'The Rachel Maddow Show' for Tuesday, November 29, 2011

Guest: Barney Frank

RACHEL MADDOW, HOST: Good evening, Ed. Congratulations on that
interview. I`m really glad you`re able to speak with him. That was

ED SCHULTZ, "THE ED SHOW" HOST: He`s quite an American, isn`t he?

MADDOW: Very impressive. Thanks, man. Appreciate it.

And thanks to you at home for staying with us.

Our guest for the interview is someone who also puts a spring in
everybody`s step around here when we know he`s going to be on the show.
But I got to say we feel particularly lucky to have him here tonight.


REP. BARNEY FRANK (D), MASSACHUSETTS: Let me be very clear: I will
neither be a lobbyist nor a historian. I promise you on both.

No, I -- there is no way I would be a lobbyist. Look, I will miss
this job and I`ll have some twinges of regret when the new Congress is
signed up.

But I will tell you this. You know, maybe you`re going to laugh, but
one of the advantages to me of not running for office is I don`t even have
to pretend to try to be nice to people I don`t like. Now, some of you may
not think I`ve been good at it, but I`ve been trying.


MADDOW: Barney Frank trying to be nice to people or fairly regularly
failing to be nice to people while making his political point, that has
been one of the great spectacles of American politics. One of great
spectacles of American legislating for the entire time that he has been in


FRANK: Apparently, I had some secret influence over the Republican
leadership that I never knew about because if I had, I would have told them
not to impeach President Clinton, I would have told them not to go to war
in Iraq, I would have told DeLay not to go on the dance show. I mean,
there are a lot of things I would have done.

REP. PAUL RYAN (R), WISCONSIN: Let`s make sure we have a fix for
people with pre-existing conditions. You can do all of that without the
government taking it over. You can do all of it by going after the root
cause of health inflation which will help our fiscal situation.


FRANK: One question.

RYAN: Yes?

FRANK: When did you figure that out? Because apparently for the 12
years the Republicans were in control, eight of which had a Republican
president, that didn`t occur to you.

The gentleman from Texas will suspend and the gentleman from Texas,
Mr. Burgess, is recognized to yield time for someone who will actually
debate the bill.

BILL O`REILLY, FOX NEWS: Come on you coward. Say the truth.

FRANK: What do you mean coward?

O`REILLY: You blame everybody else. You`re a coward.

FRANK: Bill, here`s the problem with going on your show. You start
ranting. The only way to respond is almost to look as boorish as you.

O`REILLY: This is bull. This is why Americans don`t trust the

FRANK: No, your stupidity gets in the way of rational discussion.

The collective campaigns that were run by most Republicans were
beneath the dignity of a democracy.

I`ll be honest with you, I think Rick Perry is jealous of me and he`s
why. He`s very jealous someone can tell people what he thinks and not have
to repudiate it or go back on it.

I did not think I had lived a good enough life to be rewarded by Newt
Gingrich being the Republican nominee. It still is unlikely, but I have

UNIDENTIFIED FEMALE: Why do you continue to support a Nazi policy, as
Obama has expressly supported this policy? Why are you supporting it?

FRANK: Let me --


UNIDENTIFIED FEMALE: -- a real solution.

FRANK: When you ask me that question, I am going to revert to my
ethnic heritage and answer your question with a question. On what planet
do you spend most of your time?

Ma`am, I`m trying to have a conversation with you, would be like
trying to argue with a dining room table. I have no interest in doing it.


MADDOW: Because that is how Barney Frank talks, because that is how
he gets s his work done as a politician, because that is how he gets his
point across. As a legislator, everybody wants him to be on their TV show
all the time because you never know what`s going to happen.

I personally will say one of the things I feel grateful to Congressman
Barney Frank about is he has been here on this show, not just in the
ordinary course of events when we`ve called and asked and he`s been able to
work it out with his schedule, but he`s made an effort to be here, to tell
us what`s going on when monument things are happening in Congress.

Over the summer, he joined us the night the U.S. got put on watch for
having our credit rating downgraded. He joined us by phone the night the
credit rating did get downgraded.

In June of last year, he came on the show after he had been up since
5:00 in the morning hammering out the details on the Wall Street reform
bill that bear his name. In January of last year, came on the show the day
of the Citizens United ruling when the Supreme Court blocked corporate
spending limits on elections forever -- forever changing the country.

He joined us the night Congressman Joe Wilson shouted "you lie" at
President Obama during a joint address to Congress.

On the night before President Obama signed the health reform bill, a
Democratic priority for not just decades but generations, on the night
before that was signed, Congressman Barney Frank joined us here and was
able to tell us not only what had gone on with the legislation to get to
that point, but what it had been like for him personally. Specifically at
this time when Democratic offices were having rocks thrown through their

He told us what it had been like for him in that unusually vicious


MADDOW: Congressman Frank, you were -- you were the subject, you were
the object, I guess, of a little bit of that bullying. "Politico" reported
over the weekend when you arrived at the House chamber, somebody yelled a
homophobic slur at you.

FRANK: More than one. Yes, my partner, Jim and I, were walking -- it
was a nice day. We walked from the White House to another. There was a
great deal of shouting, waving of fists and signs, and people sort of
getting very close and yelling and a number of the comments were

MADDOW: Did you feel personally threatened? What was your reaction
to that experience?

FRANK: Really sadness that -- because, look, you know, as Jim said,
we`re kind of adults and, you know, this -- I haven`t got a lot of respect
for these people, to be honest, so who cares what they say to me. But you
do have to think about it. I`m serious. The bullying in junior high and
high school is a big problem.

Again, every Democrat, every Republican in the Massachusetts
legislature voted for an anti-bullying bill. What discouraging to me is
there are kids all over the country watching this, not as a game, but as
real life and watching sort of a spectacle of so-called politicians
cheering them on. And that was just discouraging that at this point we
couldn`t have a rational debate about this kind of thug tactics were being


MADDOW: Barney Frank spent 45 years in public life. He spent 30 years
in Congress.

And as he retires, he will be remembered at the Frank in Dodd/Frank,
in Wall Street reform. He will be remembered as the finance committee
chairman when Wall Street blew up. He will be remembered as the member of
Congress you would most like to see argue with whoever it is you most
dislike in the world, because he has a sense of humor that he wields like a
wrecking ball.

There`s one other thing that I think now that he`s announced he`s
retiring, I think he should be remembered for -- a critical and
underappreciated part of his legacy. And that is that over a 30-year
period in Congress, when it became almost impossible to name it, let alone
oppose it, when it became bipartisan orthodoxy to ignore this huge, growing
thing in American policy that nobody would stand against, Barney Frank made
the case over and over and over again that when we count what dollars we
spend in this country, a dollar is a dollar is a dollar. And just because
it`s the pentagon that spends a dollar, that doesn`t mean we shouldn`t
argue over that one, if we`re going to argue over every other dollar that
we spend.


FRANK: As I look at the American budget, we continue to spend
excessively in the areas of the military far beyond any other place. Look,
America after World War II took on the role of being the protector of the
world against communism, the guarantor of stability. We`re essentially
continuing a role today of being the overwhelming military power and the
subsidizer of many of our allies who are now wealthy, who don`t have to
spend anything on their own budgets to the point where we can`t afford it.

We can be the strongest nation in the world for $400 billion a year
instead of $700 billion a year -- $450 billion instead of $700 billion.
That alone -- we could easily save $200 billion a year without in any way
endangering our security.

We continue to defend Western Europe against nonexistent threats.

I want America to be very strong and able to defend itself. I don`t
want us to take on the job of policing every political dispute everywhere
in the world. We could reduce our military spending by $250 billion a
year, $140 billion from the Iraq and Afghanistan wars. And over $100
billion in Western Europe and Japan and other wealthy nations and bring
that money home.

We can use half of it to bring down the deficit and half of it to
produce jobs.

You know, there are today 600,000 fewer local employees, public works
employees, people who shovel the snow, collect the garbage, firefighters,
teachers, police officers, because we`ve sent that money overseas.

Don`t tell me to tell a 78-year-old woman living on $19,000 a year
that she gets no cost of living but you`re going to continue to pour money
into Karzai`s coffers. Let`s bring a couple hundred billion dollars home
that is spent overseas in unconstructive ways and that`s what we need to do
to get jobs.


MADDOW: Joining us tonight for the interview is Congressman Barney

Congressman Frank, it is great to have you here today. Thanks for
being with us.

FRANK: Thank you, Rachel. That was very moving and very generous of

MADDOW: Well, I am invested in your legacy because I feel like it`s a
big part of the legacy of what liberal Americans think is possible in
Congress. When you think about ending 30 years in Congress, what are you -
- what do you want to be appreciated about what you do?

FRANK: Well, there are a couple of things. The -- I had the
opportunity, it will be 25 years ago this coming May, to be the first
member of Congress to volunteer that I`m gay. And, you know, that was an
easy one, because when you have prejudice which is based on ignorance,
there`s an easy way to combat it. You just be real. You just be who you

And you just let the contrast between who you are and how you live and
the vicious myths that are being used against people, and they erode.

I`m proud of the role I played in helping derail the impeachment of
Bill Clinton, being led by that exemplar of conventional morality and
defender of the family, Newt Gingrich, who was impeaching Bill Clinton. I
am proud of the financial reform bill.

Interestingly, today, Standard & Poor`s, the rating agency which often
gets things wrong, but this time they got it right. They had been rating
the big banks in this country as safer than other banks because of the view
that the government would bail them out, that they were too big to fail.

Today, Standard & Poor`s downgraded 37 of the large banks in America
because they finally read our bill and understood and said correctly the
government is now not willing to bail out these banks. That`s in the law.
And it took people some time to get it. I`m pleased with that.

And I am pleased that we have finally got on the table your most
recent set of quotes, about reducing military spending. You know, Rachel,
if our intervention in the world, if we really could bring the Kurds and
the Arabs together, if we could bring people in Afghanistan together, if we
could resolve these longstanding ethnic and religious disputes by sending
heavily armed, well trained young Americans, I guess I feel we`d have to do

But the point is that we waste tens and tens of billions of dollars in
these disputes and we make things worse. Here`s a deal -- we have a fine,
superb military. They`re great people and are very well-trained. They
can`t keep bad things from happening. A military can make good things

I`m proud I`m frankly one of the ones who helped put that on the

MADDOW: Right now, at this moment in American politics -- I wonder if
you see any movement toward that position. You`re one of the only people
articulating that position on a national stage for a long time, but now
with these automatic cuts in defense maybe triggered by the supercommittee,
the anti-spending mantra on the right, are people moving toward that

FRANK: They are. Actually, Ron Paul and I were working on that.
Although at some point, I got word Ron had to be careful because I was
hurting him in Iowa. So -- but, yes, the answer is exactly as you said it.

In fact, we got ourselves -- those of us who think the government
should play a constructive role in improving the quality of life. The
government is just a word for what happens when we fool our pool our
resources to do things together we can`t do individually. You know, in 45
years, I`ve never seen a tax cut put out a fire or repair a bridge. So, we
need these revenues.

But here`s the situation. They, the right wing, which has dominated
the Congress since the election in 2010, dominated the House and had a lot
of influence in the Senate, they`ve been successful because they can keep
things from happening.

Inertia has been on their side. So, people said, well, why were you
guys outmaneuvered? Because the people willing to cut the baby in half
beat the people who don`t want to cut the baby in half.

But now, by a train of events that was probably, I give the president
credit for, probably maybe serendipitous, here`s where we are: if nothing
happens in the next year, that the next year of Congress is no more
productive than this past year two things were happen. All the Bush tax
cuts will expire and military tax spending will be seriously cut.

In other words, inertia has switched sides. It`s now our ally. I
don`t want to see all the Bush tax cuts expire. I don`t think people in
the middle income ought to have taxes raised right now. I don`t want to
cut as much necessarily as a sequester would to the military.

But they have to deal with us now and I hope the president will stay
firm. I think he is taking this position. He will not sign a bill that
re-extends all the Bush tax cuts and he won`t sign a bill that alters the
sequester to cut Medicare and Social Security instead of the full hit on
the military.

That means they`ve got to negotiate with us.

By the way, we can raise taxes on the military -- on the rich. We can
see taxes raised on the rich without anybody having to vote for it. All we
need to do is vote for a bill that continues the tax cuts for everybody but
the top 2 percent. And we`ll have hundreds of billions of dollars and a
fairer tax system.

Similarly, we can put a bill through that these right wingers can vote
for on the grounds that they are reducing to the hit to the military and
wind up with very serious military reductions.

We have this argument, oh, we just -- we`ve got to keep spending
because we`re going to hallow out the military. Rachel, I just want to --
this is one last point.

We are told by Leon Panetta, who`s done a good job elsewhere. By the
way, the chief of staff of the Marines today admitted that he was wrong in
predicting that the repeal of "don`t ask, don`t tell" would be a problem.
He`s acknowledged that it worked very well.

But Panetta has done a good job, I`ve been pointing that. But he`s
made this incredible statement that if we cut anymore from the military
than has already been cut, we`re somehow going to hollow out the military.
And he said we made the mistake of hollowing out the military after all
these wars and after the Cold War.

The problem is after the Cold War, Bill Clinton was the president and
Leon Panetta was his budget director. So, we have the most extraordinary
confession in American history of Leon Panetta who used to take credit of
balancing the budget now saying, oh, we hollowed out the military.

We did no such thing. It was a very active military. And as I said,
we`re in the good position, as you said, if nothing happens, taxes go up
and the military gets cut. We can now negotiate with them and say, if
you`re willing to be reasonable, we`ll modify those things and I think
that`s going to be a good thing.

MADDOW: You have always felt free to speak your mind. That`s one of
the things people appreciate you. You are even freer than ever now.

When you`re looking ahead at the year of policy, like you were
describing and all this things that are going to have to be decided and
fought over, of course, the other thing happening in politics is that the
2012 race is going on. You have expressed some delight about the prospects
of Newt Gingrich being the Republican nominee.

But I wonder if from your position right now, having announced your
retirement, if you have advice for your fellow Democrats in how to get
stuff done in this year ahead, particularly given that it`s election
season. And given you can really say anything even if you haven`t in the

FRANK: Yes, I think it is along the lines that I just spoke about. I
-- look, there is cultural lag among some of my political colleagues.
There are a number of issues where my colleagues just lag the public.

I mean, one is where you throw in the (INAUDIBLE) -- the legalization
of marijuana. Most people don`t think you`re going to lock people up for
smoking marijuana. My colleagues in Congress and other places are afraid
to say so and they`re wrong.

You have this view that, oh, a Democratic president must always appear
to be tough and can`t cut back on the military. And that`s Mike Dukakis, a
great man, who would have been a great president, wound up on a tank, his
political disadvantage, because they thought, oh, you got to show how tough
you can be.

The public is over that. The American public understands there`s no
more Stalinist threat to Germany. They understand we do not have to deploy
large amounts of American ships to keep open the shipping lanes between us
and China and to prevent China from shutting down shipping lanes over which
China makes an enormous amount of money.

And so, what the Democrats need to do is say, look, we`re going to
spend wisely here. We`re going reduce the deficit by some restrictions on
excessive spending domestically, by raising taxes on wealthy people and by
cutting the military.

By the way, the last time the budget was balanced was under Bill
Clinton. And that was the three-legged stool that did it. And what we can
say is, you know what, we can increase the fairness in this system, at the
same time reduce the deficit -- reduce the deficit by cutting the military
so we have more money to spend on the quality of life and then finally take
them head-on on financial reform.

This notion that the Republicans are putting forward that the
Independent Consumer Bureau is a bad idea, that what we really need is a
return to unregulated derivatives -- those issues, consumer financial
reform, consumer protection of financial reform, taking military spending
from Western Europe and putting some in the deficit and some in the
production of good things at home, and raising taxes on the very wealthy, I
think that`s a very winning combination.

There`s one final thing we have. You saw this in the referenda that
occurred last election day. Look, I think there are probably a lot of
people in Ohio who thought the unions had gone too far. But when Kasich
put through this extreme bill to wipe them out altogether, he lost. There
are people in Mississippi who don`t like abortion, but when they put
through this extreme amendment about personhood, it lost.

I think what we have to say to people is, yes, we understand there are
problems, we regret the fact that we haven`t been able to make more
progress. But they`re nuts. And I think that is so patently obvious given
the Republican presidential circus that you win on that.

MADDOW: Congressman Barney Frank of Massachusetts, ranking member of
the House Financial Services Committee, congratulations on your retirement
announcement. I hope we`ll still see a lot of you particularly this next

FRANK: Even more, Rachel. I thank you for your generosity tonight.

MADDOW: Thank you. That`s really kind. Thanks.

All right. OK, 2012. Still to come. Rick Perry apparently thinks
18-year-olds can`t vote in America. Ha! That`s coming up.


MADDOW: It has been a very busy 24 hours in the news. Stories we
have been following for months all of a sudden decided to develop all at
once in unison.

Surprising development number one today? Last night, we reported on
President Barack Obama and congressional Democrats finding a fight they
wanted to pick with Republicans. A policy fight they thought they would
win. The Democrats in this case want a tax cut for working people and the
Republicans do not want that tax cut.


to expire at the end of next month. End of next month. End of the year
this tax cut ends. If we allow that to happen, if Congress refuses to act,
the middle class families are going to get hit with a tax increase at the
worst possible time.

For the average family, your taxes will go up $1,000 if Congress does
not act by the end of the month. The Republicans in the Senate voted no on
my jobs bill and those tax cuts. But in the spirit of Thanksgiving, we are
going to give them another chance.


MADDOW: Senate Republicans did vote against this payroll tax cut
once. This week, Democrats decided to make them do it again. They smartly
decided to force the Republicans to vote again against tax cuts.

Well, now as of this afternoon, it looks like the Senate Republicans
are crying uncle.


will agree to continue the current payroll tax relief for another year. I
think at the end of the day, there`s a lot of sentiment in our conference.
Clearly, a majority of sentiment for continuing the payroll tax relief that
we enacted a year ago in these tough times.


MADDOW: They already voted against it, but now they are changing
their minds.

So that was surprising development number one today.

Surprising development number two relates to the former number two.
According to Politico.com, the special guest star at the senate
Republicans` weekly and otherwise un-notable caucus lunch today was former
Vice President Dick Cheney.

As with many stories about Mr. Cheney, the details are murky. As
"Politico" put it today "It`s not clear why Cheney`s there this week or
what he plans to talk about. To several senators, Mr. Cheney`s visit was a
complete surprise." Consider also, it was surprising to me.

Surprising development number three today, you may remember a reporter
named Spencer Ackerman, who reports at the danger room site at Wired.com,
Spencer reported recently on our air that a self-proclaimed terrorism
expert from the conspiratorial ragged edge of the far right wing had been
hired by the FBI to train FBI officers about terrorism.

Using charts and graphs he argued things like this genius hypothesis.
Remember this?

This is the guy who told the FBI using this chart that over time since
the founding of Judaism, Christianity and Islam, over time the more pious
and devoted you were as a Jew or a Christian, the less prone you were to
violence. But for Muslims, being pious made you stay violent all the time.
He scientifically determined this, it`s on a graph. That man got paid for
that, his tax dollars paid for that.

Spencer Ackerman broke that story in September. Tonight, an
interesting update on this. In response to this revelation about the
creepy Muslims are the enemy training at the FBI, the White House has
ordered a review of counterterrorism training materials. Quote, "To
determine the criteria used to establish professional qualifications for
teachers and lecturers providing instruction on countering violent Islamic

Thank you. Late, but definitely need. And we know about this, we
know about this problem that the White House is now trying to address
because of good reporting by Spencer Ackerman. This is a problem that is
apparently now, at least they are trying, to fix it.

This has been a crazy busy news day. Even before getting to the 2012
news which was extra amazing today. Did you see what Rick Perry said today
in New Hampshire? That`s still coming up.


MADDOW: All right. Once you raise the prospect that you might be
quitting your presidential campaign, can you really say thereafter that
you`ve decided not to quit, you decided you`re going to stick with it?

It turns out, I looked into it, I`m all good. Not quitting, vote for
me. Can you do that? Herman Cain, can you?

The man who ran the presidential campaign for the last Republican
presidential nominee will weigh in with us on that. Next.


MADDOW: For the record, the 2012 presidential election is to be held
on the 6th of November -- November 6th, 2012. Also for the record, all
American citizens over the age of 18, minus some felons, get to vote in
that election. The elections on November 6th, and if you`re over 18, you
pretty much can vote.

That is the relevant context for understanding the true glory of Rick
Perry`s appearance in New Hampshire today.


sitting in this -- in this hall who are going to inherit this country are
counting on us. Those of you that are -- who will be 21 by November the
12th, I ask for your support and your vote.


MADDOW: Those of you who will be -- Rick Perry apparently only
looking for drinking voters maybe. I don`t know.

And I got to say, if you show up to vote on November 12th, as Governor
Perry suggests, you will be voting in probable knowledge of who won the
presidential election since it will have been held six days earlier than
November 12th.

Rick Perry not knowing when the election is or how old you have to be
in America, in order to vote, that happened right before he started taking
questions from this New Hampshire audience that made him so happy.


PERRY: With that, I think we`re going to open it up and have some Q&A
from the audience.

Yes, sir, with the beautiful beard, you get to go first.


MADDOW: You, sir, with the beautiful beard. Turns out we don`t have
footage of the beard.

But what is it about Texas governors?

I mean, one of the enduring and I think fascinating things about
George W. Bush as president is the evidence he liked to touch men`s bald
heads. There are a lot of pictures, way more pictures than you would think
of George W. Bush as president touching men`s bald heads or just seeming to
be in awe of men with bald heads in his presence.

With Rick Perry, it`s sort of a similar vibe even though they`re very
different people, right? Rick Perry calling on the man with the beautiful
beard today in New Hampshire.

Rick Perry delivering on David Letterman`s show this reason for his
oops screw-up in that one debate.


PERRY: Hey, listen, you try concentrating with Mitt Romney smiling at
you. That is one handsome dude.


MADDOW: "The New York Times" also this weekend writing about the
relationships between the various candidates on the campaign trail. "The
Times" noting that during a commercial break at one of the recent debates,
quote, "Mr. Perry walked over to Mr. Huntsman and patted his stomach."

He patted his stomach. Rick Perry may not be running a very effective
presidential campaign at this point, but I admire the fact he seems to be
having a really great time doing whatever it is he`s doing. Particularly
when he`s in New Hampshire. I don`t know why New Hampshire makes him so
giddy. But it patently does.

But Iowa comes before New Hampshire. Today marks five weeks until the
Iowa caucuses and with rumblings today that Herman Cain might be
considering quitting the race, that he is reassessing the viability of his
campaign, given the latest sex scandal allegations about him, the two most
recent polls out of Iowa show a pretty clear trend. Herman Cain`s loss in
the polls is Newt Gingrich`s gain.

Since the last insider advantage Iowa poll three weeks ago today,
Herman Cain dropped 13 points and Newt Gingrich gained 13 points. That
poll has Newt Gingrich way out ahead of the field in Iowa. Similarly in
the latest Rasmussen poll in Iowa, again, three weeks ago, to last week,
Herman Cain dropped 15 points and Newt Gingrich gained 23 points.

Looking at the overall national polls is sort of interesting for the
atmospherics of the race. Maybe it`s helpful for fund-raising. But,
really, you have to look state by state in order to get a true sense of who
might win the nomination because we choose the nominees state by state, and
state by state the same principle for now seems to be holding -- when Cain
drops, Gingrich gains.

In New Hampshire, another Rasmussen poll, which as you should know, is
a conservative leaning poll, we`ve seen over the last month, Herman Cain
dropping by 12 points, Newt Gingrich rising by 16 points. Public Policy
Polling which is a left-leaning firm, they took a really interesting
approach to this question. They called Herman Cain`s supporters in Ohio,
Mississippi, Iowa, California, Arizona and Pennsylvania, and they
essentially asked Cain supporters if Herman Cain drops out, who do you

Here`s how PPP summed up per their findings. Quote, "Cain supporters
absolutely love Newt Gingrich and they absolutely hate Mitt Romney."

Among Cain supporters in those states, Gingrich has a plus 52 positive
favorability rating. Mitt Romney`s favorability rating among Cain
supporters is negative, really negative. Minus 22 is his favorability
rating among Herman Cain`s supporters. So, as Herman Cain`s numbers drop
like a stone, it appears to be Newt Gingrich`s gain in the presidential
race, at least for now.

And that is sort of amazing when you step back from those numbers and
you consider what kind of scandals exactly are causing Herman Cain`s poll
numbers to drop, and when you consider who Newt Gingrich is.


REPORTER: Gingrich who once campaigned as a family values candidate
has been dogged for years by criticism of marital infidelity and that he
left both his ex-wives when they had serious illnesses. One was in the
hospital being treated for cancer. The other had been diagnosed with MS.

Almost always by his side when he campaigns, his wife Callista, 22
years younger than Gingrich. Married in 2000, their relationship actually
began seven years earlier, while she was a young congressional staffer and
Gingrich was married to his second wife, Mary Ann. The affair with
Callista continued the entire time Gingrich was speaker, including when he
called for the impeachment of Bill Clinton for lying about Monica Lewinsky.


MADDOW: OK. So, being the family values sanctity of marriage
crusader with all the multiple wives and the cheating, and the shtooping
your congressional staffer while you`re impeaching the president over
shtooping thing, that was amazing enough when it happened in Newt
Gingrich`s career. But for Newt Gingrich now to be repealed to the front
of the Republican pack because of somebody else`s alleged infidelity

He`s the beneficiary of people being weirded out by the -- that is
something that requires professional Republican help for me to understand.

And so joining us now is Steve Schmidt who ran the McCain/Palin
campaign in 2008. He`s now an MSNBC political analyst.

Mr. Schmidt, thank you very much for joining us tonight.


MADDOW: How is it possible Mr. Gingrich can be the beneficiary of
voters being turned off by adultery allegations?

SCHMIDT: Well, I think Republican voters have reached a conclusion
that Herman Cain simply can`t win this race. That he`s not a viable
candidate against President Obama. If you talk to actual Republican
voters, distinct from Republican operatives, the first thing that they say
about the prospect of a Gingrich nomination is, wow, we would love to see
the debates between Newt Gingrich and Barack Obama.

And Gingrich has risen up as Perry has fallen away, as Cain has fallen
down. And he has risen on the basis of his debate performances. But now
that I think as he moves into the head of the field, there`s going to be a
serious vetting that takes place of Speaker Gingrich. I think that all of
his past history is going to be at the forefront of the race and you have
all manner of issues like the Fannie and Freddie payments of almost $2

And we`ll see how these voters, many of whom are very upset about the
bailouts, are going to respond to somebody who made millions of dollars on
the basis of their insider knowledge.

MADDOW: I have to ask if what you`re saying there if you think that
the Newt Gingrich surge might not be a permanent one. I mean, it`s been a
little bit of Beltway common wisdom that in contrast with Perry and
Bachmann and Herman Cain`s surge, those were people who were not
necessarily well known quantities as politicos, and so, when they surged it
was inevitable that with scrutiny they would fade, whereas Newt Gingrich
doesn`t fit that model and maybe his surge is here to stay because people
already know who he is But it sounds like you dissent from that.

SCHMIDT: Well, I think at the end of the day a lot of this stuff is
not top of mind. No one`s had an incentive to come after Newt Gingrich in
this race.

It`s been a fairly ecumenical presence on the stage. He`s policed the
media. He`s come to the rescue of some of his other Republican contestants
when they`ve gotten in a little bit of trouble in the debate.

But, certainly, if Rick Perry wants to remain in the race and he fancy
himself as still viable in the race, the person that he`s going to have to
take down to come up is Newt Gingrich. I think in the weeks ahead, you`re
going to see Rick Perry increasingly come after Newt Gingrich.

I think the national media is going to go after Newt Gingrich as they
should through the process of vetting him. How did he make money? What
deals were he in? Where were the inconsistencies?

I think Newt Gingrich is going to have problems maintaining attacks
against Governor Romney`s authenticity, when, for example, just a few years
ago he was appearing in global warming videos with Nancy Pelosi paid for by
Vice President Gore`s climate change group.

So, I think there`s a lot of things that Newt Gingrich has done that
are going to be ventilated in the weeks ahead.

I do think it`s highly likely that he`s going to be the chief
alternative to Romney. That there could be a scenario where Gingrich wins
Iowa, Romney wins New Hampshire and no Republican candidate has ever won
both Iowa and New Hampshire. You go to South Carolina, you have a close
outcome. And you have a long primary contest because the roles have
changed on the Republican side and now, those races are going to be
proportional from the awarding of delegates based on the percentage you

MADDOW: In terms of the deflation of Herman Cain right now and him
not really being seen, as you said, as a viable candidate anymore, as sort
of a technical matter almost, can you put the genie back in the bottle
after you raise the prospect that your campaign might end? The Cain
campaign has tweeted out something tonight to the effect of when we said
reassessing, that didn`t mean quitting, that didn`t mean dropping out, it
means reassessing.

Everybody interpreted that today as the possibility that that campaign
might end.

Once you floated that possibility or perceived to float it, can you
ever not quit? Doesn`t that mean the campaign ends?

SCHMIDT: Well, I think the reality is, who knows what he`s going to
do. I think that, you know, he has a -- look, I think there`s an 85
percent chance he`s going to be on "Dancing with the Stars" next season.

You know, he`s not a serious candidate for the presidency. And I
think increasingly, you know, his presence in the race is something of a
bad joke.

MADDOW: Steve, let me ask you about one other Herman Cain thing. I
think you`re probably right and this may be the last time we ever get to
talk about him.


MADDOW: One thing sort of confuses me. And it`s in terms of the way
Republican voters are assessing his candidacy. Previous allegations
against him, before the ones yesterday, have been about alleged sexual
harassment and in one case a borderline maybe sexual abuse -- a woman
describing an unwanted somewhat forceful sexual groping by Herman Cain.

This latest allegation, though, is about a long term seemingly happy
adulterous consensual affair. But I got a clip I want you to watch here.
This is how this new allegation is being described on the right.


MIKE HUCKABEE, HOST OF "HUCKABEE": It`s a serious charge, the
allegation is one that could upend his presidential campaign. I think this
is the most damaging allegation that has been made to date. No question
about it


MADDOW: Mike Huckabee there saying the allegation of a consensual
affair is worse than allegations of sexual harassment and sexual abuse. Is
that -- how should I understand that?

SCHMIDT: I don`t understand it. So it`s hard for me to explain it to
you. Other than, you know, the hypocrisy that -- you know, abounds around
this issue. I think it`s not contained to just Republicans. I think you
see it on the Democratic Party side, I think it`s part of the reason you`ve
seen such a collapse in trust in institutions of government by the American
people, because of all the hypocrisy around issues like that that takes
place in both parties. It`s really unfortunate.

MADDOW: Steve Schmidt, senior campaign strategist for McCain/Palin
campaign, MSNBC political analyst and someone I always really appreciate
talking to about this stuff. Steve, thank you.

SCHMIDT: You bet, Rachel.

MADDOW: All right. After the show, on "THE LAST WORD" with Lawrence
O`Donnell -- Lawrence has the story of how Bill O`Reilly from the FOX News
Channel has tried to help Newt Gingrich rewrite his relatively liberal
record on climate change.

Coming up at the end of our show, THE RACHEL MADDOW SHOW department of
corrections is open for business.


MADDOW: Take a look at this footage from today. This is kind of
incredible stuff. These are protesters of some kind storming Britain`s
embassy in Iran today. We don`t know for sure how many people were
involved in this. The Britain`s foreign office says it was several hundred
people. The official Iranian government news agencies say it was 1,000

But, of course, for us Americans watching things like this, it`s hard
to think images like these without thinking immediately of this.


ANNOUNCER: This is "NBC Nightly News" with Jessica Savitch and Dick
Shepp (ph) with sports.


The American embassy in the Tehran is in the hands of Muslim students
tonight. Spurred on by an anti-American speech by the Ayatollah Khomeini,
they stormed the embassy and fought the marine guards for three hours,
overpowered them, and took dozens of American hostages. The students want
the deposed shah to return to Iran for trial. We have two reports
beginning with Steve Mallory.

STEVE MALLORY, NBC REPORTER: The United States Marine Corps guards
who are tear-gassed who try to disperse the mob of Islamic students, but
that wasn`t enough. Hundreds of Iranians finally overran the embassy
compound, seizing about 90 people, mostly Americans.


MADDOW: That crisis that started with the U.S. embassy in Tehran
being overrun ended up lasting from 1979 all the way into 1981 with the
Iranians holding dozens of Americans hostage for more than 14 months. Our
country has not had diplomatic relations with Iran ever since.

This is what the U.S. embassy in Tehran looks like right now. It`s a
wall outside that embassy there.

At the protest today at the British embassy, nobody was taken hostage,
although there was some confusion on that point in early reporting today.

The details behind today`s event all in all are a little murky. The
Iranian government`s official line that these were spontaneous protests: we
had no idea. They said it was students angry at Britain for new British
sanctions against Iran. They said police did everything they could to try
to stop this.

One reason to be skeptical about that line is the breathless coverage
of these protests on several government sanctioned news outlets including
this one, Press TV. Frankly, if the Iranian government was really not in
favor of this embassy siege and these protests, they wouldn`t have allowed
coverage of it at all. The protest would not exist as far as the official
news agencies are concerned in Iran.

So, safe to say when the British embassy was stormed and taken over
today and looted with things like an oil painting of Queen Elizabeth and
randomly this "Pulp Fiction" poster -- what was that doing there in the
first place?

When it all happened today, the Iranian government wanted the world to
know this happened. "The New York Times" going further than that today,
saying it was clear the event had been ordained by the authorities who in
the past have orchestrated attacks on embassies.

Even if the government of Iran didn`t arrange this today, even if they
didn`t arrange it, if they were so inclined, they certainly could have put
a stop to it. Again, quoting "The Times," Iran security forces and its
militia have maintained strict control over mass protests in Iran since the
disputed election of 2009.

But this one somehow got away from them. Yes, right.

Here`s the thing, in 1941, Britain and Russia deposed this guy, the
shah, and they decided that they put his son on the throne in Iran instead.
Iranians hated the son and overthrew him in a popular uprising a little
more than a decade later.

Britain again intervened, this time with the us, with the CIA, and
they stopped that popular uprising. They put the son back on the throne,
even though the Iranians hated him. The CIA and the British staged a coup
in that country in Iran and put this guy in power even though the Iranians
hated him mostly because his oil policies were good for England.

And the Iranians never really forgot about that. That was in 1953.
It took until 1979, remember the hostages at the embassy in 1979, I took
until them for them to finally overthrow that guy again in the Iranian

So, yes, when we see things like this happening today, it is in part
because Britain and Iran are fighting about sanctions about nuclear
weapons. But there`s a long and fraught history between Iran and Britain.

The Iranian government can really be manipulative about this history.
They blame Britain and the U.S. for everything that goes wrong in Iran.

But thanks to an actual conspiracy 60 years ago, a real one, that
ended a popular uprising in that country and restored a much despised king
to power, it`s sort of easy for the Iranian government to get away with
blaming everything on Britain. Sort of easy to get away with making a fake
conspiracy theories about today`s politics in order to fuel the fire of
animosity between their country and the West.


MADDOW: We have a correction to make. Last night on the show, I made
this point about the newsworthiness of the latest Herman Cain sex
allegation. This latest one from a woman who says she had a long,
consensual affair with Mr. Cain outside his marriage.


MADDOW: To be fair I think the reason this latest allegation about
Mr. Cain is news is not because this allegation is that he`s done something
illegal or even because it`s anybody`s business what any two adults do
inside or outside the bounds of their own marriage. Private life is
private life, even for public figures -- unless those public figures chose
to build their political careers on criticizing other people`s private
lives and proclaiming the superiority of their own private life.

In the case of Mr. Cain, he has campaigned for office by saying that
he will defend the sacred institution of marriage against liberals who want
to destroy it. Because of that, Mr. Cain has a sacred institution
glasshouse problem.


MADDOW: Today, in the "Washington Post," Mr. Cain`s lawyer, I don`t
really believe that thing I just said, even though I just said it.

Mr. Cain`s lawyer told "The Washington Post," quote, "She`s reaching a
conclusion she wants it to reach, and she can find whatever excuse she
wants to find to reach that conclusion. Rachel Maddow, I`m sure, believes
that the media has the right to discuss the private lives and marriages of
any candidate."

As a point of fact, I checked with Rachel Maddow today personally, and
she does not believe that. She -- I believe that you only earn the right
to have the details your marriage scrutinized publicly if you have built
your career on disparaging other people`s marriages and proclaiming the
superiority of your own. Mr. Cain has run for office by claiming that he
can save the sacredness of the institution of marriage from the liberals
who want to destroy that institution.

His marriage was no one`s business until he decided to impugn other
people`s marriages for his own in contrast for political gain. Live by the
sword, die by the sword. It`s not the morality of the issue here that
makes this news, it`s the hypocrisy.

So, when Herman Cain`s lawyer says I don`t believe that, he`s wrong.
I`m sure he regrets the error. As must "The Washington Post," which I
think has my number if they ever want to check with me in the future before
printing what someone else says I believe. Call me.

That does it for us tonight. We`ll see you again tomorrow night.

Now, it`s time for "THE LAST WORD" with Lawrence O`Donnell.


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