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All In With Chris Hayes, Thursday, February 13th, 2014

Read the transcript from the Thursday show

February 13, 2014

Guests: Heather Haddon, Staci Berger, Robert Costa, Nick Hanauer, Katrina Vanden Heuvel, Sam Seder

CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris

And if you are watching me right now, then congratulations, you must
be hunkered down somewhere warm, presumably with electricity, because it is
rough out there. As a major winter storm bears down on the South and
Northeast, "A.P." reports at least 20 deaths are blamed on the storm,
mostly from traffic accidents. More than 6,500 flights were canceled

And as of this afternoon, nearly half a million households were
without power across eight states.

Just a couple of weeks after we saw Atlanta paralyzed by a few inches
of snowfall, we are seeing scenes like this unfold in North Carolina, with
drivers abandoning their cars on gridlocked roadways. The governor warning
residents to respect Mother Nature and stay off the roads unless there`s an

This winter so far has been brutal and extreme -- and here`s one thing
we know about brutal extreme weather like this. Whether or not any one
given episode of extreme weather is caused by climate change, we know that
climate change makes extreme weather more likely. We know that as climate
change progresses, extreme weather and the havoc it causes will become more
and more routine, the new normal. And the central test of the 21st
century, really, will be responding to and building up resilience to
extreme weather events.

I spent the last year reporting on Superstorm Sandy and its aftermath
and watched East Coast governments fail that test in many ways.

But let`s not forget it was the response to Sandy that catapulted New
Jersey Governor Chris Christie into stratospheric popularity, even though
that response along with the infamous "Time for some traffic problems in
Fort Lee" e-mail can be seen as one of the most embarrassing parts of the
Christie administration`s record. Already the Christie administration has
fired its biggest Sandy contractor which had been responsible for
distributing $780 million in Sandy aid.

And tonight, we have late breaking news from WNYC -- the
administration has parted ways with a second Sandy contractor, one that had
been supervising the rebuilding of Sandy survivors` homes. More on that

But, first, the dramatic scene in New Jersey last night when Sandy
victims came face to face with the officials deciding their fate.


GOV. CHRIS CHRISTIE (R), NEW JERSEY: My pledge to you tonight is I
will govern with the spirit of Sandy.

HAYES (voice-over): The George Washington Bridge lane closures didn`t
just mean headaches for commuters and fallout for Chris Christie and
members of his administration. It also has brought unwanted national
attention to the officials tied to the other big scandal in New Jersey, the
one hiding in plain sight, the distribution of billions of dollars in
federal hurricane Sandy recovery money.

Those officials made a rare public appearance last night in Newark at
a hearing on how to distribute the next round of Sandy aid. Nearly $1.5

want to hear what everyone has to say.

HAYES: That`s Richard Constable, the head of the New Jersey
Department of Community Affairs. He`s the guy overseeing the distribution
of a lot of that Sandy money, and he`s one of the Christie administration
officials that Hoboken Mayor Dawn Zimmer says pushed her personally to
expedite a favored development in exchange for Sandy funds for her city.

Constable denies this. But whether or not Dawn Zimmer`s allegations
are true, there have been plenty of troubling revelations about the Sandy
money that are not contested.

Here`s what we know. In December, New Jersey quietly fired the
contractor that was supposed to distribute $780 million in Sandy money and
paid that contractor a $10.5 million settlement.

The state won`t clearly explain the firing. We know that African-
Americans and Latinos were far more likely than white residents to be
rejected for Sandy aid. We know that four in five people who appealed
their rejection won those appeals, suggesting that many were improperly
rejected the first time around.

After ALL IN reported on that finding last week, the state re-opened
the appeals process.

We know that last year, Chris Christie vetoed a bill that would have
required oversight of how Sandy aid was being distributed, and we know that
Christie is facing a federal investigation over whether he improperly used
Sandy money to pay for the tourism ads that featured the governor and his
family while Christie was running for re-election.

CHRISTIE: Because we`re stronger than the storm.

UNIDENTIFIED GIRL: You bet we are.

HAYES: The state now wants to spend another $5 million on tourism
ads. There were developers singing the praises of the Christie
administration at the hearing last night, but residents and advocates told
a very different story.

DONNA JACKSON, NEWARK, NJ: The hell that people have had to go
through in this state with your handling of this storm, I don`t see how you
sit there. I don`t.

DEB ELLIS: Do not spend $5 million on a tourism marketing campaign.

CASSANDRA DOCK, NEWARK, NJ: I`m not happy with being all over the
news about what`s going on in New Jersey. Knock it off.

HAYES: Not everybody`s having trouble getting Sandy money, $4.8
million went to fund a luxury high-rise in New Brunswick, a town that
sustained little damage in the storm. Developer counts Shaquille O`Neal
among its investors. Shaq endorsed Christie for reelection last year.

SHAQUILLE O`NEAL, NBA HALL OF FAMER: I don`t endorse many politician,
but Chris Christie is different.

HAYES: Another $6 million to a senior center in Belleville, another
town that was not hit hard by the storm. That isn`t sitting well with
Dennis Ferrell who spoke to ALL IN after the hearing last night.

DENNIS FARRELL: What I`ve been reading about in the papers and
things, when they`re talking about moneys from the Superstorm Sandy being
spent by the governor over in Belleville. I`m not talking about somebody
politically. I voted for the man twice, right? But to hear about $6
million spent in Belleville. Is this craziness?

HAYES: Well, it`s something. Just what it is remains to be seen.


HAYES: By the way, for their part the Christie administration denies
wrongdoing in its distribution of Sandy aid, including spending on TV ads
and both the Belleville and New Brunswick project.

We also got a statement from the department -- well, let me introduce,
joining me, Heather Haddon of the "Wall Street Journal", and Staci Berger,
president and CEO of the Housing and Community Development Network of New

I should note that the DCA has given us a statement about the firing,
the news that broke as we went to air.

A second contractor in as many months, OK, so they got rid of their
biggest one. They`ve now gotten rid of this one. They`re saying it`s not
a firing. A source in the administration telling us it`s, quote, not
performance related.

Heather, you`ve been tracking this very closely. It strikes me as
anomalous and strange that you let go of two contractors overseeing your
big project in two months.

publicly. These came out after news accounts and reporting about it, but
they did not make any public statements beforehand, and that`s something
lawmakers are really upset about. Why aren`t they being told about these
firings beforehand?

I mean, there`s millions and millions of dollars at stake. The
programs that are really pivotal right now, these grants are starting to be
allocated, people are rebuilding their homes. How are they replacing these
contractors? They have a lot of questions to answer.

HAYES: OK, you`ve been looking, Staci, at this closely. OK? Now,
I`ve covered rebuilding stuff. I`ve covered recovery hearings where
there`s rebuilding money being -- people aren`t happy. OK? People are
never happy. They`re never happy in any disaster.

Convince me this isn`t just run-of-the-mill, bellyaching that comes
with the fallout of a disaster which makes people unhappy?

think people are looking for a fair, transparent and equitable distribution
of their resources available to them under this program. And they just
haven`t gotten that. They don`t know where they are on the waiting list,
they don`t know why they were rejected, they don`t know how to repeal. In
some cases, they didn`t get information in language that they were entitled

So, it seems the way the whole program was set up and run has not been
done in a way that helps people. That is what I think really makes them
angry. And I think they have a right to be angry and they have a right to
be heard.

I`ve got a call yesterday from somebody who`s 79, lives alone, had
their application lost four times by HGI and doesn`t know what she`s
supposed to do.

HAYES: OK, HGI, we should just reiterate, right, they were the
central contractor overseeing a huge bulk of this money, right? They were
the ones quietly fired. It took a while to get an explanation out of DCA,
the Christie administration ultimately saying it turned out we didn`t need
this contractor. Another contractor let go. It turned out we didn`t need
them either.

BERGER: You need somebody. Somebody has to run the program and do it

Yes, people are always going to want the money to come more quickly
and want to get their check and make sure they can rebuild because their
lives have been destroyed and turned upside-down. And their government
owes them an explanation about why they`re not getting the information that
they deserve, not just the resources but the information about the right
way to appeal, the right way to apply.

HAYES: So I`ve been reporting on this and talking to sources at a
bunch of different places. One of the things I don`t get, Heather, and
you`ve been reporting, too, it appears from the reporting I`ve done that
there`s indications these contractors weren`t doing good jobs.
Particularly HGI, there`s a lot of complaints.

So, if you`re the Christie administration, why not just say, hey,
look, I`m Chris Christie, I hold people accountable. And when they screw
up and they screw the residents of New Jersey, I come out and I fire them
the way I fire a teacher if hay didn`t do a good job in the classroom?

HADDON: The state, itself, acknowledged that HGI wasn`t doing a good
job. They say there was problems and that`s why they took over and are
playing a more active role in handling this contract.

But again, why didn`t they announce it? Now, Richard Constable, the
commissioner, will be testifying later this month in Trenton. Lawmakers
have been calling for a lot of answers to these questions, so I expect that
they will -- he will be asked.

HAYES: He`ll be prepping for that testimony.

You, Heather, have another story about the Sandy aid distribution
being questioned. Of the 36 projects, competitor process, for $180 million
in federal funds to develop, rehabilitate rental housing, 16 were situated
in 65 communities designated by the state as hardest hit by Sandy and 20
weren`t -- meaning the majority of places that got this money weren`t the
hardest hit areas by Sandy.

HADDON: Right. So they were all in the counties that the state
designated as being the hardest hit. The question is, the state had said
they wanted to situate them in the communities also that were hardest hit.
And when I talked to officials, they said they didn`t get enough
applications in those communities and so hopefully moving forward they

BERGER: But they changed the rules in the second plan that they just
released last week. They actually said we`re not sure we need to do that
the way we did it --

HAYES: Well, let`s also be clear here, right? We have a very serious
allegation by Mayor Dawn Zimmer about explicit quid pro quo based on Sandy
money, right? In which Sandy money is involved. That allegation is
strongly denied.

We also know this, the New Brunswick development we talked about in
the package, they did get Sandy money, that was a luxury high-rise, that
was outside of area hard hit, but its firm that it hired as bond counsel
was firm of none other than Port Authority chairman David Samson. David
Samson`s law firm representing the developer in the bond deal.

People have to look at that. They have to look at Belleville and New
Brunswick. The folks in the room that our producers were shooting last
night have to look at this and say, this is a rigged game.

BERGER: The people who were in Galloway on Tuesday night, there were
200 people there, not all of them got the opportunity to be heard. I think
there are lots and lots of residents who very rightly saying, what is going
on here? Why is this process seemingly not fair? And where is our federal
government making sure the process is going the way it`s supposed to be?

HAYES: Where is the federal government is the big question.
Residents in New Jersey, just go out and hire Wolff & Samson to represent
you in these proceedings. I`m sure you`re going to have a fair shake.

Heather Haddon at the "Wall Street Journal" and Staci Berger of the
Housing Community Development Network of New Jersey -- thank you both.

BERGER: Thank you.

HAYES: Coming up, this guy again.


SEN. TED CRUZ (R), TEXAS: Do you like green eggs and ham? I do not
like them, Sam I am.


HAYES: Turns out Ted Cruz doesn`t like the Senate minority leader
much, either. Extraordinary behind the scenes revelation of what exactly
happened in the Senate yesterday. Seriously amazing intrigue in the Senate

Stick around.


HAYES: Coming up, the 1 percent is sick of your whining.


UNIDENTIFIED MALE: The money is all over the place, and the guy
that`s making, oh my god, he`s making $35,000 a year, why don`t you try
that out in India?

UNIDENTIFIED MALE: The world and this country should not talk about
envy of the 1 percent. They should talk about emulating the 1 percent.


HAYES: We`ll talk with a member of the 1 percent about that attitude,


HAYES: Something happened in the Senate yesterday that basically
never happens. Something that made even a former Harry Reid staffer shake
his head and say, "I thought I`d seen them all."

Because if you`ve been following the news out of Washington this week,
you may be thinking finally Tea Party control of the GOP is over. But that
is not at all the whole story.

Yes, both the House and Senate passed a clean debt ceiling increase
this week. But the amount of "Game of Thrones" level intrigue and behind
the scenes arm-twisting to make that happens shows how powerful the Tea
Party wing is.

Take the vote in the Senate where Mitch McConnell and Harry Reid were
hoping to bypass the filibuster allowing Democrats to raise the debt
ceiling on a party line vote with a simple majority which would mean no
Republicans would have to vote for it and every GOP senator would keep his
or her hands clean.

But Ted Cruz had other plans for Senate Republicans. He announced he
would filibuster if Reid tried to pass the debt ceiling increase with a
simple majority and meant the bill would need 60 votes and five Republicans
would have to walk the plank, voting for a debt ceiling increase they have
said would be catastrophic for the country and here`s where things get

Usually, when the Senate votes, there`s a live roll call as the votes
come in, telling you each senator`s vote. Here`s the roll call from last
time the Senate raised the debt ceiling.

Take a listen.


UNIDENTIFIED MALE: Mrs. Feinstein. Mrs. Feinstein, aye.

Mr. Cornyn. Mr. Cornyn, no.

Ms. Murkowski. Ms. Murkowski, aye.

Mr. Shelby. Mr. Shelby, no.


HAYES: OK, pretty simple, right? You say the name of the senator,
get your vote, you announce it.

Well, that live roll call, that didn`t happen yesterday. It turns out
someone asked the Senate clerk, do not read the names and votes.

We spoke to Harry Reid`s office to get to the bottom of this. He told
us his staff member, Adam Jentleson, told us, "At Senate Republicans`
request, the clerk did not call the names during the vote to make it easier
for Republican leaders to convince their members to switch their votes."

OK. So let`s picture this scene for a second. Republicans do not
want to vote for this increase, but Mitch McConnell now needs five votes to
avoid a default. It becomes clear as soon as the vote starts, he does not
have those votes. So, now he needs to twist some arms and convince some of
his colleagues to change their votes.

Republicans sympathetic to McConnell know it will be much easier to
get those colleagues to switch their votes if the vote changes are not
announced. And so, they asked the Senate clerk, hey, on this one, just go
ahead and don`t read the roll call.

And so, for the next 45 minutes, McConnell, McCain and other members
of leadership go on the floor and lobby for votes. Mitch McConnell,
himself, votes for an increase. His number two, Texas Senator John Cornyn
facing a right-wing primary changes his vote from a no to a yes.

In total, six Republicans changed their votes to yes, 12 Republicans
in total voted to break the filibuster because at the end of the day misery
does love a little company.

Now, Mitch McConnell is in one of the tough races in the country,
facing a Tea Party challenger to his right and Alison Lundergan Grimes to
his left. Yesterday he voted for a national default.

This is what he got for his efforts. The Senate Conservatives Fund
who endorsed his Tea Party challenger, tweeted out, "Mitch McConnell just
voted with the Democrats to advance yet another debt limit increase.
Kentucky deserves better." Matt Bevin, his Tea Party challenger,
immediately tweeted, "McConnell caves to the left, invokes to break
filibuster on the debt ceiling."

Next, came a blank check to the president, #mitch`sblankcheck.

So, this is score from this yesterday. The country won. No default.
Ted Cruz 1, Mitch McConnell zero.

Joining me, "Washington Post" national political reporter, Robert

I thought this scene yesterday was incredible, Robert. How much do
you hate Ted Cruz if you are Mitch McConnell right now?

ROBERT COSTA, THE WASHINGTON POST: I think Senator Mitch McConnell is
frustrated with Senator Cruz because the Republicans were in a position
where they just needed to the Democrats to extend the debt limit.

But as you pointed out, it became this political theater on the Senate
floor. I think McConnell`s frustration really is with Cruz not looking
toward a Senate majority. He thinks Cruz is pushing purely for concession
from Democrats, isn`t thinking fully about the 2014 field, and the
expectations to try to get the Senate majority for Republicans.

HAYES: So, here`s the thing I did find interesting. In the end,
McConnell walked the plank, himself, which makes me think actually he`s
pretty confident about that Tea Party challenger, he`s going to beat the
Tea Party challenger. Polling would seem to indicate it`s not a threat as
of yet.

Is that your read on the vote?

COSTA: That`s right. I think Matt Bevin is a Tea Party challenger,
he is a threat. But he`s not a major threat to Mitch McConnell. I think
McConnell is much more worried about Alison Grimes in the general, should
he win the primary.

Here`s what McConnell is really worried about though, someone like
Bevin in the current Kentucky political culture on the right could start to
rise, could start to ascend quickly if the Senate conservatives fund picks
up speed, if he gets small dollar donors coming his way. I think
McConnell`s safe for now but nervous about episodes like this.

HAYES: Yes, and this doesn`t help him at all. Meanwhile, this is
just the Senate. On the House, this statistic blew my mind. Robert, you
did fantastic reporting on the House version of this vote.

The 28 members of the Republican majority who voted if the bill on the
side to raise the debt ceiling was the lowest percentage of majority on
passage since the House began publishing electronic data on votes in 1991.
It has to rank by the lowest ever for a body to find by strict majority
rule. Amazing.

COSTA: It really is, Chris. I sat down with Devin Nunez, a Boehner
ally, congressman from California, a Republican. He said it wasn`t exactly
a profile on courage. He said the scene in the Republican cloakroom in the
House, likely in the Senate, was a lot of Republicans privately were hoping
a clean debt limit passed but were publicly opposed to it. That`s the
state right now on Capitol Hill.

Republicans know they have to govern. At the same time because of the
pressures from the right, political climate, they`re not will to go that
far in either chamber.

HAYES: Yes, I was thinking about the old kids game, finger to the
nose, not me. It`s almost that literally. Yesterday, that was the scene
on the Senate floor. Everyone is sitting around being like, oh, man, who`s
going to have to eat this one?

And, finally, it`s basically McConnell and leadership allies who suck
it up and do it.

COSTA: That`s right. I think there are two key scenes here this
week. You saw Boehner at the Capitol Hill club right before the vote
saying we`re going to do it clean, enough of the political games. And he
surprised a lot of House Republicans. They were shocked when they heard
this message so bluntly and abruptly from Boehner and McConnell just moving
swiftly toward a clean -- from what McConnell and John Cornyn to vote for a
clean, it sends a message, just like Boehner`s maneuver did in the House.

HAYES: My other favorite story out of the high jinks of this week, a
great John Stanton piece on "BuzzFeed", about an anonymous e-mail that was
promising political retribution for those who vote yes for a debt limit
increase, in the House, sent to the closely guarded personal e-mail
addresses of House Republican members.

"It`s got to be another member. Probably one of the crazy ones", said
a Republican who had seen the e-mail.

It seems to me like the basic norms of collegiality are breaking down
over there.

COSTA: They really are. I think when you hear about this e-mail,
it`s one of many episodes right now in congressional politics where there`s
so much pressure from the outside, especially from conservative groups that
Republicans are really almost hesitant to move forward on anything. On
divided government, on the question of divided government, they`re really
not willing to concede they can`t get everything they want. And that`s
really where the problem right now is in the GOP. That`s what McConnell
and Boehner are grappling with and often with difficulty.

HAYES: It`s going to be really interesting to see what happens the
rest of the year, although my sense is they`re happy to not do anything the
rest of the year and go out on the campaign trail.

Robert Costa of "The Washington Post" -- thank you so much.

COSTA: Thank you.

HAYES: On his very last night on the "Tonight Show" last week, Jay
Leno gave a huge shout-out to a specific group.


JAY LENO, TV HOST: I`m also proud to say this is a union show, and I
have never worked --


I have never worked with a more professional group of people my life.
They get paid good money and they do a good job.


HAYES: Up next, meet the Republican senator who is trying to stop his
own constituents from joining a union even though the company they work for
is apparently fine with it.


HAYES: One of the most high stake important elections of 2014 is
happening right thousand. It`s a three-day election that ends tomorrow
night. Not done at polling places.

The election is taking place at this Volkswagen plant in Chattanooga,
Tennessee, where approximately 1,500 workers are trying to decide if they
want to be part of the United Autoworkers Union, making it the first
factory owned entirely by a foreign car maker to be organized by the United
Auto Workers.

Now, here`s the thing -- the workers inside the plant appear to want
the join the union and executive, management inside the plant appear to not
want to interfere saying, quote, "Volkswagen is committed to neutrality and
calls upon all third parties to honor the principle of neutrality."

Volkswagen operates a union workforce in their home of Germany. They
also operate something called a Works Council, basically a committee of
white and blue collar workers who work with management on policies and
solving problems.

Volkswagen seems interested in a German style works council at the
Chattanooga plant, saying, "Our works councils are key to our success and

So, you would think, great, workers are going to choose on their own,
corporation`s going to stay out of it which basically never happens in
union election and it`s a free country, right? I mean, we`ve got free
market capitalism where the big bad government doesn`t tell companies what
to do? This would be a matter that would solely be between management and
the workers.

But no, no, big government has decided that it doesn`t want to leave
the decision to the workers or management of this private company.


UNIDENTIFIED MALE: Senator Bob Corker spoke out against the United
Auto Workers on Tuesday. Take a look.

SEN. BOB CORKER (R), TENNESSEE: We`re just concerned about the impact
an outside entity. Look at Detroit if you want a comparison. Look at the
impact that they could have on our community.


HAYES: Yes, that`s Republican Senator Bob Corker of Tennessee who
wants to tell executives at Volkswagen how to run their company, conduct
themselves and manage an election. He wants to tell the workers of his
state to vote against the union. And along with Tennessee state lawmakers
-- get this -- is threatening to withhold tax incentives for further
expansion of the three-year-old assembly plant if Chattanooga workers vote
this week to join the UAW.

In other words, they`re going to use the power of the state to coerce
workers` votes, OK? And Republican Senator Bob Corker would rather
Chattanoogans lose their jobs than have union jobs.

So, conservatives, here`s your test. Do you care about the freedom of
private businesses or do you just hate unions? Because the lines on this
one are crystal clear. If you care about businesses having the freedom to
do whatever they want, then you let Volkswagen do what they want to do and
you get the heck out of the way.

If you`re just animated by hating unions, then you do what Bob Corker
does. So which side are you on?

Joining me now, my colleague John Nichols, Washington correspondent
for "The Nation" magazine, author of "Uprising: How Wisconsin Renewed the
Politics of Protest, from Madison to Wall Street."

OK. What is going on here in the -- the Corker Volkswagen thing is
just nuts, right? Corker says he`s going to stay out of it, it would be
inappropriate. Then he comes forward to basically be like, they`re going
to take away your second assembly. You`re not going to get any expansions
and any more jobs if you guys vote for the union.

suggesting that the plant may be in trouble if you don`t back the union.

And this is bizarre because, of course, Corker is a guy who helped to
bring this plant in. And he`s always been very encouraging of it. And he
has made statements in the past, as in these times revealed, there`s videos
of him saying good things about the role that unions have played.

HAYES: Right.

NICHOLS: But in this circumstance, he has just gone to a point where
I have never seen a politician go. He`s literally -- he literally said,
I`m staying out, I don`t want to interfere, and then the next day was
holding a press conference interfering.

HAYES: With other -- and we should say it`s other Republicans in the
state, other prominent Republicans.

NICHOLS: Who have gone further than he.

HAYES: Even further than he, basically getting together -- what I
love is, they`re like, you know all that corporate welfare that we threw at
you? The corporate welfare we threw at you to build your non-unionized
plant, that is contingent on the plant being non-union.

Then he says -- he threatens they`re going to close the factory.
Volkswagen has to come out with a statement saying, no, that`s not true.
And then this is him yesterday. "I have had conversations today and based
on those am assured that should workers vote against the UAW, if they vote
against, Volkswagen will announce in the coming weeks it will manufacture
its new midsized SUV here in Chattanooga."

NICHOLS: This is where it gets incredible, Chris, because the guy who
runs the plant for Volkswagen came out and said that`s not the case, it`s
absolutely not the case.

And then we know that the Volkswagen execs in Germany, by all
accounts, have very encouraging of the neutrality stance, actually do see
this as part of a global strategy and have, in fact, benefited from their
involvement with work councils before.

So they have -- I don`t know who he`s talking to. You know, it`s not
like he got on a phone to Germany and found somebody there. And the guy
who`s running the plant on the ground here says no.

HAYES: You know what? What`s fascinating about this, too, is that it
is so the norm in this country that union elections, they`re such a thumb
on the scale, right, that having a neutral election just freaks people out.
Like, what, they`re just going to go in and decide? There`s not going to
be a huge campaign against it? It`s like the Republicans in the state need
to fill the vacuum that management is supposed to play.

NICHOLS: And there`s something more here, too. I think we have to be
honest about this.

Corker actually has been speaking out against the union for quite a
while now, going back into last year. He made a statement a while back
that was incredibly revealing. He said, if union gets in here, then it`s
going to be BMW, and Nissan, and all these other plants.

And what you start to realize is that some of these folks, some of
these Southern politicians, have for so long done their economic
development based on just their sell was no union, that I think they`re
really terrified that they might have to go out and try and attract
business based on their strengths.

HAYES: Look at this map of foreign automakers where they have their
plants, majority of which are three states, Alabama, Tennessee,
Mississippi, Kentucky, South Carolina, and West Virginia. There has been
this huge move. Right? The South brought a lot -- first they got
textiles, then it went to auto and they said, hey, you can come and have
union-free labor.

That`s been the selling point of Southern politicians trying to lure
big employers down in the South for...

NICHOLS: Since the 1940s.

HAYES: Since the 1940s. And the fear is that this breaks some kind
of firewall and it spreads throughout the South.


It is because of something that the United Auto Workers have done.
They have shown a flexibility here that I don`t know that some of those
politicians ever thought they would. The United Auto Workers have said,
look, we want to organize this plant, of course, and we want to bargain on
wages. But we`re willing to give up a lot of the say as regards work rules,
structure to this work council which will non-union and union people in it.

And I think this is the subtlety of it. I think there are a lot of
folks saying, that might actually sell in the South.

HAYES: Interesting. John Nichols of "The Nation," thanks so much for
coming by.

NICHOLS: Pleasure.

HAYES: All right, the billionaire who says 99 percenters should stop
complaining because they don`t live in China or India, I think, something,
coming up.


HAYES: Tomorrow night, we have a special ALL IN exclusive you won`t
see anywhere else on television. I`m excited to bring it to you.

We will be taking a look inside how America and American schools are
collectively dealing with events like Newtown. We`re going to give you a
small look right now into what we as a society have evidently decided is
the best course of action to address school shootings. And I have to tell
you, the footage is disturbing.


UNIDENTIFIED MALE: My boy is in there. I`m not going to relax.


HAYES: We will bring you some shocking new footage and that entire
story tomorrow. You`re going to want to check it out.



BUD KONHEIM, CEO, NICOLE MILLER: We have got a country that the
poverty level is wealth in 99 percent of the rest of the world. And so
we`re talking about how, woe is me, woe is us, woe is this.


UNIDENTIFIED MALE: Our 9 percent are the 1 percent in the rest of the

KONHEIM: The figure is even bigger than that. So, here we are
incredibly wealthy.

UNIDENTIFIED MALE: Because of capitalism.


KONHEIM: Exactly. And here it is, money is all over the place. And
the guy that is making, oh, my God, he`s making $35,000 a year. Why don`t
you try that out in India or some countries we can`t even name, something
like a China, any place. The guy is wealthy.


HAYES: You hear that, America? You hear that, 46.5 million people
who are living in poverty in America? Do you hear that, 47 million people
whose food stamps are cut?

You hear that, everyone who`s being turned away from food pantries
that are running out of food, as documented by our own Ned Resnikoff? Do
you hear that kids at home on a snow day who aren`t eating today because
you only get your regular lunches from school and a snow day means you
don`t get lunch?

Here`s what you need to do. Just go to India. Why all the whining
all the time, whining, whining, whining?

All right. The views you just heard at the top of the segment were
those of Bud Konheim, the bow-tied, befleeced and bespectacled co-founder
and CEO of Nicole Miller.

Here`s the thing. It seems like every day there`s some headline of
some rich guy saying something that reveals a bafflingly incorrect and
blinker view of the world and of the fundamental problem of inequality.

It`s not just Bob Konheim. Remember, less than a week ago, we were
treated to the oddly detailed opining of AOL CEO Tim Armstrong, as he
explained to his employees why he was making changes to their retirement
plan, saying -- quote -- "We had two AOLers that had distressed babies that
were born that we paid a million dollars each to make sure those babies
were OK in general. So, when we had the final decision about what benefits
to cut because of the increased health care cost, I made the decision to
basically change the 401(k) plan."

Armstrong later apologized and reversed his proposed pension changes.
But those comments seem to display, among other things, a bizarre blind
spot in his empathetic faculties, to have pointed to some employees`
desperately sick children on a company phone call so that everyone at the
watercooler the next day would wonder, who`s the one that messed up our
401(k) plans?

And sandwiched in between these two sterling instances of humanity, we
have billionaire real estate mogul Sam Zell right out of 1 percent central


percent" are being pummeled because it`s politically convenient to do so.

The problem is the world and this country should not talk about envy
of the 1 percent. They should talk about emulating the 1 percent. The 1
percent work harder. The 1 percent are much bigger factor in all forms of
our society.


HAYES: Let me tell you something about Sam Zell. He bought The
Tribune Company in 2008 for $8.2 billion, an extremely highly leveraged
deal. It was widely regarded. I reported on it at the time as an
unsustainable debt structure that would implode in on itself.

Well, guess what? Less than a year, the company went bankrupt,
listing $7.6 billion in assets and $13 billion in debt. More than 4,200
people lost their jobs. But despite the company`s troubles, executives
received tens of millions of dollars in bonuses.

Sam Zell is like the action movie hero who throws the lighter behind
him not bothering to look back at the explosion. That`s Sam Zell. Try
doing what Sam Zell did if you`re not in the 1 percent.

What the heck is wrong with these people?

Joining me now, venture capitalist and technology entrepreneur Nick
Hanauer, a member of the 1 percent who is going to explain what the heck
the deal is.

What is your response when you see -- these are not isolated
incidents. This has actually been a recurring theme, I would say..


HAYES: No, particularly I think since the crash and Obama`s election,
there`s a certain subsection -- obviously, I don`t want to paint with a
broad brush -- there`s tons of people who make a lot of money who have
fantastic politics. There`s a certain subsection who are convinced that
they are under siege and are just not going to take it anymore.

HANAUER: Yes, so it`s a super interesting thing.

And I think, as you may know, Chris, I have been out talking about
economic inequality for a while. And what you learn quickly is how
emotional this subject is.


HANAUER: And that`s because, you know, ultimately, this is not about
money. It`s about status, privileges and power.

And ,you know, the current sort of trickle-down economic orthodoxy is
amazingly confirmatory of the power and status and privileges people like
Sam Zell and others, right, the idea that markets are perfectly efficient,
that rich businesspeople are job creators, and all this is basically
designed to -- you know, to confer power and status on these folks.

And so when you begin to challenge that status by calling into
question the idea that -- for instance, that economic inequality is a good
thing, which is what they would hold, again, you`re not challenging their
pocketbooks. You`re challenging their manhood.

And you have to remember that for a subset -- you know, look, this is
my world, I know a lot of these folks. And for a subset of these people,
the most important thing in the world is status, privilege and power. They
sacrificed everything for it. These are the people who did not go to their
kids` soccer games, right?

HAYES: Right. No, that`s a great -- it`s a very good point.


So these are a lot of these folks -- I mean, it`s, you know, these are
borderline sociopathic people and they don`t care about other people.


HAYES: I don`t want to call people -- I don`t want to diagnose anyone
from afar. Let me just stipulate.

HANAUER: Yes. OK. Good for you.


HANAUER: But, anyway, I think -- but you just have to recognize that
people, look, not everybody in the top 1 percent is a sociopath. I don`t
mean to say that.

But power and status and privileges are enormously important to people
in general, and they`re doubly important to people who have worked
relentlessly for them their whole lives.


HAYES: The point you`re making there about the emotionality I think
is so key, because there is this story that you tell yourself, you know...


HAYES: ... in the process of success in which you have got this sort
of positive feedback loop.

HANAUER: Exactly.

HAYES: And a lot of these people -- I`m sure Sam Zell has had many
dark nights of the soul and been through troubled times when it felt like
the whole thing was going to fall apart.

And there`s this kind of feeling of, don`t you understand how hard it
is to get where I got?

HANAUER: Yes. But, also, Chris, look, everybody has to be the hero
of their own story.


HANAUER: That`s just true of people.

And so if you accept, for instance, the efficient market hypothesis,
the idea that markets are perfectly efficient, then the rich deserve to be
rich and the poor deserve to be poor. Look, if you believe that, when you
roll up in your $150,000 Mercedes to some poor family begging for food, you
don`t have a moral crisis.

You roll past thinking to yourself, well, all is good in the world.
But that`s because you`re a job creator. Right? You are, as Sam Zell
said, as all these guys say, you are in the part of -- you are part of the
population that matters and other people don`t. And, therefore, you know,
everything is right with the world.

But, of course, for instance, if you`re not a job creator, if it`s the
middle class that are the true job creators in a capitalistic economy,
then, you know, you may not deserve all the status, power and privileges
you have.

HAYES: Right. That`s right.

It is this question of dessert that once you start getting at that,
you get somewhere very deep very quickly.

And, Nick Hanauer, I got to say, you have been doing a great job
speaking about this stuff. So, thanks for coming on tonight.

HANAUER: Thank you.

HAYES: Nick Hanauer, venture capitalist, thanks a lot.

HANAUER: Thank you.

HAYES: All right.

Much more on the pathologies of the 1 percent, a problem I find
endlessly fascinating, when we come back.



ZELL: The stories are rampant of people who started with a candy
store and took it from there. There are lots of people who have the
ambition and have the motivation and have succeeded. Lots of people have
come from nowhere and become part of the 1 percent.


HAYES: Joining me now, Katrina Vanden Heuvel, editor and publisher of
"The Nation" magazine. And Sam Seder hosts the online podcast Majority
Report, co-host for the "Ring of Fire" radio show.

I find this topic fascinating, because the way that this particular
psychology emanates in our policies and politics is massively destructive
for the country. And so I want to kind of understand it. And I think part
of it does have to do with what Nick Hanauer was saying about this sense
that you have earned it. And if someone starts to question that, they`re
taking away something profound, right, about how you think of yourself.

also the culture.

Think of 10, 15 years ago, before we have had this smart, populist
moment come upon us, the masters of the universe. We did have a culture in
which wealth and status and richness was prized. I think we`re at a very
different tectonic shift. And it`s what Paul Krugman called the paranoia
of the plutocrats.

They feel it coming. And it`s not so much the populism that`s
spiraling out of control. It`s inequality and it`s a sense on the part of
millions of people that the system is unfair, that it`s rigged, and these
people -- you know, no one`s saying equal income for all.


HAYES: Yes, that was Chris Christie`s line the other day, that, like,
everyone`s going to have an equal salary.

VANDEN HEUVEL: The founding fathers would have rolled over in their
graves, because they were for a system where you didn`t have extraordinary
concentrated wealth which was going to destroy the experiment of self-

This is a rigged system. People feel it in their gut. There is a
reason that a majority of Americans support an increase in the minimum
wage. And it`s transpartisan.

HAYES: Right.

VANDEN HEUVEL: And these guys -- most of them are guys -- feel it.

HAYES: Yes. Yes. so you think that`s -- I think that`s a really
good point, that they actually -- part of this is a reaction to the fact
that the facts are, inequality is growing, the facts are the public is


HAYES: ... aware of that. And so the reaction emotionally is this
kind of defensiveness.

SAM SEDER, RADIO TALK SHOW HOST: And I also thinks that it stems from
the fact they have sort of untethered themselves. The wealthy now, and you
have written about this, the wealthy untethered themselves from the society
in which they live in.

They`re living now in a psychographic, as opposed to actually like a
geographic location.

HAYES: Wait. Explain what that means.


SEDER: Well, I think they`re traveling in circles of other wealthy
people. They`re not -- I heard a story once about Bob Rubin riding in a
town car going somewhere in New York City calling the assistant to the
deputy mayor complaining about traffic, but not knowing where he was in the


VANDEN HEUVEL: And, by the way, this is going...


SEDER: And so that I think is what the story is. They`re untethered
from society. They don`t want to give back and thus they cannot say that
they have gotten benefit from society. And that`s...


VANDEN HEUVEL: But we need to tether them back.

And I also want to speak to Nick Hanauer for a moment. Nick Hanauer,
as you spoke of, was in Washington the other day with a group called
Patriotic Millionaires and Smart Capitalists. There are people guys like
Bill -- PIMCO. I wrote about...


HAYES: Yes, Bill Gross of PIMCO...

VANDEN HEUVEL: ... it in a column called "Guilt of the Gilded."

Bill Gross -- I`m sorry -- of PIMCO, the global investment manager,
says to his colleagues, you better just welcome what you have and we better
start taxing wealth...

HAYES: Right.

VANDEN HEUVEL: ... higher than work. And so there are people
speaking out.

And my view in our society is, when the elites divide, I believe in
social movements. And we need a social movement for shared prosperity.
But when the elites divide and you have a countervailing force to the
ugliness of the Sam Zells, the Wilbur Rosses, you could see a more
enlightened politics.

Franklin Delano Roosevelt was not exactly from the...


VANDEN HEUVEL: ... of America.

HAYES: Not at all. No, he wasn`t.

But a huge part of that had to do -- right. A huge part of that had
to do with sort of grassroot movements at the time.


HAYES: But I think there is something about -- there is something
about this kind of untethering that`s happening, right, where the entire
structure of American society is getting so attenuated that you can live in
finer and finer little slices of it.

And that`s what was striking to me about the Tim Armstrong comment,
was, like, he wasn`t trying to be a jerk. He really wasn`t...


VANDEN HEUVEL: It`s cluelessness.

HAYES: He was trying to say, hey, look -- I think he was actually
trying to say, hey, look, we`re good people. Of course we`re going to pay
for this, because that`s what we do for our employees.

But it`s like not understanding what that would mean.


SEDER: And I think what`s really problematic is that you can find
cranks like that really in any walk of life. You just hear about them more
when they`re extremely wealthy or they`re running a company.

But the bottom line is that we need -- the real problem is when they
begin to determine our politics.


SEDER: Because they move from a plutonomy to a plutocracy.

And this is all stuff that you have obviously written about quite a
bit. But we see it even in the context -- we were talking about this
earlier -- in the context of New York politics, when you have a Democratic
governor who is, you know, talking about -- you know, has a problem with
taxing millionaires at a time where, you know, we clearly have...

HAYES: Can afford it.


HAYES: Yes. They can afford it.

VANDEN HEUVEL: But the good news is there has been a resurgence of
the Democratic wing of the Democratic Party, spurred on by fast food
workers striking, spurred on by social movements.

And I think, you know, we talked earlier about the plutocrats. They
feel it in their bones. And they know they have never had the moment of
accountability, because President Obama, what`s he done?

HAYES: They have never had the moment of accountability.

VANDEN HEUVEL: Moment of accountability.

HAYES: Here`s the craziest thing. The craziest thing is that if you
are -- it never gets -- it never stop shocking me, but if you`re running
for office, you talk to those folks...

VANDEN HEUVEL: Right, but...

HAYES: ... of all political stripes all the time. It`s all you do is
call up rich people and talk to them.

VANDEN HEUVEL: But here`s the thing. We need public financing.

People`s eyes may glaze over, but until we have public financing, we
are not going to be able to unravel the rigged system, because the rules
are built to -- for the wealthiest...


VANDEN HEUVEL: ... and not the wealthiest -- I mean, there are so
many wealthy people in this country who vote against their self-interests,
work against their self-interests, because they want to have economic
justice and social justice. And all power to them.

But most of them writing the rules want a country that is not of, by,
for the people, but of the corporations.

HAYES: And I`m a firm believer that the most insidious aspect of the
current financing system is social, as much as structural, which is, it
literally gets in the brains of people running for office that all they do
all day is talk to people that have lots of money. It`s poison.

VANDEN HEUVEL: Sixty percent of their time spent fund-raising.


Katrina Vanden Heuvel and Sam Seder, always a pleasure. Thank you.


HAYES: That`s ALL IN for this evening.


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