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'The Rachel Maddow Show' for Tuesday, August 16, 2011

Read the transcript to the Tuesday show

Guests: Ezra Klein, Eugene Robinson, Ed Schultz

RACHEL MADDOW, HOST: Good evening, Chris. May I please be a guest on
your show sometime?

CHRIS HAYES, MSNBC HOST: Yes, I would love that.

MADDOW: Thank you. Sorry, I put you on the spot like that.

HAYES: Happily.

MADDOW: Also delighted. Thanks a lot, Chris.

And thanks to you at home for staying with us for the next hour.
Today was day two of President Obama`s big three-day looks like a campaign,
sounds like a campaign, but we swear most definitely is not a campaign bus
tour through the Midwest. And again because this is not -- not a campaign
trip, they say, today, Mr. Obama`s bus tour found itself rolling through
Iowa of all places.

Oh, hey, what do you know, must have taken a wrong turn somewhere.
But now that we`re here, hello, Iowa!

After weeks of Republican presidential hopefuls barnstorming the state
of Iowa, today the Democratic presidential nominee for 2012 took a tour
through the state as well, and the message President Obama delivered in
Iowa today is the message that he`s really been delivering at every stop
along this tour through the country this week -- we need jobs, we need jobs
now, and we need Congress to get to work on getting America some jobs.


economic growth and jobs is going to be our people and the private sector
and our businesses. But you know what? Government can help. Government
can make a difference.

So, I hope that I can count on you in the days ahead to lend your
voice to this fight to strengthen our economy. I need you to keep your
pressure on your elected representatives for things like the payroll tax
cuts or road construction funds, or the other steps that will help to put
our country back to work.


MADDOW: Government can help. Government can make a difference, he

That`s the message President Obama has been delivering in Iowa. It`s
what he said today -- government has a role to play in getting the economy
back on its feet. That sort of thing sounds like a foreign language to
you. If it sounds like the stuff of pipe dreams, that it`s probably
because Republicans in Washington have spent the better part of the last
eight months somewhat monopolizing the discourse by convincing everybody
that no matter what sort of dire straits the country is in, no matter what
sort of disaster we are mired in, there can really be no fiscal policy to
improve the economy whatsoever. There can be no action taken by the
government to improve the economy.

And if the Democrats or the president want to try it, Republicans in
Congress say they will block it.

Whether or not they will block everything remains to be seen,
President Obama`s trying to change those dynamics in part with his bus tour
this week, telling folks at every stop to express themselves to Congress --
is all the stuff we can do, the president is saying, call your member of
Congress, tell them we should do this stuff, tell them we should use
economic policy to help create jobs.

The president started trying to enlist average Americans` help for
leverage against Congress during the debt ceiling fight. He is continuing
asking Americans for their help now.

But if Republicans keep convincing the Beltway nothing is possible, if
that is true, if Republicans are, in fact, going to be able to block
everything that President Obama and the Democrats want to do to overtly
help the economy, if the shocks we`ve been through over the last few weeks
from getting our credit downgraded -- S&P says because Republicans said
national default was no big deal to them we got downgraded -- from the
downgrade, to the stock markets terrifying ride of the last few weeks, if
those shocks are not enough to shock us into a new political reality, and
Republicans really are going to stop any new fiscal action to help the
economy, then there`s really only one other tool that is available to the
government, and it is called monetary policy. It`s the Federal Reserve.
It`s how much money there is in the economy at any time, interest rates
charged to banks, it`s all that fun stuff.

The president alone can`t do anything on fiscal policy really --
fiscal policy is only controlled through Congress. That`s the whole purse
strings thing, right?

And Republicans, so far at least, have decided to stop any fiscal
policy from going through Congress. So, the only other thing available is
the Federal Reserve. It`s an independent agency. It is run, in fact, by a
Republican who was appointed by George W. Bush. It`s this baldy, beardy
man, named Ben Bernanke.

Now, no matter how soporific the whole idea of monetary policy is, and
the actions of he Federal Reserve -- come on, puppy, stay awake, stay with
me, puppy -- up, up, not down, wake up, puppy, come on, it`s going to be --

No matter how adorably sleep inducing Fed monetary policy is, come on,
there you go -- yes! Wall Street and the private sector actually find
baldy, beardy Ben Bernanke to be rather riveting. The U.S. economy needs a
shot in the arm right now, right? It needs a little bit of help.

But if Republicans are going to stop that from coming from the
president or Congress, then -- I mean, not to be gross, but even the
suggestion of the possibility of a little stimulation from this fellow at
the Fed is the sort of thing to send Wall Street into ecstasy.

You may recall last month when Ben Bernanke testified before Congress
and mentioned the mere possibility of the Fed launching a new round of
stimulus. The instant reaction to that comment was that stocks shot up
almost immediately. The market loved the idea of the Fed doing something
to help the sputtering economy.

You may recall last week when the Fed announced it was going to keep
interest rates exceptionally low for the next two years, the market shot up
more than 400 points that day after losing 600 points the day before.

The extent to which congressional Republicans are able to stop there
from being any jobs policy in Congress to help the economy is the extent to
which we are all sort of dependent on hopefully, maybe, the Fed doing
something to try to help. It`s essentially the only other option that the
country has.

If you don`t want the economy to be helped, if you sort of like the
idea of the economy being absolutely in the tank when a Democratic
president was trying to run for reelection, you better that hope not do
congressional Republicans keep blocking any policy from getting through
Capitol Hill, but you also better hope that the Fed feels too afraid to act
as well.

And it is in that context in which the latest entrant into the
Republican presidential rate, Texas Governor Rick Perry, today threatened
to lynch baldy, beardy Ben Bernanke, the chairman of the Federal Reserve.


more money between now and the election, I don`t know what y`all would do
to him in Iowa, but we`d -- we would treat him pretty ugly down in Texas.
I mean, printing more money to play politics at this particular time in
American history is almost treasonous in my opinion.


MADDOW: Lynch the chairman of the Federal Reserve if he tries to help
the economy. Stay out of Texas, Ben Bernanke.

People being outraged about this is likely to be exactly what Rick
Perry wants. This was an applause line for him, and not only is he not
apologizing for it, he`s proud of it. Governor Rick Perry telling
reporters today, quote, "I`m just passionate about the issue and we stand
by what we said."

Being deliberately provocative with lines like this is one of the ways
that Rick Perry has tried to shape his image as a candidate. I mean,
saying on day two of his campaign that the U.S. military doesn`t respect
President Obama, saying that the president does not love the United States
or at least saying he`s not sure if Mr. Obama does and he really should be
asked whether he truly loves the United States, refusing to tell a reporter
who asked whether or not he was carrying a gun on the campaign trail.

Ben Smith from "Politico" reporting, quote, "I asked Perry whether
he`s armed today, he declined to say. Quote, `That`s why it`s called

This is what gets shorthanded as Rick Perry`s style, his bravado, his
swagger. This is actually what he`s marketing as a candidate.

As "Salon`s" Alex Pareene put it today, this is feature of the Rick
Perry candidacy. This is a feature, not a bug.

Governor Rick Perry wants to be seen as the guy who says outrageous
confrontational stuff, the guy who threatens bodily harm to the chairman of
the Federal Reserve instead of saying a bunch of really boring stuff about
what his own monetary policy would be as president.

That`s boring.

This is his brand. This is the kind of thing that Rick Perry wants to
be known for, saying the blunt in politics thing, letting people know how
tough he is. And as such, this is one of those moments that is sort of a
test for the political system and for the political media.

Are you going to help this guy do what he wants you to do?

If you want to talk about extremism and Rick Perry, you sort of have
two options just from, say, today`s news. You could talk about Rick
Perry`s intemperately over-tough language implying perhaps not metaphorical
violence toward an economic policy official that is, in fact, a form of
stylistic extremism which he would be delighted for you to cover -- please,
he`d be pleased if you were outraged about it, so try to be outraged.

Or another option is to talk about Rick Perry saying Social Security
is a Ponzi scheme, that is unconstitutional and must be abolished at the
federal level. That`s a different kind of Rick Perry extremism.

You can talk about Rick Perry saying yesterday that the United States
government should have defaulted rather than raising the debt ceiling,
saying he would have voted against raising the debt ceiling. That`s
another option. That`s substantive extremism.

Governor Perry made it clear last month that in his mind, the United
States going into default would be no big deal.


PERRY: I think this -- this threat that some how another the world`s
going to come to an end and the threat of we`re not going to be able to pay
our bills is a bit of a stretch.


MADDOW: So that`s an option, that sort of comment, that substantive
Rick Perry extremism, and that is available for discussion. Rick Perry
also opposed to the 16th Amendment to the Constitution, repealing that, of
course, would eliminate the federal income tax, which would remove 80
percent of all government revenue, because that will help the debt problem.

That is, strictly speaking in terms of its relationship to mainstream
economic thinking, that kind of idea -- get rid of the source of 80 percent
of all federal revenue, getting rid of the income tax altogether, that
technically speaking is extreme when compared to mainstream economic

Perhaps if he was threatening to beat the 16th Amendment to death in
Texas, instead of proposing just to repeal it, maybe then we could get some
kind of political shock and outrage over that kind of extremism as well.

Joining us now here on set is Ezra Klein, columnist for "The
Washington Post" and Bloomberg, and MSNBC policy analyst.

Ezra, I got to tell you -- you have been doing a great jobs hosting in
the afternoon on the "MARTIN BASHIR SHOW."

EZRA KLEIN, MSNBC POLICY ANALYST: Thank you. That`s very kind of

MADDOW: What is your take on Rick Perry`s warning to the chairman of
the Fed?

KLEIN: I`m sort of loving. Is that a fair take?


KLEIN: We are having, I guess, an ideas campaign. What is remarkable
about that Perry clip if you actually back up a little bit, is he began by
saying I`m not going to take a position on the Federal Reserve. I think he
said, I want to part of it.

MADDOW: Yes -- I want to take a pass of the Federal Reserve.

KLEIN: Then he thought for a moment, actually, if I was going to have
a position, we should possibly beat him. It`s really quite a take, but it
is extraordinarily ignorant.

I mean, even putting aside how much money you print between now and
the election, there will be growth in the American population, Rick Perry
knows this. Texas is one of the quickest growing states in the Union.

And what does he think the money supply`s supposed to do? Sit there,
it doesn`t grow, where it`s going to have less money as we have more
people? That is a really quite bad idea.

MADDOW: Does this come from an idea if you just talk generally about
money and generally about spending and generally about debt without
actually getting to the specifics of what it is that you`re criticizing,
just the mention of those things sounds bad to people and makes you sound
like a fiscal conservative?

KLEIN: Yes, and then there`s the other set. I call these meta
solutions, right? They sound like solutions. They sort of even look like
them if you don`t look closely, but they are not. We`ll just pass it up to
someone else.

Medicaid, Medicare, Social Security, they are unconstitutional, but
we`re not going to get rid of them, we`re going to give them to states. It
will be somebody else`s problem.

Monetary policy, we`re not going to make decisions about it, we`re
just going to say we don`t like it. The money supply just won`t move.
TARP, we`re not going to say what we`d have done instead of it, we just
wouldn`t have had it. We wouldn`t have stimulus, even though Rick Perry
had billions of stimulus dollars and it kept him from going into a deficit
in Texas.

And so, you have this sort of governing theory of just not really
saying what you would be doing but saying something but nevertheless taking
a position, right? And your position is no position. Your position is you
don`t like it and we shouldn`t have done it and that is sort of enough,
because who`s going to ask the follow-up question?

MADDOW: Well, the follow-up question, to me, is what`s your big idea,
bucko, try to sound tough, to go mano-a-mano with the man who wants to be
seen as a tough guy in the situation. At the same time, though, when
you`ve got this many candidates running for the nomination, when you`ve got
them all just saying no and then them all just saying I hate it all, are
you elevating any of them to ask them to say what their federal policy
would be?

I mean, when Rick -- even when Mitt Romney has done that as a guy
that`s tried to take it seriously as a frontrunner here and somebody who`s
tried trying to engage only the president and not the other candidates on
the campaign trail, it seems like they`re pretty confident they`re not
going to be pressed on those things, that they just don`t need to
politically at this point.

KLEIN: And they are right. I mean, when I hear -- when I was
watching FOX News debate, which I thought the FOX News folks did a pretty
good job, when I heard the doorbell go off after a minute of explaining
what they would do about he hardest problems facing the country -- just
made me sick to my stomach, give them five, give them two, give them three,
I`m sorry -- put the puppy on, but we might need to hear it.

And what`s amazing about what Perry is doing is that the GOP used to
have a big idea, it was called the Federal Reserve. Milton Friedman, he`s
a conservative icon, he was Reagan`s economic advisor. He won a Nobel
Prize as an economist and he said, the Great Depression, it was all
monetary, it was a monetary failure, and Republicans like this. By the
way, he was right, but they liked it because that meant it wasn`t private
businesses fault and the only answer we have to recessions is in Congress
spending a bunch money, you can act through the Federal Reserve in a more
disinterested way outside the political process. And get in the way of it.

Perry is throwing all of that out and he doesn`t have a new framework
to support what we should do, he just has nothing. But to actually get at
that, you need to have a long conversation, you need to talk about Milton
Friedman, and monetary policy and money basis, and nobody likes that. But
if we had had basically the nothing policy that he`s talking about, we
would have had a Great Depression.

MADDOW: When you look though at the spectrum of Republican idea that
is being represented by the presidential candidates, whether or not that
door bell is going off of the debate -- do you feel like there is an
articulated conservative economic policy that is a legitimate alternative
to what the Democrats are proposing or is it all just no, no, no?

KLEIN: Well, there`s Mitt Romney who is sort of implying that maybe
he`d do something similar to what the Democrats did but not quite. I mean,
a lot of what the Democrats did was basically stolen from George W. Bush or
Mitt Romney. TARP and the auto bailout began with Bush. The individual
mandate began with Mitt Romney. Stimulus is not a particularly
conservative -- or liberal policy. Obviously, Bush had his stimulus before
Obama came in and in the early (INAUDIBLE) Paul Ryan and others were saying
we need a tax cuts stimulus for that recession.

So, one of the problems Republicans have, not so much Romney because
he`s pretty good at sort of passing this stuff around, but the rest of them
is they have opposed to everything the Obama administration did. But the
Obama administration, in trying most everything, has taken off the table a
lot of what their Republican Party wanted to do. So, they are not left to
many solutions.

MADDOW: Right.

KLEIN: I mean, right now, they are opposing payroll tax cut, an
extension of the payroll tax cut.

So, when the Republicans oppose to payroll tax cuts?

MADDOW: Right. And Newt Gingrich is the only one that is dissenting
on that, which is fascinating. I cannot wait to see how that plays out.

Ezra Klein, columnist for "The Washington Post" and "Bloomberg," MSNBC
policy analyst -- Ezra has been guest hosting on "THE MARTIN BASHIR SHOW"
here at 3:00 p.m. Eastern and doing a spectacular job of doing it. Ezra,
thanks for being here.

KLEIN: Thank you.

MADDOW: Still ahead, Ed Schultz, Eugene Robinson, and how the
president is kind of secretly taking a turn in his politics -- a turn that
should make happy the people in his own party who have criticized him for
being too soft on Republicans. We have the evidence on tape. That`s


MADDOW: The president today in an interview on CNN, making some news
about the nation`s footing and expectations regarding a potential terrorist


have right now is not the launching of a major terrorist operation,
although that risk is always there. The risk that we`re especially
concerned of right now is the lone wolf terrorist, somebody with a single
weapon being able to carry out wide-scale massacres of the sort that we saw
in Norway recently. You know, when you`ve got one person who is deranged
or driven by a hateful ideology, they can do a lot of damage, and it`s a
lot harder to trace those lone wolf operators.


MADDOW: The president`s new remarks echoing those of his own Justice
Department, which just recently warned of lone wolf style attacks, like the
president mentioned that just took place in Norway.

The president also telling CNN today there might be, in his words, a
little extra vigilance in monitoring potential terrorist risks as the 10th
anniversary of the 9/11 attacks approaches.

We will be right back.


MADDOW: Earlier this month, on the occasion of President Obama`s 50th
birthday, we did a review on this show of the vast conspiracy theory that
Barack Obama is not who he says he is, that he is secretly foreign and
therefore, secretly not really president of the United States, and his fake
birth certificate that made it seem like he wasn`t foreign is really part
of an elaborate plot hatched in 1961 to do something -- not quite sure
what, but it definitely sounds bad.

Because President Obama released a second form of his Hawaiian birth
certificate this spring and promptly decided to launch the mission to kill
Osama bin Laden in the same 48-hour period, it has been sort of nice to
know that as President Obama is running for reelection this year and next,
at least we won`t have conservatives this time around questioning his
Americanness. At least that`s over. Oh, wait.


PERRY: I think you want a president that is passionate about America,
that`s in love with America. I know what this country needs.


MADDOW: Asked later to clarify what he means by saying America needs
a president that`s in love with America, presidential candidate and Texas
governor Rick Perry rather doubled down.


REPORTER: Governor, you said you would be a president who loves
America, are you suggesting the current president does not love America?

PERRY: No, you need to ask him.

REPORTER: Are you suggesting he does not?

PERRY: I`m saying you`re a good reporter, go ask him.


MADDOW: You`re a good reporter. Go ask the president if he loves the
country. That`s what a good reporter should do, because I don`t know if he
loves the country.

Apparently, it is going to be another year like that, birtherism is
dead, long live the accusation of the president`s secret foreignness. You
know, the filing deadline is not until November, right? Maybe there`s
still time for Orly Taitz to get in?

Joining me now is Eugene Robinson, Pulitzer Prize-winning columnist at
"The Washington Post" and an MSNBC political analyst.

Eugene, I`m glad I could persuade you to talk about this. Thank you
for being here.


MADDOW: How does -- how does one prove that you are in love with

ROBINSON: Well, as you know, the traditional way, and actually the
surest way is with a bumper sticker. So, here`s my idea -- see, the
president has this new bus, right, the souped-up bus, this amazing -- he
could put a really, really big bumper sticker on the back that says I heart
America and then everybody will know.

MADDOW: When Rick Perry said this today, particularly with a follow-
up question, I don`t know, you`re a good reporter, go ask him. It`s
actually what he said.

It struck me when I saw it as old school, as really the return of Orly
Taitz. As the sort of the thing that the respectable right might be over
by now, might be a little embarrassed by.

But we saw Karl Rove and other people on the right, very upset with
what Rick Perry had said about Bernanke, nobody seems to be peeping about
this. Does that mean it`s back for the campaign?

ROBINSON: You know, I`m not sure it`s actually back. It might be in
Rick Perry world, right? You know, he`s in the -- in the past two days
he`s demonstrated why people, Republicans I know in Texas, have said this
guy is going to blow up. You know, it may be that this is just who Rick
Perry is, that these intemperate things he says are, yes, part of his

But, in fact, are off the -- just out of bounds and are going to get
him in serious trouble.

I don`t think the Karl Roves of the world like going back to this
mime, I think it`s been done, and he killed Osama bin Laden. So, it really
doesn`t have the kind of traction that it once had.

MADDOW: When you`re talking about Republicans who are skeptical of
Rick Perry`s chances, though, and they see that -- they see a line like
this as something indicating that he`s not going to last in the long term,
I see a line like this as evidence of his discipline, that he`s just going
to run with the you come down to Texas, we`ll show you what a Fed chairman
has to face when he does something that I can`t explain about federal
policy, I don`t believe that the president loves America, the military
doesn`t respect America, he never served in the military -- he`s just going
back to old school stuff, he`s going to stay disciplined with it, and it
doesn`t strike me he`s responding to the outrage over these comments as if
he`s made a gaffe.

ROBINSON: No, he certainly is not. But, you know, Texas politicians
that succeed in the rest of the country tend to modulate their Texas-ness a
bit. They tend to speak in language the rest of the country gets. And so,
when you talk about Ben Bernanke in terms of a lynching, and when you go
back to this old, and frankly tired, canard about the president`s love for
America, I`m not sure that -- if this is, indeed, by design and discipline,
I`m not sure it`s a good idea.

I think if he wants to stick around in this race, he`s going to have
to dial it back. He may never apologize for these things, but saying them
again, I -- you know, if he`s going to keep hitting on this, not sure it`s
a good idea.

MADDOW: I wonder if there`s room here for a Democratic countercharge,
what do you think the effect would be if the president actually engaged on
this and said you know what, America, we`re tired of having our patriotism
questioned because we love America in a way that the conservatives want --
I mean, is there room for that sort of countercharge? Have politics
changed enough to capitalize against him on this?

ROBINSON: You know, I think there may well be, and I would love to
hear the president give that speech. In fact, he has given any number of
speeches before and since becoming president that were just brimming and
oozing with his love for this country. So, he certainly laid the
groundwork for any such speech and attack campaign he would go on, and I
think it would be great.

It would at least flush out the other Republican candidates and force
them to take a stand and say, you know, what do you think about the
president`s love of America -- Democrat`s love of America, and let`s get
this on the table, good idea.

MADDOW: And, you know, I have to say if that happened and the other
candidates were questioned about that, that gives them all the opportunity
to say, you know what, Rick Perry, you can be the wing nut guy if you want
to be, I`d like to be considered one of the serious candidates now, and it
gives them all a chance to do that.

ROBINSON: Exactly. It could make Michele Bachmann seem reasonable.

MADDOW: Oh, please.

Eugene Robinson, Pulitzer Prize-winning columnist of "The Washington
Post," MSNBC political analyst -- once again, thanks a lot for your time,
Gene. I appreciate it.

ROBINSON: Great to be here, Rachel.

MADDOW: All right. The best new thing in the world today will not be
the best new thing in the world today for your arteries or waistline. But
for everything else -- pure, delicious awesome. That`s coming up right at
the end of the show tonight.


MADDOW: Two last recall elections in Wisconsin are being decided
today. In one of the two races, the Republican candidate is the author of
a children`s book that`s called "With My Rifle By My Side." It`s a
children`s book. Results on how that candidate and all the candidates did
tonight in Wisconsin coming up in just a moment.


MADDOW: At the end of George W. Bush`s second term as president,
everybody knew that his vice president, Dick Cheney, would not be running
to succeed him. Dick Cheney would not be running for president, why did we
know that? We just knew that.

So, there was going to be a primary in 2008 for the Democrats and a
primary in 2008 for the Republicans as well -- wide open on both sides.
There was a lot to pay attention to that election cycle.

But this year, after about 14 seconds of cable news chatter about
whether President Obama might get a primary challenger in the Democratic
Party, ha, everybody turned all their attention to the Republican side,
because that`s what presidential politicking is about this year, it`s just
the Republican side. And as everyone is increasingly riveted by the fight
for the nomination among the Republicans, even today, August 16th, the chat
is still about whether more Republicans might still get into the race.

In this environment where everybody`s watching the presidential
politicking only on the Republican side, in this environment, President
Obama has effectively started his own reelection campaign this week. The
president embarking on a bus tour of the Midwest starting yesterday.


OBAMA: Hello, Cannon Falls! Hello, Minnesota! Hello, Dakota!
Hello, Iowa!

It is wonderful to be back in Iowa.

This place is as pretty as I remember it.


MADDOW: Well, everybody in the beltway has been flipping quickly
through the coverage of President Obama`s Midwest bus tour to see if he
said anything sound byte-y about Mitt Romney, or Michele Bachmann, or Rick

I`m not sure it has been widely noticed that what the president has
been doing out there is showing how he is going to run for reelection.


OBAMA: I want everybody to understand here that I`m not here just to
enjoy the nice weather. I`m here to enlist you in a fight. We are
fighting for the future of our country -- and that is a fight that we are
going to win.

If all of you are enlisted in the fight to make sure that we`ve got a
country that is looking out for middle class families and promoting common
sense and thinking about the next generation and not just the next election
and is thinking more about country than it is about party and is less
interested in vilifying opponents than figuring out how to get something
done, then we`re going to start electing folks who do that.


MADDOW: The election itself is not for 15 months, and the president
has the luxury of not having to run in a primary against Democrats before
the general election takes place.

But probably the single most important thing on Election Day that will
determine whether or not President Obama is reelected is, of course, the
state of the economy and jobs. And if the economy and jobs don`t get
better between now and 15 months from now when the country is voting, who
will voters blame for things not being better?

And so, the president, not technically campaigning, but heck,
traveling Iowa by bus, the president is making his case, making the
critical campaign-style case for the difference between the parties.

Spoiler alert, here comes the Republicans Paul Ryan budget vote to
kill Medicare. Listen.


OBAMA: There are two contrasting visions that are going to be
presented over the next year and a half. In this debate that we still have
to finish about how to close the debt and the deficit and how we move this
country forward.

And I`m on the side of a vision that says we live within our means,
but we still make investments in the future and everybody pays their fair
share and we`ve got shared sacrifice and shared opportunity.

And on the other side, you got a vision that says we are going to make
sure that those who have benefited the most pay the least and we under-
invest in education and we under-invest in infrastructure, and we under-
invest in basic research. That`s their vision.

And we dismantle Medicare as we know it and make it into a voucher

Well, that`s -- I don`t think that`s the way America`s going to grow.
That`s not how America`s going to prosper.

But the only way we`re going to be able to win that argument is if you
guys make a decision that you want a country that`s big and bold and
generous and not one that`s cramped and just believes in a winner take all
economy and which everybody else is left out in the cold. That`s not the
kind of -- that`s not the kind of America that I was raised in. Not the
kind of America I believe in.


MADDOW: The main stylistic criticism of President Obama from within
his own party, from people who say they supported him and they still
support him, but they want more from him -- and I don`t mean the
disagreements on certain policies, but I mean, things about his style as
president, the main criticism is that the president has not confronted the
Republicans enough about their political sins.

He is now doing that confronting on what is effectively the campaign
trail in Iowa. A corollary of that main criticism, again, from within his
own party, stylistic criticism of his presidency is Republicans have been
getting too much out of him in negotiations, that the president ought to
say what he wants, what he think the country needs and make the country
believe it and make Republicans pay a price if they don`t go along with it
if they don`t. Convert the popularity of Democratic ideas into political
leverage against Republicans, to get his way or at least go down swinging
while saying and standing up for what he believes in.

He, again, is now doing that on what is effectively the campaign trail
in Iowa. Listen.


OBAMA: There are bipartisan ideas, common sense ideas, that have
traditionally been supported by Democrats and Republicans that will put
more money in your pockets, that will put our people to work, that will
allow us to deal with the legacy of debt that hangs over our economy.

We could renew the payroll tax cut that we gave you in December that
put $1,000 in the pocket of a typical family.

We`ve got pending trade legislation. Congress right now could start
putting folks to work rebuilding America.

Today, I`m announcing that we`re ramping up our efforts to get capital
to small businesses and rural areas.

Let`s give tax credits to companies hiring our veterans, and let`s put
them back to work and let`s let them use their skills to get this country
moving again. Congress could do that right now.

I want to pass a road construction bill to put tens of thousands of
people to work all across America.

I`ll be putting forward when they come back in September a very
specific plan to boost the economy, to create jobs, and to control our
deficit. And my attitude is: get it done.

And if they don`t get it done, then we`ll be running against a
Congress that`s not doing anything for the American people, and the choice
will be very stark and will be very clear.


MADDOW: Don`t tell the beltway, because frankly there`s no reason yet
to interrupt the Michele Bachmann coverage.

But President Obama is running for reelection and we now know how he`s
going to run for reelection. Does this show he has taken to heart some of
the constructive criticism that`s been levied against him from his most
avid supporters?

Joining us now is our own Ed Schultz, host of "THE ED SHOW," which, of
course, follows this program every night.

Ed, thanks for making the time tonight. I know it`s not an easy thing
to do. Thanks for being here.

ED SCHULTZ, HOST, "THE ED SHOW": Thank you, Rachel. Good to be with
you tonight.

MADDOW: Are you seeing a shift from the president on this bus tour,
or do you feel like this is a continuation of what he has been say

SCHULTZ: No, I think the president knows that his base is very
frustrated and the worst thing the base could do with all of these
Republicans who are propping up and running for nomination, the worst the
base could do is to freeze up. And the president, I think, has to own some
responsibility to make sure that the base doesn`t freeze up.

They are not totally happy with the way he has negotiated, as you
mentioned in the set-up piece about how he`s gone back and forth with the
Congress. Congress is at a 13 percent approval rating in some polls
because they haven`t done the job. They`ve spent their time being
obstructionists, and I think this president can`t get on the road enough to
go out and make the case and reintroduce himself and make sure people know
exactly what he`s advocating for.

But then he`s going to ask for the order, telling them that he is not
going to give up and make it in very clear terms that in his first term as
president, he had all sorts of olive branches coming out of the White
House, the second time around, it`s not going to be that way and he needs
our help. That`s what I`d like to see the president do.

Now, whether he`s going to do it or not, I`m sure he`s got plenty of
advice coming from everywhere. I`m a cable host, you`re a cable host. I
supported President Obama, I believe in him.

But I think it`s time to take off the gloves and flat-out get after
it, because these folks are standing in the way of a lot of progress this
country could make, which the president just said in those sound bytes
about helping the job market.

MADDOW: The thing I`m hearing from him that sounds the newest to me
and most pointed in terms of a strategy is the last thing we played him
saying there, my attitude is -- he said, I`m going to put forward a
specific jobs plan in September. My attitude is get it done, and if they
don`t get it done, then, he says -- we`ll be running against a congress not
doing anything for the American people and the choice will be stark and

That`s sort of what you say before I will win. He`s saying I`m going
to go down swinging and then give you a chance to tell me what you think
about the two sides here.

Do you think that is an effective -- effective line to take between
now and 15 months from now?

SCHULTZ: I think it`s very easy for people to understand where he`s
coming from. I think the president is basically starting to set up a
narrative -- you know, this isn`t my fault. You know, I caved in on the
Bush tax cuts, I extended them. You know, I didn`t go after the Employee
Free Choice Act. I didn`t get the public option of universal health care.

I did a lot of good things for Wall Street. I was out there fighting
for the automobile industry. You know, everything else we`ve tried to do
on jobs, they haven`t come to the table.

And I think people will understand that, but they want to hear a
little bit more saying this time around it`s going to be different, because
I don`t think the base, Rachel, is going to be overly enthusiastic to be
out there campaigning, doing all the things they did in 2008, if it`s going
to be just more of the same.

The base and I think independents want this president to start drawing
some lines in the stand. We understand obstructionism. We understand
exactly how difficult the Congress has been working with this president.
We understand when they call him a socialist and they paint him as un-

That infuriates, I think, a lot of Americans.

And I just think the president needs to pivot now and be far more
aggressive and don`t be afraid to point the finger at the Republicans and
name names. Name the obstructionists.

There`s a yearning out here in the middle of the country right now for
the president to step up and get after it.

MADDOW: Ed, let me ask you about one very, very important part of the
Democrat`s political structure and of the Democratic Party`s base and
president`s base, unions. Unions upset that the Democratic Party has once
again chosen a non-union state and a city where there`s not even a single
union hotel for the Democratic Convention next year in North Carolina.
Some unions are pledging not to go to the convention to support Democrats
because of that.

Is that a rift that the White House can heal and do you see interest
on their part to do so?

SCHULTZ: Well, I think the White House would be smart to turn to the
union heads in this country and ask them the question: do you want
Republicans to win North Carolina? Do you want the Republicans to win

The bottom line is, the president is pretty good at telling people
you`re not going to get everything you want, but I would encourage wage
earners in this country to put those kinds of things aside and to look at
the big picture.

But as I will do on "THE ED SHOW" tonight, I will document some things
that the president has been saying about organized labor and collective
bargaining that I find very troubling and I think people out here in the
middle of the country find troubling as well.

This president has not delivered for labor the way they thought he was
going to -- and I don`t think he has delivered for the middle class the way
they wanted him to. But the landscape, the obstructionism, the record
number of filibusters in the Senate the first two years has also made it
tough for any president to navigate through those waters.

But I think that labor, if I had to make a prediction, I think that
they will be there for this president when push comes to shove.

MADDOW: Ed Schultz, host of MSNBC`s "THE ED SHOW" -- Ed, I got to
tell you that I know that you have been a strong supporter of this
president and I also know you take policy and the substance and progress
issues so seriously that despite the fact that you have been a supporter of
him, you`ve also been one of the most blunt spoken critics of him -- and
your honesty and straightforwardness of that is something that I`ve always
really respected. So, thanks for talking about this tonight.

SCHULTZ: Thank you, Rachel.

MADDOW: "THE ED SHOW," of course, is right here on MSNBC, right after
this show.

All right, sometimes the job of a reporter in the field is to chart
the ebb and flow of political events that define the contours of the
American experience. At other times, the job of a political reporter in
the field is to do this -- in the field political journalism is alive and
well and risking its health. Best new thing in the world today is coming
up in just a moment, tonight with frosting.


MADDOW: Just under an hour ago, polls closed in the two final recall
elections of the summer in the great state of Wisconsin. Last week, it was
six incumbent Republicans facing recall election. Two of those Republicans
didn`t survive. And they`ll be replaced by Democrats who challenged them.

This week, it`s two incumbent Democrats facing Republican challengers.
Earlier this summer, in the first Wisconsin recall, another Democratic
incumbent senator easily beat the Republican challenging him. But,
tonight, at least one and maybe both Democrats has been thought to be
facing a tough challenge.

The first one is the race in district 12, where right now with 19
percent of precincts reporting, the incumbent Democratic Senator Jim
Holperin has 54 percent of the vote. His Republican challenger Kim Simac
has 46 percent of the vote. State Senator Holperin is a freshman Democrat.
He won district 12 in 2008, narrowly beating the Republican candidate, 51
percent to 49 percent.

That district leans Republican with Republican Governor Scott Walker
winning more than 57 percent of the vote there in November. And the
conservative Supreme Court justice candidate David Prosser winning 10 of
the 11 counties in the district just back in April.

Senator Holperin`s challenger is Republican Kim Simac. She has not
held office before. She`s a small business owner and author. Her most
recent book for children is titled "With My Rifle By My Side: A Second
Amendment Lesson." She also founded a Tea Party group called Northwood
Patriots two years ago.

As I said, this race in district 12 could have been expected to be
close this evening. At this point, it`s too early to say whether it will
be. Again, at this hour, with 19 percent of precincts reporting, the
incumbent Democratic Senator Jim Holperin has 54 percent of the vote and
Republican challenger Kim Simac has 46 percent.

The other recall election today in Wisconsin was in southeastern part
of the state, District 22, where at this hour, we`ve got 14 percent of
precincts reporting. The incumbent Senator Bob Wirch has 44 percent. His
Republican challenger, Jonathan Steitz has 56 percent of the vote. State
Senator Wirch has been elected to the Senate four times, including a race
in 2004, when he beat then-attorney, now National Republican Party chairman
Reince Priebus, despite being outspent in that race by Mr. Priebus three to

State Senator Bob Wirch`s competition tonight is also an attorney, a
corporate lawyer who has run on the platform of being pro-concealed
weapons, anti-abortion, anti-union and anti-regulation.

Once again at this hour, with 14 percent of precincts reporting,
incumbent Democratic Senator Bob Wirch with 44 percent of the vote trailing
his Republican challenger Jonathan Steitz with 56 percent of the vote. But
these are early, early returns.

Whichever of these candidates win tonight`s election, in District 22,
the victory is going to be short lived -- thanks to the new redistricting
plan that Wisconsin plan that Wisconsin Governor Scott Walker signed into
law last week. Both of these guys, both of these candidates, the incumbent
and his challenger, will be living outside the new District 22 after it is
redrawn for the next election.

And regardless of whether or not State Senators Wirch and Holperin
hold or lose their seats tonight, Republicans will still be in control of
the Wisconsin state Senate -- thanks to the results of last week`s recall
elections. It has been a wild ride in Wisconsin this year.

We will be right back and keep you posted as further results become



MADDOW: (INAUDIBLE) has not worked at THE RACHEL MADDOW SHOW anymore.
Anthony has left the friendly confines of this show and our silly hijinx
for the much more sober journalistic duty of covering the presidential
campaign as an embed on the campaign for NBC news.

So, even though it looks like we were there in the spin room.


MADDOW: I need to actually correct part of that. The producer I was
discussing there, Antony Terrell has left this show, and he is an NBC News
embed on the campaign trail. But what I got wrong there is when I said
that in leaving this show, Anthony Terrell, great producer, has left his
high jinx behind him. Watch.


ANTHONY TERRELL, NBC NEWS: I`m here at the Iowa state fair. I am in
line to get some fried butter. It`s 11:00 a.m. and this is going to be my

Thank you. I`m really looking forward to this butter. (INAUDIBLE) I
had to get a pop to wash it down with. I`m really thirsty. (INAUDIBLE)

Let`s take a bite. Hmmm!

UNIDENTIFIED FEMALE: What does it look like on the inside?

TERRELL: A little bit of cinnamon. Some frosting on the interior.
It tastes like a pancake, if you will. Very soft and gooey. I know my
cholesterol levels are going to shoot up.


TERRELL: Look at that.


TERRELL: That`s a stick of butter.


TERRELL: Got to love the Iowa state fair.


MADDOW: Anthony Terrell having his liquid, delicious frosting coated
deep fried cake and eating too. Anthony`s complete lack of cynicism about
every aspect of his job which is covering politics is the best new thing in
the world today.

Thanks for staying with us tonight. Now, it`s time for "THE ED SHOW."


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