germany has moved to stop all payments for Libyan oil for 60 days.  The U.N. Security Council has voted unanimously - unanimously to refer Muammar Gadhafi to the International Criminal Court at the Hague for crimes against humanity for the force that he has used against his own people. 

And if you have heard rumors today about U.S. warships positioning themselves closer to Libya, you heard right.  The amphibious assault ship, Kearsarge, and the aircraft carrier, the USS Enterprise, are in the neighborhood. 

Nobody knows if there will be a no-fly zone for them to enforce or what other military action may be ahead either by the United States or by the international community, more broadly. 

Today the Gadhafi regime, on the one hand, used troops and special forces to attack an oil refinery and two cities close to Tripoli.  They sent fighter jets to bomb sites in eastern Libya. 

On the other hand the colonel himself told ABC Christiane Amanpour that Libyans love him.  He says the people of Libya love him so he has no plans to step down.  Also, he is bombing them. 

Also, he can‘t step down, he says, because he is not even really technically the president or king or anything so what would he be stepping down from?  His colonelship? 

Delusions, civil war, Ukrainian nurses, or not, the forecast for Muammar Gadhafi‘s future as the leader of Libya looks to be short and brutal.  We will keep you posted.


MADDOW:  Next year, London will be hosting the 2012 Summer Olympic Games.  The opening ceremonies happen in 515 days.  I know that may seem like a long time off, but when you‘re planning the Olympics, that is pretty much right around the corner. 

It‘s kind of already too late to make major changes.  Now, for example, would probably be too late to change the logo, the Olympic logo which they unveiled about three-and-a-half years ago. 

The logo is basically the numbers 2-0-1-2, 2012, and the Olympic ring.  See, 2012, says London in the first two and the five rings are in the zero. 

The designers say the logo is meant to be, quote, “an instantly recognizable symbol and a universal form unconventionally bold, deliberately spirited and unexpectedly dissident echoing London‘s qualities of a modern, edgy city.” 

So that unexpectedly-dissident logo is going to be everywhere in 515 days.  The whole world has known about this logo for about four years.  Why, then, is today the day that the nation of Iran has decided that that logo is so offensive that it is threatening to boycott the entire Olympics because of it? 

According to one of the Iranian state news agencies today, quote, “Iran objects to 2012 London games logo.”  The agency reporting Iran has sent a letter to the IOC calling for, quote, “designing a new logo and confronting the symbol‘s designers.” 

What is so upsetting to the Iranian government about the Olympics logo, even though they‘ve known about it for nearly four years, even though it hasn‘t changed in all that time, even though it never bothered them before? 

Iran decided today that if you squint at this logo just right, they‘ve decided it says the word “Zion,” as in Israel, as in Jews.  OMG!  It‘s an international Jewish conspiracy, just like everything else if you listen to the Iranian government. 

They look at the Olympics logo and I guess, what, you rearrange the numbers and turn that maybe sort of extraneous parallelogram from the second two in 2012, turn that into a dot on the “I”? 

Yes - no.  Iran is either cuckoo for coco puffs and they see Israelis under every rock, or Iran wants international attention today for something other than the fact that the political opposition there says the two candidates who challenged Ahmadinejad in the last election and have since been opposition leaders were just arrested. 

The opposition is calling for rallies tomorrow to defend them and protest the arrests.  They say that Mir-Hossein Mousavi and Mehdi Karrubi were not only arrested by the Iranian government.  They were arrested along with their wives. 

Iran is denying it.  More tellingly, they chose today to announce randomly that four years after they saw it for the first time, the London Olympics logo has suddenly been revealed to them as a Jewish plot to take over the world through graphic design or something. 

The crackpot tin pots in charge of Iran are hoping that nobody will notice the reports that they are rounding up the opposition.  They are trying to make the world not notice that by creating exactly the kind of distraction that creates the most stupid hubbub. 

They are trying to create a distraction so no one will wonder where these guys and their wives have gone.  The distraction is not working. 

Now it‘s time for “THE ED SHOW.”  Good night.



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