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All In With Chris Hayes, Thursday, June 20th, 2013

Read the transcript from the Thursday show

June 20, 2013
Guests: Matt Taibbi, Philip Goldfeder, Les Bernal, Errol Louis

CHRIS HAYES, HOST: Good evening from New York. I`m Chris Hayes. Thank
you for joining us.

Tonight on ALL IN:

If you still possess the ability to be shocked by the rank corruption that
crashed our economy, then you`re going to be shocked by the report Matt
Taibbi of "Rolling Stone" has for us tonight. That is coming up.

Also, a shocking turn of events on the House floor as the House speaker
brings crucial legislation to the floor and watches it go down in flames.
I`ll tell you why what`s bad for John Boehner is good for the country.

Plus, taxpayer funded bailouts of struggling casinos? Now, there is
something that sounds totally ridiculous. But, yes, it is also something
that is totally happening.

We begin tonight with a truly rare bit of genuine progress from Congress.
Excellent news, in other words -- excellent news that nonetheless has me
seething with anger.

Here`s what`s happening that`s great news and infuriating. The bipartisan
group of senators committed to making sure 11 million undocumented
immigrants are given a road out of limbo and fear and toward citizenship is
trying to pass a comprehensive bill by a huge margin in the Senate. That
group of senators are called, annoyingly, the "gang of eight" and the
reason they think they need the huge margin victory is to put pressure on
House Speaker John Boehner to bring the legislation to the house floor even
though it will almost certainly not have the support of a majority of House

So that`s the game plan, right? The goal is get 70 votes in the Senate, a
goal that has seemed, well, further away by the day lately. I mean, when
one of the bills architects, Marco Rubio -- I see you, Marco Rubio --
started openly flirting with killing it.

So, in order to stabilize and further build support from their side of the
aisle, Republican Senators Bob Corker and John Hoeven struck a deal with
the gang of eight, a deal that suddenly makes comprehensive immigration
reform seem more possible, more likely to actually happen than it has in

That is the progress. That`s progress. It`s excellent news. And it`s
also infuriating because of how they are luring Republicans into the fold.
Corker and Hoeven have an amendment where they are calling for a border,
quote, "surge".

Here`s what we know about it: it would require an additional 20,000 border
agents on the U.S./Mexico border, doubling the number that are there right
now -- 700 miles of fencing at the U.S. border, 350 miles more than we have
right now. And full implementation of electronic entry and exit system, of
international entry points, complete with U.S. Customs and Border
Protection officers.

The price tag? Well, it`s all for a cool $30 billion, or more.


REPORTER: So it`s about $30 billion total?

UNIDENTIFIED MALE: Correct. Maybe slightly higher.

UNIDENTIFIED MALE: It will be more than that.



HAYES: You know, another bill or so. Yes, probably more than $30 billion.

Now when you were evaluating -- you right now watching this -- the American
voter, the American citizen, the American taxpayer, you`re thinking: is
this a smart way to spend money?

I would like you to keep in mind these two important things. The Migration
Policy Institute, a nonpartisan think tank, found that in 2012 we spent $18
billion on immigration enforcement agencies, a 43 percent increase from
2006. Here`s the kicker. That $18 billion, that`s more than we spent on
all other law enforcement agencies combined by 24 percent.

And do you happen to know what the net migration between Mexico and the
United States currently is? It is zero. Zero.

The most recent numbers show that from 2005 to 2010, the net migration is
zero. A huge change from 1995 to 2000, the net migration from Mexico to
the U.S. was more than 2 million people. But from 2005 to 2010, the number
of people coming here from Mexico was about the same as the number of
people going to Mexico from the U.S.

So we`re already spending almost $18 billion a year on a problem that does
not exist. And Republicans in the Senate are poised to add $30 billion to
that all over a handshake deal to win votes. And remember, these are the
exact same people who say they care about spending and the deficit.

Let`s take for example, Republican Bob Corker, whose name is on the
amendment. Senator Corker is nothing, if not a fiscal hawk.


SEN. BOB CORKER (R), TENNESSEE: Our country is on verge of being broke,
and we have to do some courageous things to take us where we need to go.

We`ve got to move towards cutting spending. That`s -- we have a spending
problem in this country. I think everybody knows it.

Obviously, spending is out of control. There`s no question.

I hope we`ll quickly move to cutting spending.

We are on unsustainable course.

People understand that spending is out of control in Washington. They way
understand that.

Young Americans expect us to solve our fiscal issues so they aren`t saddled
with debt and robbed of their opportunity for the American dream.


HAYES: If you listen to Bob Corker, you`d think he`s interested in
lowering the debt. But two days ago, when the CBO came out with an
estimate saying the Senate immigration bill before they added the
amendment, would save almost $200 billion over 10 years, we heard from not
one Republican, Bob Corker or anyone else, who was rushing to switch their
vote and support this money-saving legislation.

No, instead Senator Corker struck a deal to spend over $30 billion more.
And his supposedly deficit conscious colleagues came rushing to his side to
switch their votes and support the bill once $30 billion was added to the
price tag.

This is the party that won`t stop talking about debt and deficit. This is
the party that would have you believe their number one concern is that
we`re spending our children into oblivion. And yet, they do not appear to
have been persuaded to support immigration reform because it saves $200
million. No, no, quite the opposite. They`re being persuaded to support
immigration now that Republicans have tacked on tens of billions of dollars
in additional spending to the bill.

And here`s why and this is the way to understand everything that`s
happening with Republicans and immigration. This is the deal, this
amendment. It isn`t about stopping people at the border. It`s not about
policy and it`s obviously not about the deficit. It`s about paying a price
to appease the deep fears of the Republican base, fears that were so
eloquently described yesterday on the lawn of the Capitol.


coming here who want to come to cut your lawn and have a better life. But
there are people who want to cut your throat.


HAYES: The cost of keeping people like that quiet is $30 billion, courtesy
of the U.S. taxpayer.

Joining me now is Ezra Klein, MSNBC policy analyst and columnist of "The
Washington Post" and "Bloomberg View".

Ezra, you and I have had this discussion about how everything about the
immigration debate isn`t about what people say it is. I want to start on
the border fence and I want to talk about poverty.

I want to play this bit of Senator Corker admitting that the bill he
proposed is overkill. Take a listen.


CORKER: For people who are concerned about border security, once they see
what is in this bill, it`s almost overkill.


HAYES: Who advertises the policy in Washington that they are supporting as
overkill, as doing more as spending too much money? That`s the opposite of
what we`re supposed to get out of the cash-strapped sequester-ridden
government at the moment.

EZRA KLEIN, MSNBC POLICY ANALYST: But this is exactly the key for these
guys at the Republican Party right now. So many of the Republican Party
establishment in Washington, they are looking at their base and this is one
of those issues where they turn and say, oh my God, I can`t believe we`re
connected to these people.

I mean, folks like Corker and Hoeven, and a lot of these other guys are --
and they are mostly guys -- are sitting there trying to figure out how to
trick the Republican base into not killing them if they vote for this
immigration bill. So an amendment like this one, it`s not about getting
the border safer. It`s about finding something they can do that will make
it seem like they have done enough, as you say, to calm this primal fear.

But they won`t have done something that destroys a bill for a path to
citizenship, because on this issue, what you`re seeing a huge gap, an
enormous chasm between Republican elites and a lot of Republican voters and
they are shoveling money into that gap --

HAYES: That`s exactly --

KLEIN: -- until it fills up and they can walk across it.

HAYES: That is exactly right. It is the definition of throwing money at a
problem, because what the money is, the money isn`t real money in many
ways. It is very much real money, I mean, that`s real money. But the
money is a symbol that we hear you and we care as much about security and
your fears of this kind of infiltration and invasion as much as you do.

KLEIN: The money is tangible. I think this is actually the key to the
Corker amendment and what they`re doing. So, the two things that are kind
of on the table, Cornyn, which was the conservative amendment, was trying
to set very, very high benchmarks for how much operational control and
situational awareness you have of the border.

So he was saying things like we need to apprehend 90 percent of anybody who
comes across it. We have to have 100 percent situational awareness, which
means we know what`s going on everywhere on this 2,000-mile border at all
times. These are impossible things to do.

What Corker and Hoeven are doing is buying things, they are buying border
patrol agents. They are fencing.

And the reason that is helpful is on the one hand it`s achievable. On the
other hand, Democrats kind of don`t mind. They don`t think it`s a great
idea. But somebody at the AFL-CIO was saying to me the other day, look, we
don`t think it`s the most effective public works program you can do, but it
is a public works program.

HAYES: Well, it`s also so funny because you and I had this conversation.
Once spending gets tagged as security or defense, it`s not like not real

KLEIN: It`s on a different budget.

HAYES: Right. It`s on different budget. It`s in different conceptual
space. I guarantee you on the Sunday shows this weekend, they`re not going
to be talking about like what`s this going to do for the deficit, because
it`s in this other space called security spending.

I want to talk about Jeff Sessions because you, I thought, called out Jeff
Sessions in a great way. Jeff Sessions, senator from Alabama, is not going
to vote for the bill no matter what gets put in it. And he`s been giving
explanations for why he can`t vote for it. And this one particularly, that
it would be bad for people at the bottom of the wage scale.

You take a listen to the sound and explain to me why we should maybe not
necessarily trust Jeff Sessions on this particular issue. Take a listen.


SEN. JEFF SESSIONS (R), ALABAMA: How in the world can we justify passing a
bill that hammers the American working man and woman who is out trying to
feed a family, get a job, that has little retirement, a little health care,
some money to be able to take care of the family and hammer them with
additional adverse economic impacts?


HAYES: So, this is in some ways the left version of the argument for
immigration restriction. You let in too many immigrants. It`s going to
push wages down to the bottom of the wage scale.

And you took issue on "Wonk Blog" with Jeff Sessions making this argument.

KLEIN: What set me off about Sessions here -- something else happened. We
had this Congressional Budget Office report and it said what every
economist will tell you, it said immigration will grow the economy. Over
time immigration will raise wages. Immigration will make a lot of people
better off.

But what Sessions says, and what some sort of anti-immigration economists
will say is that, well, there are some losers. There are some very, very
low-educated, sort of high school or less, mostly men, who are going to
face some wage competition. And even if the pie is bigger, they are worse

So, Jeff Sessions releases a statement, and he says, well, look, yes, maybe
it grows the economy and does these other things, but it does so by giving
money to businesses and to rich people and not to be the sort of low-skills
workers who we need to help. And number one, when you get 200 billion
bucks from this bill, if you want to just hand that over to folks with high
school educations and give it to them to get college educations, or just
give it to them in a big tax credit, you would do an enormous amount of
good for them. But, of course, Sessions isn`t proposing that.

HAYES: Exactly.

KLEIN: But more to the point, what Sessions is doing here, everything else
Republicans do, and this is a fear. You can have this theory. Moving
money over to businesses and rich people and saying they will use that
money to grow the size of the pie. They will hire people and we`ll have
this much better economy and all the gains will be shared because the
American economy is a working engine of distribution if you`re just not
screwing with the people who know what they are doing.

And here he comes on this one issue of immigration reform, any policy that
does not share its gains sufficiently with folks at the bottom is not a
policy worth having. And so, then, you think what about the Bush tax cuts?
What about when you voted against things like Obamacare and the American
Jobs Act?

There are a lot of policies in the American government that don`t fit Jeff
Sessions` new litmus test, but only uses it, a lot of Republicans only use
it when it comes to immigration reform.

HAYES: And the reason, and I think the thing that unites Corker and
Sessions here, and the way the Republican Party is tying themselves in knot
(ph) is what driving opposition to comprehensive immigration reform is
deep-seeded cultural, in some cases, ethnic anxiety about infiltration,
about diffusion, about losing the kind of America people had. And,
luckily, we have progressed to the point politically where you cannot just
champion that as the reason to be against it.

And so, what has to happen is Republican members of Congress have to
reverse engineer reasons to oppose it, when really what they`re doing is
representing the cultural anxieties of their base.

KLEIN: And this was the danger of the Congressional Budget Office report
because what it did was it took the bloodless language of the budget away
from them. They can`t say it will increase the deficit. They can`t say it
will hurt the economy. Now they are coming into weird corners of it. You
know, maybe it will hurt average wages for very small group of workers.

And these are all things we can fix, but they don`t want to fix any of
those things. They don`t want to use the gains of immigration to help
these workers because they are not worried about these workers. That`s not
why they are against this bill.

HAYES: They are worried about the immigration.

KLEIN: You could tell that they are worried about the immigrants, who, by
the way, are also low-wage workers who it wouldn`t be such a bad thing to

HAYES: MSNBC policy analyst Ezra Klein -- thank you so much.

KLEIN: Thank you.

HAYES: There`s a lot of blame to go around for the financial crisis, but
explosive new doctrines reveal how much blame the ratings agencies like
Moody`s and S&P deserve. Matt Taibbi joins me next with the smoking gun.


HAYES: "Let`s all hope we`re wealthy and retired by the time this house of
cards falters", that`s a direct quote from a Wall Street insider before
they almost blew up the entire world economy. Matt Taibbi joins me next to
share with us a new smoking gun he`s found and the story of a Republican
congressman who got millions of dollars literally in checks from the U.S.
government while pushing to cut food assistance for the poor. This one
sets some kind of hypocrisy record.



SEN. AL FRANKEN (D), MINNESOTA: Tom Toles of "The Washington Post" depicts
the problem quite well in this satirical cartoon. Now, here you see the
rating agencies. He labels them that so that`s how you know they are them.
Giving three 10s to a figure skater, labeled Wall Street. He`s kind of fat

And you see that he says, "I pay their salaries." That`s why he`s getting
the three 10s, or AAA. And yet he`s a figure skater and she`s dumping
trash really.

There you see an apple core. There`s a fish head, skeleton, a banana. You
don`t. Those on the ice. You just don`t want that. That`s bad.

And then the little figure here, a little garbage man. The bottom says,
"Somebody else pays to clean the ice." That, of course, is us, the


HAYES: It`s very hard to improve on cartoonist Tom Toles by way of Al
Franken in explaining the rank corruption of the financial rating agencies.

Rating agencies like Standard & Poor`s and Moody`s are supposed to rate
investments as safe or not safe. These agencies played possibly the
central role in the financial crisis.

And the story of how they helped sell garbage as if they are gold is
explained in a blockbuster new article for "Rolling Stone" by Matt Taibbi.
Thanks to e-mails and documents disclosed in recent documents, we know the
agency`s top ratings could be obtained for a price.

It, quote, "stopped being something that had to be earned and could be
something that could be paid for."

Emails from S&P executives indicate an awareness of the practices, "Lord
help our F-ing scams," said one. And another, "Let`s hope we`re all
wealthy and retired by the time the house of cards falters."

A lot of people escape accountability in the wake of the crisis. But the
ratings agencies not only got away with it, they have been rewarded with
more power and credibility. When S&P downgraded the U.S. credit rating,
everyone paid attention. The trouble is, no one is paying attention when
they sold the country and the world a pack of lies. Also they could rake
in more in ratings fees.

Joining me now is Matt Taibbi, contributing editor for "Rolling Stone".
His new piece, "The Last Mystery of the Financial Crisis" , which was just
posted on

It`s great to have you here.

MATT TAIBBI, ROLLING STONE: It`s good to have you here, Chris.

HAYES: So, people know, I think, in a general way the ratings agencies
that are involved. Explain to us what`s new here. Why did you write this
article in 2013, you know, years after the crash, when we claim to know the
ratings agency have been up to no good? What`s new here? How does this
help us understand what they did?

TAIBBI: So, this is sort of a typical financial crisis of a story where we
should have had a regulator doing this investigation after the crash.
Instead, it was really, in this case, left to a San Diego-based law firm
called Robbins Geller Rudman & Dowd. They were involved in a series of
lawsuits against the ratings agencies.

And over a period of years, they compiled the massive archive of internal
documents full of just incredible e-mails of the people inside,
particularly Moody`s and Standard and Poor`s, who are basically admitting
that they are selling ratings for money. That`s really what it comes down
to. It`s an incredibly graphic demonstration of what went wrong in the
crisis. It was a rare opportunity we thought that kind to show how bad it

HAYES: So the two things here, let`s say you`re the ratings agency. And
I`m the bank. I pay you to -- I just made this new thing. It`s called a
sieve, which was an issue.

TAIBBI: Right.

HAYES: It`s a new contraption. It`s a bunch of mortgage pulled together.
And I pay you to rate it. You come back to me and say, this doesn`t look
that hot. I say -- well, what? What do I say?

TAIBBI: You say, no, we think your analysis is off. We find your approach
inappropriate. That`s one of the words they use sometimes.

And what they did is essentially they would go over l heads of the
analysts, you know, the guys in white suits looking at the stuff.

HAYES: Yes, they`ve got a quantitative model and they say, this does not
look very safe.

TAIBBI: Yes, they`re like, the best we can do is BBB, sorry, you know?

And then what happens is the bank goes over their heads to the sale side
guy, to the business guy and says, your analyst is giving us a hard time.
Then the next thing you know, they are talking to the analyst and the next
thing you know, it`s AAA. It`s just how it worked. The entire scheme is
laid out this way in these documents.

HAYES: And that`s key. There`s the analysts and they are charged with
sort of running the models and being independent. There`s a business side
for folks doing sales and --

TAIBBI: They want the fees.

HAYES: So, you`re going over the head of the people who should be making
the decision to the business side guys. And say, hey, look, you do tens of
millions of dollars of business. You`re going to turn us away with this
stupid rating?

TAIBBI: Right, what`s the difference, you know? You want a 1 percent
capital buffer, they want 0.75 percent. You know, can`t we meet in the
middle somewhere? And, of course, it ends up being exactly what the banks

This is what happens over time. The analysts really didn`t have the juice
in this sort of the bureaucracy. It ended up being the sales side people
who had all the power.

HAYES: Carl Levin has a great way -- you quote him in the article
describing this. "It`s like one of the parties in court paying the judge`s

TAIBBI: Right. And that`s exactly what it is. And it wasn`t always this
way. The rating agencies used to work on a kind of subscription model
where people bought financial products.

HAYES: The investors.

TAIBBI: The investors, they were actually paying for the ratings. Now
they have a new thing which they call the issues or pays model, which is
exactly what you described. Banks want them to be rated, they come, it
hands over a bunch of money and --

HAYES: What`s remarkable is the e-mails show, and I did a the lot of
reporting on the financial crisis for my book and going through this. It`s
like people knew. That`s what`s so remarkable.

TAIBBI: Right.

HAYES: People know it`s a scam. People know it`s going to blow up.
People are not stupid.

On the inside of it, people -- everyone is operating with a kind of a wink
and a nudge.

TAIBBI: Oh, what`s really I thought was amazing was the last sieve in this
thing, which they released a week before they downgraded the entire
subprime market. They put out this billion dollar sort of bucket of
subprime and they give it a AAA rating and they know the whole thing is
going to go bust, and yet they are cheerleading for it as they are sending
it out into the market.

I mean, it`s just incredible cynicism.

HAYES: I want to read this quote. "2008 was to the American economy,"
this is you`re your article, "what 9/11 was to national security. Yet
while 9/11 prompted the U.S. government to tear up half the Constitution in
the name of public safety, after 2008, authorities went in other direction.
If you can imagine a post-9/11 scenario where there were no metal detectors
at airports, and people could walk on carrying chainsaw and meat cleavers,
you get a rough idea of what was done to reform the ratings process."

So there had been no reforms of the rating process.

TAIBBI: No, it`s exactly the same as it was before. It`s still the same
issuer pays model. When you`re looking at financial products that have
been rated, they have been rated by a ratings agency that got paid by the
financial company that created that product. So, it`s that --

HAYES: What changes that? Legislation? How do we change that?

TAIBBI: Well, you know, as Senator Franken has a bill that would create
kind of a government agency that was sort of sign randomly these ratings.

HAYES: So you break the connection where you`re paying the judge`s salary?

TAIBBI: Exactly. But they somehow, I think or just organically, in the
market, there has to be created a new kind of company that`s paid in some
other way.

HAYES: By investors, we should note in 2002-2007, which is the peak years
of the boom, the fees for those ratings agencies, Moody`s, S&P and Fitch
group, doubled from $3 billion to $6 billion. They made a pretty penny off

TAIBBI: Right. They made an awesome amount of money.

HAYES: Matt Taibbi of "Rolling Stone" magazine --

TAIBBI: Thanks for having me.

HAYES: Good to have you here.

All right. This is what bipartisanship looks like in the House: a big fat
failure for the farm bill, rejected by the Democrats who thought it didn`t
spend enough on food stamps, and rejected by Republicans who thought it
spent too much on food stamps.

That story is coming up.


HAYES: I got to tell you, I almost feel bad for John Boehner at this
point. I mean, we talked about what a bad day he had yesterday. But today
was so bad it was enough to bring tears to your eyes, because today, John
Boehner failed to do a very basic thing. If there`s one thing you should
be able to do as speaker of the U.S. House of Representatives, it is a
thing John Boehner failed to do today, which is pass a farm bill.

A farm bill is one of the pieces of legislation that`s generally passed
without controversy at fairly regular intervals. It`s usually the very
definition of routine business in Congress.

But, today, in a surprise turn, the House voted down the farm bill.


UNIDENTIFIED MALE: The yays are 195. The nays are 234. The bill is not


HAYES: Sixty two Republicans joined 172 Democrats in voting to defeat the
bill. Most of the Democrats opposed the bill`s massive cuts to the food
stamp program now known as SNAP. Many Republicans thought it didn`t cut
that feed the hungry program enough. But regardless of why the farm bill
failed, its failure was a great defeat for John Boehner and a great victory
for anybody who cares about making sure the poor have enough to eat.

Because you see this farm bill was, how can I put this, a piece of garbage.
We have been talking this week about how this bill would have cut $20
billion over ten years from the federal food stamp program, which would
have affected 2 million people. But that`s just the beginning. That`s not
all. It wasn`t just about taking food away from the hungry. The bill would
have also handed over cash in the form of farm subsidies to the same people
calling for billions of dollars in food stamp cuts.

Now the actual people, the individuals, the actually members of Congress
trying to cut food stamps and no one better represents the hypocrisy at
work than Republican Congressman Steve Fincher of Tennessee. You see the
good man from the great state of Tennessee decided that poor people on food
stamps needed a good bible lesson. Last month in the holiest of places,
Fincher spit an array of proverbs in an attempt to curtail the food stamp


REP. STEPHEN FINCHER (R), TENNESSEEE: The poor will always be with us. It
also says if you don`t work, you don`t eat.


HAYES: Good God, please pardon the expression. Does Steve Fincher get all
righteous about the government spending other people`s money?


FINCHER: We`re all here on this committee making decisions about other
people`s money. We have to remember there`s not a big printing press in
Washington that just continually prints money over and over and over. This
is other people`s money that Washington is appropriating and spending.


HAYES: Yes, other people`s money. Get this. Between 1999 and 2012, that
man, Congressman Fincher received payments totalling more than $3 million
in taxpayer money in the form of farm subsidies. He was not alone.
Fifteen members of Congress or their spouses benefitted from a total of
more than $200,000 in taxpayer funded farm subsidy payments last year

And what makes matters worse, an amendment to stop lawmakers from receiving
farm subsidies was voted down yesterday. That`s in addition to defeating
an amendment to stop crop insurance subsidies for those who make more than
$250,000 a year. Sort of recap, it wasn`t enough that Republicans wanted
to cut $20 billion from food stamps, but then they went and stomped all
over any opportunity to stop this ridiculous cash giveaway to people who
don`t need it including themselves.

This bill aimed to almost take food out of the mouths of hungry people in
order to give money to members of Congress with farms. This was
essentially Robin Hood in reverse. It`s the redistribution of tax dollars
from the poor to the rich. So listen up, John Boehner, if you`re off
somewhere with wet eyes mourning your defeat today, buck up. This was a
bad bill any way. Good riddance to bad rubbish. Pass a farm bill that
isn`t a regressive piece of crap. We`ll be right back with Click 3.


HAYES: Delaware may be about to spend $8 million of taxpayer money to bail
out casinos. That`s right, as in the places you go to lose money. That`s
coming up.

But first, I want to show the three awesomest things on the internet today
beginning with your latest time. Today Facebook introduced a new video
feature on its photo sharing site Instagram. Users of Instagram can now
shoot and edit 15-second video clips from their smartphone. You have yet
another venue to share the aspects of your day with all of your friends and
with several filters to choose from. Jealous? Yes, I thought so.

People are really going nuts over this. All kinds of cool videos are
popping up, but some are seeing this as a direct frontal assault on
Twitter`s rival video sharing app Vine, which only allows 6-second videos.
What will renowned Vine do now with 9 more seconds to swallow lemons and
freak people out? Buy citrus now, people.

The second awesomest thing on the internet today, a remarkable and touching
tribute to a beloved actor, James Gandolfini left us far too soon and
though that actor had a long and wide-ranging career, he will be forever be
known for his brilliant portrayal of New Jersey mob boss Tony Soprano.

Last night a reserve sign was placed at the booth of the famed restaurant
where the unforgettable final scene of "The Sopranos" was shot. The owner
of Holsten`s Ice Parlor in Bloomfield, New Jersey says Gandalfini would
spend down time in between talks talking to people was just a really nice
guy, a nice guy and a truly exceptional actor. He will be missed.

And the third awesomest thing on the internet today, a TV personality
reveals her true colors and gets her just desserts. It`s Paula Deen. She
has been wooing America for years with her southern charm, her deep fried
personality and yes, butter. But did you know that in addition to her
humor and home style cooking, Paula Deen is also an admitted racist.

As part of a discrimination suit she is facing Deen gave a videotaped
deposition showing her interest in throwing a southern style wedding for
her brother. Deen said she wanted to model it after a restaurant where,
quote, "The whole entire wait staff was middle aged black men all sporting
white jackets and black bow ties.

And it gets even more charming, Deen also admitted to using the "n" word
years earlier. Judging by her wedding fantasy I`m guessing the "n" word
doesn`t stand for nutritious. Deen defended using the racist language and
questionalbel humor. They are jokes. The internet has been having a grand
time with Deen`s homespun racism using the hash tag, paulasbestdishes. We
shall over-crumb cake and my personal favorite, some of my best friends are
black eyed peas.

You can find all the link`s for tonight`s Click 3 on our web site, We`ll be right back.


HAYES: You know what they say about casinos. The house always wins and if
you have ever been to a casino, you know it`s true. This week, the
governor of Delaware, Jack Markell, proposed writing an $8 million check to
an ailing industry in desperate need of a bailout, the steel industry or
auto industry, but the casino industry.

It looks like Delaware lawmakers might support the plan to use $8 million
of an unexpected winds fall from higher state tax collections to split
between three struggling casinos. The Joint Bond Bill Committee voted
today to approve the plan. It`s a rude awakening to taxpayers who are
always told that state-approved gambling is a revenue generator, real money
maker, well, not so much despite advertising and viral video attempts.


UNIDENTIFIED MALE: This ride just got wilder. Join us for an evening with


HAYES: All right, this problem is not a fluke. . The growth in total
gambling tax revenues across the nation has been fairly flat since 2007.
Meanwhile more than 80 casinos have opened across the country from 2000 to
the present. It doesn`t add up. There`s a finite pool of gambling bucks
out there so Delaware`s loss is the effect, for example, of brand new
casinos opening next door in Maryland.


UNIDENTIFIED FEMALE: One year after opening Maryland Live Casino at
Arundel Mills, it`s cranking out jackpots and raking in revenue. In May,
Maryland Live pulled in $37.5 million in slots and $17.6 million from table
games for a total of $55.1 million.

UNIDENTIFIED MALE: As easy it is to go to buy your socks -- you can go
play blackjack.


HAYES: New casinos in New York State have hurt the ones in Connecticut.
New establishments in Kansas have hurt Missouri and those new casinos in
Maryland and Pennsylvania have hurt Delaware and also Atlantic City even
before Hurricane Sandy hit. Revenue in Atlantic City has been declining
since 2006 before the great recession.

The billion dollar Native American casino industry is levelling off as
well. The Delaware casino bailout is part of the jarring end to a years`
long casino bubble in which gambling has been used by politicians of all
stripes to raise revenue without actually raising taxes.

Joining me now is New State Assemblyman Phillip Goldfeder, a Democrat who
represents District 23 in Queens where Resorts World Casino is located.
Resorts World has the highest grossing slot revenue generator in the nation
last year. Assemblyman Goldfeder served on the racing and wagering

Assemblyman, thank you for joining me. I understand your support for this
enterprise in your district. It brings jobs in and I understand why that`s
important to you and the people you represent. But when you look at
Delaware and the promises made there that now are turning into an $8
bailout, do you worry about the future, the road that you and New York are
headed down?

ASSEMBLYMAN PHILLIP GOLDFEDER (D) NEW YORK: That`s why you have to be very
careful. You have to put a lot of consideration to the plans in which are
proposed and carried out. The governor has proposed legislation that`s
going to bring four casinos to upstate New York. Now I think that Resorts
World, as you mentioned, has been doing a tremendous job, 1700 jobs, 1,200
of those jobs have been from the local community.

But more importantly, they have been a great partner to the community
making sure they are support in supporting the community they are in. So
we have seen old success in New York and there`s no reason why New York
money should be leaving New York. We should be keeping New York money in
New York.

HAYES: That`s the argument that always gets made. That`s the argument
when I was covering this issue in Illinois. When there are casinos being
built in Illinois was people were going across the border to Indiana to
gamble in Indiana. There was a casino not that far away. We should keep
Illinois money in Illinois.

But of course, the problem is this has led to everybody getting into the
pool, this proliferation. So you have a bizarre beggar thy neighbor gain
in which your district`s gain is someone else`s loss. If someone else
comes and builds a casino, and say Long Island, that`s going to hurt your

GOLDFEDER: There`s no question about it, but that`s why you have to look
at the state as a whole and do the right thing based on your state. I
can`t worry about other states. I have to worry about the jobs in my
community. We have seen a tremendous amount of success with the VLTs and
gaming industry thus far.

There`s no reason to think the amount of money that New York generates for
the rest of the country that we shouldn`t finally take a look at how we can
try to keep that money here and keep those jobs here. My community
especially in the aftermath of Hurricane Sandy, we`re struggling. We need
those jobs.

So there`s no reason to think that we have to be worried about everybody
else. It`s time to think about ourselves to make sure that we can bring
our economy back and ultimately help the entire nation.

HAYES: Final question, jobs are the reason that it`s being given in
Delaware for this $8 million check. Could you find yourself in a situation
where the casino that is in your district is hurting because of
circumstances, economic recession, another casino opening up, and you have
to go to the state assembly and argue for taxpayer dollars to be spent to
bail it out because precisely there are jobs at stake?

GOLDFEDER: Well, two things, number one is that this bill would still have
to go to a voter referendum and ultimately the voters are going to decide.
That being said, you`re absolutely right and that`s why you have to put a
lot of thought into how you do it and where you do it.

You know, I commend the governor for keeping casino debate at top of the
priority list, but we`re being careful. Legislation got drafted. We were
careful about where they were going to go and how they ultimately they
would compete with each other.

We`re not looking to divide ourselves up. We`re looking to make sure that
we can bring in the most revenues and provide as much money to our local
schools and local state budgets.

HAYES: Careful means limits. New York State Assemblyman Phillip
Goldfeder, thank you so much. We`ll be right back with someone who will
tell us about the real toll of these government casino partnerships across
the country. It`s an amazing story.


HAYES: Delaware wants to bail out its struggling casinos with taxpayer
money. They are writing a check, but is it worth it? Joining me now at
the table is Les Bernal, the national director of Stop Predatory Gambling,
you can probably guess where he comes down on this and Errol Louis, host of
"Inside City Hall" on New York One.

You sat down at table and we were talking about who are we going to get to
talk about this. Your name was floated. We talked to you and I was like,
what`s this guy`s angle? Why is your life devoted to this issue?

I never thought I would be spending the prime years of my life on. I
learned so much about it by working in the Massachusetts Senate. I worked
for a state senator there who is strongly opposed to casinos and lotteries.
By learning about it and I gambled. I never questioned the issue. I
learned so much about it. There`s not a single act of government today
that creates more financial inequality than government sponsorship of
casinos and lotteries. So it awakened by conscience --

HAYES: That`s a strong statement.

BERNAL: This is the primary way that government communicates with us today
as citizens. Government advertising for casinos and lotteries is how
government communicates with us today. We encouraged people to buy savings
bonds. You know, invest in your country, you know, have a common good.
Today it`s all about relying on gimmicks like casinos.

HAYES: Why is it a gimmick? Those 1,700 people that work in the
assemblyman`s district, they are real people with real jobs collecting
paychecks, right?

BERNAL: There isn`t a -- one of the biggest public policy failures of the
last 40 years is the experiment with casinos. So what that state senator
was talking about is they feed on the perception. Americans have few
options today. There`s a perception that there`s few viable ways to make
real money, real opportunity. So these casino interests partnering with
government officials looking for revenue just prey on people, desperate
people looking for work. These are jobs that are phoney prosperities.

HAYES: But people are going to gamble any way. That`s part of the
problem. The reason that we have seen this proliferation and the reason we
saw it happen in New York is that, look, if you`re making this calculation
with the politician, you have Atlantic City there. I`ve been on those
buses myself. Going from New York and Atlantic City, we haven`t created
people`s desire to sit at the blackjack table. That exists. So we could
create real serious revenue that flows into the state.

ERROL LOUIS, HOST, NY1`S "INSIDE CITY HALL": That was always the thinking.
You`re right. Look, every weekend you pay $20. It`s really cheap. You
get on a bus, take a nap, 90 minutes later you`re in Atlantic City and can
gamble all weekend and come right back. The thinking was let`s keep some
of that here in the state.

But as you said, as you showed, they figured that out in Connecticut. They
figured that out in Pennsylvania. They are figuring that out in
Massachusetts now and so becomes a zero sum game. Everybody is sort of
taking from everyone else. The notion that people wouldn`t pay the $20 and
ride 90 minutes to go gamble if you put it a little bit closer to their
homes in New York City, for a handful of people that might be true.

HAYES: Here`s what I want to separate out. The casino industry is
predatory. From a practical argument where there`s a ceiling on the
demand. We`re now locked in the cycle. There are 84 casinos open since
2000. Gambling revenue has been flat from 2007. At a certain point,
everyone is slicing the pie thinner and thinner.

BERNAL: This isn`t about whether or not people gamble. You have a poker
game or the Super Bowl office pool. This is a government program. This is
the public voice of American government to most citizens encouraging people
to lose money.

HAYES: Why is it a government program? You set up a private casino and
we`re going to tax it at a high rate. The effective tax rate is some 55,
60 percent. That`s the deal that`s made. You can open the casino, but
government are going to share that revenue.

BERNAL: This isn`t like a normal business. These guys have regional
monopolies when they partner with government. You and I can`t go open up
our own casino. We talk about the solution between government and powerful
corporate interests against the common good. This is the poster child for


BERNAL: Because citizens of New York and elsewhere, they are not calling
up legislators saying I want more places to lose money. This isn`t driven
by public demand. This is driven by powerful corporate interest. Casinos
are arguably the most powerful lobbying force in America today.

HAYES: So what drives the politics of this? You watch this in New York
and it`s similar in Illinois. If it is the case that citizens aren`t
calling up, there are probably a few. But I agree. There`s not a mass
movement for this. Yet it`s taken over state houses. I remember as a kid.
Whenever you drive across the country doing reporting anywhere, I`m always
astounded. There`s a casino in downtown Detroit. What is the political
economy that makes that happen?

LOUIS: Indirectly people are not asking for casinos, but they are asking
for better schools, new roads, they are asking for tuition assistance and
stuff that costs money. They are also saying don`t you raise my taxes by
one penny or we`ll throw you out of office. They say, okay, we`ll just do
a selective, very regressive tax on a handful of mostly desperate people
and we`ll just sort of take the money out of them and we have the help of
an industry that will make it seem glamorous like it`s a dream world. What
happens in Vegas stays there? You can do all kinds of fun stuff.

HAYES: One of the pioneers of this was in the American Indian Foxwood
casinos in Connecticut, built on tribal land. It was a little different
than putting one in Queens, but that produced just a tremendous amount of
revenue. That was real money that flowed into the state that really did
pay for a lot of stuff.

BERNAL: But Connecticut is one of the worst managed states. They are
bordering on bankruptcy in Connecticut. It goes back to a failed revenue
source. It hasn`t delivered for schools or created jobs. It`s one of the
biggest gimmicks in America today and aside from the revenue piece and how
it`s socially unjust, this is a business that makes millions of Americans
expendable. They make between 40 percent and 60 percent of slot machines
come from people who are problem gamblers. They make people expendable.
This is about making people -- making them useless to the public good.

HAYES: It creates a perverse incentive because the government now is in
the business of -- is in business with the enterprise because they are now
counting on those taxpayer dollars, which you become marketing arm for the
industry because the industry is essentially almost a kind of public

BERNAL: Government has a vested interest against its own people. They
have a vested interest.

LOUIS: We require because we have a constitutional prohibition on this
table gaming. We`re going to take it to the voters. There`s going to be a
ton of money from the surrounding states trying to get us to kill it. The
ones who want it here will be here.

HAYES: The politics gets tricky. Les Bernal from Stop Predatory Gambling
and Errol Louis from NY1, thanks.

That`s ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts now. Good
evening, Rachel.



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