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'The Rachel Maddow Show' for Thursday, December 29, 2011

Read the transcript to the Thursday show

Guest Host: Chris Hayes
Guests: Dave Weigel, Ezra Klein, Karen Tumulty, Spencer Ackerman

now. And sitting in for Rachel, Chris Hayes.

Chris, great to have you with us tonight.

CHRIS HAYES, GUEST HOST: Thanks, Ed. I appreciate it.

And thanks to you at home for staying with us the next hour. Rachel
has a well deserved night off.

There are only five days to go until the Iowa caucuses. Only 100
hours or so remaining until voting actually finally begins in the much
anticipated Republican presidential nominating contest.

So, tonight, we begin with Iowa and everything that happened today in
the run-up to Tuesday`s caucuses. At a town hall in Cedar Rapids, someone
asked Rick Perry about a landmark Supreme Court case, a case that was very
important to Texas, the state where Perry is, of course, governor.

In Lawrence v. Texas, the Supreme Court struck down the anti-sodomy
law in Texas and 13 other states. This happened in 2003, when Perry was in
fact serving as governor of Texas.


do I -- how do I defend my criticism of limited government in the Lawrence
v. Texas.

Listen, here`s -- here`s the issue that I have. I don`t dislike
government. I just want government to work. I wish I could tell you I
knew every Supreme Court case. I don`t. I`m not even going to try to go
through every Supreme Court case.

That would be -- you know, I`m not a lawyer. But here`s what I do
know. I know they`re spending too much money in Washington, D.C. and $15
trillion worth of debt is on the back of that young man right there. And
if we don`t go in and cut the size of government, court cases aren`t going
to make one tinker`s heck.


HAYES: One tinker`s heck. That`s the word that showed up in my
prompter. I don`t know what that means.

The "Texas Tribune" pointed out that Perry actually cited that case,
Lawrence v. Texas, in his book "Fed Up" in a chapter called "Nine Unelected
Judges Tell U How to Live."

Perry wrote, in quotation marks, that "Lawrence v. Texas showed that,
quote, "Texans have a different view of the world than do the nine
oligarchs in robes."

I guess at the very least we should give Perry points for getting the
number of justices on the Supreme Court correct.

A couple of other developments today having to do with Rick Perry and
the courts, on the show yesterday, Rachel talked about Rick Perry`s
transformation on abortion -- transformation by DVD. As Perry told a
roomful of Iowans earlier this week, he had watched Mike Huckabee`s DVD
"Gift of Life." That apparently got him thinking.


PERRY: I really started giving some thought about the issue of rape
and incest, and some powerful -- some powerful stories in that DVD.


HAYES: We were wondering yesterday whether Rick Perry had given any
to the to the exception of the life of the mother. He didn`t make his
stance clear when he was talking about his DVD transformation, whether the
DVD had made him transformed into thinking even if a pregnancy means a
woman will likely die in the course of carrying a baby to term, whether
Governor Perry would still make it a crime for her to end that pregnancy
and save her own life.

So, we called the Perry campaign to ask about an exception for the
life of the mother, and we did not hear back.

But, today, Rick Perry himself responded to an ABC News reporter who
asked him the same thing. The ABC reporter asking, "So the lone exception
now is for the life of the mother?" "That`s correct," answered Perry.

One more bit of Perry court trouble today. The Texas governor is
suing to get on the ballot in Virginia. In the meantime, he had asked the
court to stop the state from sending out any ballots that don`t have his
name on them. Today, a federal judge in Richmond said no to Perry`s

All in all, I think you have to say it was another bad day in what has
been a long string of bad days for Mr. Rick Perry.

Another lawsuit has been filed in Virginia on behalf of Newt Gingrich,
who also isn`t on the ballot. But unlike Perry, this one does not
challenge the constitutionality of Virginia`s procedures. This lawsuit
argues that Mr. Gingrich met the standard. It claims the signatures were
counted incorrectly.

This time last night came the breaking news the Iowa chairman of the
Michele Bachmann campaign was defecting to support Ron Paul. Tonight,
another senior member of the Bachmann campaign is also jumping ship. Last
night, Bachmann`s political director, Wes Enos, defended Kent Sorenson for
his decision to leave Bachmann for Ron Paul. Today Mr. Enos apparently
decided to join him.

And in the much sought-after former "American Idol" winner endorsement
race, Kelly Clarkson also came out big for Ron Paul on Twitter today.
Clarkson told her followers she will vote for Paul in the general election
if he wins the nomination, adding, quote, "I love Ron Paul."

That won Clarkson some backlash among fans who were enraged because of
the recent controversy over Ron Paul`s racist and homophobic newsletters.
Clarkson later tweeted an apology of sorts, saying she does not support
racism or homophobia, but she is sticking by her support for Ron Paul.

Meanwhile, Rick Santorum spent his day on the campaign trail in Iowa
amid lots of chatter about whether his recently improved polling numbers in
the state actually mean anything significant.

For reasons that have everything to do with Google, I hesitate to use
the word "surge." A concern this headline writer for the "Philadelphia
Daily News" did not share. His headline prompted the absolutely best
Twitter exchange of the day, if not ever. Dan U-A tweeting Rick Santorum
to say, "Great to see this headline on! Santorum surges from
behind in Iowa. Can I get a retweet?"

And Rick Santorum did it. He retweeted. But he is still not going to
win in Iowa or anywhere else for that matter.

Not so for Mr. Willard Mitt Romney, who appears to be feeling mighty
confident about his chances in Iowa, a state he`d originally all but
written off as lost. Today, the Romney campaign announced plans for a
four-day marathon bus tour across the Hawkeye State in the final days
before the caucuses. The weird thing is Romney doesn`t appear to be
planning to get off the bus much. He has only 10 stops planned in four
full days of driving, some 770 miles.

On Wednesday morning, the day after the caucuses, Romney is planning
to still be in Des Moines so he can be available for morning show
interviews, which is exactly the kind of thing you put on your schedule
when you are feeling are about your chances the night before.

Joining us now from Java Joe`s coffee house in Des Moines, MSNBC
contributor and political reporter, Dave Weigel. He`s been
spending time with all the political campaigns in Iowa.

Dave, how are you doing?

DAVE WEIGEL, MSNBC CONTRIBUTOR: Very good. Good to see you.

HAYES: Good to see you too. So from your on-the-ground reporting
today, covering the various campaigns, what is your sense of the state of
the race?

WEIGEL: I think you`ve summed it up pretty well. The Romney campaign
is confident in a way that`s expressed in this campaign schedule. It`s
expressed in a way they talk and the crowd sizes at their events. They
like to point out how large the crowds are.

And they are impressive. An event last night, the crowd is that, one,
literally went out the door. Two, cops were preventing people from parking
on the site of the development where they held the rally. So, that`s good
event. That`s also sign of some momentum.

The Paul campaign is not -- is apparently holding on to what it has.

And the Santorum surge, I was not in Davenport last night. I`ve seen
a couple -- another event where he had a good crowd. In Davenport, he had
about 250 people. That`s not always a great area for Republicans.

He clearly is getting some of the vote from people who had chosen
Perry before, chosen Bachmann before. We don`t have time for the litany of
people who`ve surged and then collapsed. But I do get a sense they`re
taking a fifth or sixth look at him.

HAYES: Here`s my question about Ron Paul. You, Mr. Weigel, probably
have written more articles under your byline about Ron Paul than any
reporter in America. That might actually be the case from your time at
"Reason" magazine. You`ve been covering Ron Paul for a long time.

WEIGEL: If you count blog posts, yes.

HAYES: If you count blog posts, exactly. So, you know, there`s sort
of an interesting dynamic at play insofar as Ron Paul is starting to poll
at number two and possibly threatening to come in number 1 and this
occasioned, a serious look at his past and the sort of opposition research
files on him, which include these newsletters bearing his name with some
genuinely vile, and a long list of vile pronouncements that went out under
his name. And also a real sort of sustaining, concerted attack both by
rivals and also people in the FOX News establishment and Republican

What is your sense of how effective that has been in terms of
diminishing his support in Iowa?

WEIGEL: Well, strikingly, in Iowa I haven`t really heard voters
mention this. I`ve sometimes forced the question, and they`re not pleased
with it but they haven`t really formulated an opinion. I mean, Kelly
Clarkson might be the modal voter at the moment because she`s still not
aware that these newsletters exist or that there`s any question of his
views of civil rights and racial transcendence.

This story was resurrected over the Christmas holiday, and I think it
didn`t permeate. It`s also not being pushed by Republican rivals.

I mean, what Michele Bachmann`s been saying and what Rick Santorum`s
been saying when they criticize Paul is that he`s basically going to give
away American supremacy to every other country on the planet. He`s going
to let Iran nuke us and probably poison our water supply. He just can`t be
trusted on national security. That`s the tack they take.

You notice, Jon Huntsman in New Hampshire is running a web ad about
the newsletter. That`s because that`s a different electorate.

HAYES: Right.

WEIGEL: I mean, he`s trying to convince the liberals and independents
but that`s really not the case in Iowa.

HAYES: Do you think the foreign policy attack on Paul resonates with
the base, or is there -- it seems to me it`s such a striking dynamic of the
sort of foreign policy platforms of the major GOP candidates at this stage,
is that you basically have a bunch of real militaristic neocons and then
Ron Paul and then Huntsman, who`s not really factoring in Iowa.

And there`s not a lot of space in the middle of what I think are
pretty opposite ends of the spectrum, Ron Paul being one and the whole sort
of host of the other contenders on the other, do you think that he`ll let
Iran get nuclear weapons attack is an effective one is working?

WEIGEL: It`s not so much, it`s kind of a sub Rosa argument about him
not being a friend to Israel.

The thing -- I guess a strategist for another campaign described it to
me, I was kind of asking, so Ron Paul got about 10 percent last time, how
is he at 25 percent this time, who are tees people? And they just say it`s
angry voters. It`s the kind of voters that might have vote for Sharron
Angle elsewhere. They just like Paul, they feel like they don`t know
enough about him yet.

And that is where they`re attacking. There are evangelical voters who
might have voted for -- some of them voted for Huckabee four years ago, and
they just -- this is the point of attack, that he won`t protect Israel. I
mean, it`s -- it`s also helpful that Romney really doesn`t want to attack
him. I mean, the only guys attacking him are the guys coming up from third
to fourth place.

HAYES: So that`s an interesting point. So basically, this is sort of
code for evangelical voters about his support of Israel, which is the real
kind of emotional issue that can actually move the kinds of voters that
show up for a caucus in Iowa.

WEIGEL: Yes, that`s how it comes out more when I ask people about
Paul`s views. I mean, you really -- to my surprise, I`ll meet people at
rallies for any candidate, and they say they like Paul. I mea, the way
Paul has manifested in their minds is as a truth teller who they would --
as far as they can tell, he predicted the economic crisis and he wants to
get rid of as much of the government as he can get his hands on and they
would love if someone like that can get elected but they don`t think he

So Republicans kind of late to the game are trying to remind people of
the -- of not even the right-wing views that he has but the old right
isolationist, you know, kind of John Birch views that he has. And it`s
taking a while, but that`s -- Israel I think is the way they`re getting
into it.

HAYES: Dave Weigel, political writer for and MSNBC
contributor -- thanks so much for joining us tonight. Enjoy your stay in
beautiful Iowa.

WEIGEL: Thank you, Chris.

HAYES: Things are looking darker and darker for whichever candidate
is the not Mitt Romney option of the month. The candidate presumed to have
all that critical Tea Party support. Maybe that`s because 2012 really
isn`t about the Tea Party. Wither the Tea Party, I will make my case
coming up next.


HAYES: Newt Gingrich is no longer way up on top of the presidential
polls, but he is still totally brazen and outrageous. The latest sample
will be a first ballot inductee into the audacity hall of fame. That`s
coming up.


HAYES: December 2007, exactly four years ago this month, the liberal
magazine, "The American Prospect" ran this on their cover. "Has Hillary
Locked it Up?" There was Democratic Senator Hillary Clinton grinning from
ear to ear as her Democratic presidential rivals Barack Obama and John
Edwards were left looking sort of dumfounded standing in the wings.

In December 2007, before any of the voting even took place, "The
American Prospect" wrote this, quote, "The candidate of the Democratic
establishment, who voted for the resolution authorizing the war in Iraq,
has become the clear front-runner in a party screaming for change and
peace. That Clinton has managed to pull this off is a tribute to the
strategic and tactical brilliance of her campaign."

Of course, we all know how that story ended for Senator Clinton. But
that wasn`t the only time during that crazy election that people got things
wrong. This is not meant to pick on "The American prospect," which is a
great magazine. Everybody said that John McCain was dead in the water
months before Iowa and New Hampshire. And he was not. After Barack Obama
won Iowa, everybody said that he was going to win New Hampshire and then
cruise to the nomination, and he did not.

I think the 2008 campaign left the political media industrial complex
a little bit chastened and a little bit more likely to hedge in the future
about bold pronouncements about what was inevitable in a presidential
primary campaign. And the emergence of Barack Obama that year suggested
that something really important was afoot, that there was an entirely new
way for insurgent candidates to win primaries, to dislodge the
establishment choice. That the combination of small dollar donors and the
Internet and social media and superior organizing tactics meant that all of
the old traditional establishment advantages no longer applied.

One of the great lessons of the 2008 race was that it didn`t really
matter if you were the establishment candidate, you could be beaten. And
then came 2010, which was another genuinely unpredictable year. At the
beginning of 2010, you would have been hard pressed to find anyone who
predicted a Christine O`Donnell victory in the Republican primary over the
beloved and highly electable Republican Congressman Mike Castle.

Or who predicted that Sharron Angle would be the Republican nominee in
Nevada. Or that Joe Miller would defeat sitting Senator Lisa Murkowski in
the Alaska GOP primary. Or that Mike Lee would defeat sitting Senator Bob
Bennett in the Utah GOP statewide convention. Or even that Marco Rubio
would beat out Charlie Crist down in Florida.

What was so shocking about all of these upsets was that in each case,
an insurgent, more radical candidate, was able to defeat a more
establishment-connected and almost certainly more electable front-runner.
And they were able to do it in a Republican Party that has a long history
of giving great deference to its establishment figures. In fact, if you
look just at presidential nominating battles, the history of the Republican
Party over the last two decades is the history of establishment candidates
coming out on top.

In 1988 was George H.W. Bush, the sitting vice president.

In 1992, it was Bush 41 again running as the incumbent president.

In 1996, it was Bob Dole, who no one had much enthusiasm for but he
was certainly the establishment guy. He was the next in line.

In 2000, it was George W. Bush, probably the most establishment guy
possible. After all, this was the son of the previous Republican
president. 2004, it was the incumbent George W. Bush.

And in 2008, it was John McCain, the next guy in line, who had paid
his dues and come into the fold of the establishment.

If that history was a guide, you would fully expect that Mitt Romney
would win the nomination this year and win it pretty easily.

But because of the anti-establishment shocker in 2008 and even more
freshly the super anti-establishment tumult of 2010, there`s been a sense
by people observing this year`s Republican race, myself included, that
maybe those old rules don`t apply anymore, that maybe we`re still in the
midst of the Tea Party backlash. And the Tea Party just won`t accept an
establishment guy like Mitt Romney.

The operating assumption of the political media looking at this race
has been it`s all about the conservative base searching for the anti-Mitt
Romney, the anti-establishment candidate.

But that assumption ignores the possibility, which I think is more and
more likely, that it`s really not 2010 anymore, that the Tea Party moment
is over. That whatever rift there was between the Tea Party and the
Republican establishment has apparently been healed.

How else do you explain the fact that Mitt Romney is now on top in
Iowa, a place where only a tiny number of the most ideologically zealous
members of the base even participate? A place that is not traditionally
friendly to perceived non-zealots, a place that has a history of bucking
the establishment pick, of elevating guys like Pat Buchanan and Pat
Robertson and Mike Huckabee.

In this era of the anti-establishment, in this era of the Tea Party,
here`s Mr. Establishment now poised to possibly win Iowa. Those of us who
thought Republican politics in 2012 were going to mirror Republican
politics of 2010 now look I think about as prescient as those who were
saying Hillary Clinton had it all locked up four years ago today.

Joining us now from Java Joe`s in Des Moines, Iowa, a coffee shop you
may be familiar with from such guests as our previous guest, is Karen
Tumulty, national political correspondent for the "Washington Post."

Karen, thanks so much for joining us tonight.

KARENT TUMULTY, WASHINGTON POST: Thank you for having me.

HAYES: All right. So my thesis, my provocative thesis that I`m
throwing down from on high here in the confines of midtown Manhattan, New
York, is that the Tea Party is -- what we`re seeing is the end of the Tea
Party as such and Mitt Romney`s ascension in Iowa signals that. And what
do you think of this thesis?

TUMULTY: Well, you know, first of all, after as many years as I`ve
been doing this, I don`t -- I`m never comfortable calling the end or the
beginning of anything until it actually happens.

But there are a couple of things worth noting. One is that Mitt
Romney is at 25 percent in the polls here. That is no greater than he got
four years ago. And that does suggest that, you know, if these numbers
hold that 75 percent of the people who show up next Tuesday are going to be
voting for somebody else. I think one of the things that has really
defined this year is the fact that there`s a lot of anti-establishment
energy but it can`t seem to settle on one candidate.

HAYES: Right.

TUMULTY: So I think that`s an issue out there. I think it`s less of
an embrace of Mitt Romney than sort of, you know, going through those seven
stages. They`ve moved on from denial to acceptance.

But the other thing you`ve got to think about is that Mitt Romney
himself has changed. I mean, he has embraced, as have they all, a lot of
what the Tea Party stands for. I mean, this is a guy who`s walked away
from climate change. He`s walked away from mandates on health care. So
has Newt Gingrich.

So, in that sense, you could argue maybe that the Tea Party has
actually won.

HAYES: Right. Yes, I think that`s a good point. I think that to the
degree that it`s the end of the Tea Party -- I mean it in the sense of as a
distinct oppositional force, because I think what we`ve seen is a kind of
co-option, and that co-option has moved in both directions. I mean, I
think you`re exactly right to say that what we`ve seen from the positions
taken by the primary candidates is to cater as much as is humanly possible
to the most sort of radical notions.

I mean, you have people who were going to be front-runners like Rick
Perry saying they want to get rid of Social Security, which is really about
as far out there as you can get.

TUMULTY: Right. And you`ve got too the fact that they just -- there
are so many candidates out there now vying for the Tea Party vote, vying
for the Christian conservative vote, that you know, they haven`t been able
to sort of coalesce around anyone. And it`s been sort of almost like
speed-dating, all of these candidates.

HAYES: But the lack of coalescing I think also points to something
that I think is an undernoted aspect of the polling that we`ve seen from
the Republican base. For the duration of the beginning of this campaign,
which is when you ask them do you want to stick to the principles, do you
want to beat Barack Obama, they want someone first and foremost that can
beat Barack Obama.

And ultimately, it seems like that strategic calculation is going to
be the overriding one as we come out of Iowa no matter what the results

TUMULTY: Precisely. And I think that a lot of these people have
decided that with the number one economy on everyone`s mind -- I mean the
number one issue on everyone`s minds being the economy, I mean, who sort of
fills the suit of a guy who can go out there as Mr. Fix-It on the economy.
So, a lot of these other issues, I think there`s a calculation going on
here that in November, a lot of these other issues are going to fade
compared to that.

HAYES: I also wonder the degree to which the experience of Christine
O`Donnell, Joe Miller, and Sharron Angle, those three in particular acted
as a kind of inoculation for this time around, which is it tempered -- it
allowed the sort of pragmatic wing such as it is in the sort of GOP
establishment to be able to point to these concrete losses and say, look,
if you -- if, you know, in the dog goes off the leash again like it did in
2010, look where you`ll get us.

TUMULTY: Yes. And speaking of experience, another thing that I think
is worth noting here is that as we go into Tuesday it appears like the two
candidates who are best positioned to do well here in Iowa, Ron Paul and
Mitt Romney, are also the two candidates who`ve done this before.

HAYES: Right.

TUMULTY: So I think there`s also -- the fact is there is nothing in
presidential politics that beats knowing what you`re getting yourself into.

HAYES: Karen Tumulty, national political correspondent for the
"Washington Post" -- thanks again for joining us tonight. There is some
delicious ice cream being consumed over your right shoulder.


TUMULTY: I`ll see if I can join them.

HAYES: Yes, check it out.

America`s busiest deadly fighting force doesn`t wear a uniform or even
have a pulse. And it is not Dick Cheney. Details just ahead.


HAYES: From the department of shameless Schadenfreude I present this.
A gentleman named Newton Leroy Gingrich opining in 2009 on the occasion of
Congress voting to defund right-wing bogeyman ACORN. His op-ed is called
"The real ACORN scandal: its enablers."

And from it I quote, "This is not ACORN`s first documented violation
of law. ACORN has a long history of engaging in voter fraud. Seventy
ACORN staffers in 12 states have been convicted of voter registration fraud
by adding such notables as Mickey Mouse and Donald Duck to the voter

Gingrich goes on to call ACORN, quote, "The political dirty tricks
muscle of liberal Democrats." That`s kind of a mixed metaphor, but
whatever. And to accuse the organization of other crimes and then to call
for a federal criminal investigation of all of its sources of federal
funding -- because obviously any politician who funnels money to an
enterprise that commits voter fraud needs to be scrutinized. Heck,

So, hmm, interesting. I wonder what Gingrich of 2009 would say about
this admission by Gingrich of 2011.


hired somebody who turned in false signatures. I mean, we turned in
11,100. We needed 10,000. But 1,500 of them were turned in by one guy who
frankly committed fraud.


HAYES: One guy who frankly committed fraud. See, that happens
sometimes when you`re running large signature collection drives or voter
registration initiatives, it`s hard to assert quality control. Gingrich
is, of course, referring to his campaign`s embarrassing debacle last week
when it failed to turn in enough valid signatures to earn him a spot on
Virginia`s primary ballot in his home state.

At the time Gingrich admitted it was his campaign`s fault and
everybody had a good chuckle. But yesterday on a campaign stop at an Iowa
chocolate factory, Gingrich admitted to a voter his campaign had turned in
fraudulent signatures for which it had paid money.

So, when it`s acorn calling the federal government to investigate the
political dirty truck tricks muscle of liberal Democrats. When it`s in
Newt`s campaign --


GINGRICH: Oh, it was just a mistake.


HAYES: Oh, is that all? Well, then, never mind.


HAYES: Ron Paul is still threatening to win next Tuesday`s Iowa
caucuses, still within striking distance, much to the ire of the Republican
Party establishment. Good thing for them, then is that Ron Paul is not a
particularly difficult figure to discredit. By now, America is well aware
of his political kryptonite, the infamous newsletters bearing his name and
littered with extraordinarily offensive language.

Congressman Paul reportedly modified his earlier "wasn`t me" excuse
earlier today, telling a radio talk show caller that he didn`t write all of
the newsletters, only the parts dealing with economics.

True or not, that actually brings up an important point. The Ron Paul
newsletters weren`t all about homophobia and peddling racist conspiracy
theories. It was actually devoted largely to the singular Ron Paul
economic ideology, seeking converts to the church of the gold standard, the
only form of currency spelled out specifically in the Constitution.

Here`s the congressman spelling that out to Iowans yesterday.


monetary policy. It gives no authority for the Federal Reserve. It says
only gold and silver can be legal tender. And this would be very helpful
at preventing financial bubbles.


HAYES: It prevents financial bubbles? That`s the ideology -- not
having a gold-backed money gives the Federal Reserve too much power. They
can print fiat currency. That leads to inflation -- so says Paul and his
acolytes. And inflation is just a benign way to say theft.

This unwavering belief in gold is not held solely by Ron Paul. It is
broadly popular in conservative circles. It`s one of those beliefs that,
like so many in conservative politics, also happens to be a useful business
opportunity. There are a whole lot of people like Glenn Beck who want to
sell you gold, specific kind of gold. The government can`t confiscate and
one his advertisers, Goldline, the gold retailer who just happened to sell
that special kind of gold and whose executives now face 19 counts of theft
and fraud in California.

What`s happened in the last few economically uncertain years is that
people have used a ton of their money to buy gold and that has led a lot of
other people to make a ton of money peddling gold, in some cases to the
sort of folks who might enjoy a Ron Paul newsletter or a little time with
Glenn Beck -- G. Gordon Liddy, I`m looking at you.

But even as Ron Paul was saying yesterday that gold-backed currency
would prevent financial bubbles, there`s a good case to be made that gold
itself has experienced quite a bubble these last few years of global
turmoil and that bubble may be about to burst.

Knowing the price of gold has dropped considerably since the summer,
David Frum wrote this this morning, "Gold trades as a way to make a
statement. That`s simply not a sensible way to invest. A great many
Americans are paying a steep price -- and may pay a much steeper price yet
for allowing hucksters and ideologues to sway their economic judgment."

Gold has a kind of totemic allure for certain kinds of conservatives.
It`s something real, something the government can`t get its filthy mitts
on. But now that the price of gold is at a three-month low and dropping
still, what does the bursting of the gold bubble tell us about where this
economy is headed?

Joining us now is Ezra Klein, the "Washington Post" wonk blog. He`s
also a columnist for "Bloomberg View" and an NBC political analyst,
frequently seen here right here in this building as Martin Bashir guest
hosting at 3:00.


HAYES: Thank you for doing double duty this evening.

KLEIN: I`m glad to be here.

HAYES: What do you think of allure of gold is? I have to admit I
find the universe of gold buggism fascinating. And I find the kind of like
gold industrial complex that it powers much of conservative media
fascinating because if you turn on FOX News or you listen to right-wing
talk radio, it`s shocking -- shocking to me how many of the advertisers are
selling gold.

KLEIN: Let`s say what you really wanted to do with your money was you
wanted to put half of it and put it under your bed.

HAYES: Right.

KLEIN: You want to take the other half and buy canned goods and
ammunition. But if you said that to your wife, she would think that`s a
dumb way to invest. The thing you do --

HAYES: Or your husband.

KLEIN: Or your husband. Either way.

But that really is what a lot of the gold buying is about. Not for
everybody. There are a lot of speculators in gold. Folks who are very
sophisticated about the gold markets, try to make a lot of money off it.
But a lot of the people being scared into buying into gold, what they`re
being scared into doing is investing based on a very, very certain type of

And that type of fear that`s sort of nothing to do with the economic
case for why one might want to own gold. It is disconnected. It`s
completely different.

HAYES: In what way? I mean, the idea being that after we hit a
Cormac McCarthy-like "Road" situation, a bleak post-apocalyptic future in
which we have all of our possessions in a repurposed grocery cart that we
push through a wilderness of cannibals and marauders that we have gold with

KLEIN: Well, there`s this theory that gold is somehow intrinsically
valuable, that there is something about gold that unlike fiat-backed
currency, unlike the greenbacks that the Federal Reserve simply prints that
it matters, it means something.

And you sort of interrogate that and you think, well, what does it
mean? Can I eat my gold? Well, no, it`s not for you at all. Can I build
a house out of gold? You need a whole lot. Can I use it for ammunition?
Maybe a little.

Gold does not have an incredible -- does not have an incredible
intrinsic value. And the other piece of it is that gold has testable --
there`s a testable theory behind Ron Paul`s argument on gold. What Ron
Paul believed, and it is in his book on the Fed if you`ve read it, what Ron
Paul believed we were about to undergo in 2006 was a big currency crisis.
He thought the dollar was going to crash. And he actually prints a
testimony he did back and forth with Ben Bernanke on this exact topic to
show how prescient he was.

But we did not have a currency crisis. The dollar is stronger than
ever. Treasury bonds are stronger than ever. So the thing that the gold
bugs thought would happen, the thing they thought gold would prevent from
happening, did not happen.

HAYES: Right. And what`s fascinating is that the sort of gold bug,
this sort of gold fetishization is a kind of hardcore version of what is a
more broadly popular conservative vision of monetary policy, right? Which
is that you want hard money, you want to restrain how much the Federal
Reserve can print, and you even have members of the Federal Reserve board
of governors warning constantly over the last 18 months of impending
inflation, not quite a currency crisis, but making warning similar to what
Ron Paul`s saying, we`re going to have inflation, we`re going to have
inflation, we`re going to have inflation, and it has not materialized.

KLEIN: No, it has not. Although, I mean, I think we do need to
separate that. You got people on the Federal Reserve board saying
inflation might, might go to 3 percent or 4 percent. That`s different than
sort of the Ron Paul -- we`re going to have hyperinflation, we`re going to
have a serious currency crisis.

And they do deserve to be separated. One thing that`s I think
important to note is there`s this other strain of conservative theory
represented best by Milton Friedman which is that you should have the
Federal Reserve, the Federal Reserve in fact the key element of policy
because that is how you get economic management away from Congress, away
from this sort of interest group-dominated public choice-ridden government.
And that was for a very long time the key conservative argument.

If you remember the debate on the economy a couple months ago, when
asked about who he would like in the Federal Reserve, Mitt Romney actually
said Milton Friedman.

HAYES: Right.

KLEIN: And I wondered, does he have any idea what Milton Friedman
would be doing right now?

HAYES: Yes. And what`s fascinating is I think the Ron Paul base of
the Republican Party has defeated the Milton Friedman base. I think what
you`re actually seeing more -- sort of hard money-ism take over Republican
Party. We will discuss that some other time.

MSNBC political analyst Ezra Klein, also of "The Washington Post" and
"Bloomberg View" -- thanks for your time, man.

KLEIN: Thank you.

HAYES: Just ahead, a moment of geek starring birds. We`ll explain.


HAYES: America`s secret remote control wars -- just ahead.


HAYES: Here`s what we think modern American war looks like. Troops
say good-bye to their families. They ship out for places like Iraq and
Afghanistan, where they fight insurgents, build alliances, try to help new
governments get on their feet.

Too many of the troops come home injured. Some of them face a life
change by new disabilities acquired in service to their country. And too
many of them don`t come home. It`s unbearable every time we see this.

Now, with the war in Iraq over too many of our troops are being sent
right back into combat, out of Iraq, into Afghanistan, tour following tour
following tour. We know how this warfare goes. We award medals for
special acts of heroism. We pass laws to offer veterans a little help with
finding a job back home when they get back.

Lately, we debate whether now would be a good time to hold a ticker
tape parade for veterans of Iraq with the war in Afghanistan dragging on.
Iraq, Afghanistan, leaving home, returning, medals, maybe a parade, that`s
what we think modern American warfare looks like.

But there`s another kind of American warfare. This kind never comes
with a ticker tape parade. You won`t see tearful scenes at the airport, no
surprising the kids at schools with an early return for the holidays. You
might not even see much news about it.

This other kind of war is the one our country is waging with unmanned
drones. We send remote-controlled drones with names like Predator and
Reaper to hunt for terrorism suspects. We send our drones out from bases
in several countries on missions in several countries, some of which we are
not officially declared war against.

We send them out to kill. Sometimes drones gather intelligence. But
they`re really great at killing.

Robotic warfare is weird and more than a little disquieting. It`s
secretive. So we end up with stories about suspects believed to have been
killed in American drone strikes. We don`t necessarily know how many or
when or where or who.

In a strictly tactical sense, it`s entirely possible, and many of the
supporters in the administration and elsewhere make the case that drones
are an incredibly effective way of waging what was once called the war on
terror. But we don`t know for sure the ratio of civilians killed by
mistake to genuinely dangerous militants killed on purpose because the
government`s official position on the CIA drone program is that it does not

We do know, however, that when a drone blows up a home with children
in it makes headlines in local papers. We know it does not engender
goodwill. We know that none of us here at home are forced to think much
about what it would be like to be the father or the mother of a child
killed from above.

This year on September 30th, the CIA led a drone operation against
Anwar al-Awlaki in Yemen. He was a cleric and suspected leader of al Qaeda
who had been convicted of no crimes. He was suspected of being involved
with terrorism. He`d never been convicted of it.

He was an American citizen. He was born in America. And he was
killed by an American drone strike. So far as we know, it was the first
time ever that U.S. Forces planned to kill and did kill an American

Two weeks later, another strike in Yemen against another suspected
terrorist killed Awlaki`s teenage son. The boy was 16 years old. He was
in Yemen searching for his father.

Relatives say he and some friends were about to start eating at a
barbecue when the drone strike happened.

After the boy`s death, "The Washington Post" published his birth
certificate. He was born in Denver. You can see his father`s birth place
here, New Mexico.

In a report last month called "The Year of the Drone," the New America
Foundation considered U.S. drone strikes in Pakistan alone going back to
2004. They used press reports from countries around the world, and they
came up with these estimates.

This is how many militants the New America Foundation thinks were
killed by U.S. drone strikes in Pakistan. This is four years from 2004 to
2007 under the Bush administration. Four years in this one column. This
is the low estimate.

This is what has happened each year after that. U.S. drones killed at
least, at least three times as many militants in Pakistan alone every year
since 2008 than we did in the four years before combined.

Drone warfare began as a Bush administration program, but the Obama
White House has accelerated and expanded it vastly.

And still, we don`t know much about how American warfare like this
works. The "Washington Post" published a blockbuster report this week that
fills in some of the picture. Quote, "The apparatus involves dozens of
secret facilities including two operational hubs on the East Coast, virtual
Air Force cockpits in the Southwest, and clandestine bases in at least six
countries on two continents."

"Other commanders in chief have presided over wars with far higher
casualty counts," the report continues, "but no president has ever relied
so extensively on the secret killing of individuals to advance killing of
individuals to advance the nation`s security goals."

What does it mean for a democracy when the government wages a secret

Joining us now is Spencer Ackerman who writes about national security
for Wired`s excellent "Danger Room" blog.

Spencer, thanks for checking in.

SPENCER ACKERMAN, WIRED.COM: Thanks for having me, Chris.

HAYES: Spencer, can you explain why we have seen such escalation in
the use of drones in the first three years of the Obama administration?
What is the rational, the reasoning strategically behind it?

ACKERMAN: There`s a strategic argument, and then there`s a political
argument that`s a little bit more difficult to make. The strategic
argument is that this is a really advanced and developed way to apply the
kind of lethal force that usually in the past was only applicable against
large groups of people.

Now, it`s very specifically targeted. Every time a zone strike
occurs, that`s the lagging indicator of a body of intelligence works that`s
gone into targeting it.

Then, there`s a political argument, which is -- which is kind of
unique to the Obama administration, in that it`s got to still prosecute or
feels the need to still prosecute a global war against al Qaeda, but it
doesn`t want to get bogged down and hung up on giant land invasions and
wants to ultimately take credit for ending the big wars in Iraq and
Afghanistan. How to still do that, the drone kind of squares that circle.

HAYES: That`s an interesting way of putting it. There seems to be
three issues.

One is a legal issue, which is extremely complicated in terms of what
legal justification there is for which missions. In fact, it`s sort of a
patch work, the Joint Special Operations Command, JSOC, has certain legal
directives, under the authorization to use military force. The CIA has
other legal directors under a presidential finding, which was signed and
then later revised.

Then there`s the basic moral question of effectiveness. I mean,
there`s an earlier report by David (INAUDIBLE), who is a counterinsurgency
expert claiming that 98 percent of the fatalities from drones were, in
fact, civilians. We only had a 2 percent kill rate.

The study that I just cited from New America Foundation have the
civilian death rate at 34 percent.

How do we have a conversation? What do we know about how many
innocents are being killed in these operations?

ACKERMAN: The frank answer is we know nothing because nothing is
being disclosed and there is effectively no oversight on the drone program
at all. The administration and members of Congress can`t even say the word

HAYES: Right.

ACKERMAN: The word is classified. Whenever you hear anyone talk
about the program, they talk about a capability. That`s a euphemism.

And the amount of euphemism that surrounds this program shows how
little oversight there really is. We don`t honestly know an answer to that
question. It is impossible on the outside really to judge it. What we do
see is bodies of children every now and then turning up in Pakistan.

And now, as the drones proliferate to Yemen and Somalia, we may see
those as well.

HAYES: Spencer Ackerman, national security reporter for Wired`s
"Danger Room" blog -- thank you so much for your help. And happy New Year.

ACKERMAN: And you as well, Chris.

HAYES: Right after this show on "THE LAST WORD" with Lawrence
O`Donnell, NBC`s Chuck Todd has an on the bus interview with Newt Gingrich
and he talks about everything.

And next up, right here an ornithological moment of geek or if you`re
so inclined, a moment of beck.


HAYES: Tonight`s "Moment of Geek," biologists may have solved a
cinematic mystery. Mainly, what the heck got into these birds?


HAYES: No matter what your film studies professor told you about how
Alfred Hitchcock`s "Birds" was about the eruption of Lacanian real into
symbolic, something very real about birds did reportedly inspire that

Look at this. Sea bird invasion hits coastal homes, thousands of
birds floundering in streets. This is from Monterey Bay in California in

The first few paragraphs read like literature. Quote, "A massive
flight of sooty shearwaters fresh from a feast of anchovies collided with
shore side structures from Pleasure Point to Rio del Mar during the night.
Residents, especially in the Pleasure Point and Capitola area were awakened
about 3:00 a.m. today with the rain of birds slamming against their homes.
Dead and stunned seabirds littered the streets and roads in the foggy,
early dawn. Startled by the invasion, residents rushed out on their lawns
with flashlights and then rushed back inside as the birds flew toward their

he great suspense master Alfred Hitchcock was reportedly vacationing
nearby and is said to have requested a copy of the newspaper. And then two
years later, he brought us one of the greatest thrillers of all time.


HAYES: What was their evil intent that so frightened (INAUDIBLE)?
That story in 1991 another weird mass die off of seabirds also in Monterrey
Bay. This one according to "The L.A. Times" included reports of pelicans
and cormorants, wandering around drunk and throwing up anchovies.
Scientists traced the bird behavior to an acid produced by algae which was
consumed by fish and shellfish which were in turn consumed by birds to
drunken and lethal effect.

I got biological oceanographer wondering could that same toxic algae
that got the pelicans and the cormorants drunk in 1991 have caused all
those other sea birds to go nuts 30 years earlier?

Well, it turns out, it is a question for which there is empirical data
available. Sea birds and turtles gather back in 1961 after the mess in
Monterey Bay, had had the stomach contents collected and preserved. A
scientist Cybil Bargo (ph) of LSU had her team study what had been saved
and indeed, bingo, toxic algae, they found it present in 79 percent of the
plankton that the unfortunate 1971 drunk birds had eaten.

Toxic algae produced a, quote, "never damaging acid," which made the
birds go nuts and die. So, at least according to the latest issue of
"Nature Geo Science," the sea birds that helped inspired the movie "The
Birds" most likely ate anchovies and squid that had eaten toxic algae and
it was a neurotoxin induced confusion that they plunged themselves at the
good people of Pleasure Point.

Of course, spoiler alert, these new findings won`t explain why crows
would (INAUDIBLE).

That does it for us tonight. I`m Chris Hayes in for Rachel. We`ll
see you again tomorrow night. And I will see you Saturday at 7:00 a.m. and
Sunday at 8:00 a.m. on my show, "UP WITH CHRIS HAYES."

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


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