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All In With Chris Hayes, Transcript, 8/2/2016

Guests: Blake Farenthold, Rick Wilson, Betsy Woodruff, Sam Seder, Josh Barro, David K. Johnson

Show: ALL IN with CHRIS HAYES Date: August 2, 2016 Guest: Blake Farenthold, Rick Wilson, Betsy Woodruff, Sam Seder, Josh  Barro, David K. Johnson (BEGIN VIDEOTAPE) CHRIS HAYES, MSNBC HOST (voice-over):  Tonight on ALL IN --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I think the Republican  nominee is unfit to serve as president. HAYES:  President Obama lambasts Republican support for Trump.

OBAMA:  There has to come a point at which you say, enough.

HAYES:  His question for GOP leadership.

OBAMA:  Why are you still endorsing him?

HAYES:  This as Trump openly hoped for the economy to go down the tubes  quickly.

DONALD TRUMP (R), PRESIDENTIAL NOMINEE:  The numbers are getting worse and  worse all the time.  If they get real bad, I hope it happens fast, so I  don`t have to -- they`ll all blame me.

HAYES:  Plus, Trump`s son on Trump`s daughter and sexual harassment.

ERIC TRUMP, SON OF DONALD TRUMP:  Ivanka is a strong woman, I don`t think  she would allow herself to be subjected to that.

HAYES:  And Trump`s latest pet peeve. D. TRUMP:  Don`t worry about that baby.  I love babies.  Actually, I was  only kidding.  You can get the baby out of here.

HAYES:  When ALL IN starts right now.

D. TRUMP:  I think she might believe me that I love having a baby crying  while I`m speaking.

(END VIDEOTAPE) HAYES:  Good evening from New York.  I`m Chris Hayes.

Tonight, it`s Trump against a Gold Star family.  Trump against Obama, Trump  against his own party.  Or just another day on the trail here in 98 days  from the 2016 election.

Trump`s days-long feud with the Khan family, the Muslim American parents of  an army captain killed while serving in Iraq is just the latest outrage to  bring condemnation from senior members of his party, including House  Speaker Paul Ryan, Senate Majority Leader Mitch McConnell and most  forcefully, Senator John McCain.

But just as with Trump`s proposed Muslim ban, his Star of David tweet, his  attacks on the ethnicity of Judge Gonzalo Curiel, and countless other  controversies, top Republicans have stopped short of withdrawing or even  tempering support for their party`s nominee.

At a press conference today with the prime minister of Singapore, President  Obama had a message for those Republican leaders.

(BEGIN VIDEO CLIP) OBAMA:  The question, I think, that they have to ask themselves is, if you  are repeatedly having to say, in very strong terms, that what he has said  is unacceptable, why are you still endorsing him?  What does this say about  your party, that this is your standard bearer?

There has to be a point at which you say, this is not somebody I can  support for president of the United States, even if he purports to be a  member of my party.  And, you know, the fact that that has not yet happened  makes some of these denunciations ring hollow.

(END VIDEO CLIP) HAYES:  Calling Donald Trump woefully unprepared and unfit for the  presidency, President Obama argued the stakes of this election go far  beyond partisan politics.

(BEGIN VIDEO CLIP) OBAMA:  This is different than just having policy disagreements.  I think I  was right and Mitt Romney and John McCain were wrong on certain policy  issues, but I never thought they couldn`t do the job.  And had they won, I  would have been disappointed, but I would have said to all Americans, they  are -- this is our president and I know they`re going to abide by certain  norms and rules and common sense, will observe basic decency, will have  enough knowledge about economic policy and foreign policy, and our  constitutional traditions and rule of law, that our government will work.

But that`s not the situation here.  And that`s not just my opinion.  That  is the opinion of many prominent Republicans.  There has to come a point at  which you say, enough.

(END VIDEO CLIP) HAYES:  Trump responded with a statement calling President Obama, quote, "a  failed leader who along with the Secretary of State Clinton created a  foreign policy that has destabilized the world and made it unsafe.  He`s  the one who is unfit to be president and Hillary Clinton is equally unfit." Trump`s attacks on the Khan family come at a critical juncture in this  campaign.  Recent polls showing Hillary Clinton with a sizeable bounce  after the Democratic convention.  The latest NBC News/Survey Monkey online  poll puts her eight points ahead of Trump, up from just one point lead a  week ago.

According to "The Hill", the Trump campaign e-mailed surrogates this week  calling for an urgent pivot away from the Khan controversy.  "Reuters"  reports the Trump backers asked Capitol Hill to put out statements showing  their support.  It appears no such support was forthcoming. And today, two of Trump`s surrogates distanced themselves from his comments  about the Khan family.

(BEGIN VIDEO CLIPS) GOV. CHRIS CHRISTIE (R), NEW JERSEY:  It`s just inappropriate for us in  this context to be criticizing them and I`m not going to participate in  that.

RUDY GIULIANI (R), FORMER NEW YORK CITY MAYOR:  I think it could have been  handled better.  I think he knows that.  My advice to Donald would be very  simple.  I`ll tell you the advice I would give him.  You have one person to  attack, Hillary Clinton.

(END VIDEO CLIPS) HAYES:  Today, Representative Richard Hanna of New York became the first  sitting GOP congressman to endorse Hillary Clinton, citing his belief that,  quote, "being a good American who loves his country is far more important  than parties."  Hanna is a relative moderate who faces no political  consequences as he`s set to retire at the end of the year.

Meanwhile, for all the loyalty Donald Trump is receiving from top  Republicans, he`s apparently not inclined to return the favor.  In an  interview with "The Washington Post," Trump refused to support Paul Ryan  and John McCain in their upcoming primaries.

Joining me now, Congressman Blake Farenthold.  He`s a Republican from Texas  who has endorsed Donald Trump.

Congressman, let me ask, do you want to take back your endorsement of  Donald Trump, or are you still sticking with that?

REP. BLAKE FARENTHOLD (R), TEXAS:  I`m still on the Trump train.

HAYES:  What do you think of the way that he`s attacked the Khan family?

Do you agree with Medal of Honor winner Dakota Meyer who says that Trump  owes them an apology?

FARENTHOLD:  I think it`s really tough being in Donald Trump`s shoes, when  you`ve got the media looking to put the worst possible spin to everything  that you say.

HAYES:  Wait, are --  FARENTHOLD:  Donald Trump has said he honors the service of the Khans and  the sacrifice that they made.

HAYES:  Right.  But he also questioned whether the mother of this man who  gave his life in Iraq was instructed or not allowed to say anything.  What  do you think of that?

FARENTHOLD:  Well, I -- again, that was Donald Trump speculating and there  are a lot of folks within the Republican Party would love it if he would  stick to the script, but ad lib.  But the American people are tired of the  focus group tested platitudes we hear from the Clinton campaign.  When was  the last time she spoke --  (CROSSTALK) HAYES:  When he says about a mother who stood on stage, later explaining  that she`s so grief-stricken at images of her son, she couldn`t bring  herself to speak and implies that the woman has been instructed not to  speak with clearly bigoted insinuation about the woman`s faith as her  husband is giving testimony about their deceased son, do you think that`s  decent on the part of Donald Trump?

FARENTHOLD:  Again, I don`t think you can pick someone`s motivations and  know what`s in someone`s head, whether it`s Mrs. Khan or Donald Trump.  HAYES:  Congressman, what would it take?  Presumably I`m going to assume  there`s some set of pronouncements from your party`s nominee, some set of  policy proposals that would cause you to rescind your endorsement.  Would  you agree with that?  There`s a hypothetical set of things that would make  you rescind your endorsement.  Do you agree with that?

FARENTHOLD:  Sure.  Anything could happen.  But right now, you`ve got  Donald Trump versus Hillary Clinton and it`s a real clear choice.

HAYES:  Could you provide me with an example of what kind of thing would be  in that category?  Because I think what`s confusing to a lot of people from  the president on down, what it would take for a Republican such as yourself  to rescind your support for him?

FARENTHOLD:  You could come up with hundreds of things that he could do,  but, again, he hasn`t done them yet.  And everything that you and the media  are blowing out of proportion, it`s tough.

Listen, I`ve been out on the campaign trail and you get a tracker or  somebody following you.  And Donald Trump has every major network looking  to put the worst possible spin on every word that comes out of his mouth.

And he`s going to speak from the heart and not read canned speeches.

HAYES:  Do you think Dakota Meyer, the Medal of Honor winner, who called on  him to apologize was blowing it out of proportion?

FARENTHOLD:  Again, I think a lot of these calls are being fed by you guys`  spin.  Go look at the actual transcript.  It`s not as bad as press reports  make it look.

HAYES:  So, you`re just going to stick with this the next 98 days and  basically wherever this train goes, through whatever bigoted muck it may  travel, Congressman Farenthold is on that train?  Is that how I should  understand it? FARENTHOLD:  The train could get derailed, but it hasn`t yet.  And I think  it`s going to take a lot to make Hillary Clinton a person who tells lies to  cover up her lies look better than Donald Trump, a man who speaks from his  heart.

HAYES:  So far he`s doing it.  Congressman Blake Farenthold, thank you very  much.  Appreciate your time tonight, sir. I`m joined now by Republican strategist Rick Wilson, who I should say,  strongly opposes Donald Trump.

(LAUGHTER) HAYES:  I mean, I guess there`s nothing.  I have to say, like today --  first, let`s start with this.  Forget all the Khan family stuff, anyone  with a basic sense of decency can understand why it`s indecent, right?

Forget the politics of it.

Trump today trolling Paul Ryan, playing footsie on Twitter with his primary  opponent, and this is the best part, talking about Ryan, "I`m just not  quite there yet, I`m not there yet," spitting back in his face the phrasing  that Paul Ryan used in his sort of Hamlet-ish dithering over whether to  endorse Trump.  What do you make of that?

RICK WILSON, REPUBLICAN STRATEGIST:  Look, this is a guy who`s vengeful and  so petty and so small, that it should remind Republicans that this isn`t a  Republican nominee.  This is a virus that has infected the Republican  Party.  And he`s eating the host from the inside out.

He will never be a transactional person.  He will never have any of the  things you do in politics to try to build your party, build your movement,  et cetera.  It`s all Trump.  This is only about him.  This is only about  his ego and his gratification of his little revenge fantasies.

And, you know, today with John McCain and Paul Ryan both, who swallowed an  enormous river of bile for this guy, and have defended him over and over  again -- you know, I can`t wait for both of those gentlemen to be past  their primaries.  Because while it sucks they can`t come out and say what`s  in their hearts, it`s explicable that they`re both in contested primaries  right now, and you get this sort of political imperative underneath it.

But on the other side of it, Donald Trump`s pivot to the general election  is still mostly about slamming his fellow Republicans.  It`s a mystery.

HAYES:  Here`s what`s so striking to me.  Again, we`re in the realm of --  we`re so far from the realm of policy at this point, aside from things like  the Muslim ban.  You know, this idea of like what would he do on day one?

We`re in this sort of bizarre netherworld of kind of arm chair psychology.

You know, every single person that has come into his orbit, particularly  those have lent their support have walked away diminished.  They walked  away with their dignity essentially eaten.  It doesn`t seem accidental.

This is the M.O. of this guy.    And if for no other reason of the self-preservation of dignity, you think  more people would take the Ted Cruz route, having witnessed that.

WILSON:  Well, you know, you look at a guy like Chris Christie, when Donald  Trump said, go fetch your shine box, Chris Christie tugged his forelock and  said, yes, Mr. Trump.  He abased himself in ways that you would normally  have to pay a professional to do.

This is a guy who revels in humiliating his vanquished opponents, who  revels in rubbing it in your face after he`s beaten you, or rubbing in your  face after he perceives himself to be in a superior position.  You don`t  build a team like that.  You don`t broaden your appeal like that.

This guy is playing out bizarre revenge fantasies against people that ran  against him.  It`s always on the tip of his tongue to go after Jeb or Marco  or Ted Cruz or anyone else who slighted him at any point.

HAYES:  If you sit and watch his campaign events day after day, as I do and  my colleagues do, there`s a long rift in which he relives the primary.

It`s like a big chunk of the stump speech, just getting himself worked up  over that.

Rick Wilson, thank you for the time.  Appreciate it.

WILSON:  Thanks, Chris. HAYES:  Joining me now, Betsy Woodruff, politics reporter for "The Daily  Beast", Robert Costa, national political reporter for "The Washington Post"  and MSNBC analyst. Robert, the Richard Hanna news doesn`t strike me as a particularly big  deal.  There are a few other people, former staffer of Jeb Bush, a former  confidante and close staffer of Chris Christie who have come out and said  not only am I not going to vote for the guy, I`m going to vote for Hillary  Clinton.

What are the conversations on Capitol Hill and among professional  Republicans like around this topic?

ROBERT COSTA, THE WASHINGTON POST:  It`s a particular type of Republican  who at this moment is migrating away, rushing away from Donald Trump.  I`ve  seen this, especially with loyal, long-time Republicans, mostly women.  You  look at Sally Bradshaw, the aide to Jeb Bush.  Maria Comella, the former  aide to New Jersey Governor Christie, and you see a lot of Republican  women, and of course with Hanna, the New York congressman, really  uncomfortable with Trump. It`s not an ideological discomfort, it`s temperamental.

HAYES:  Yes, there`s some word now from how the NRCC, Betsy, is going to  handle this, or the group that has to coordinate down-ballot, house  congressional race.  There`s not a ton of vulnerable Republicans.  But  there`s, you know, a dozen in districts -- actually more than that if I run  the tally in my head.  What do those folks do?

BETSY WOODRUFF, THE DAILY BEAST:  They cross their fingers and hope for the  best.  "Politico" published a memo I believe this afternoon that the NRCC  sent to many of these vulnerable Republicans and the line that stuck out to  me, they said, if you supported Trump in the past, but feel like you can`t  support him anymore, just own it.  Just come out and say it and be honest  with it and take the hit.

I think it`s fascinating that a branch of the Republican Party is telling  elected Republicans that it`s okay for them to disavow the Republicans`  presidential nominee.  This is uncharted territory.  The fact that this is  even something we`re talking about is a really big deal and I think it  shows that a lot of Republicans are looking for life boats at this point.

HAYES:  Robert, do they think -- do they think he can win?  I mean, I think  it`s worse for them if he does.  If he wins, then he fundamentally and  permanently transforms the Republican Party.  If he loses, they can be  like, OK, man, that was embarrassing, whoo, OK, let`s get back to it.

Do they think he could win?

COSTA:  There is a sense that Trump could win, because there is a sense  that the political winds maybe somewhat he is in his favor, that he is  lacking in terms of fundraising, in competition with the Democrats, the  grassroots organization for Trump is behind in many states, key states,  battleground states, but because Trump represents this populist movement  that`s almost non-partisan, maybe if he can drive out working class voters,  especially white working class males, he could have this new coalition that  could be potent, and you mix that with Secretary Clinton`s also high  negative numbers, there`s maybe a brew there for Trump.  But most people  are skeptical.

HAYES:  That`s the case to be made, although I remain unpersuaded.  We`ll  see, of course, as time goes on.

If there`s a single -- if you could buy stock in a politician.  The one  stock I think that`s probably gone up highest in value since clothing in  Cleveland is not Hillary Clinton necessarily.  It`s Ted Cruz, Betsy.

And I think every day that goes by, what he did in that arena, looks more  and more perceptive, just a sheer level of self-preservation while you  watch everyone else abase themselves.

WOODRUFF:  I would say there are two counterpoints to that.  Ted Cruz`s  numbers have taken a nose dive ever since that moment happened.  Even if he  won the argument on principle, back home in Texas, things are not looking  good for him.  If you make your stock purchasing decisions based solely on  that, maybe Cruz isn`t the best pick.

The other problem with Ted Cruz, with what he did in Cleveland, is that he  didn`t oppose Trump for the reasons that folks like Sally Bradshaw and  Richard Hanna opposed Trump.  Cruz said the reason he felt he could not  support Trump, particularly at the Texas delegate breakfast was because  Trump went after his wife and his father.  He made it clear it was  personal.  That it wasn`t about policy, it wasn`t about perceived bigotry  or temperament problems, that this was actually something between him and  Trump.

That said, of course, lots of never Trump folks will see Cruz as the  principled alternative going forward.  But I think other folks are going to  be pretty skeptical.

COSTA:  Chris, real quick, on the point you`re making, it`s a provocative  one, maybe Cruz did have the best convention in that he`s positioning  himself for 2020.  But that`s a gamble as Betsy says, because who`s to say  the Republican Party, whether Trump wins or loses, is going to be reverting  back to this ideological movement, conservatism?

HAYES:  That`s a great point.  Here`s the one lesson I`ve learned cover the  run-up to the Iraq war in 2003.  You vote and you conduct yourself in  politics, bent towards what the long-term first order judgment of what`s  best is, and not in short-term political gain, because there are so many  Democrats who voted for that war, who had their careers later on  practically destroyed by it, because people told them in the minute, in the  moment, this is the way the polling goes.

And if anyone has learned anything about that, it`s probably Hillary  Clinton who now stands on the other side of this race.  But it`s amazing to  me to watch people make the same mistake again.

Betsy Woodruff and Robert Costa, thank you both very much.

COSTA:  Thank you. WOODRUFF:  Sure thing. HAYES:  Still to come, how would Democrats respond if they nominated a  candidate like Trump?  A little thought experiment ahead.

But, first, the Republican nominee`s deeply concerning attitude towards  sexual harassment.  Donald Trump`s comments right after this break. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) IVANKA TRUMP, DAUGHTER OF DONALD TRUMP:  At my father`s company, there are  more female than male executives.  As president, my father will change the  labor laws that were put in place at a time when women were not a  significant portion of the workforce.  Policies that allow women with  children to thrive should not be novelties.  They should be the norm.  He  will fight for equal pay for equal work, and I will fight for this too,  right alongside of him.

(END VIDEO CLIP) HAYES:  Just two weeks ago at the Republican National Convention, Ivanka  Trump put a feminist face on her father`s campaign.  A moment that feels  another eon, given Donald Trump`s response, the cascade of allegations of  sexual harassment and worse against the former chairman of FOX News, Roger  Ailes.  One week after calling Ailes a good friend and personal friend, and  seeming to call into question some of the acquisitions, Donald Trump was  asked, "What if someone had treated Ivanka in the way Ailes allegedly  behaved?"  To which he replied, "I would like to think she would find  another year or another company if that was the case." This morning, Trump`s son Eric attempted to do damage control and ended up  making it worse.

(BEGIN VIDEO CLIP) ERIC TRUMP:  My father runs a company and that is an absolutely no-go on  anywhere.  That`s very much the case.  I think what he`s saying is, you  know, Ivanka is a strong, you know, powerful woman.  She wouldn`t allow  herself to be objected to it.  And, by the way, you should certainly take  it up with human resources.  And I think she definitely would, as a strong  person.

At the same time, I don`t think she would allow herself to be subjected to  that.  I think that`s the point he was making and I think he did so well.

(END VIDEO CLIP) HAYES:  After that, FOX News anchor Gretchen Carlson whose lawsuit against  Ailes precipitated his resignation from FOX News, tweeted, "Sad in 2016,  we`re still victim-blaming women.  Trust me, I`m strong, stand with  Gretchen."

And fascinatingly, Megyn Kelly, who has not commented at all about Ailes,  despite reports that she told investigators that Roger Ailes sexually  harassed her, responded to Eric Trump`s comments with one word, "Sigh." Joining me now, NBC legal analyst Lisa Bloom.  She represents Jill Harth,  who sued Donald Trump for sexual assault in 1997.  Trump has called Harth`s  claims, quote, "meritless". Lisa, first, I want you to just react to -- your reaction to hearing this  sort of idea which I think is very common place that fundamentally there`s  some problem with the woman at issue, if this kind of thing happens.

LISA BLOOM, NBC NEWS LEGAL ANALYST:  Well, it obviously happened to  Gretchen Carlson.  It probably happened to Megyn Kelly.  It`s happened to  me.  It`s happened to the majority of working women.

No matter how strong you are, no matter if you are a known sexual  harassment attorney, as I have been for many years, there`s going to be  that guy in power who`s going to try to grope you, who`s going to say  something inappropriate.  It`s just a fact of life for working women, no  matter how strong you are.

And how dare anybody with the name of Trump blame women for sexual  harassment.  Thank God we have laws to protect us.  I encourage Donald  Trump and Eric Trump to read those laws.  We don`t have to leave our jobs,  we don`t have to find another career.  We get to have our dignity and our  jobs at the same time. HAYES:  You know, to your point about it could happen to anyone, here is  Ivanka Trump herself in her 2009 book, autobiography, "The Trump Card".

"That type of thing has happened to me before, many times actually on my  father`s construction site, but in those cases, they never realized I was  the boss`s daughter when they started hooting and hollering.  Didn`t much  matter how I responded." So, to your point, it can happen to anyone.

BLOOM:  Yes, absolutely.  And it does.  We have to stop focusing on the  women or the victims of sexual harassment, who are sometimes men as well,  I`ve represented them too.

We have to focus on the perpetrator.  People like Roger Ailes, right?  I  mean, he is getting the send off a $40 million pay-off.  It doesn`t like  much of a penalty. My client Jill Harth, as you say, has accused Donald Trump of sexual  harassment since 1997.  There was a settlement at that time that went all  to her husband, for his company.  So, she didn`t get a dime.  She`s been  asking for an apology, and she still hasn`t gotten one.

I think Donald Trump, fundamentally, does not get it, and his son, trying  to do damage control, has dug him in deeper.

HAYES:  Yes.  What -- tell me how this works generally in terms of  litigation of this kind of thing?  My sense is, you know, people talk about  HR, I think there`s probably a lot of hesitancy to go forward, because  there will be hassles or recriminations. Once you enter the legal arena, how do these cases shake out?

BLOOM:  Well, actually, the best thing a sexually harassed worker can do is  gather evidence, hold on to it, and document it.  Put in writing what your  compliant is, give it to HR and hold on to that.  That protects you.

The company has an obligation legally under Title 7 and state laws to do a  prompt, thorough investigation, punish the perpetrator and protect the  victim.  You cannot be retaliated against.  If you are -- and it certainly  happens, and I represent a lot of people where it does happen, that they  are then fired, or lose their jobs.  Definitely see a lawyer.

Now you have two claims, your original sexual harassment claim and you have  a retaliation claim, which often is the stronger claim.  And there are a  lot of lawyers who are going to be happy to represent you in that.

HAYES:  All right.  Lisa Bloom, thanks for joining us.  Appreciate it.

BLOOM:  Thank you.

HAYES:  Coming up, you`ve asked for it, you`ve waited for it the whole day.

Trump`s last ten list, a running tally that literally had any other  candidate said or done, it would have ended their campaign.  It`s just 24  hours old the one we have, but it`s already outdated.  We have more things  to add right after this short break.

(COMMERCIAL BREAK) HAYES:  All right.  Last night, we gave you an update on a segment we like  to call Trump`s last ten.  It`s a running tally of things that had  literally any other candidate said or done them, probably would end their  campaign, but not Donald Trump.    If you recall, we had to wipe out our previous board, entire erase it clean  and replace it all the new controversies that Trump has brought on himself  the weeks of the convention.  But because we are now in full general  election mode, and the candidate for the Republican Party who`s running for  president is Donald Trump, this list is already out of date.

So, let`s a moment to remember some of the stories that have brief stay in  the list created just about 24 hours ago.  Number eight, Trump suggesting  U.S. military support for NATO members should be conditional on whether  they met their financial obligations to the alliance.  Number nine, a Trump  adviser who is saying that Hillary Clinton should be shot for treason for  mishandling e-mails.  And number ten, Trump`s claim that Justice Ruth Bader  Ginsburg`s mind is shot after she criticized him in a few interviews. We now bid those controversies goodbye to make room for three new ones that  have topped up since yesterday.  Our new number three, Trump musing in an  interview that if his daughter Ivanka was sexually harassed at work, quote,  "I`d like to think she would find another career or find another company if  that was the case." Number two, after a recipient for the Purple Heart medal gave a copy of his  medal to Trump at a rally, the Republican presidential nominee, who  received five draft deferments during the Vietnam War said and I quote, "I  always wanted to get the Purple Heart, this was much easier." And, finally our new number one, Trump seemed to root for the economy to  tank.  "The numbers are getting worse and worse and they get real bad.  I  hope it happens fast."  And if it does, he`ll make sure to blame the  Democrats.

(BEGIN VIDEO CLIP) TRUMP:  Because the numbers are getting worse and worse all the time.  If  they get real bad, I hope it happens fast.  They`ll all blame me.  You`ll  end up winning and your first day the economy crashes because of some  incompetent people before me.  Ai, yai, yai.  Well, we`ll get it  straightened out, but we`ll certainly blame them, OK?  We`re going to blame  them. (END VIDEO CLIP) (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) TRUMP:  And as far as the tax returns, as soon as the audit is complete,  like any lawyer would tell you, Greta van Susteren, she`s going over it  awhile ago -- she`s a lawyer.  She said, well no lawyer would let somebody  release a tax return when they`re under audit.  It`s a routine audit. I`ve gone through audits -- which I think is very unfair, for 15 years.  I  have friends that are very rich, they never get audited.  I`m audited every  year.  Maybe that`s because of politics, who knows. (END VIDEO CLIP) HAYES:  In the past four decades, every major party nominee has released  his or her tax returns.  Most of those presidential hopefuls release them  by the time they were officially nominated at their party`s convention.

Not Donald Trump. While candidates are not, of course, legally obligated to release tax  returns, Trump`s refusal goes against pretty firm longstanding precedent in  the interest of transparency. Trump is citing an IRS audit and apparently the advice of Fox News`s Greta  Van Susteren, as the latest reason as to why he won`t be releasing his tax  returns anytime soon, even though, as The Washington Post points out, the  first president to release his taxes, Richard Nixon, did so in the middle  of an audit. Yesterday while stumping for Hillary Clinton in Omaha, Nebraska,  billionaire investor Warren  Buffett called Trump out on it. (BEGIN VIDEO CLIP) WARREN BUFFETT, FOUNDER, BERKSHIRE HATHAWAY:  I`ve got news for him, I`m  under audit too.  And I would be delighted to meet him anyplace, anytime,  between now and election, I`ll bring my tax return, he can bring his tax  return.  Nobody`s going to arrest us.  There are no rules against showing  your tax returns.  And just let people ask us questions about the items  that are on there. How many of you would be afraid to have your tax return made public?

You`re only afraid if you got something to be afraid about. (END VIDEO CLIP) HAYES:  Joining me now, David K. Johnson, columnist of The Daily Beast,  author of "The Making of Donald Trump," which examines Trump`s rise to  prominence and is out today -- somehow you`ve written this book in the last  15 hours.  I`m not quite sure how this happened. All right, so, well, so first of all, let`s start with the basic factual  stipulation.  You`ve covered taxes for 20-plus years.  That is the case. DAVID K. JOHNSON, THE DAILY BEAST:  I`m a teacher (inaudible) that follows  the law, and I`m not a lawyer. HAYES:  Right, so you could release -- there`s no reason... JOHNSON:  Not only could you do it, but let`s take Donald at his word.  He  doesn`t want to release the returns under audit.  He`s indicated that`s  2012 forward.  Well, let`s see your returns, then, from 2011 back to say  1980. Hillary Clinton`s returns are all available, complete returns, back to the  `70s.  There`s no reason for Donald not to release the returns, by his own  standard, that are no longer under audit. HAYES:  One of the reasons I wanted to have you on and talk about this  topic is -- again, we`re doing this thing, you know, the last 10.  And he  says so many outrageous, offensive things.  And, you know, ultimately this  is a guy with no public service record to look at. JOHNSON:  Right. HAYES:  All he`s got in the record in private business.  And basically  there`s no -- there`s very little public documentation about that in some  ways.  This is the way that you would get some sense of the guy`s dealings  -- how good or bad he is, right? JOHNSON:  Well, ask Hillary Clinton about when I reverse engineered her tax  returns and how furious she was.  I showed that they paid more than twice  as much federal income tax, the President in Bill Clinton, for several  years as needed. I can tell you a lot if we had Donald Trump`s tax returns.  I could tell  you how wealthy he really is from the value of the buildings and the  depreciation that`s taking -- now he`s got over 500 business entities.  So,  his tax return, if you`ve seen the pictures, like this high, as it should  be. But, Donald has a long history, -- and I go through this in "The Making of  Donald Trump," of  using two sets of numbers.  So, he claims, for example, that his golf  course in Los Angeles is worth over a quarter of a billion dollars and then  he tells the property tax officials, it`s worth ten.  His golf course in  Westchester County, he says, oh, it`s worth over $50 million.  Well, no,  no, for tax purposes, it`s worth 1.4. HAYES:  This is my favorite.  We covered this and we should pictures just  off Zillow of like houses adjacent to the golf course that are worth more  than $1.4 million.

JOHNSON:  And listen, a number of the columns I`ve written at The Daily  Beast and the National Memo and other places have shown that there`s tremendously strong  evidence of tax cheating by Donald.  And I can give you the best example of  this. In 1984, the city of New York and state of New York audited his tax  returns.  He filed a schedule C, it`s what freelancers file, or people who  work for themselves as a consultant.  No revenue, zero revenue, over  $600,000 in deductions. I know you`ll be shocked to hear the auditor said, excuse me, we`d like a  little documentation and support for this.  He had none. He still ordered an appeal.  His long-time tax lawyer testifies and when  he`s shown the New York City return, he goes, well, that`s my signature on  the photocopy, but I didn`t prepare that document.  Well, the only other  person who could have done that would be Donald Trump. HAYES:  Wow. JOHNSON:  And by the way, my first national investigative reporting award  more than 40 years ago was for catching somebody who used a photocopier to  put their name on somebody else`s medical records.  I think -- and Donald  participated in the empty box scheme at Bulgari, and luckily didn`t get

indicted or he would have lost his casino license. I think there`s a lot there we could learn, especially about all of the  money coming out of  Kazakhstan and other former parts of the Soviet empire to his businesses,  which his son, one of his sons has acknowledged.  And all of his travels  with the son of the reputed mob boss here in New York City, a violent  convicted felon, who took the broken stem of a margarita glass and plunged  it into a guy`s face, took 110 stitches.  And ran then a $40 million stock  swindle for the Genovese and Gambino crime families, Donald says I wouldn`t  know if he was in the room.  Well, I have got photographs and videotape and  I recount episodes in my book he was with him in Colorado, in Arizona, and  Florida, and New York. He signed off on business deals with him. HAYES:  The point being right here that -- and I want to just be clear  about we know and don`t know, because I don`t want to cast aspersions  unnecessarily without documentation.  The point being that a variety of  questions have been raised about the propriety of business dealings, about  where his money is coming from, about who -- I mean, this strikes me as an  important thing, who does the future president of the country owe money to?

Right?  Who are they on the hook to is a pretty key thing.  We`ve never had  something like this.

All of that would be answered in tax returns, which in some ways become  more important with this candidate than any other we`ve had before. JOHNSON:  Absolutely, and particularly if he owes money to people who are  connected to  Vladimir Putin.  That should be very, very troublesome.  We need to see his  tax returns, absolutely need to see them. HAYES:  All right, David K. Johnson, thanks for stopping by today. Still to come, it`s Donald Trump versus a baby.  No, you didn`t mishear me.

The tape you do not want to miss, that`s just ahead.  Don`t go away. (COMMERCIAL BREAK) HAYES:  Thing one tonight, Donald Trump is obviously not the typical  candidate.  He doesn`t follow all the normal rules and social niceties your  average politician might follow, but some things are just unavoidable for a  person running for office like, for instance, the classic kissing babies  routine.  Even Trump partakes in that old campaign trail tradition.  Here  he is just last week holding two babies at once.  How sweet. Here`s another shot of that a few moments later.

Listen, babies are hard, they cry.  Although check out that swift handoff. But today, he had a true politician`s test: a crying baby during his stump  speech.  Take a look. (BEGIN VIDEO CLIP) TRUMP:  And I`m very close to China.  I have the biggest bank in the world  as a tenant of mine in New York, the biggest in the world, a Chinese bank.

Don`t worry about that baby.  I love babies.  I hear that baby crying, I  like it.  I like it.  What a baby.  What a beautiful baby. Don`t worry, don`t worry.  The mom`s running around, like -- don`t worry  about it, you know.  It`s young and beautiful and healthy, and that`s what  we want. (END VIDEO CLIP) HAYES:  Well handled, sir. In case you missed it, his response even illicited some attendees to chant  "moms for Trump," just tremendous. Now, you may be thinking to yourself, could there possibly be any more to  that tape?  Of course there is.  And that`s thing two in just 60 seconds. (COMMERCIAL BREAK) HAYES:  OK, so a crying baby interrupts Donald Trump`s speech and it looks  like he`s going to be annoyed, but he actually handled it pretty well. (BEGIN VIDEO CLIP) TRUMP:  Don`t worry about that baby.  I love babies.  So -- I love babies.

I hear that baby crying, I like it.  I like it.  What a baby.  What a  beautiful baby.  Don`t worry. (END VIDEO CLIP) HAYES:  Pretty gracious of Trump, right?  That is until his patience for  that baby ran out, exactly 53 seconds later. (BEGIN VIDEO CLIP) TRUMP:  They have ripped us to shreds, ripped us absolutely to shreds. Actually, I was only kidding.  You can get the baby out of here.  That`s  all right.  Don`t worry. I think she really believed me that I love having a baby crying while I`m  speaking.  That`s OK.  People don`t understand.  That`s okay. (END VIDEO CLIP) HAYES:  Two things, that`s actually kind of funny.  And also, babies are  hard.  Although that definitely could have gone worse. (BEGIN VIDEO CLIP) TRUMP:  All right, get him out, get him out. Knock the crap out of him, would you?  Seriously. I`d like to punch him in the face, I`ll tell you. (END VIDEO CLIP) (COMMERCIAL BREAK) HAYES:  So when Donald Trump`s nomination began to look like a real  possibility, a number of  conservatives began to rally behind the never Trump movement.  And it was  around that time that I  started posing the question to myself and friends, how would I or other  people react if Democrats had nominated a temperamentally unfit, incoherent  candidate with absolutely no electoral experience as their party`s standard  bearer. It`s a hard thing not to speak about, especially considering the current  president is openly calling for Republicans to withdraw their support for  Trump.  New York Times columnist Ross Douthat presented an interesting  scenario with this tweet yesterday, "imagine a race where the choices were  an unfit, paranoid unstable Democratic nominee and a Rick Santorum." And today Slate contributor Seth Stevenson (ph) imagined a world if Sean  Penn were the Democratic nominee asking his Democratic friends, would you  willingly cede the White House to, say, Ted Cruz if it meant keeping Sean  Penn away from the levers of power?"  Would you vote for Cruz just to stop  Penn? There are those who say the better analogue in this scenario would be  someone like Mitt Romney or John Kasich since Hillary Clinton isn`t a  hardliner like Cruz, Stevenson writes, "she represents everything that`s  wrong with the left.  The analogy is fair when viewed through the eyes of a  Republican voter." Well, it just so happens I have a pick for a better analogue to Donald  Trump, someone who already has plans to run for president.  And we talk  about what it would be like if Democrats were faced with that dilemma next. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) KANYE WEST, RAPPER;  And, yes, as you probably could have guessed by this  moment, I have decided, in 2020, to run for president. (END VIDEO CLIP) HAYES:  Kanye West announcing his 2020 campaign. Joining me now Josh Barro, senior editor of Business Insider and MSNBC  contributor, and Sam  Seder, host of the Majority Report, also an MSNBC contributor. I don`t know where -- you`re all worked up about this thought experiment,  which I think there`s a kernel of something useful for liberals and anyone  with certain diehard politics.  But you think it`s bunk. Like, the kind of what if Democrats had their own Trump thing. SAM SEDER, HOST, MAJORITY REPORT:  Yeah, I mean -- you know, it`s more -- I  guess my point is, it makes more sense to say, what if Democrats had Trump,  not even their own Trump, because it shows just how absurd the idea is. I mean, it`s not like Donald Trump parachuted in and all of a sudden won  the lottery and  that`s how he became the nominee.  There`s something uniquely problematic  about the Republican base that elected Donald Trump their nominee and there is no analog on the  Democratic side. Any problem that you can find with Donald Trump that is shared widely is  something that is  unique to the Republican Party.  And that`s why we see  the needle has not moved on Donald Trump in terms of what I`ve said in the  past, is is the normal electorate.  It is a uniquely Republican phenomena. JOSH BARRO, BUSINESS INSIDER:  I think there are two separate questions  here.  One is would Democrats nominate someone like this?  And I think it`s  true that the Democratic Party is more resilient than the Republican Party. I mean, you saw, there was an insurgency in the Democratic Party that got  put down in the primaries this time.  And Bernie Sanders, obviously, was a  much less ridiculous person than Donald  Trump.  And even he was not able to overcome the establishment candidate. So, I think the Democratic Party functions better, is not vulnerable to  outsiders like Trump. I think second question is what would Democrats do if they ended up in this  situation?  I think the incentive that Republicans are facing where if they  decide to fight each other during the general election, they`re just all  going to die fiery political deaths and lose their re-election races for  congress, those incentives would apply for Democrats.  So, I think there  would be pressure to line up behind a terrible candidate. I mean, I think the closest real political analogue right now for Democrats  is Alan Grayson who is a congressman from Florida, who is trying to run for  the Senate, who frankly seems pretty mentally unstable, and he`s in a  primary that I think he`s going to lose, but he`s the sort of person who,  if he were to somehow get the Democratic nomination, that`s who you would  have to think about.  Would Democrats say this person is responsible enough  to have his finger on the nuclear button? HAYES:  Well, let me say this about Grayson, because I think it`s actually  a perfect example for this reason.  And it gets back to what you said,  right.  So Grayson is -- has been a kind of -- because of his -- both his  stances on progressive issues, which he`s been a sort of stalwart  progressive down the line, and because he likes to fight with Republicans  in a very flamboyant fashion, has been beloved by a certain part of the  Democratic base.  The latest allegations came out from his ex-wife saying  that over a period of years, 20 years, he had repeatedly abused her.

Immediately, the two lefty groups that endorsed him, right, the PCCC and  Democracy in America rescinded their endorsements, which is precisely the  kind of sort of check on this behavior that was in every way lacking during  the primary, which speaks to your point about the sort of asymmetry. SEDER:  Right.  And this is something -- I mean, I don`t even think that  Grayson is analogous to Donald Trump. The problem that people have with Donald Trump is not necessarily that he`s  a bad person at home.  It is, the guy is completely devoid of policy.

Every single thing that you would want from a candidate, from a president,  this guy lacks. I mean, Alan Grayson may be, as you claim, mentally unstable, or have some  other issues, but I think like, this is a guy who could actually... HAYES:  The other thing is, he served in congress.  I mean, to me there`s  the sort of -- more like the Ted Cruz thing. The thing that I`ve been thinking to myself, the reason I find it  destructive is, watching all this -- I said at the top of the show, it  reminds me of Iraq back in 2003.  Watching these people make these short- term political calculations that are so obviously the wrong calculation on  the substance and merit of the thing, thinking that they`re going to get  over for the next three months.  They`re going to get over,  they`re going  to sort of duck underneath the wave and they`re going to survive, not  realizing that that`s not the way it works. SEDER:  But let me just say my final point is, is that to even propose this  thought experiment  is to delude one self that there isn`t a problem with  the Republican base. The reason why Paul Ryan and McConnell are making these decision is not  because they`re not sure what it`s going to look like in five years, it`s  that they are afraid of their voters today.  And that`s why they`re making  those decisions.  And that`s what`s being ignored in that thought  experiment is there`s something uniquely problematic with the Republicans. BARRO:  I mean, Paul Ryan`s district is not as Republican as you might  think.  It`s like an R plus three district.  So if he broke with Donald  Trump, he would have real risk of losing the general election to a  Democrat. So I think, you know, Paul Ryan has not been a profile in courage.  I wish  he had stood up to Donald Trump.  But he faces strong incentives to do what  he did.  And I think a lot of people would make the moral failure that Paul  Ryan has made there. I think a lot of us would step back and wonder if we would really rise to  the occasion in the way that we want our leaders to... SEDER:  I`m not judging his morality, I`m saying those incentive structures  is the problem. HAYSE:  Right.  Right. SEDER:  That he is... HAYES:  Well, there`s also -- the other thing I`ll say is, there`s this  broader problem of just what facts people find credible.  So, go back to  the Grayson thing, right, the response of the people on the  left wasn`t, that`s made up, these allegations, it`s all a conspiracy.

It`s was like, no, whoa those look -- like, when you get rid of it the  structure of belief in the way that has been laid waste to on the right for  30 years, you can forgive anything, because anything can be a conspiracy,  anything can be the hatchet of the people trying to get them. And then you never have to do with any first order issues because you can  explain them all way. Josh Barro, Sam Seder, thanks for joining us. That is All In for this evening.  The Rachel Maddow Show starts right now. END THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY  BE UPDATED. END

  Show: ALL IN with CHRIS HAYES Date: August 2, 2016 Guest: Blake Farenthold, Rick Wilson, Betsy Woodruff, Sam Seder, Josh Barro, David K. Johnson

  (BEGIN VIDEOTAPE)

CHRIS HAYES, MSNBC HOST (voice-over):  Tonight on ALL IN -- 

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I think the Republican nominee is unfit to serve as president.

HAYES:  President Obama lambasts Republican support for Trump. 

OBAMA:  There has to come a point at which you say, enough. 

HAYES:  His question for GOP leadership. 

OBAMA:  Why are you still endorsing him? 

HAYES:  This as Trump openly hoped for the economy to go down the tubes quickly. 

DONALD TRUMP (R), PRESIDENTIAL NOMINEE:  The numbers are getting worse and worse all the time.  If they get real bad, I hope it happens fast, so I don`t have to -- they`ll all blame me. 

HAYES:  Plus, Trump`s son on Trump`s daughter and sexual harassment. 

ERIC TRUMP, SON OF DONALD TRUMP:  Ivanka is a strong woman, I don`t think she would allow herself to be subjected to that. 

HAYES:  And Trump`s latest pet peeve.

D. TRUMP:  Don`t worry about that baby.  I love babies.  Actually, I was only kidding.  You can get the baby out of here. 

HAYES:  When ALL IN starts right now. 

D. TRUMP:  I think she might believe me that I love having a baby crying while I`m speaking. 

(END VIDEOTAPE)

HAYES:  Good evening from New York.  I`m Chris Hayes. 

Tonight, it`s Trump against a Gold Star family.  Trump against Obama, Trump against his own party.  Or just another day on the trail here in 98 days from the 2016 election. 

Trump`s days-long feud with the Khan family, the Muslim American parents of an army captain killed while serving in Iraq is just the latest outrage to bring condemnation from senior members of his party, including House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell and most forcefully, Senator John McCain. 

But just as with Trump`s proposed Muslim ban, his Star of David tweet, his attacks on the ethnicity of Judge Gonzalo Curiel, and countless other controversies, top Republicans have stopped short of withdrawing or even tempering support for their party`s nominee. 

At a press conference today with the prime minister of Singapore, President Obama had a message for those Republican leaders. 

(BEGIN VIDEO CLIP)

OBAMA:  The question, I think, that they have to ask themselves is, if you are repeatedly having to say, in very strong terms, that what he has said is unacceptable, why are you still endorsing him?  What does this say about your party, that this is your standard bearer? 

There has to be a point at which you say, this is not somebody I can support for president of the United States, even if he purports to be a member of my party.  And, you know, the fact that that has not yet happened makes some of these denunciations ring hollow. 

(END VIDEO CLIP)

HAYES:  Calling Donald Trump woefully unprepared and unfit for the presidency, President Obama argued the stakes of this election go far beyond partisan politics. 

(BEGIN VIDEO CLIP)

OBAMA:  This is different than just having policy disagreements.  I think I was right and Mitt Romney and John McCain were wrong on certain policy issues, but I never thought they couldn`t do the job.  And had they won, I would have been disappointed, but I would have said to all Americans, they are -- this is our president and I know they`re going to abide by certain norms and rules and common sense, will observe basic decency, will have enough knowledge about economic policy and foreign policy, and our constitutional traditions and rule of law, that our government will work. 

But that`s not the situation here.  And that`s not just my opinion.  That is the opinion of many prominent Republicans.  There has to come a point at which you say, enough. 

(END VIDEO CLIP)

HAYES:  Trump responded with a statement calling President Obama, quote, "a failed leader who along with the Secretary of State Clinton created a foreign policy that has destabilized the world and made it unsafe.  He`s the one who is unfit to be president and Hillary Clinton is equally unfit."

Trump`s attacks on the Khan family come at a critical juncture in this campaign.  Recent polls showing Hillary Clinton with a sizeable bounce after the Democratic convention.  The latest NBC News/Survey Monkey online poll puts her eight points ahead of Trump, up from just one point lead a week ago. 

According to "The Hill", the Trump campaign e-mailed surrogates this week calling for an urgent pivot away from the Khan controversy.  "Reuters" reports the Trump backers asked Capitol Hill to put out statements showing their support.  It appears no such support was forthcoming.

And today, two of Trump`s surrogates distanced themselves from his comments about the Khan family. 

(BEGIN VIDEO CLIPS)

GOV. CHRIS CHRISTIE (R), NEW JERSEY:  It`s just inappropriate for us in this context to be criticizing them and I`m not going to participate in that. 

RUDY GIULIANI (R), FORMER NEW YORK CITY MAYOR:  I think it could have been handled better.  I think he knows that.  My advice to Donald would be very simple.  I`ll tell you the advice I would give him.  You have one person to attack, Hillary Clinton. 

(END VIDEO CLIPS)

HAYES:  Today, Representative Richard Hanna of New York became the first sitting GOP congressman to endorse Hillary Clinton, citing his belief that, quote, "being a good American who loves his country is far more important than parties."  Hanna is a relative moderate who faces no political consequences as he`s set to retire at the end of the year. 

Meanwhile, for all the loyalty Donald Trump is receiving from top Republicans, he`s apparently not inclined to return the favor.  In an interview with "The Washington Post," Trump refused to support Paul Ryan and John McCain in their upcoming primaries. 

  Joining me now, Congressman Blake Farenthold.  He`s a Republican from Texas who has endorsed Donald Trump. 

Congressman, let me ask, do you want to take back your endorsement of Donald Trump, or are you still sticking with that? 

REP. BLAKE FARENTHOLD (R), TEXAS:  I`m still on the Trump train. 

HAYES:  What do you think of the way that he`s attacked the Khan family?  Do you agree with Medal of Honor winner Dakota Meyer who says that Trump owes them an apology? 

FARENTHOLD:  I think it`s really tough being in Donald Trump`s shoes, when you`ve got the media looking to put the worst possible spin to everything that you say. 

HAYES:  Wait, are --

FARENTHOLD:  Donald Trump has said he honors the service of the Khans and the sacrifice that they made. 

HAYES:  Right.  But he also questioned whether the mother of this man who gave his life in Iraq was instructed or not allowed to say anything.  What do you think of that? 

FARENTHOLD:  Well, I -- again, that was Donald Trump speculating and there are a lot of folks within the Republican Party would love it if he would stick to the script, but ad lib.  But the American people are tired of the focus group tested platitudes we hear from the Clinton campaign.  When was the last time she spoke --

(CROSSTALK)

HAYES:  When he says about a mother who stood on stage, later explaining that she`s so grief-stricken at images of her son, she couldn`t bring herself to speak and implies that the woman has been instructed not to speak with clearly bigoted insinuation about the woman`s faith as her husband is giving testimony about their deceased son, do you think that`s decent on the part of Donald Trump? 

FARENTHOLD:  Again, I don`t think you can pick someone`s motivations and know what`s in someone`s head, whether it`s Mrs. Khan or Donald Trump.

HAYES:  Congressman, what would it take?  Presumably I`m going to assume there`s some set of pronouncements from your party`s nominee, some set of policy proposals that would cause you to rescind your endorsement.  Would you agree with that?  There`s a hypothetical set of things that would make you rescind your endorsement.  Do you agree with that? 

FARENTHOLD:  Sure.  Anything could happen.  But right now, you`ve got Donald Trump versus Hillary Clinton and it`s a real clear choice. 

HAYES:  Could you provide me with an example of what kind of thing would be in that category?  Because I think what`s confusing to a lot of people from the president on down, what it would take for a Republican such as yourself to rescind your support for him? 

FARENTHOLD:  You could come up with hundreds of things that he could do, but, again, he hasn`t done them yet.  And everything that you and the media are blowing out of proportion, it`s tough. 

Listen, I`ve been out on the campaign trail and you get a tracker or somebody following you.  And Donald Trump has every major network looking to put the worst possible spin on every word that comes out of his mouth.  And he`s going to speak from the heart and not read canned speeches. 

HAYES:  Do you think Dakota Meyer, the Medal of Honor winner, who called on him to apologize was blowing it out of proportion? 

FARENTHOLD:  Again, I think a lot of these calls are being fed by you guys` spin.  Go look at the actual transcript.  It`s not as bad as press reports make it look. 

HAYES:  So, you`re just going to stick with this the next 98 days and basically wherever this train goes, through whatever bigoted muck it may travel, Congressman Farenthold is on that train?  Is that how I should understand it?

FARENTHOLD:  The train could get derailed, but it hasn`t yet.  And I think it`s going to take a lot to make Hillary Clinton a person who tells lies to cover up her lies look better than Donald Trump, a man who speaks from his heart. 

HAYES:  So far he`s doing it.  Congressman Blake Farenthold, thank you very much.  Appreciate your time tonight, sir.

I`m joined now by Republican strategist Rick Wilson, who I should say, strongly opposes Donald Trump. 

(LAUGHTER)

HAYES:  I mean, I guess there`s nothing.  I have to say, like today -- first, let`s start with this.  Forget all the Khan family stuff, anyone with a basic sense of decency can understand why it`s indecent, right?  Forget the politics of it. 

Trump today trolling Paul Ryan, playing footsie on Twitter with his primary opponent, and this is the best part, talking about Ryan, "I`m just not quite there yet, I`m not there yet," spitting back in his face the phrasing that Paul Ryan used in his sort of Hamlet-ish dithering over whether to endorse Trump.  What do you make of that? 

RICK WILSON, REPUBLICAN STRATEGIST:  Look, this is a guy who`s vengeful and so petty and so small, that it should remind Republicans that this isn`t a Republican nominee.  This is a virus that has infected the Republican Party.  And he`s eating the host from the inside out. 

He will never be a transactional person.  He will never have any of the things you do in politics to try to build your party, build your movement, et cetera.  It`s all Trump.  This is only about him.  This is only about his ego and his gratification of his little revenge fantasies. 

And, you know, today with John McCain and Paul Ryan both, who swallowed an enormous river of bile for this guy, and have defended him over and over again -- you know, I can`t wait for both of those gentlemen to be past their primaries.  Because while it sucks they can`t come out and say what`s in their hearts, it`s explicable that they`re both in contested primaries right now, and you get this sort of political imperative underneath it. 

But on the other side of it, Donald Trump`s pivot to the general election is still mostly about slamming his fellow Republicans.  It`s a mystery. 

HAYES:  Here`s what`s so striking to me.  Again, we`re in the realm of -- we`re so far from the realm of policy at this point, aside from things like the Muslim ban.  You know, this idea of like what would he do on day one?  We`re in this sort of bizarre netherworld of kind of arm chair psychology. 

You know, every single person that has come into his orbit, particularly those have lent their support have walked away diminished.  They walked away with their dignity essentially eaten.  It doesn`t seem accidental.  This is the M.O. of this guy.  

And if for no other reason of the self-preservation of dignity, you think more people would take the Ted Cruz route, having witnessed that. 

WILSON:  Well, you know, you look at a guy like Chris Christie, when Donald Trump said, go fetch your shine box, Chris Christie tugged his forelock and said, yes, Mr. Trump.  He abased himself in ways that you would normally have to pay a professional to do. 

This is a guy who revels in humiliating his vanquished opponents, who revels in rubbing it in your face after he`s beaten you, or rubbing in your face after he perceives himself to be in a superior position.  You don`t build a team like that.  You don`t broaden your appeal like that. 

This guy is playing out bizarre revenge fantasies against people that ran against him.  It`s always on the tip of his tongue to go after Jeb or Marco or Ted Cruz or anyone else who slighted him at any point. 

HAYES:  If you sit and watch his campaign events day after day, as I do and my colleagues do, there`s a long rift in which he relives the primary.  It`s like a big chunk of the stump speech, just getting himself worked up over that. 

Rick Wilson, thank you for the time.  Appreciate it. 

WILSON:  Thanks, Chris.

HAYES:  Joining me now, Betsy Woodruff, politics reporter for "The Daily Beast", Robert Costa, national political reporter for "The Washington Post" and MSNBC analyst.

Robert, the Richard Hanna news doesn`t strike me as a particularly big deal.  There are a few other people, former staffer of Jeb Bush, a former confidante and close staffer of Chris Christie who have come out and said not only am I not going to vote for the guy, I`m going to vote for Hillary Clinton. 

What are the conversations on Capitol Hill and among professional Republicans like around this topic? 

ROBERT COSTA, THE WASHINGTON POST:  It`s a particular type of Republican who at this moment is migrating away, rushing away from Donald Trump.  I`ve seen this, especially with loyal, long-time Republicans, mostly women.  You look at Sally Bradshaw, the aide to Jeb Bush.  Maria Comella, the former aide to New Jersey Governor Christie, and you see a lot of Republican women, and of course with Hanna, the New York congressman, really uncomfortable with Trump.

It`s not an ideological discomfort, it`s temperamental. 

HAYES:  Yes, there`s some word now from how the NRCC, Betsy, is going to handle this, or the group that has to coordinate down-ballot, house congressional race.  There`s not a ton of vulnerable Republicans.  But there`s, you know, a dozen in districts -- actually more than that if I run the tally in my head.  What do those folks do? 

BETSY WOODRUFF, THE DAILY BEAST:  They cross their fingers and hope for the best.  "Politico" published a memo I believe this afternoon that the NRCC sent to many of these vulnerable Republicans and the line that stuck out to me, they said, if you supported Trump in the past, but feel like you can`t support him anymore, just own it.  Just come out and say it and be honest with it and take the hit. 

I think it`s fascinating that a branch of the Republican Party is telling elected Republicans that it`s okay for them to disavow the Republicans` presidential nominee.  This is uncharted territory.  The fact that this is even something we`re talking about is a really big deal and I think it shows that a lot of Republicans are looking for life boats at this point. 

HAYES:  Robert, do they think -- do they think he can win?  I mean, I think it`s worse for them if he does.  If he wins, then he fundamentally and permanently transforms the Republican Party.  If he loses, they can be like, OK, man, that was embarrassing, whoo, OK, let`s get back to it. 

Do they think he could win? 

COSTA:  There is a sense that Trump could win, because there is a sense that the political winds maybe somewhat he is in his favor, that he is lacking in terms of fundraising, in competition with the Democrats, the grassroots organization for Trump is behind in many states, key states, battleground states, but because Trump represents this populist movement that`s almost non-partisan, maybe if he can drive out working class voters, especially white working class males, he could have this new coalition that could be potent, and you mix that with Secretary Clinton`s also high negative numbers, there`s maybe a brew there for Trump.  But most people are skeptical. 

HAYES:  That`s the case to be made, although I remain unpersuaded.  We`ll see, of course, as time goes on. 

If there`s a single -- if you could buy stock in a politician.  The one stock I think that`s probably gone up highest in value since clothing in Cleveland is not Hillary Clinton necessarily.  It`s Ted Cruz, Betsy. 

And I think every day that goes by, what he did in that arena, looks more and more perceptive, just a sheer level of self-preservation while you watch everyone else abase themselves. 

WOODRUFF:  I would say there are two counterpoints to that.  Ted Cruz`s numbers have taken a nose dive ever since that moment happened.  Even if he won the argument on principle, back home in Texas, things are not looking good for him.  If you make your stock purchasing decisions based solely on that, maybe Cruz isn`t the best pick. 

The other problem with Ted Cruz, with what he did in Cleveland, is that he didn`t oppose Trump for the reasons that folks like Sally Bradshaw and Richard Hanna opposed Trump.  Cruz said the reason he felt he could not support Trump, particularly at the Texas delegate breakfast was because Trump went after his wife and his father.  He made it clear it was personal.  That it wasn`t about policy, it wasn`t about perceived bigotry or temperament problems, that this was actually something between him and Trump. 

That said, of course, lots of never Trump folks will see Cruz as the principled alternative going forward.  But I think other folks are going to be pretty skeptical. 

COSTA:  Chris, real quick, on the point you`re making, it`s a provocative one, maybe Cruz did have the best convention in that he`s positioning himself for 2020.  But that`s a gamble as Betsy says, because who`s to say the Republican Party, whether Trump wins or loses, is going to be reverting back to this ideological movement, conservatism? 

HAYES:  That`s a great point.  Here`s the one lesson I`ve learned cover the run-up to the Iraq war in 2003.  You vote and you conduct yourself in politics, bent towards what the long-term first order judgment of what`s best is, and not in short-term political gain, because there are so many Democrats who voted for that war, who had their careers later on practically destroyed by it, because people told them in the minute, in the moment, this is the way the polling goes. 

And if anyone has learned anything about that, it`s probably Hillary Clinton who now stands on the other side of this race.  But it`s amazing to me to watch people make the same mistake again. 

Betsy Woodruff and Robert Costa, thank you both very much. 

COSTA:  Thank you.

WOODRUFF:  Sure thing.

HAYES:  Still to come, how would Democrats respond if they nominated a candidate like Trump?  A little thought experiment ahead. 

But, first, the Republican nominee`s deeply concerning attitude towards sexual harassment.  Donald Trump`s comments right after this break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

IVANKA TRUMP, DAUGHTER OF DONALD TRUMP:  At my father`s company, there are more female than male executives.  As president, my father will change the labor laws that were put in place at a time when women were not a significant portion of the workforce.  Policies that allow women with children to thrive should not be novelties.  They should be the norm.  He will fight for equal pay for equal work, and I will fight for this too, right alongside of him. 

(END VIDEO CLIP)

HAYES:  Just two weeks ago at the Republican National Convention, Ivanka Trump put a feminist face on her father`s campaign.  A moment that feels another eon, given Donald Trump`s response, the cascade of allegations of sexual harassment and worse against the former chairman of FOX News, Roger Ailes.  One week after calling Ailes a good friend and personal friend, and seeming to call into question some of the acquisitions, Donald Trump was asked, "What if someone had treated Ivanka in the way Ailes allegedly behaved?"  To which he replied, "I would like to think she would find another year or another company if that was the case."

This morning, Trump`s son Eric attempted to do damage control and ended up making it worse. 

(BEGIN VIDEO CLIP)

ERIC TRUMP:  My father runs a company and that is an absolutely no-go on anywhere.  That`s very much the case.  I think what he`s saying is, you know, Ivanka is a strong, you know, powerful woman.  She wouldn`t allow herself to be objected to it.  And, by the way, you should certainly take it up with human resources.  And I think she definitely would, as a strong person. 

At the same time, I don`t think she would allow herself to be subjected to that.  I think that`s the point he was making and I think he did so well. 

(END VIDEO CLIP)

HAYES:  After that, FOX News anchor Gretchen Carlson whose lawsuit against Ailes precipitated his resignation from FOX News, tweeted, "Sad in 2016, we`re still victim-blaming women.  Trust me, I`m strong, stand with Gretchen." 

And fascinatingly, Megyn Kelly, who has not commented at all about Ailes, despite reports that she told investigators that Roger Ailes sexually harassed her, responded to Eric Trump`s comments with one word, "Sigh."

Joining me now, NBC legal analyst Lisa Bloom.  She represents Jill Harth, who sued Donald Trump for sexual assault in 1997.  Trump has called Harth`s claims, quote, "meritless".

Lisa, first, I want you to just react to -- your reaction to hearing this sort of idea which I think is very common place that fundamentally there`s some problem with the woman at issue, if this kind of thing happens. 

LISA BLOOM, NBC NEWS LEGAL ANALYST:  Well, it obviously happened to Gretchen Carlson.  It probably happened to Megyn Kelly.  It`s happened to me.  It`s happened to the majority of working women. 

No matter how strong you are, no matter if you are a known sexual harassment attorney, as I have been for many years, there`s going to be that guy in power who`s going to try to grope you, who`s going to say something inappropriate.  It`s just a fact of life for working women, no matter how strong you are. 

And how dare anybody with the name of Trump blame women for sexual harassment.  Thank God we have laws to protect us.  I encourage Donald Trump and Eric Trump to read those laws.  We don`t have to leave our jobs, we don`t have to find another career.  We get to have our dignity and our jobs at the same time.

HAYES:  You know, to your point about it could happen to anyone, here is Ivanka Trump herself in her 2009 book, autobiography, "The Trump Card".  "That type of thing has happened to me before, many times actually on my father`s construction site, but in those cases, they never realized I was the boss`s daughter when they started hooting and hollering.  Didn`t much matter how I responded."

So, to your point, it can happen to anyone. 

BLOOM:  Yes, absolutely.  And it does.  We have to stop focusing on the women or the victims of sexual harassment, who are sometimes men as well, I`ve represented them too. 

We have to focus on the perpetrator.  People like Roger Ailes, right?  I mean, he is getting the send off a $40 million pay-off.  It doesn`t like much of a penalty.

My client Jill Harth, as you say, has accused Donald Trump of sexual harassment since 1997.  There was a settlement at that time that went all to her husband, for his company.  So, she didn`t get a dime.  She`s been asking for an apology, and she still hasn`t gotten one. 

I think Donald Trump, fundamentally, does not get it, and his son, trying to do damage control, has dug him in deeper. 

HAYES:  Yes.  What -- tell me how this works generally in terms of litigation of this kind of thing?  My sense is, you know, people talk about HR, I think there`s probably a lot of hesitancy to go forward, because there will be hassles or recriminations.

Once you enter the legal arena, how do these cases shake out? 

BLOOM:  Well, actually, the best thing a sexually harassed worker can do is gather evidence, hold on to it, and document it.  Put in writing what your compliant is, give it to HR and hold on to that.  That protects you.

  The company has an obligation legally under Title 7 and state laws to do a prompt, thorough investigation, punish the perpetrator and protect the victim.  You cannot be retaliated against.  If you are -- and it certainly happens, and I represent a lot of people where it does happen, that they are then fired, or lose their jobs.  Definitely see a lawyer. 

Now you have two claims, your original sexual harassment claim and you have a retaliation claim, which often is the stronger claim.  And there are a lot of lawyers who are going to be happy to represent you in that. 

HAYES:  All right.  Lisa Bloom, thanks for joining us.  Appreciate it. 

BLOOM:  Thank you. 

HAYES:  Coming up, you`ve asked for it, you`ve waited for it the whole day.  Trump`s last ten list, a running tally that literally had any other candidate said or done, it would have ended their campaign.  It`s just 24 hours old the one we have, but it`s already outdated.  We have more things to add right after this short break. 

(COMMERCIAL BREAK)

HAYES:  All right.  Last night, we gave you an update on a segment we like to call Trump`s last ten.  It`s a running tally of things that had literally any other candidate said or done them, probably would end their campaign, but not Donald Trump.  

If you recall, we had to wipe out our previous board, entire erase it clean and replace it all the new controversies that Trump has brought on himself the weeks of the convention.  But because we are now in full general election mode, and the candidate for the Republican Party who`s running for president is Donald Trump, this list is already out of date. 

So, let`s a moment to remember some of the stories that have brief stay in the list created just about 24 hours ago.  Number eight, Trump suggesting U.S. military support for NATO members should be conditional on whether they met their financial obligations to the alliance.  Number nine, a Trump adviser who is saying that Hillary Clinton should be shot for treason for mishandling e-mails.  And number ten, Trump`s claim that Justice Ruth Bader Ginsburg`s mind is shot after she criticized him in a few interviews.

We now bid those controversies goodbye to make room for three new ones that have topped up since yesterday.  Our new number three, Trump musing in an interview that if his daughter Ivanka was sexually harassed at work, quote, "I`d like to think she would find another career or find another company if that was the case."

Number two, after a recipient for the Purple Heart medal gave a copy of his medal to Trump at a rally, the Republican presidential nominee, who received five draft deferments during the Vietnam War said and I quote, "I always wanted to get the Purple Heart, this was much easier."

And, finally our new number one, Trump seemed to root for the economy to tank.  "The numbers are getting worse and worse and they get real bad.  I hope it happens fast."  And if it does, he`ll make sure to blame the Democrats. 

(BEGIN VIDEO CLIP)

TRUMP:  Because the numbers are getting worse and worse all the time.  If they get real bad, I hope it happens fast.  They`ll all blame me.  You`ll end up winning and your first day the economy crashes because of some incompetent people before me.  Ai, yai, yai.  Well, we`ll get it straightened out, but we`ll certainly blame them, OK?  We`re going to blame them.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP:  And as far as the tax returns, as soon as the audit is complete, like any lawyer would tell you, Greta van Susteren, she`s going over it awhile ago -- she`s a lawyer.  She said, well no lawyer would let somebody release a tax return when they`re under audit.  It`s a routine audit.

I`ve gone through audits -- which I think is very unfair, for 15 years.  I have friends that are very rich, they never get audited.  I`m audited every year.  Maybe that`s because of politics, who knows.

(END VIDEO CLIP)

HAYES:  In the past four decades, every major party nominee has released his or her tax returns.  Most of those presidential hopefuls release them by the time they were officially nominated at their party`s convention.  Not Donald Trump.

While candidates are not, of course, legally obligated to release tax returns, Trump`s refusal goes against pretty firm longstanding precedent in the interest of transparency.

Trump is citing an IRS audit and apparently the advice of Fox News`s Greta Van Susteren, as the latest reason as to why he won`t be releasing his tax returns anytime soon, even though, as The Washington Post points out, the first president to release his taxes, Richard Nixon, did so in the middle of an audit.

Yesterday while stumping for Hillary Clinton in Omaha, Nebraska, billionaire investor Warren Buffett called Trump out on it.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, FOUNDER, BERKSHIRE HATHAWAY:  I`ve got news for him, I`m under audit too.  And I would be delighted to meet him anyplace, anytime, between now and election, I`ll bring my tax return, he can bring his tax return.  Nobody`s going to arrest us.  There are no rules against showing your tax returns.  And just let people ask us questions about the items that are on there.

How many of you would be afraid to have your tax return made public?  You`re only afraid if you got something to be afraid about.

(END VIDEO CLIP)

HAYES:  Joining me now, David K. Johnson, columnist of The Daily Beast, author of "The Making of Donald Trump," which examines Trump`s rise to prominence and is out today -- somehow you`ve written this book in the last 15 hours.  I`m not quite sure how this happened.

All right, so, well, so first of all, let`s start with the basic factual stipulation.  You`ve covered taxes for 20-plus years.  That is the case.

DAVID K. JOHNSON, THE DAILY BEAST:  I`m a teacher (inaudible) that follows the law, and I`m not a lawyer.

HAYES:  Right, so you could release -- there`s no reason...

JOHNSON:  Not only could you do it, but let`s take Donald at his word.  He doesn`t want to release the returns under audit.  He`s indicated that`s 2012 forward.  Well, let`s see your returns, then, from 2011 back to say 1980.

Hillary Clinton`s returns are all available, complete returns, back to the `70s.  There`s no reason for Donald not to release the returns, by his own standard, that are no longer under audit.

HAYES:  One of the reasons I wanted to have you on and talk about this topic is -- again, we`re doing this thing, you know, the last 10.  And he says so many outrageous, offensive things.  And, you know, ultimately this is a guy with no public service record to look at.

JOHNSON:  Right.

HAYES:  All he`s got in the record in private business.  And basically there`s no -- there`s very little public documentation about that in some ways.  This is the way that you would get some sense of the guy`s dealings -- how good or bad he is, right?

JOHNSON:  Well, ask Hillary Clinton about when I reverse engineered her tax returns and how furious she was.  I showed that they paid more than twice as much federal income tax, the President in Bill Clinton, for several years as needed.

I can tell you a lot if we had Donald Trump`s tax returns.  I could tell you how wealthy he really is from the value of the buildings and the depreciation that`s taking -- now he`s got over 500 business entities.  So, his tax return, if you`ve seen the pictures, like this high, as it should be.

But, Donald has a long history, -- and I go through this in "The Making of Donald Trump," of using two sets of numbers.  So, he claims, for example, that his golf course in Los Angeles is worth over a quarter of a billion dollars and then he tells the property tax officials, it`s worth ten.  His golf course in Westchester County, he says, oh, it`s worth over $50 million.  Well, no, no, for tax purposes, it`s worth 1.4.

HAYES:  This is my favorite.  We covered this and we should pictures just off Zillow of like houses adjacent to the golf course that are worth more than $1.4 million. 

JOHNSON:  And listen, a number of the columns I`ve written at The Daily Beast and the National Memo and other places have shown that there`s tremendously strong evidence of tax cheating by Donald.  And I can give you the best example of this.

In 1984, the city of New York and state of New York audited his tax returns.  He filed a schedule C, it`s what freelancers file, or people who work for themselves as a consultant.  No revenue, zero revenue, over $600,000 in deductions.

I know you`ll be shocked to hear the auditor said, excuse me, we`d like a little documentation and support for this.  He had none.

He still ordered an appeal.  His long-time tax lawyer testifies and when he`s shown the New York City return, he goes, well, that`s my signature on the photocopy, but I didn`t prepare that document.  Well, the only other person who could have done that would be Donald Trump.

HAYES:  Wow.

JOHNSON:  And by the way, my first national investigative reporting award more than 40 years ago was for catching somebody who used a photocopier to put their name on somebody else`s medical records.  I think -- and Donald participated in the empty box scheme at Bulgari, and luckily didn`t get  indicted or he would have lost his casino license.

I think there`s a lot there we could learn, especially about all of the money coming out of Kazakhstan and other former parts of the Soviet empire to his businesses, which his son, one of his sons has acknowledged.  And all of his travels with the son of the reputed mob boss here in New York City, a violent convicted felon, who took the broken stem of a margarita glass and plunged it into a guy`s face, took 110 stitches.  And ran then a $40 million stock swindle for the Genovese and Gambino crime families, Donald says I wouldn`t know if he was in the room.  Well, I have got photographs and videotape and I recount episodes in my book he was with him in Colorado, in Arizona, and Florida, and New York.

He signed off on business deals with him.

HAYES:  The point being right here that -- and I want to just be clear about we know and don`t know, because I don`t want to cast aspersions unnecessarily without documentation.  The point being that a variety of questions have been raised about the propriety of business dealings, about where his money is coming from, about who -- I mean, this strikes me as an important thing, who does the future president of the country owe money to?  Right?  Who are they on the hook to is a pretty key thing.  We`ve never had something like this. 

All of that would be answered in tax returns, which in some ways become more important with this candidate than any other we`ve had before.

JOHNSON:  Absolutely, and particularly if he owes money to people who are connected to Vladimir Putin.  That should be very, very troublesome.  We need to see his tax returns, absolutely need to see them.

HAYES:  All right, David K. Johnson, thanks for stopping by today.

Still to come, it`s Donald Trump versus a baby.  No, you didn`t mishear me.  The tape you do not want to miss, that`s just ahead.  Don`t go away.

(COMMERCIAL BREAK)

HAYES:  Thing one tonight, Donald Trump is obviously not the typical candidate.  He doesn`t follow all the normal rules and social niceties your average politician might follow, but some things are just unavoidable for a person running for office like, for instance, the classic kissing babies routine.  Even Trump partakes in that old campaign trail tradition.  Here he is just last week holding two babies at once.  How sweet.

Here`s another shot of that a few moments later. 

Listen, babies are hard, they cry.  Although check out that swift handoff.

But today, he had a true politician`s test: a crying baby during his stump speech.  Take a look.

(BEGIN VIDEO CLIP)

TRUMP:  And I`m very close to China.  I have the biggest bank in the world as a tenant of mine in New York, the biggest in the world, a Chinese bank.  Don`t worry about that baby.  I love babies.  I hear that baby crying, I like it.  I like it.  What a baby.  What a beautiful baby.

Don`t worry, don`t worry.  The mom`s running around, like -- don`t worry about it, you know.  It`s young and beautiful and healthy, and that`s what we want.

(END VIDEO CLIP)

HAYES:  Well handled, sir.

In case you missed it, his response even illicited some attendees to chant "moms for Trump," just tremendous.

Now, you may be thinking to yourself, could there possibly be any more to that tape?  Of course there is.  And that`s thing two in just 60 seconds.

(COMMERCIAL BREAK)

HAYES:  OK, so a crying baby interrupts Donald Trump`s speech and it looks like he`s going to be annoyed, but he actually handled it pretty well.

(BEGIN VIDEO CLIP)

TRUMP:  Don`t worry about that baby.  I love babies.  So -- I love babies.  I hear that baby crying, I like it.  I like it.  What a baby.  What a beautiful baby.  Don`t worry.

(END VIDEO CLIP)

HAYES:  Pretty gracious of Trump, right?  That is until his patience for that baby ran out, exactly 53 seconds later.

(BEGIN VIDEO CLIP)

TRUMP:  They have ripped us to shreds, ripped us absolutely to shreds.

Actually, I was only kidding.  You can get the baby out of here.  That`s all right.  Don`t worry.

I think she really believed me that I love having a baby crying while I`m speaking.  That`s OK.  People don`t understand.  That`s okay.

(END VIDEO CLIP)

HAYES:  Two things, that`s actually kind of funny.  And also, babies are hard.  Although that definitely could have gone worse.

(BEGIN VIDEO CLIP)

TRUMP:  All right, get him out, get him out.

Knock the crap out of him, would you?  Seriously.

I`d like to punch him in the face, I`ll tell you.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HAYES:  So when Donald Trump`s nomination began to look like a real possibility, a number of conservatives began to rally behind the never Trump movement.  And it was around that time that I started posing the question to myself and friends, how would I or other people react if Democrats had nominated a temperamentally unfit, incoherent candidate with absolutely no electoral experience as their party`s standard bearer.

It`s a hard thing not to speak about, especially considering the current president is openly calling for Republicans to withdraw their support for Trump.  New York Times columnist Ross Douthat presented an interesting scenario with this tweet yesterday, "imagine a race where the choices were an unfit, paranoid unstable Democratic nominee and a Rick Santorum."

And today Slate contributor Seth Stevenson (ph) imagined a world if Sean Penn were the Democratic nominee asking his Democratic friends, would you willingly cede the White House to, say, Ted Cruz if it meant keeping Sean Penn away from the levers of power?"  Would you vote for Cruz just to stop Penn?

There are those who say the better analogue in this scenario would be someone like Mitt Romney or John Kasich since Hillary Clinton isn`t a hardliner like Cruz, Stevenson writes, "she represents everything that`s wrong with the left.  The analogy is fair when viewed through the eyes of a Republican voter."

Well, it just so happens I have a pick for a better analogue to Donald Trump, someone who already has plans to run for president.  And we talk about what it would be like if Democrats were faced with that dilemma next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KANYE WEST, RAPPER;  And, yes, as you probably could have guessed by this moment, I have decided, in 2020, to run for president.

(END VIDEO CLIP)

HAYES:  Kanye West announcing his 2020 campaign.

Joining me now Josh Barro, senior editor of Business Insider and MSNBC contributor, and Sam Seder, host of the Majority Report, also an MSNBC contributor.

I don`t know where -- you`re all worked up about this thought experiment, which I think there`s a kernel of something useful for liberals and anyone with certain diehard politics.  But you think it`s bunk.

Like, the kind of what if Democrats had their own Trump thing.

SAM SEDER, HOST, MAJORITY REPORT:  Yeah, I mean -- you know, it`s more -- I guess my point is, it makes more sense to say, what if Democrats had Trump, not even their own Trump, because it shows just how absurd the idea is.

I mean, it`s not like Donald Trump parachuted in and all of a sudden won the lottery and that`s how he became the nominee.  There`s something uniquely problematic about the Republican base that elected Donald Trump their nominee and there is no analog on the Democratic side.

Any problem that you can find with Donald Trump that is shared widely is something that is  unique to the Republican Party.  And that`s why we see the needle has not moved on Donald Trump in terms of what I`ve said in the past, is is the normal electorate.  It is a uniquely Republican phenomena.

JOSH BARRO, BUSINESS INSIDER:  I think there are two separate questions here.  One is would Democrats nominate someone like this?  And I think it`s true that the Democratic Party is more resilient than the Republican Party.

I mean, you saw, there was an insurgency in the Democratic Party that got put down in the primaries this time.  And Bernie Sanders, obviously, was a much less ridiculous person than Donald Trump.  And even he was not able to overcome the establishment candidate.

So, I think the Democratic Party functions better, is not vulnerable to outsiders like Trump.

I think second question is what would Democrats do if they ended up in this situation?  I think the incentive that Republicans are facing where if they decide to fight each other during the general election, they`re just all going to die fiery political deaths and lose their re-election races for congress, those incentives would apply for Democrats.  So, I think there would be pressure to line up behind a terrible candidate.

I mean, I think the closest real political analogue right now for Democrats is Alan Grayson who is a congressman from Florida, who is trying to run for the Senate, who frankly seems pretty mentally unstable, and he`s in a primary that I think he`s going to lose, but he`s the sort of person who, if he were to somehow get the Democratic nomination, that`s who you would have to think about.  Would Democrats say this person is responsible enough to have his finger on the nuclear button?

HAYES:  Well, let me say this about Grayson, because I think it`s actually a perfect example for this reason.  And it gets back to what you said, right.  So Grayson is -- has been a kind of -- because of his -- both his stances on progressive issues, which he`s been a sort of stalwart progressive down the line, and because he likes to fight with Republicans in a very flamboyant fashion, has been beloved by a certain part of the Democratic base.  The latest allegations came out from his ex-wife saying that over a period of years, 20 years, he had repeatedly abused her. 

Immediately, the two lefty groups that endorsed him, right, the PCCC and Democracy in America rescinded their endorsements, which is precisely the kind of sort of check on this behavior that was in every way lacking during the primary, which speaks to your point about the sort of asymmetry.

SEDER:  Right.  And this is something -- I mean, I don`t even think that Grayson is analogous to Donald Trump.

The problem that people have with Donald Trump is not necessarily that he`s a bad person at home.  It is, the guy is completely devoid of policy.  Every single thing that you would want from a candidate, from a president, this guy lacks.

I mean, Alan Grayson may be, as you claim, mentally unstable, or have some other issues, but I think like, this is a guy who could actually...

HAYES:  The other thing is, he served in congress.  I mean, to me there`s the sort of -- more like the Ted Cruz thing.

The thing that I`ve been thinking to myself, the reason I find it destructive is, watching all this -- I said at the top of the show, it reminds me of Iraq back in 2003.  Watching these people make these short- term political calculations that are so obviously the wrong calculation on the substance and merit of the thing, thinking that they`re going to get over for the next three months.  They`re going to get over,  they`re going to sort of duck underneath the wave and they`re going to survive, not realizing that that`s not the way it works.

SEDER:  But let me just say my final point is, is that to even propose this thought experiment  is to delude one self that there isn`t a problem with the Republican base.

The reason why Paul Ryan and McConnell are making these decision is not because they`re not sure what it`s going to look like in five years, it`s that they are afraid of their voters today.  And that`s why they`re making those decisions.  And that`s what`s being ignored in that thought experiment is there`s something uniquely problematic with the Republicans.

BARRO:  I mean, Paul Ryan`s district is not as Republican as you might think.  It`s like an R plus three district.  So if he broke with Donald Trump, he would have real risk of losing the general election to a Democrat.

So I think, you know, Paul Ryan has not been a profile in courage.  I wish he had stood up to Donald Trump.  But he faces strong incentives to do what he did.  And I think a lot of people would make the moral failure that Paul Ryan has made there.

I think a lot of us would step back and wonder if we would really rise to the occasion in the way that we want our leaders to...

SEDER:  I`m not judging his morality, I`m saying those incentive structures is the problem.

HAYSE:  Right.  Right.

SEDER:  That he is...

HAYES:  Well, there`s also -- the other thing I`ll say is, there`s this broader problem of just what facts people find credible.  So, go back to the Grayson thing, right, the response of the people on the left wasn`t, that`s made up, these allegations, it`s all a conspiracy.  It`s was like, no, whoa those look -- like, when you get rid of it the structure of belief in the way that has been laid waste to on the right for 30 years, you can forgive anything, because anything can be a conspiracy, anything can be the hatchet of the people trying to get them.

And then you never have to do with any first order issues because you can explain them all way.

Josh Barro, Sam Seder, thanks for joining us.

That is All In for this evening.  The Rachel Maddow Show starts right now.

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