The Rachel Maddow Show, Transcript 04/21/10

Guests:
Gov. Ed Rendell, Simon Johnson, Richard Clarke
Transcript:

RACHEL MADDOW, HOST:  Good evening, Lawrence.  I could listen to the chorus there at the end all night.  I don‘t feel like we need to be in any rush.

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  I don‘t feel like I have a right to be in the same TV box with Jon Stewart.  That is genius.

MADDOW:  At some point, you and I will do a dance number that involves a bleeped gospel choir.  It will happen, Lawrence.

O‘DONNELL:  I‘m ready.

MADDOW:  All right.  Thanks, Lawrence.  Appreciate it.

And thanks to you for staying with us for the next hour.

           

Do you remember how in the health reform fight we covered a whole bunch of groups that tried to look like citizen-powered, grassroots organic outrage but they were secretly funded and organized by corporations who didn‘t want health reform?  It looks like that same thing is going on now with Wall Street reform.  Meet the old fake boss, same as the new fake boss.  That story is ahead.

“The Interview” tonight is Richard Clarke.  The man who‘s right in his warnings about al Qaeda before 9/11 and who now wears as a badge of honor the fact that Dick Cheney tried to blame him for that attack after the fact.

Plus, we will meet the Senate candidate who wants to pay doctors in chickens; and the Supreme Court of the United States, spectacularly uninformed and depicted by finger puppets.

That is all ahead this hour.

But, first, about a week ago, “The New York Times” published a poll of tea party participants across the country.  We do not spend a lot of time talking about polls on this show, especially polls of social movements that don‘t have formal membership and are pretty loosely defined.  But there was one thing written up in that poll that has stuck with me that I can‘t really get out of my head.

This is from the end of “The New York Times‘” synopsis of their findings.  “Nearly three-quarters of those who favor smaller government said they would prefer it even if it meant spending on domestic programs would be cut.”

“But in follow-up interviews”—this, I cannot get this out of my

head—“tea party supporters said they did not want to cut Medicare or

Social Security—the biggest domestic programs, suggesting instead a

focus on, quote, ‘waste.‘”

That‘s a conundrum, isn‘t it?  Asked Jodine White, age 62, of Rocklin, California: “I don‘t know what to say.  Maybe I don‘t want smaller government.  I guess I want smaller government and my Social Security.”  She added, “I didn‘t look at it from the perspective of losing things I need.  I think I‘ve changed my mind.”

Right there on the spot, talking to “The New York Times” pollster.

It‘s sort of perfect, isn‘t it?  Whatever you think about the tea party protests and their tactics, now they‘ve got their message across, this right here has been one of the persistent centrist and liberal critiques of the tea party movement and this whole Obama era anti-government uprising on the right—that sort of blatant clear as day contradiction, get your government hands off my Medicare.  Get the government out of my life.  Don‘t touch my social security.

These are not apocryphal stories, I mean, made up by liberals, right?  This lady really is wearing a taxpayer revolt T-shirt while holding a sign that reads, “Don‘t touch my Medicare.”  She‘s not a staffer on the show.  We did not make her up.

This guy really did direct people to throw bricks through the windows of Democratic Party offices to protest there being too much government while he is living on Social Security disability payments—which you might know are from the government.

It‘s a contradiction that‘s present even in the way these folks choose to articulate their protest against the government.  For example, the march on the National Mall in Washington, D.C., which, even while it‘s being used as a staging ground for anti-government protesters, is a government-funded national park.

Protesters last week convening against government encroachment on private property, while standing on probably the most famous piece of public property in America.  It even has a commie-sounding name, the Boston Common—common.  Get it?  One of the country‘s oldest national parks.

On Monday, anti-government protesters showed of their right to bear arms in a government-funded state park in Virginia.

You might remember when tea party folks converged on Washington, D.C., for the big 9-12 anti-government march last year.  In addition to using a national park for the site of their protest, one of the great footnotes to that protest were the complaint by many 9-12 protesters that the public transportation system that they used in D.C. to get to their anti-government march, they didn‘t feel was up to their standards.

Here‘s how we covered it at the time.

(BEGIN VIDEO CLIP)

MADDOW:  Occasionally, you come across something when you‘re reading the news that can‘t be improved upon with comment.  So, here, without comment, is from today‘s “Wall Street Journal.”  Quote, “Protesters who attended Saturday‘s tea party rally in Washington are unhappy with the level of service provided by the subway system.  Republican Congressman Kevin Brady asked for an explanation of why the government-run subway system didn‘t, in his view, adequately prepare for the rally to protest government spending and government services.”

Seriously.  That‘s not me saying seriously, that‘s in “The Wall Street Journal.”

(END VIDEO CLIP)

MADDOW:  The ostensibly principled position these folks are taking is that they want smaller government.  They want government to do less.  And just because so many of them are retired Medicare and Social Security recipients who get to their protests in national parks via public mass transit, don‘t let that get in the way of their anti-government message.

When you are shown to demonstrably not believe something you say you believe, that‘s hypocrisy.  And reasonably speaking, it should undermine your claim that you‘re acting on principle.  You can‘t say you hate government-run health care, for example, and then profess your love for Medicare.  It is one or the other.  Or you don‘t make any sense.

In the case of the tea partiers, though, mainstream media coverage has been willing to almost assume that they‘re making sense, even in the face of evidence to the contrary.

Because the idea of being in favor of smaller government, the idea that government is inherently wasteful and incompetent and should be shrunk, because that idea has shifted from a conservative movement talking point 30 years ago to centrist Beltway common wisdom today, sometimes we don‘t recognize the hypocrisy when it‘s right in our face.  The conservative movement won the framing fight.  It doesn‘t sound crazy anymore to rail against the federal government while standing in a national park until you really think about it.

I mean, imagine anyone protesting in favor of government.  Imagine for a minute if people were actually out there protesting for government not to go away and shrink but to be better, to stay the same size or maybe even to do more.  Imagine if people were protesting against cuts to government that were going to hurt their quality of life.

It might not get as much air time as the tea party anti-government protests but that is, in fact, some of what‘s going on in America right now.

If you were in Atlanta, Georgia, today, you might have seen big mass transit buses and trains marked with giant red Xs across them.  Every bus or train with an “X” on it represented one that‘s scheduled to be cut from service as a result of the Atlanta transit system‘s massive budget deficit.  The Xs were drawn on by transit employees.

In Cleveland, Ohio, yesterday, hundreds of people jammed in to a crowded school board meeting to protest that city‘s decision to lay off more than 500 teachers in order to make up a $53 million deficit.  That decision is going to result in a 40 to one student to teacher ratio in Cleveland classrooms.

(BEGIN VIDEO CLP)

UNIDENTIFIED FEMALE:  When does money precede education of our children?

(END VIDEO CLIP)

MADDOW:  In Springfield, Illinois, today, thousands of people marched on the state capitol to argue—get this—to argue in favor of a tax increase in Illinois.  In favor of a tax increase in Illinois so that cities in Illinois do not see the same type of teacher layoffs and mass transit cut that places like Cleveland and Atlanta are already experiencing and already protesting.

At the Save Our State march today in Illinois, people reportedly chanted to their lawmakers in unison, “Show some guts.  Show some guts.”

Similar protests have taken place in the past few weeks in places including Burbank, California, and Greenville, South Carolina.  These are Americans arguing that what the government provides is important and they don‘t want it to be taken away.  And they‘re arguing that when government has to be cut for financial reasons, there‘s real pain caused by that—essentially, the people really need what government does.

It‘s sort of the un-tea party.  The anti-tea party.  The un-tea party? 

Probably never going to catch on.

Even if the protests do, it doesn‘t necessarily fit the national media narrative that everybody hates the government now.  But this is happening.  It‘s a real thing.  It should be reported on, too.

Joining us now is Pennsylvania Governor Ed Rendell.  He‘s the former chairman of the Democratic National Committee.

Governor Rendell, thanks very much for joining us tonight.

GOV. ED RENDELL (D), PENNSYLVANIA:  My pleasure.

MADDOW:  State and local governments are in dire straits right now.  You and I have talked about that before on the show.  We are seeing protest about mass transit cuts and teacher layoffs.

What do you think the political impact is of the tough situation that cities and states are in and how people are reacting to it?

RENDELL:  Well, I think you made a very central point in the early part of your narrative, and that‘s the conservatives have won this argument and they‘ve certainly won it over the last 16, 17 months—in the fact that the tea party gets tremendous—the tea parties get tremendous coverage.

And think about it—week before the health care vote, they had a rally in Washington, got 1,000 people, maybe not even that.  The tax day rally, the big rally to protest federal taxes got less than 1,500 people showing up, according to their own organizer.  Other people thought it was in the 400 or 500 range.

Gosh, if I had a rally in Washington to have stronger laws to protect puppies, we‘d have 100,000 people without blinking.  And yet, the media, including the so-called liberal and progressive media, have given the tea party-ites elevation in terms of the impact they‘re having on the national debate and discussion—way above what they deserve.

And conversely, the rallies that you talked about, I think you‘d have to look pretty hard tomorrow in “The Washington Post” and “The New York Times” and “The Boston Herald,” in any papers, to find those rallies covered.

But people do understand—and, by the way, I think we Democrats have not done a good job making our case.  Education matters—and spending on education, spending for quality pre-K and full-day kindergarten improves performance.  Spending for after-school tutoring gets kids who are falling below proficiency levels in reading and math, up to proficiency levels.

But we haven‘t made our case very well.  We, Democrats, I think, are responsible in part for losing this debate over the last 16 or 17 months because we‘ve been unable and willing to speak about or afraid to speak about what we believe in.  The government effectively managed and effectively implemented can make a real difference in changing the quality of people‘s lives and creating opportunity for people.

So, I think we bear some of the blame.  We, Democrats, and we ought to get off our duffs and start speaking about what we believe in.  And the mainstream media deserves some of the blame for elevating the tea partiers‘ point of view and not pointing out the hypocrisy in what they‘re saying.

MADDOW:  The hypocrisy in what they‘re saying and also, I think, the way that it sort of inflates the Beltway narrative about what—the way that they want to describe the country right now.  It‘s sort of formed into this calcified common wisdom right now which isn‘t necessarily borne out by the facts.

But let me ask you about that, though.  Whether it was because of inflated media coverage or not, when the tea parties formed, Republicans rushed to catch up with them.  They really chased that energy.

Is it possible that on the left and in the center, the people are further ahead Democratic politicians on this issue, understanding the importance of what government does?  Are Democrats going to be catching up to regular folks on this?

RENDELL:  Well, I think so, particularly if we stop being afraid.  Last night at an affair in Washington, I said that too many of our Democrats from the last 16 months have been cowering behind shower curtains and haven‘t gotten out there and spoke about what we believe in.

We believe that government effectively managed can make a difference in so many people‘s lives.  And there are so many pieces of evidence to show that.  And that government can work.

But we don‘t say it.  We haven‘t been out there fighting.  We haven‘t been out there supporting the president.  We haven‘t been out there doing a lot of things.

So, I think, we bear some of the responsibility for what is going on.  And the tea partiers have been the only voice America‘s been hearing.  And I think that‘s got to change.

But, to your point—absolutely.  I think that there are progressives in this country who are way out in front of the politicians, and I love the fact that the Illinois protesters were saying, “Show some guts,” because I think that‘s exactly what we need to do.

If we‘re going to go down in November—and I don‘t think we are—but if we‘re going to go down, let‘s go down fighting for the things we believe in.  Let‘s not be afraid, and let‘s not sort of let them control the dynamic and control the dialogue.

MADDOW:  Governor, one of the reasons I think that Republicans and conservatives have been better at articulating the “government is bad” message is because the Republican Party really feels like it has to answer to the conservative movement.  And the conservative movement has made—taken that on as an ideological hill where they‘ve planted their flag and they‘re just consistent about it, regardless of what‘s going on in electoral politics.

Are Democrats not respectful in the same way of the progressive base, of the unions and liberal groups and anti-war groups and feminists and minority groups and others that make up the Democratic base?  Would them paying more attention to their base make them smarter about articulating a core Democratic message?

RENDELL:  Sure, and also smarter electorally because turnout is going to determine what happens in the 2010 congressional elections, in my judgment.  Everyone gives a little bit too much credit to the independents.

Look, we want to win the battle for the hearts and minds of the independents and for their votes.  But it‘s also going to defend on turnout.

In Pennsylvania, we have 1.3 million more registered Democrats than Republicans.  We‘ve got a governor‘s election and a senator‘s election, and, of course, all our congressmen.  If we get a good Democratic turnout, we win.

But we have to give our base a reason to get out there, a reason to feel proud of who we are and what we stood for as a party.  And I don‘t think up to now we‘ve done a very effective job in doing it.

MADDOW:  Pennsylvania‘s governor, Ed Rendell—thank you so much for your time tonight, sir.

RENDELL:  My pleasure, Rachel.

MADDOW:  Appreciate it.

RENDELL:  Show some guts.

MADDOW:  I‘m trying.

OK.  The indignity of not knowing pretty basic stuff that you‘re asked to make decisions on has encroached on the dignity of the United States Supreme Court.  We have that story for you coming up—thanks to a set of perfectly dignified Supreme Court justice finger puppets that we‘ve been working on all day.

Please stick around.

(COMMERCIAL BREAK)

MADDOW:  “The Interview” tonight is Richard Clarke.  He was right about our vulnerability to al Qaeda before 9/11.  He now says we are vulnerable to something else that we as a country are not taking seriously enough.

I know.  I know.  Everyone says (ph) Uncle Benny has a warning about what the country is not taking seriously enough.

But when Richard Clarke said it, we listen.  He has earned that.

That‘s ahead.

(COMMERCIAL BREAK)

MADDOW:  Today, Senate Republicans Richard Shelby and Kay Bailey Hutchison made a point of talking up the possibility that some Republicans might actually vote for Wall Street reform.  Republican Senator Chuck Grassley of Iowa actually cast a vote in favor of Wall Street reform in a committee vote today.

But as Republican opposition to Wall Street reform softens like cheese left in a sunbeam, don‘t think the fight is over.  Wall Street reform is not just opposed by Republicans.  It is also opposed by a huge anti-reform lobbying effort that‘s underway on the part of the financial industry.  The financial industry, of course, does not want to be further regulated—bailout necessitating financial crisis be darned.

Six top banks spent almost $7 million on lobbying in just the first quarter of this year.  Add that to the $43 million spent by a handful of friendly special interest groups, and you‘ve got a well-funded effort to kill Wall Street reform.

Justin Elliott over at “Talking Points Memo” did some great legwork today, tracking down the origins of some of opposition to Wall Street reform—some of the opposition that has looked like it was coming from the left.  It‘s about this group—Stop Too Big to Fail.

The group is responsible for a $1 million-plus anti-Wall Street reform ad buy.  Plus, some anti-Wall Street reform—a series of anti-Wall Street reform postings on some liberal Web sites.  The group‘s liberal credentials also used to include what looked like an endorsement on their Web site from the former chief economist of the IMF, an IMT professor, Simon Johnson, who does believe that Wall Street reform needs to do more to restrict the size of the biggest banks.

Mr. Johnson‘s photo appeared on this Web site, The Stop Too Big to Fail Web site, after he participated in a conference call with the group.  On that conference call, he explained his views about Wall Street reform.

Now, Mr. Johnson‘s photo was finally removed from the Web site at Mr.  Johnson‘s request, after he got word that this group was sponsoring a $1.6 million ad campaign to defeat Wall Street reform altogether—which is, needless to say, not at all what he‘s about.

How do folks at Stop Too Big to Fail get in touch with Simon Johnson to ask to participate in this conference call thing in the first place?  Well, a man named Oliver Wolf contacted him.

Oliver Wolf apparently works for a company called DCI group.  In fact, we left a message for Oliver Wolf at his voicemail box that the DCI Group main number tonight.  So far, no word back.

But does the name DCI Group sort of ringing a bell for you somewhere?  Does that sound familiar?  If it is, it‘s because you probably watch this show—and because the DCI Group is famous for using corporate money to create the appearance of fake grassroots movements.

Late last year, we noted on this show they were busy doing P.R. for the anti-health reform astroturf organization, the Coalition to Protect Patients‘ Rights.  They‘ve operated a fake news Web site, which looked like a regular news site but happened to be full of articles promoting the positions of DCI clients.

Three founding partners of DCI Group are veterans of R.J. Reynolds. 

Around the 1990s, they cut their teeth on the whole “not at all corporate-

seeming, corporate campaign” thing by setting up supposedly grassroots

Smokers‘ Rights Groups.  Smokers‘ Rights Groups that were really just run

by the tobacco companies.

           

Also, do you remember how DCI Group came up around the last Republican National Convention?  Remember this?  Remember the Burmese military dictatorship getting dragged into John McCain‘s big pile of political problems around the RNC?

We covered that last time DCI reared its ugly head.  We covered it with the help of some reporting by “Newsweek‘s” Michael Isikoff.

(BEGIN VIDEO CLIP)

MICHAEL ISIKOFF, NEWSWEEK:  John McCain had selected the CEO of DCI Group, Doug Goodyear, to manage the Republican convention last year.  I wrote a story shortly after that that Doug Goodyear‘s firm, DCI Group, had previously represented the Burmese military junta.  They‘d been hired after George Bush was elected to help burnish the Burmese junta‘s image and they put—ran a public relations campaign talking about how they were cracking down on the drug trade and how some of the allegations against them were false.

Now, of course, the Burmese junta was long known as one of the most authoritarian anti-democratic regimes in the world, with one of the worst human rights records.

It happened to be my story, a rather unfortunate for Doug Goodyear because it was right after the 2008 cyclone in Burma where the Burmese junta was keeping out NGOs and outside relief workers.  So, I think the timing forced Douglas Goodyear to resign shortly after the story came out.

(END VIDEO CLIP)

MADDOW:  Ah, DCI group.  These guys‘ whole reason for existing is to burnish the credentials of the Burmese junta or take corporate money and turn it into fake grassroots-looking campaigns.  They did it for big tobacco and for the pharmaceutical industry.  They did it for the Burmese military junta, which made it too embarrassing for the Republican National Convention to associate with them.  They did it for corporations who didn‘t want health care reform to pass and they‘re doing it now, apparently, for corporations who don‘t want Wall Street reform to pass.

That‘s who‘s behind the opposition to financial reform that is supposedly coming from the left.  Don‘t believe it for a second.  These guys are pros.

Joining us now is Simon Johnson, the Ronald A. Kurtz professor of entrepreneurship at MIT Sloan School of Management.  He‘s also a contributing business editor at “The Huffington Post” and is author of the book, “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown.”

Simon Johnson, thank you so much for coming on the show.

SIMON JOHNSON, HUFFINGTON POST:  My pleasure.

MADDOW:  Let me ask if I got all that right first of all.  Stop Too Big to Fail reached out to you.  How did they lobby you to sort of be part of their group?

JOHNSON:  Well, I talked to a lot of people, Rachel, and there‘s a lot of support, as you know, across the spectrum for sensible financial reform and for strengthening the Dodd bill actually.

So, part of what I do is talk to all these people.  We bring a lot of them on board through the “Huffington Post,” for example, and we don‘t always ask perhaps as carefully as we should, show us all your credentials, show us exactly who‘s backing you.  But, you know, we talk to people and we make friends and we try and bring people with us.

I thought this group sounded a little off when I first started interacting with them.  But it wasn‘t until I—got a little bit deeper into it now—and it wasn‘t until I heard about the ads they were running and the positions they were taking.

I called them up on Friday and said, I think you guys are confused.  You‘re giving in with the Republicans.  And they gave some, you know, runaround then, and then I heard about ads they bought in Nevada and Missouri and some other places, and I realized that this is a big problem.

MADDOW:  Do you think they targeted you in particular because they are trying to appear like they‘re coming from a progressive perspective in their opposition to Wall Street reform?

JOHNSON:  Yes, I absolutely do.  It‘s quite clever.  It‘s very well done, Rachel.

And this is an important point.  This is very sophisticated disinformation.  I used to work in Russia, for a long time, actually.  And this is the kind of thing which you saw in Russia, in the Soviet Union.  Very, very clever.

So, they called themselves Stop Too Big to Fail, and my position is exactly the position, for example, of Senator Sherrod Brown and Senator Ted Kaufman, they unveiled the bill, as you know, on this.  Very sensible, put a size cap on the leverage camp on the biggest banks, make them smaller as an additional piece of all regulatory reforms.  So, that‘s my views and that‘s the senators‘ views on what it would take to greatly reduce the risk associated with these banks that are too big to fail.

But this group calling itself Stop Too Big to Fail is wrapping itself in some of the same appearances.  Of course, when you actually see the TV ad, there‘s no mistaking.  This is an anti-reform ad.  It is a “kill the bill” ad.  And we now understand this very clearly and we will go after them most strenuously, I can assure you.

MADDOW:  One of the tensions that happened among progressives on health reform was when the bill got watered down, when the bill became a not a very progressive health care reform bill compare to what could have been, some people did say, “Kill the bill,” and some people said, “No, stick with the bill and try to strengthen it as much as you can.”

Is that same split happening among progressives now on Wall Street reform?  Do you think there is a credible, not astroturf, not corporate front progressive movement to kill the Dodd bill, kill Wall Street reform, because it‘s not progressive enough?

JOHNSON:  No, I don‘t think so.  Certainly, not yet.  That‘s not what we‘re seeing.

I think everyone we‘re working with who‘s legitimate says, look, we‘ll take what we can get now, and we should try and get as much as we can.

I think the Brown-Kaufman bill in their approach would actually be a stronger message to take November.  It would be a much better winning proposition, and I have a piece coming out in “The New York Times” online tomorrow saying exactly that.

So, we‘ve not given up on strengthening the bill, but I think our

broad—our broad view is: look, take what you can get this time and then

we‘ll come back for more.  If you think about regulating over-the-counter

derivatives, and I know everyone‘s eye glaze over as soon as you say that -

fine.  We‘ll get what we can take now and we‘re going to come back for more because we‘re not going to fix it sufficiently, I think, this time.  The Dodd bill, though, is an improvement and it‘s certainly not at all what the Republicans claim it is.

           

MADDOW:  Simon Johnson, a Ronald A. Kurtz professor of entrepreneurship at the MIT‘s Sloan School of Management, and until recently, the accidental, not-at-all-intentional poster boy for an astroturf campaign to kill financial reform—thank you for extricating yourself from these folks and being willing to talk to us about it tonight.

JOHNSON:  Thank you.

MADDOW:  Appreciate it.

All right.  Coming up next: it‘s “The Interview.”  Richard Clarke is here for the interview, and that will require me telling you a stemwinder about a giant, hideous, brass statue in Estonia.  It comes around in the end, I swear.  But we‘re going to do that.  Hold on.

We‘ll be right back.

(COMMERCIAL BREAK)

MADDOW:  Very quick story.  Bear with me.  This is Estonia, part of Eastern Europe, roughly the size of New Hampshire and Vermont combined.  Estonia became part of the Soviet Union in World War II. 

They didn‘t get their independence until the Soviet Union collapsed 50 years later.  And by the time Russian trooped finally left Estonia in 1994, broadly speaking, Estonians were kind of psyched to see them go. 

In 2007, Estonia‘s parliament passed a forbidden structures law which said anything that marks or celebrates those 50 bad Soviet occupation years is getting torn down.  That could have included this giant, hideous, heroic Russian soldier statue that the Soviets left behind in Estonia‘s capital city. 

Russia and ethnic Russians who wanted that statue to stay got really mad about the prospect that the statue and other things representing the occupation were going to get torn down.  There were riots.  Ultimately, the Estonians decided they wouldn‘t tear down the giant, hideous, brass Russian soldier statue.  They would just move it out of the city center. 

Russia was still furious.  They love that statue.  This means war.  Now, if in your mind, you‘re remembering Russian tanks lumbering into Estonia in 2007, your memory is wrong.  That‘s not what happened.  That‘s not what they did. 

Instead Russia went to war more like this.  Estonia is one of the most wired countries in the world.  Even years ago, they already had more mobile phones than people.  Every school online.  Ninety percent of all bank transactions conducted online. 

People in the capital city pay their bus fare and their parking tickets by text message.  They vote online and there‘s free Internet access for everyone, basically, as a basic right.  The country is called Estonia, but you can think of it as E-stonia.  They‘re really online. 

And that‘s what Russia went after, or at least what it seems like Russia went after.  Distributed denial of service attacks, essentially millions of simultaneous online hits, shut down access to government Web sites and newspaper Web sites and other online media. 

Then the telephone networks, the credit card verification systems, banking, even the basic indexing structure of the Internet, all tied up in Estonia.  And it went on for weeks.  Essentially, a total shutdown. 

Now, the Russian government said they did not do it, but they said they couldn‘t rule out the possibility that patriotic individual Russians just did it on their own free time. 

The Russian government also said they weren‘t behind a similar but even more crippling attack on Internet and IT systems in the nation of Georgia the following year.  Even before physical military fighting broke out, Georgians could not get access to information from their own government.  They couldn‘t read online media. 

They couldn‘t call out of the country in some cases or send E-mails out of the country in some cases to let anybody else in the world know what was going on in that war.  That‘s cyber war. 

Russians appear to be good at it.  So do the Chinese, the North Koreans, the Israelis - lots of countries.  Maybe even mean even us.  Cyber-war is such a 1970-style tron-sounding word that we associated with relatively harmless pranking of government Web sites, like what happened to the Georgian president‘s Web site during that war with Russia or like happened to some U.S. government Web sites when we think North Koreans came after us last July. 

It starts to feel like much more than pranking when you think about all the other systems that are potentially vulnerable to attackers who have skills and points of access to take down not just Web sites but E-mail systems, banking systems, finance systems, phone systems, cell phone systems, electrical grids, municipal systems. 

This isn‘t the first time you‘ve actually thought of this.  Did you see “The Italian Job?”  Do remember when they hacked into the stop lights? 

(BEGIN VIDEO CLIP)

UNIDENTIFIED ACTOR:  They are about to hit a major detour and be sent your way.  Oops. 

(END VIDEO CLIP)

MADDOW:  We believe that lovable rogues in baseball hats in heist movies can take down critical infrastructure through hacking.  Why do we have such a hard time believing that Chinese intelligence services might do it to us too? 

Joining us now is Richard Clarke.  He was the nation‘s first special adviser to the president for cyber-security.  He is also the government‘s former counterterrorism chief.  He is now chairman of Good Harbor Consulting.  His new book is called “Cyber War: The Next Threat to National Security and What to Do About It.”  Richard Clarke, thank you so much for being here. 

RICHARD CLARKE, AUTHOR, “CYBER WAR”:  I‘m delighted to be here. 

MADDOW:  So I‘ve read the book and I‘m sort of obsessed with the concepts in it, as you might be able to tell. 

CLARKE:  I can see that. 

MADDOW:  That last Fourth of July attack - I remember it was affecting Web sites of like the FTC, Treasury Department.  It was sort of seen mostly as a nuisance.  How bad could that have been? 

CLARKE:  Well, the North Korean attack, and it was a North Korean attack, is interesting.  Because there‘s nothing for us to attack back in retaliation.  They don‘t have cyberspace very much over there.  In fact they had to launch the attack from China and from South Korea. 

MADDOW:  So they have North Korean operatives physically outside of North Korea in places with better Internet infrastructure from which they can launch attacks? 

CLARKE:  Oh, absolutely.  They had North Korean army people take over a whole floor of a hotel in China to launch part of this attack.  So that‘s interesting.  They can defend themselves because they don‘t have anything to defend in cyberspace.

And even this poor, little country can attack us.  What they didn‘t do - they flooded us in various sites.  What they didn‘t do is get inside those sites.  But they could, or somebody else could. 

We know that countries can get inside the control systems for the things you mentioned.  The electric power grid.  So they turn off the lights?  No, they don‘t just turn off the lights.  They cause a generator to explode.  That‘s hard to replace.  It keeps the electric power grid down for a long time. 

They could cause trains to derail.  So the United States government has created these military commands, the 10th Fleet, which has no ships, the 24th Air Force, which has no planes, the U.S. cyber-command, to do this sort of thing. 

China‘s created military commands.  Russia‘s created military commands.  So for me, there are two takeaways here.  One, we‘d better defend ourselves, and we‘re not doing that.  Unfortunately, the Obama administration‘s attitude is, “We‘ll defend the government, the rest of you are on your own.” 

And the other takeaway here is we don‘t talk about arms control.  We ought to try to get this military under control.  We need some civilian oversight of this thing before it happens by accident. 

MADDOW:  When you talk about our military cyber command, is it offense or defense or both? 

CLARKE:  It‘s both. 

MADDOW:  OK. 

CLARKE:  It‘s both. 

MADDOW:  So it‘s about finding ways to access other countries‘ vulnerabilities, not accessible through physical warfare but through computing. 

CLARKE:  Right. 

MADDOW:  But it‘s also trying to protect the United States from similar attacks. 

CLARKE:  It‘s trying to protect the Pentagon from similar attacks.  It doesn‘t have the authority and it doesn‘t have the capability to defend you and me, to defend the banking system, to defend the power grid, trains, pipelines.  No one‘s doing that. 

The government‘s policy is you defend yourself.  It‘s as though in the Cold War when the Russians had bombers that could come bomb us - it‘s as though the government said to U.S. Steel in Pittsburgh, “You know, the Russians have bombers, you‘d better get some air defense systems to protect yourself from them.” 

MADDOW:  Right.  Because we don‘t want to interfere with your private industry.  Yes. 

CLARKE:  Right.  It goes back to ideology and it goes back to the dislike in Washington to regulation.  I mean, the only way the government‘s going to be able to defend our cyberspace is to have more regulation. 

Regulation in Washington is a dirty word.  But if we don‘t have some targeted regulation, we‘re not going to be able to defend ourselves against North Korea or Iran.  If we do sanctions on Iran over their nuclear program and they choose to retaliate by a cyber-attack and we‘re defenseless, you know, the day after, people are going to wake up and say, “Why couldn‘t we defend ourselves?”

MADDOW:  Right.  Critical national systems that are not government systems are the sort of things we‘ve thought about in terms of traditional counterterrorism measures.  Things like chemical plant security, things like the security of our ports. 

Other things that are not necessarily government functions but we recognize would be an attack on the American people.  We‘ve also been not very successful at making ourselves more resilient in those senses because we‘ve had to go through industry in order to try to get those things protected. 

CLARKE:  Right. 

MADDOW:  Same thing‘s happening here. 

CLARKE:  Same thing‘s happening here.  Regulation is a dirty word.  Industries resist.  We just had Verizon win a case in federal court.  And the federal judge ruled the government cannot regulate the Internet under existing law.  Well, then the government cannot defend cyberspace under existing law. 

MADDOW:  Is there a conflict between privacy concerns on the Internet and the need to protect from our - critical national systems from cyber-attack? 

CLARKE:  Absolutely. 

MADDOW:  OK. 

CLARKE:  One simple way - and it would be a terrible idea, but one simple way to defend would be to have the government filtering, watching what‘s going on, on the internet. 

You know, after the Bush administration warrant-less wiretapping with NSA, I don‘t think it‘s a very good idea.  I‘m not going to be the guy who says, “Trust the government.”  But there‘s a way of doing it by making the telephone companies, making the Internet service providers filter what‘s going on, on their networks. 

MADDOW:  Can you filter for security but not for content? 

CLARKE:  Yes, you can.  What you do is you look for patterns of ones and zeros that are known to be attack software.  And you‘re not reading people‘s E-mails.  But even then, I don‘t want the government doing it. 

MADDOW:  Yes.

CLARKE:  Let‘s have Verizon do it.  Let‘s have AT & T do it.  And let‘s have somebody else checking to make sure they‘re not abusing our privacy rights. 

MADDOW:  One last question for you.  Is this going to be another one of these post Cold War things that is sort of defined both by asymmetry and anonymity, where countries, nation states are at a disadvantage and the real threats, the real agility, the real incentive to use attacks like this are for non-state terrorist groups and for lone wolves who are extremists? 

CLARKE:  No.  I know there‘s a theory out there that‘s the case.  I think this is about nation states.  That is, in fact, good news, because if we get our act together, we can move from talking about cyber-war to talking about cyber-peace. 

MADDOW:  I‘d like us to be talking about cyber-defense first. 

CLARKE:  Well, that‘s part of cyber-peace. 

MADDOW:  Yes.  “Cyber War: The Next Threat to National Security and What to Do About It” is the new book by Richard Clarke.  It‘s not only important, it‘s compelling and written like a thriller, which is one of your particular skills, sir.  Thank you so much for being here.  I really appreciate it.  Thank you.

CLARKE:  Thank you.  Thanks very much. 

MADDOW:  So will that be cash, credit or chickens?  The “paying your doctor in chickens” proposal.  Not actually the weirdest news today from a senator from Nevada or would-be senator from Nevada.  That‘s just ahead, OK?

(COMMERCIAL BREAK)

MADDOW:  There are two Republicans, front and center, in the Nevada Senate.  One trying to hold on to his seat in 2012, one looking to unseat the Democratic majority leader, Harry Reid, this year. 

Both of these Republicans are making headlines today.  Both making headlines that make you think at first glance that maybe you‘re accidentally reading “The Onion” instead of real news. 

First, Nevada scandal-ridden sitting Republican Senator John Ensign.  According to disclosure forms analyzed by “Talking Points Memo,” Sen. Ensign‘s re-election campaign raised a grand total of $50 during the first three months of this year.  Not $50,000, not $50 as an abbreviation for something else, but 50, as in the number that comes after 49 and before 51. 

Sen. Ensign raised $50 in three months.  His $50 was raised in two donations of $25 apiece, both from the same man, a donor who explained the TPM that he donated to Sen. Ensign despite the senator‘s sexual and ethical scandals because, and I quote, “All men are dogs, the way I look at it.”  Here‘s your $50. 

Then there‘s the other Republican looking to represent the great state of Nevada in the Senate.  She is Sue Lowden.  She‘s the frontrunner challenging Democratic Senator Harry Reid for his seat.  Would-be senator Sue Lowden is now becoming famous coast to coast for her unique proposals for how Americans should deal with the expense of health care. 

(BEGIN VIDEO CLIP)

SUE LOWDEN ®, REPUBLICAN FRONT RUNNER FOR THE SENATE IN NEVADA: 

Others have suggested and I think that bartering is really good.  Those doctors who you pay cash, you can barter.  And that would get prices down in a hurry. 

And I would say go ahead out and pay cash for whatever your medical needs are, and go ahead and barter with your doctor. 

(END VIDEO CLIP)

MADDOW:  At first, it seemed like candidate Sue Lowden must have misspoken.  Surely, she didn‘t mean barter.  Certainly, she meant bargain or haggle, right?  I mean, you can haggle with your doctors to pay less. 

Bartering is what you do to avoid using money altogether.  Is that really what she means?  Yes.  Turns out she really meant barter. 

(BEGIN VIDEO CLIP)

LOWDEN:  Let‘s change the system and talk about what the possibilities are.  I‘m telling you that this works.  You know, before we all started having health care in the olden days, our grandparents - they would bring a chicken to the doctor. 

They would say, “I‘ll paint your house.”  They would do - that‘s the old days of what people would do to get health care with their doctors.  Doctors are very sympathetic people.  I‘m not backing down from that system. 

(END VIDEO CLIP)

MADDOW:  Just to be clear, she‘s not saying your chicken is sick.  Bring your chicken to the doctor.  She‘s saying you‘re sick, bring the doctor a chicken. 

And just in case candidate Lowden‘s position wasn‘t crystal clear by this point, one of her aides elaborated to “Talking Points Memo” today saying, quote, “Americans are struggling to pay for their health care.  And in order to afford coverage, we must explore all options available to drive costs down.  Bartering with your doctor is not a new concept.” 

OK.  If you pay your doctor and nurse in chickens, do we expect that they will in turn be able to go pay for electricity and equipment and their rent also with chickens?  Can people donate chickens to Sue Lowden right now or to John Ensign?  He might actually need them more. 

Fundraising dinner ticket?  One cup of sugar.  A meeting in the candidate‘s office?  One prime heifer.  An autographed picture?  That will cost you one bushel of wheat.  Guaranteed opposition to financial reform?  Six pairs of tube socks, please. 

If she‘s elected, imagine what Sue Lowden could do for the tax code.  Imagine what she could do for the budget.  Good news, we don‘t owe China any money anymore but everyone needs to come up with their weight in butter, OK?  Fast.  

(COMMERCIAL BREAK)

MADDOW:  Tonight on “COUNTDOWN,” Sen. Sherrod Brown is here.  And on this show, if the Supreme Court‘s level of tech savvy were a computer, it would be a broken one that sparked when you plugged it in.  I will explain with the help of some puppets, next. 

(COMMERCIAL BREAK)

MADDOW:  The Supreme Court of the United States heard arguments this week in a case about sexually explicit text messages sent using employer-issued pagers.  In our increasingly text obsessed, status-updating digital society, this may be a fair time to ask if our highest court in the land has kept up with the times, cyber-savvy wise, particularly given the transcripts of Monday‘s proceedings at the court. 

Check out this rather low-tech conversation between Chief Justice John Roberts and Atty. Dieter Dammeier.  Now, there are no cameras allowed in Supreme Court proceedings so my friend Kent Jones is here to help dramatize their actual exchange. 

KENT JONES, MSNBC CORRESPONDENT (as Chief Justice John Roberts): 

Maybe, maybe everybody knows this, but what is the difference between the pager and the E-mail? 

(as Atty. Dieter Dammeier):  Sure.  The E-mail goes through the city‘s computer.  It goes through the city‘s server.  The pagers are a separate device that goes home with you, that travels with you, that you can use on duty or off duty. 

(as Roberts):  You can do that with E-mail. 

(as Dammeier):  Certainly, certainly. 

(END VIDEO CLIP)

MADDOW:  Chief Justice Roberts getting right to the heart of the matter, also getting a neck cramp.  Later, Justice Kennedy also tried to log into this conversation. 

(BEGIN VIDEO CLIP)

JONES (as Roberts):  What happens, just out of curiosity, if you‘re - he is on the pager and sending a message and they are trying to reach him for, you know, a SWAT team crisis.  Does the one kind trump the other or do they get a busy signal? 

(as Dammeier):  My understanding is that you would get it in between messages.  So messages are going out and coming in at the same time pretty much. 

(as Roberts):  Would you know where the message was coming from? 

(as Dammeier):  I believe so.  It identifies where it is coming from.  It identifies the number of where it is coming from.  If you know the number, you know where it‘s coming from. 

(as Associate Justice Anthony Kennedy):  And he‘s talking to the girlfriend.  And he says - he gets a voice message that says, “Your call is very important to us.  We will get back to you”? 

(END VIDEO CLIP)

MADDOW:  That is one of the really cool things about text messages, no busy signals.  Then Justice Scalia had a few thoughts of his own.  He also has his own finger. 

(BEGIN VIDEO CLIP)

JONES (as Roberts):  Do any of these other people know about the wireless?  Don‘t they just assume that once they send something to this police sergeant, it‘s going to the police sergeant? 

(as Dammeier):  Well, they expect some company, I‘m sure, is going

have to be processing the delivery of this message.  And -

(as Roberts):  Wait.  I wouldn‘t think that.  I thought, you know, you push a button, it goes right to the other thing. 

(as Dammeier):  Well -

UNIDENTIFIED FEMALE:  You mean it doesn‘t go right to the other thing? 

(END VIDEO CLIP)

MADDOW:  Thank you, Kent.  If you have a cramp, we‘ll take care of it later. 

JONES:  Sorry about Alito.  He is a little slow. 

(LAUGHTER)

MADDOW:  These are the people making important unappealable decisions about the interwebs.  Behold the majesty of the law.  I hope they never let cameras in the Supreme Court.  This is so much better.

JONES:  Well, it is. 

(LAUGHTER)

(COMMERCIAL BREAK)

MADDOW:  That does it for us tonight.  “COUNTDOWN” starts right now. 

Have a great night.  Thanks for being with us. 

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

END   

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