The Rachel Maddow Show, Transcript 09/19/08

Guests:
Ana Marie Cox
Transcript:

RACHEL MADDOW, HOST:  Good evening, Keith.  We will make more.  Thank you so much.

And thank you for sticking around this Friday night.  It was an extraordinary news day today.  To cap on extraordinary news week, we‘re going to try to pack as much of it as reasonably as possible into the next hour.

(voice over):  It‘s a crisis so bad that normally-hostile politicians came together to try to do something to bail out America‘s economy and abort (ph) a global fire sale on financial assets.  Barack Obama was on board.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE:  I urge Senator McCain, President Bush, Republicans and Democrats to join me.

(END VIDEO CLIP)

MADDOW:  Obama was on board, but John McCain is having none of it.

(BEGIN VIDEO CLIP)

MCCAIN:  Maybe just this once, he could spare us the lectures.

(END VIDEO CLIP)

MADDOW:  This has been a landmark week in America and a week that John McCain would probably just as soon forget.  It‘s a week that ends for him with some unforgettable audacity.  Paul Krugman reviews McCain and Obama, and the economic crisis. A day after we were among those shoveling dirt onto the troopergate investigation, there are signs of life there.  Alaska state lawmaker, Hollis French, vowed that the investigation will conclude before November -before the election—even as “First Dude,” Todd Palin defies his subpoena.  We have the latest live from the last frontier. Plus: The equal part secrecy, deviousness, falsity, power-grabbiness, hawkishness, and taunting—mix them all together and you get Dick Cheney or is it Sarah Palin or is Sarah Palin Dick Cheney?  A vice presidential audition that‘s going unexpectedly well four more years—four more years.

       

THE RACHEL MADDOW SHOW starts now.

(on camera):  Today ended a week that was a dry run for John McCain and Barack Obama—a genuine crisis: the partial, so far, meltdown of the country‘s financial system.  It threatens every American.  And absent much of anything at all from George W. Bush, the nation has turned its eyes to the two men vying to head the federal government.  What we got this week was a glimpse, not only of policy positions, but also of leadership style, of temperament under pressure.  Barack Obama went for the door marked, “I am a calm, focused unifier” in the face of national peril.

(BEGIN VIDEO CLIP)

OBAMA:  We did not arrive at this crisis by some accident in history.  What led us to this point was years and years of a philosophy in Washington and on Wall Street that viewed even common sense regulations and oversight as unwise and unnecessary.  It shredded consumer protections and loosened the rules of the road.

CEOs and executives got reckless, lobbyists got what they wanted, and politicians in both parties looked the other way until it was too late.  It is now the American people who pay the price.

(END VIDEO CLIP)

MADDOW:  Senator Obama has the political luxury of his consistent positions in favor of regulating the financial markets, having clearly enunciated his current position in a major speak at NASDAQ a year ago this week and having restated it in even more forceful terms and in more detailed this past March at Cooper Union.  He can afford to be steady and stick to the plan he has already offered.

John McCain, a foot soldier in the Reagan revolution of deregulation and a 26-year veteran booster of capitalism without restriction doesn‘t have that same luxury.  So, McCain led today by blaming Barack Obama for the crisis on Wall Street.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE:  We learned a lot of words from Senator Obama over the course of this campaign.  But, maybe just this once, he could spare us the lectures and admit to his own poor judgment in contributing to these problems.  The crisis—the crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence peddling, and he was right square on the middle of it.

(CROWD BOOING)

MCCAIN:  My friends, this is the problem in Washington.  People like Senator Obama have been too busy gaming the system and haven‘t ever done a thing to actually challenge the system.

(END VIDEO CLIP)

MADDOW:  No, really.  That‘s your diagnosis?  It‘s Barack Obama‘s fault?

Perhaps not the least ridiculous possible approach to this situation, considering the gravity of this crisis and considering that—one, McCain advisor Phil Gramm wrote the laws that deregulated these markets; two, McCain‘s campaign manager, Rick Davis, lobbied to help Fannie and Freddie steer clear of federal regulations; and three, one of McCain‘s top policy advisors, Charlie Black, was a lobbyist for Freddie Mac for 10 years.  None of which was lost today on Senator McCain‘s rival, Barack Obama.

(BEGIN VIDEO CLIP)

OBAMA:  This is the guy who spent nearly three decades in Washington and after spending the entire campaign saying I haven‘t been in Washington long enough, he apparently now is willing to assign me responsibility for all of Washington‘s failures.  I think it‘s pretty clear I think it‘s pretty clear that Senator McCain is a little panicked right now.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW:  (INAUDIBLE) panicked header as the economy hangs in the balance, the McCain appeared, at least, to produce the race card, of all things from the bottom of the deck today.  It was a television ad with sinister images of a purported connection between Senator Obama and former Fannie Mae exec, Franklin Raines.  The report to which the purported connection was sourced, it was the “style section” of the “Washington Post.”

Why would McCain even bring this up?  Why would he raise Obama‘s thin ties to Fannie and Freddie, given the reports that he, himself, has 19 people working as either advisors or fundraisers for him who are lobbyists for Fannie Mae or Freddie Mac?

Time to bring in senior editor for “Newsweek” magazine, Jonathan Alter.  He‘s also an NBC news analyst.

Jon Alter, nice to see you.

JONATHAN ALTER, NEWSWEEK:  Hi, Rachel.

MADDOW:  Is this a rouge thing—go on the offense from the point at which you are, yourself, vulnerable?  I mean, McCain‘s trying to go on the offense on longevity in Washington and ties to lobbyists.

ALTER:  Yes, it‘s rich, so to speak, considering that his campaign manager, Rick Davis was a lobbyist for Fannie Mae and Freddie Mac.  You know, it reminds me of what was done to McCain by George W. Bush in the South Carolina primary.  After McCain won New Hampshire, suddenly, Bush rechristened himself with the help of Karl Rove as, quote, “a reformer with results,” when that had been, you know, McCain‘s calling card.

So, you just try to steal the other guy‘s thunder and you assume that the American public is stupid which is what is the operating assumption on this case.

MADDOW:  Well, what do you think of the last provocative—I admit provocative point I made there, and I honestly am open-minded about this—but, I want to get your opinion on this idea that this Raines ad, this Franklin Raines ad that was put up today by the McCain campaign not because there is a worrying tie between Obama and Frank Raines, the Fannie Mae executive, because there doesn‘t seem to be a tie between them, but because Raines is black and they were bending over to make a race-tinged ad showing this two black men looking very menacing and then showing a worried and distressed elderly white woman at the end of the ad

ALTER:  Well, you know, I would like to think that‘s not true.  And it is a fact that Frank Raines was kind of disgraced when he left Fannie Mae.  So, there was—they were trying to get to that scandal element here.  And to give them the benefit of a huge doubt, all right, let‘s give them that.

The problem is that it might be a part of a pattern.  It was an ad last week that they did going after critics of Sarah Palin and they used a quote from Joe Biden saying, “She is good looking” as if, you know, this was a horrible thing for somebody to say but they didn‘t put it over Biden‘s picture, they put it over Barack Obama‘s picture, trying to play on that old, you know, Emmett Till idea that got him lynched in the 50s.  That black men are after our white women and think they are good looking.

This is one of the deepest, you know, canards in American history and part of the stain of racism.  And so, you know, were they doing that?  Maybe it was just a mistake in the editing room.

The problem is: Obama cannot call him on these things because, then, he looks like he just playing grievance politics and that becomes distraction.  And we all chew on this, instead of talking about real things like the financial meltdown.

MADDOW:  Sure.

ALTER:  But McCain had a bad week, Rachel.  You know, he was “Uncle Ziggy” in the Zigzag Express, all over the highway there.  And so, you know, he‘s trying to recover now by lashing out.  I don‘t think it‘s going to work for him.  His best hope is that the market goes up enough so that everybody starts talking about something else.

MADDOW:  You know, he said Senator Amy Klobuchar on the show earlier this week, and I said to her that the Obama campaign seems to hit its stride when the country is talking about issues and that‘s why they seemed to have hit their stride this week because we are talking about the economy, but I said they also seemed to wilt when McCain gets to drive there whenever we end up talking about, you know, lipstick and Britney Spear stuff.

Klobuchar actually agreed with me on that, even the wilting part of it.  If next week, McCain throws up another culture or patriotism something smokescreen and the country isn‘t talking the economy as much, are Obama and Biden back on their heels or do you think they‘re they learning their lesson?

ALTER:  Well, we will see.  And it‘s an extraordinarily important point for them to be able to move the conversation back to substance.

Look—today was a huge day in American history.

MADDOW:  Yes.

ALTER:  It was not just the biggest bailout in history, but basically remember when McCain said we are all Georgians now?  We are socialists now, Rachel.

I mean, this is a form of European-style socialism – $1 trillion to back these industries?  It actually also advantages Obama and that it‘s very hard for the right to say that Obama is a dangerous socialist since their president, Hank Paulson, president of the United States arguably.

MADDOW:  Yes.

ALTER:  He is the one who is driving this train.

MADDOW:  Yes.

ALTER:  They came up with a necessary, but nonetheless a socialist solution to this crisis.

MADDOW:  Jonathan Alter, NBC News analyst and “Newsweek‘s” senior editor, have a very good weekend in very trying times.  Thanks for joining us.

ALTER:  Yes.  Thanks, Rachel.

MADDOW:  The estimate of today‘s government rescue plan for the economy, as John said, is $1 trillion, $1 trillion.  A number so big, it used to be in the zillion, bazillion, kabillion (ph), category of words made up to sound too big to imagine.  Should we be happy this plan is so ambitious because maybe then it‘s big enough to work?  Or might the economy totally, globally tank no matter the size of this rescue plan?  Is this just the first trillion?

With numbers this big, this diagnosis this dire, I am no longer worrying about my tax dollars, I‘m worried about the country.  This sometime feels like everything everyday rebounds (ph) to the election but this feels bigger than the election.

Whether it is President Obama or McCain, will the new president be taking over a government that is a shell of its former self, helming an economy that is itself a shell of its former self?  How much is our economy changed?  How much is our country changed just in the past weeks?

Here to try to Talk Me Down—and I really hope he does—is Paul Krugman, “New York Times” columnist, professor of economics at Woodrow Wilson School at Princeton.

Paul, nice to see you.  Thanks for joining us.

PAUL KRUGMAN, NEW YORK TIMES:  Hi, there.

MADDOW:  So, make your case.  Should I be this freaked out or can you Talk Me Down here?

KRUGMAN:  Gosh.  You know, in the long run, it will work out.  But, as the great economist, John Maynard Keynes said, “In the long run, we are all dead,” this is pretty serious.  I mean, this is—it‘s funny.  I thought I was a little over the top but it turns that what Bernanke and Paulson told Congress was pretty much what I‘ve been saying in my worst moments which is that unless we get a grip on this right now, it‘s 1931.  It‘s the Great Depression all over again.  This is an incredible financial crisis.  The whole system is apparently within days of melting down.  So, you know, assuming that it gets rescued here, then it‘s only bad, but not terrible, but wow—it‘s really pretty bad.

MADDOW:  What is a total meltdown look in terms that non-economists

look like in terms that non-economists can understand and what can rescue us from total meltdown?

       

KRUGMAN:  OK.  The meltdown of the financial markets really would mean that nobody can get a loan, not even loans to, you know, operating.  So, business sort of grinds to a halt because the cash—nobody can do business entirely on cash.  And you can‘t have the lending and so, unemployment scoots up, business failures across the board, lots of people, even more people lose their houses.  You know, 1932, sort of, after the banking crisis of the early Great Depression.

That‘s the picture except it‘s, you know, it‘s all kind of not banks of big buildings of marble, but it‘s more virtual, it‘s more 21st century, but still basically the same thing.

What can advert it is if the taxpayer stands guarantee, so behind enough assets so business is able to keep functioning.  And that‘s essentially what we think is in the plan, although, you know, we don‘t have any details yet about how this is going to work.

MADDOW:  In the, I guess, in the broadest possible terms, is

politics just ceased to matter?  We‘re not hearing, I know, certainly we‘re

hearing sniping on the campaign trail, John McCain blaming Barack Obama for

what‘s happened which is -

KRUGMAN:  Right.

MADDOW:  I think a spit-take moment for most of the country.  But honestly, beyond that, it seems like what is being talked about to try to rescue the economy right now isn‘t particularly partisan or isn‘t particularly contentious, it just seems sort of desperate and unified.

KRUGMAN:  That‘s not entirely true.

MADDOW:  OK (ph).

KRUGMAN:  I mean, I think, there is now bipartisan agreement except for a sort of rump true believer Republicans, that we need a gigantic rescue plan.  So, that much politics has just ended.  You know, but the details—what happens to stockholder and financial firms that get a lot of their assets bought out?  What happens to the—what happens to the company where even if there‘s an asset buyout by the Feds, it‘s still not solved—the company.  How do we keep it a going concern, do we keep it a going concern?

Those are real issues.  If you listen closely to what Chuck Schumer is saying, it‘s not the same as what Hank Paulson used to be saying and there‘s going to be, I think, there probably is, right now, behind closed doors, a fight about those details.  So, there is—it‘s not like we‘ve agreed on everything.  But the big thing, yes.  Politics, you know, it‘s just amazing.  And my first reaction on hearing this was, you know, Economic Czar Paulson has seized control of the means of production.  All the political divides have broken down.

MADDOW:  As Jon Alter just said, we are all socialists now, right?

KRUGMAN:  Incredible.

MADDOW:  Paul Krugman, “New York Times” columnist, you have absolutely not succeeded in Talking Me Down.

KRUGMAN:  Right.

MADDOW:  But thank you for coming on to help us explain it tonight, appreciate it.

KRUGMAN:  Thanks so much.

MADDOW:  So, it wasn‘t such a good week for John McCain on the whole “talking about the economy” thing.  It also wasn‘t such a good week for John McCain on any front, even foreign policy.  He wants to rattle-sabers against Spain.  Then, there was a whole inventing the BlackBerry thing and he wants to fire the SEC chairman, even though he can‘t.  And he wants to have the FEC chairman resign even though the FEC is just minding its own business.

We‘re going to be looking back at John McCain‘s less than stellar week, in just a moment.

And: It turns out that reports of the demise of troopergate may

have been greatly exaggerated.  One man very close to the investigation

says Republicans‘ efforts to push the investigation off until after the

election may not have succeeded after all.  He‘ll be joining us live from

Alaska, next

(COMMERCIAL BREAK)

MADDOW:  Breaking news tonight in the troopergate investigation.  Well, I‘m getting used to saying that.  The scandal has taken more turns than a square dance at this point.

Anyway, tonight‘s breaking news on the investigation into

troopergate, Sarah Palin‘s alleged abuse of power as governor of Alaska,

her alleged improper firing of the state‘s Public Safety commissioner for

refusing to settle a personal Palin family score by firing a state trooper

as you know.

Here‘s tonight‘s breaking news.  An Alaska lawmaker heading up the probe says it will still be completed before the election, probably by October 10th, despite attempts by allies of Palin and the McCain campaign to derail the investigation.

I, all but declared troopergate over on last night‘s show.  It turns out I was wrong.  Republicans have charged that the inquiry has been corrupted by politics and by supporters of Barack Obama, even though it was launched after a 14 to zip bipartisan vote in the Alaska State House.

Palin, initially, vowed full enthusiastic cooperation with the investigation.  Now, neither she nor her husband, nor state employees are agreeing to straightforwardly answer questions in the probe.  And Republican lawmakers are suing to try to kill the investigation all together.

Joining us now is Democrat Bill Wielechowski, an Alaska senator and a member of the Senate Judiciary Committee overseeing the Palin investigation.

Senator, thank you very much for joining us.

STATE SEN. BILL WIELECHOWSKI, (D) ALASKA:  Hi, Rachel.  Glad to be here.

MADDOW:  Yesterday, we heard Todd Palin was not going to show up and give a deposition in troopergate.  We heard that the investigation could be delayed until after the election.  Twenty-four hours later, all changed.  It now, at least, sort of looks like the investigation is back on track.  That‘s what it seems like from here.  What‘s your assessment?

WIELECHOWSKI:  I think you‘re accurate.  The investigator has told us that he feels he can complete the investigation by October 10th.  When the legislative council, 14 members, agreed to go forward with this unanimously, they set a deadline of October 31.  And he intends to adhere to that deadline.

MADDOW:  The independent investigator who is picked to head up this investigation.  He is one of the people who the McCain and Palin forces, for lack of a better term, have been impugning in terms of his independence, in terms of his reputation, in terms of his status as a non-partisan arbiter here.  What‘s your reaction to that?

WIELECHOWSKI:  It‘s really unfortunate.  What we‘ve seen in the last couple of weeks is a pretty much nonstop smear campaign by the McCain campaign to attempt to discredit a man who has given 25 years of his life to prosecuting criminals here in Alaska.  He‘s got a sterling reputation.  He was unanimously voted by the legislature several years ago to be the first head of Office of Victims‘ Right here in Alaska.

And he is—it‘s really unfortunate to see what they‘ve been doing to him and anyone, really, that steps forward and disagrees with the McCain campaign.

MADDOW:  It seems like there has also been a real campaign against the reputation of Walt Monegan, who is the Public Safety commissioner, who was fired, who‘s firing rise to this investigation in the first place.  Obviously, he‘s a different guy than the investigator, Branchflower.

But has there also been a push back or reaction in the state to the impugning of Chief Monegan?

WIELECHOWSKI:  There has.  I think Alaskans are very, very upset.  Walt Monegan, again, another individual with just a stellar reputation, 35 years of protecting Alaskans.  He was this chief of the Anchorage Police Department.  He was the head of the state trooper.  One of the most respected individuals, quite frankly, in the entire state.  And there‘s been a real pushback just from ordinary Alaskans to see, who are seeing that he‘s really being smeared, unfortunately, drive to the mud by the McCain campaign.

MADDOW:  Can you describe how the climate around the investigation feels now as compared to when it started?  And, of course, when it started, Sarah Palin had not yet been tapped as John McCain‘s V.P.

WIELECHOWSKI:  Right, this investigation, quite frankly, was pushed by Republicans.  It was a number of key Republicans who wanted this investigation to go forward.  It, ultimately, did go forward on unanimous vote in front of the legislative council.  Eight Republicans and four Democrats all voted to go forward with it.  The House speaker, who‘s a conservative Republican, voted to go forward with it.  The president of the Senate, a conservative Republicans from governor Palin‘s own district, voted to go forward with it.

The governor herself came out and said, “I welcome the investigation.”  She‘s directed her staff to cooperate with the investigation repeatedly.  In fact, she came out with a press release on August 13th, directing her staff to cooperate with the investigation.  The reason she did that was because at that time, we were getting ready to issue subpoenas and she said, “No, you don‘t need to issue subpoenas, I‘ll cooperate completely.”  And she had cooperated completely.  Everything changed, unfortunately, the day after she was selected to be the vice president.

MADDOW:  If Todd Palin, and state employees, and aides to the governor, refuse to testify, if they resist the subpoenas, is the investigation really hamstrung or do you think that it can go forward and report in a full way by October 10th?

WIELECHOWSKI:  Oh, absolutely.  You know, we‘ve said all along, it‘s up to Steve Branchflower, the investigator.  And if he thinks he‘s got enough information, if he thinks he can go forward, then it‘s to go forward.  And he‘s been working on this for almost a month and a half now.  He‘s been working on it every day.  He‘s collected quite a bit of evidence. 

And he‘s taken a lot of depositions already.

And I think one thing that the people forget is, of the people that were subpoenaed that failed to appear, we already have statements from them because the attorney general had been conducting an independent investigation of his own.  And he got that investigation where there are sworn statements by a number of those witnesses.

So, you know, he wanted to talk to them himself and they, unfortunately, are not allowing him to do that.  But he still has quite a bit of information.  He feels that he can issue and impartial report.

MADDOW:  This is a big development in this case.  The squashing has been squashed, at least, in the short run.

Alaska Senator Bill Wielechowski, thanks for talking about this with us tonight, and good luck to you.

WIELECHOWSKI:  Thank you.

MADDOW:  Coming up: We will play the name those eerily (ph) similar elected officials.  What politicians, either extremely close to the Oval Office or trying to get there, think subpoena is a four-letter word.  And also enjoy a friendly totally disproven feud (ph) between friends.  If you answer correctly, your price includes a chilling feeling of executive branch deja vu.

Stay tuned for results.

(COMMERCIAL BREAK)

MADDOW:  John McCain‘s terrible, horrible, no good, very bad week cap off gaffe caustically (ph) today when he confused the SEC, the Securities Exchange Commission with the FEC, the Federal Election Commission.  Does that mean that John McCain was thinking more about the election than about our national financial meltdown?  Paging Dr. Freud.

More on that in just a moment.

RACHEL MADDOW, HOST:  John McCain‘s terrible, horrible no-good, very bad week, kept off and gaffed (UNINTELLIGIBLE) today when he confused the SEC - the Securities and Exchange Commission with the FEC - the Federal Election Commission. Does that mean that John McCain was thinking more about the election than our national financial meltdown?  Paging Dr. Freud.  More on that in just a moment.

First though, it‘s time for a special Friday edition of the underreported holy mackerel stories in today‘s news. First up, a development in the only story I‘ve ever covered in all the stories I‘ve covered in all the years of the Bush administration that involves the phrase “snorting meth off the toaster oven.” 

New news today about the royalty-in-kind office of the Department of Interior.  The office at which the inspector general of the department says nearly a third of the staff were involved in socializing with and receiving gifts from the oil and gas companies they were supposed to be overseeing.  And by “socializing with,” I mean socializing with while naked, while lying down, presumably, also snorting meth off toaster ovens and otherwise doing drugs.

The inspector general last week submitted his three reports documenting the dirty details of the “Drill, baby drill” office of interior. Yesterday, he told the House Natural Resources Committee that he doesn‘t know why the two highest ranking officials that he recommended for prosecution in the case have been given a get-out-of-jail free card by the Justice Department.  Two former employees of that office did cut deals with Justice that involved pleading guilty. But the department has not yet explained why it‘s not brought charges against two other higher-ranking officials.

Columnist Al Cayman(ph) of “The Washington Post” today does, however, put a silver lining around the dark ethics cloud hanging over the Department of Interior.  Cayman(ph) notes that just this month the Interior Department was awarded an education and communication award from the Office of Government Ethics. They earned the award for, quote, “developing a dynamic, laminated ethics guide for employees.”  I guess we now know a little bit more about why they might have wanted to laminate it.

Finally, Barack Obama gave an interview to the Elko, Nevada NBC station yesterday where he had a pesky, little encounter.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I warned a year ago and a year and a half ago that the subprime lending crisis could spill over, and that - let me again. The main thing that I try to would do is avoid from getting in this crisis in the first place. I warned - I‘m sorry. 

UNIDENTIFIED MALE REPORTER:  There‘s a lot of flies in here. The senator is going to do something about these flies.  (LAUGHTER)

OBAMA:  Let‘s cut that.  We‘re going to do it one more time.  All right, let‘s try it one more time.  (LAUGHTER)

There‘s no doubt that we‘re under-investing in education.  Now, mostly that‘s a state issue.

UNIDENTIFIED MALE REPORTER:  It‘s OK.

OBAMA:  All right.  Let‘s try it again.  We need to invest in early childhood education.  (LAUGHTER)  I‘m sorry.

UNIDENTIFIED FEMALE:  We need an exterminator.

(END VIDEO CLIP)

MADDOW:  The fly obviously a well-trained agent of the Republican Party. 

Advantage GOP in round one of the annoying electoral insect wars.

(COMMERCIAL BREAK)

MADDOW:  I am not a person who plays golf.  I‘m no golfer, but I know enough the rules of golf to guess that John McCain wishes he could take a mulligan right now. Sen. McCain, this was your week.

(BEGIN VIDEOTAPE)

MADDOW (voice over):  The McCain campaign was on top of the world.  And then, Monday happened.

UNIDENTIFIED MALE REPORTER:  Good morning.  Meltdown, a financial tsunami engulfing some of the nation‘s biggest moneymakers. 

MADDOW:  While the rest of the known universe was uttering words like crisis, meltdown and panic, John McCain uttered eight words that triggered what soon became an avalanche of a week.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  Still, the fundamentals of our economy are strong.

MADDOW:  McCain and his advisors knew they were in a dilly(ph) of a pickle.  Sounds too much like Hubert Guber(ph) in 1929, “What do we do?  How do we get our guy out of this and blame the other guy at the same time?”  Three hours later, they had a solution, probably written frantically on note cards.

MCCAIN:  Our workers are the most innovative, hardest working, best skilled, most productive, most competitive in the world.  That‘s the American worker.  And my opponents may disagree, but those fundamentals - those are the fundamentals of America and I think they are strong.

MADDOW:  Got to give them credit for ambition anyway.  People who think the economy is in trouble like Barack Obama and everyone else in America hate American workers?  Yes.  The week was off to a bad start, a surefire way to turn it around, unleash the McCain camp expert.  That will show him.  Douglas Holt-Eakin, McCain‘s chief economic advisor, gave it a whack.

DOUGLAS HOLT-EAKIN, MCCAIN‘S CHIEF ECONOMIC ADVISOR:  You‘re looking at the miracle John McCain helped create.

MADDOW:  John McCain invented the Blackberry?  John McCain says he doesn‘t even know how to use E-mail or the Google.  With Internet inventor Al Gore surely giggling at an undisclosed cyber-optimized location, the McCain campaign sent out its other top economic advisor fired Hewlett Packard CEO, Carly Fiorina.  She‘ll straighten this mess up.

UNIDENTIFIED MALE:  Does Sarah Palin - John McCain obviously thinks she has the experience to become president of the United States. Do you think she has the experience to run a major company like Hewlett Packard?

CARLY FIORINA, MCCAIN ECONOMIC ADVISOR:  No, I don‘t.

MADDOW:  Carly, you want to take another stab at that one? 

FIORINA:  I don‘t think John McCain could run a major corporation.

MADDOW:  Oh.  Surely after that effort, the McCain camp announced Carly Fiorina was going to, quote, “disappear for awhile.”  Tada.  Back on the home front, John McCain was in the midst of day two of his gaffe-filled week.  Take, for instance, his attempts to discuss the Securities Investor Protection Corporation, the SIPC.  OK, now you try, Sen. McCain.

MCCAIN:  I pledge that the FDIC and SPIC will have all the support they need.

MADDOW:  I‘m sorry.  Did you just say S-P-I-C?

MCCAIN:  We‘ve got the FPSCC, the CFTC, the FDIC and the SPIC.

MADDOW:  Oh, that‘s so unfortunate on so many levels. By Wednesday, things were just getting weird.  McCain was selling his “Drill baby drill plan” with an environmental twist. 

MCCAIN:  His fish - everywhere.  Yes, they - the fish love to be around those rigs.

MADDOW:  With McCain already twisted into the verbal equivalent of MC Escher lithograph, he performed a miraculous change of heart about the bailout plan for troubled insurance giant, AIG, opposing it on NBC‘s the “Today” show on Tuesday, then supporting it on ABC‘s “Good Morning, America” on Wednesday.  Perhaps the senator is unaware that those shows are recorded.  Having barely politically survived Wednesday, McCain tried Thursday on for size.  His big, bold idea for a blue ribbon commission to study the economy having died faster than a diet pledge at a state fair, Sen. McCain tried out a new line.

MCCAIN:  The chairman of the SEC serves at the appointment of the president, and in my view, has betrayed the public trust.  If I were president today, I would fire him.

MADDOW:  Well, his a man of words about actions, except no president can take the action of firing the SEC chairman, that doggone constitution and its anti-tough-talk rules. The whole thing almost made Sarah Palin look like the rational half of the Republican ticket, so much that she attempted to turn that whole “who‘s the running mate” thing upside down.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE:  That‘s exactly what we are going to do in a Palin and McCain administration.

MADDOW:  Which brings us to today, to Friday, which brought yet another McCain gaffe on the economy.  As he attempted today deliver his “fire the SEC guy” line again, he fell just short of his intended target.

MCCAIN:  That‘s why I believe that the chairman of the FEC chairman should resign.

MADDOW:  That‘s right, FEC chairman Donald McGhan, you‘re next.  Your crime?  Heading a commission with letters so close to that darned SEC.  There is good news tonight, though, a silver lining for the McCain campaign.  This week is officially over except for Saturday and Sunday.

(END VIDEO CLIP)

MADDOW:  I‘d like to welcome Ana Marie Cox.  She‘s the Washington editor for “RadarOnline.com” and a contributor to “Time” magazine.  Ana, thanks for spending some of your Friday night with us. 

ANA MARIE COX, WASHINGTON EDITOR, RADARONLINE.COM:  It‘s really good to be here.  And I just want to say congratulations, Rachel, on how well the show is doing.  And I just, as a viewer, really appreciate having alternative to all the wrinkly, old men and (UNINTELLIGIBLE) that are on the other channels, although I have been out with McCain, so I‘ve seen a lot of both of those types. 

MADDOW:  You know, I think that in my own mind, I am a wrinkly old man so -

COX:  You‘re like a (UNINTELLIGIBLE) to me. 

MADDOW:  Oh, thank you.  I think - yes.  OK. 

COX:  I understand that you‘re different. 

MADDOW:  Thank you.  You saw in the tape the stuff that we collected over the course of this week from the campaign trail.  This just seems like a horrendous week for McCain, I mean, at least from the studio in which I‘m sitting here in New York.  Looking at the tapes, it just felt bad.  I know that you were traveling with him this week.  Did it seem bad out there, too?

COX:  Oh, yes.  You know, there are some things that the bubble will protect you from.  But the sort of the sloshing of flop sweat tends to work its way inside.  So, yes, and I think the traveling press noticed that things were not going well.

I think that today, maybe they felt a little bit better about today than you did.  I think that week had started so bad, there was kind of no way for it to get - it hit bottom and stayed at bottom and then maybe crept up just a little bit.

MADDOW:  Do they seem mad?  Do they seem energized?  Do they seem demoralized? 

COX:  Oh, they are energized by their anger, that‘s what I would say.  It‘s a very - they have never been a calm group of people on the McCain campaign, which I kind of like, to be honest.  I like emotional people because they are fun to cover.  But, you know, they seem pretty angry.  They also - this is, I think, interesting. 

You know, you had a segment about their ad about Raines.  And there‘s accusation or a question about whether or not there was intended to be somehow playing a race card in that.  And I think that - I was trying to talk to McCain people about this and frankly, they don‘t care.  They don‘t care what we think.  They stopped.  You and I could talk about everything they have done in the past week.  It‘s a mistake.  This is not going to matter to them.  They‘ve reached that point.

MADDOW:  What was amazing, though, in the response to that, it was Karen Tumulty, your colleague at “Time” magazine who posted at the “Time” Web site that those thoughts about maybe this being a race-driven decision to put up this ad about Raines, given that the tie - the actual link between Obama and Raines is so tenuous, he sort of had to look somewhere else to explain why they would be running an ad like that.  And the response from the McCain official blogger was that Karen Tumulty was hysterical.  And I thought, “Oh, they are trying to (UNINTELLIGIBLE).” 

(CROSS TALK)

They‘re trying to get called racist.  They‘re trying to get called sexist because maybe they think that makes them look old school.

COX:  I think - I mean, I actually also want to say I do not think that that ad was intentionally racist.  I honestly do not.  And that‘s based on conversations with them and it‘s based also on the fact that they had another ad in the can already, the Jim Johnson ad …

MADDOW:  Right.

COX:  … before they did this ad.  And I think I‘ve been told that was finished first.  But it‘s still a misleading ad, definitely.  And I think what you saw in that post from Michael Goldfarb, their blogger, is that they are ready to stay in the flames of any controversy.  Because I do think that what they saw with Sarah Palin and the way the media treated her, was how much that excited the people that were not excited before.

Some of it has to do with Sarah Palin‘s, I think, remarkable charisma.  And she‘s a great communicator.  I don‘t think you can argue with those things.  But I think also, there‘s a lot of resentment on the part of some people in the Republican base.  And when you have the mainstream media calling you names, that fires them up.

MADDOW:  I‘m going to start just talking about ornamental horticulture (UNINTELLIGIBLE). 

COX:  Well, I was going to say, I mean, the thing is, like, what I‘ve (UNINTELLIGIBLE) it‘s unfortunate we get distracted into these arguments about whether or not it‘s racist, whether or not it‘s sexist, because there‘s so many good reasons not to vote for John McCain and Sarah Palin, like good stuff (UNINTELLIGIBLE) reasons.  You know, I would rather talk about the stuff that‘s kind of ridiculous.  But it is interesting that we are spending so much time on these things, that you and I are just right now. 

MADDOW:  We just - we‘ll stop.  Thanks.  Thanks for joining us.  Ana Marie Cox, joining us today from Washington.  Appreciate it.

COX:  All right.  Thank you.

MADDOW:  Well, it may take years before she ever acquires that dark metaphorical Darth Vader cloak that envelops Cheney.  Sarah Palin has already scored top marks in the Dick Cheney school of vice presidential behavior, majoring in secrecy and vindictive governance with a minor in contempt for the rules.  Can‘t wait to read her senior thesis on the last throes of the Iraq insurgency. 

(COMMERCIAL BREAK)

MADDOW:  Extreme views, a little bit of cluelessness, comfort with dishonesty and secretive authoritarian tendencies.  Take equal parts of each, shake over worrisome health and you have what many Americans think of as the office of vice presidency under Dick Cheney.  Vice President Cheney really, deeply unpopular with the American people and has been for a long time.

Joe Biden and Sarah Palin now vying to replace him.  When John McCain asked Sarah Palin to be his vice presidential running mate after meeting her just once, the first question on everyone‘s mind was, what kind of decider is John McCain?  How do you pick the person you want to run the country with after one meeting?  Does that mean McCain is one of those look them in the eye and know their soul kind of gut-check deciders?  Because we all know how well that worked with Putin.

Either it was a gut-check decision or someone else made this decision for McCain.  Somebody told him he couldn‘t have who he really wanted and he had to take Palin, in which case I want a chance to vote on whoever that person is, who gets to tell McCain what he can and can‘t do. 

So that was the first question and we all found out about the Palin pick.  How did that happen, John McCain?  The second question, of course, was who‘s Sarah Palin?  And that is what Americans have been paying so much attention to now for the past three weeks or so since we‘ve gotten to know her.  We are all coming to our own conclusions about whether we think she really has what it takes to take over Cheney‘s office.  I‘m thinking it might be a really, really easy transition from Cheney to Palin. 

And here‘s why.  First, extreme views.  Who else in the world doesn‘t think that global warming is man-made at this point?  Wonder twin Cheney-Palin powers, activate.  Second, a little bit of cluelessness?  Cheney gets lots of credit for being the Machiavellian puppet master, controlling everything in Washington, the omniscient evil genius.  You know, don‘t give the guy too much credit.

(BEGIN VIDEO CLIP)

DICK CHENEY, UNITED STATES VICE PRESIDENT:  I think they‘re in the last throes, if you will, of the insurgency.

(END VIDEO CLIP) 

MADDOW:  Vice president Cheney‘s last throes?  Meet would be vice president Palin‘s online government checkbook.

(BEGIN VIDEO CLIP)

PALIN:  As Alaska‘s governor, I put the government‘s checkbook online so that people can see where their money is going.  We‘re going to bring that transparency.

(END VIDEO CLIP)

MADDOW:  You know, that would be an awesome idea for Washington.  That‘s why Barack Obama and Tom Coburn did that already two years ago.  How about also the issue of comfort with dishonesty?

(BEGIN VIDEO CLIP)

CHENEY:  It‘s been pretty well confirmed that he did go to Prague and he did meet with a senior official of the Iraqi intelligence service.  And we have reporting that places him in Prague with a senior Iraqi intelligence official.

(END VIDEO CLIP)

MADDOW:  Dude, that‘s so was not pretty well-confirmed.  But you‘re obviously pretty comfortable repeating it, nonetheless.  Gov. Palin, if you want Cheney‘s job, we‘re going to need to know just how comfortable you are with saying stuff that‘s flat-out not true to the American people.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS TV HOST:  The bridge to nowhere - 

PALIN:  Yes. 

HANNITY:  Did you originally support it?

PALIN:  I killed the bridge to nowhere and, you know, I think I ruffled some feathers there also.

(END VIDEO CLIP)

MADDOW:  I cannot speak to the feathers but you so totally did not kill the bridge to nowhere. And you‘ve been called out on it a million times already.

Finally, let‘s assess the most Cheney-esque of all the vice presidential vices that have brought Americans‘ feelings to a warm simmer of fear and loathing about the east wing of the White House.  That would be secretive and authoritarian tendencies.  The easiest job in the Federal Government is being vice president Cheney‘s spokesperson.  How many different ways can a person say no comment?  It‘s just not that hard a job.  You know how the McCain campaign won‘t let Sarah Palin talk to the press?  The guy running the McCain campaign, Steve Schmidt, used to be Cheney‘s spokesman, so he‘s had lots of practice.  Don‘t forget also the mysteriously missing E-mails from Cheney‘s office including from the day the FBI announced they were investigating the Valerie Plame-Wilson affair. 

I see you those missing Cheney E-mails and raise you the 1,100 Sarah Palin E-mails she‘s withholding under executive privilege.  Subpoenaed in a Palin investigation in Alaska?  Check the Cheney and Bush playbook for how to deal with a subpoena in Washington. 

Here‘s my favorite and this has just broken today.  One of the weirdest, most surreal displays of the secretive and authoritarian tendencies of Vice President Cheney was when his office insisted that the office of the vice presidency really didn‘t exist formally on paper.

(BEGIN VIDEO CLIP)

DAVID ADDINGTON, DICK CHENEY‘S CHIEF OF STAFF:  The best that can be said is that the vice president belongs neither to the executive nor to the legislative branch.

(END VIDEO CLIP)

MADDOW:  See, since we‘re not part of the executive branch, we don‘t have to follow the rules about disclosing anything that the executive branch has to disclose.  Oh, and we don‘t have to follow any of the rules about disclosing anything that the legislative branch has to disclose either.  We‘re fairies.  We‘re in the ether.  We‘re in your mind, scaring your future. 

“The Hill” newspaper in Washington today asked both Joe Biden and Sarah Palin if they, too, would maintain that the office of the vice presidency doesn‘t really exist, if they too would deny that the office of vice presidency is part of the government, part of the executive branch.  Biden‘s response, essentially, don‘t be ridiculous.  He said, quote, “Unlike Dick Cheney, Joe Biden won‘t have to create a full-employment plan for lawyers and scholars to clear up something that was unquestioned for about 200 years.  The vice president is part of the executive branch, period, end of story.”

Sarah Palin‘s response, on the other hand - no comment. Dick Cheney, meet Sarah Palin.  Sarah Palin, meet Dick Cheney, although it seems like you guys might already know each other.

(BEGIN VIDEO CLIP)

CHENEY:  A pig, but at the end of the day, it‘s still a pig.

PALIN:  The difference between a hockey mom and a pit bull - lipstick.

(END VIDEO CLIP)

MADDOW:  Let the debate continue about whether or not Sarah Palin is ready to take over for Dick Cheney.  I, for one, think she‘s been preparing for it her whole life. 

(COMMERCIAL BREAK)

MADDOW:  Now, it‘s time for “Just Enough” with my friend, Kent Jones.  Hi, Kent.  What have you got?

JONES:  Thank you, Rachel.  Happy talk like a pirate day, arghh.  First up in London.  The west end buzzing about a new stage show due to open next month called the “Obama Musical.”  The tune reportedly takes a humorous look at personalities behind Obama‘s campaign.  Even though the show is still in rehearsal, my spies tell me that the Axelrod flute duet before act one - goose bumps.

And finally, science magazine has published a study that found that people that react strongly to sudden noises and threatening images tend to be conservative politically. On the other hand, people who are less sensitive to noise and pictures tend to be more liberal.  Let‘s do an experiment.  Now, does this image frighten you?  OK. 

Now, how about this one?  Aah, no respect to science but sometimes these studies are just wrong. I‘m just saying, Rachel.

MADDOW:  Thank you very much, Kent.

JONES:  Sure.

MADDOW:  And thank you for watching tonight at home.  We will see you here Monday night.  Until then, you can hear my radio show at 6:00 p.m. Eastern coast to coast on Air America Radio where I talk real good.  “COUNTDOWN WITH KEITH OLBERMANN” starts right now.  Good night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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