The Rachel Maddow Show, Transcript 10/03/11
RACHEL MADDOW, HOST: Good evening, Lawrence. Thank you.
And thanks to you at home for staying with us for the next hour. If
you have the kind of job where you have to ask for your days off a really
long time in advance or if you need to make family travel plans for next
year, I have good news from today`s news. We can get your election year
calendar locked down.
Now, on Friday, as we reported on Friday, the state of Florida
decided to move its Republican primary up. They`re moving it up really
early to January 31st. Then after Florida made that announcement, like
dominos falling right into your winter plans, the other early primary and
early caucus states followed suit and have moved up their likely election
dates as well.
So, here`s how it looks right now if you want to make a note of it.
The Iowa caucuses are mostly going to be held on either January 2nd or
January 3rd. The New Hampshire primary will probably be held on January
10th. Nevada has just decided to move its caucuses up, too. It appears
those will be held on January 17th.
South Carolina has moved its primary up as well to January 21st.
Then to wrap up the month, we will get the Florida primary, as I said, on
What this means is that all of the other primary dates are sort of in
flux, too. Super Tuesday right now is expected to be on the 6th of March.
But, again, things are in motion. However else the calendar shakes
out, though, where things will culminate, if you want to make your plans,
where things will culminate, is, of course, at the conventions. The
Republican Convention next year will be held in Tampa, Florida, the week of
august 27th. The Democratic Convention will be held the week of September
3rd in Charlotte, North Carolina.
North Carolina. Why are the Democrats going to North Carolina?
North Carolina after all has a giant downside for the Democratic Party
which is that organized labor is a really important Democratic
constituency, and a very embattled one right now.
Union rights under attack this year essentially anywhere that
Republicans have governing authority – from Washington, D.C., to Madison,
Wisconsin, to Columbus, Ohio, to anywhere you noticed a teacher picketing
or a firefighter writing a letter to the editor. It has been a tough year
for union rights. And Democrats will not be making it any easier on unions
when they convene in Charlotte, North Carolina, since that is a city
without a single unionized hotel.
This is not some sort of secret that they realized after the fact.
Democrats made their decision to hold their convention in Charlotte in full
knowledge of the union rights problem that it presents. But they decided
to go there anyway.
They decided to go there anyway because North Carolina is really
important to them – really important specifically to Barack Obama`s re-
In the 2008 presidential election, you may remember that the day
before Election Day, then-candidate Barack Obama`s grandmother, the woman
who had raised him, died in Hawaii. And that night, the night before
election day, election eve with the on-air countdown clocks already ticking
down the number of hours before the first polls would open, Barack Obama
went to North Carolina and he stood in the rain at the University of North
Carolina and he gave his closing arguments, in a sense for the whole 2008
It was a powerful, personal moment because it was one of the only
times he has ever been seen to cry in public when he was talking about his
grandmother. It was also a powerfully emotional political moment because
here it was the night before the presidential election and the Democratic
candidate is in the South – because there are multiple Southern states
that are within reach for the Democrat on Election Day.
(BEGIN VIDEO CLIP)
BARACK OBAMA, THEN-PRESIDENTIAL CANDIDATE: After decades of broken
politics in Washington, after eight years of failed policies from George W.
Bush, you don`t need to boo, you just need – you just need to vote.
OBAMA: After 21 months of a campaign that has taken us from the
rocky coasts of Maine, to the sunshine of California, we are one day away
from changing America. One day.
(END VIDEO CLIP)
OBAMA: The next day Barack Obama went on to win Florida. He went on
to win Virginia. And he went on to win North Carolina – where you saw him
speaking there, a Democrat winning in North Carolina. Bill Clinton did not
win North Carolina either time he ran, but Barack Obama did. Barely.
Obama and Biden won by a little more than 14,000 votes. Democrats
actually had a big year in North Carolina in 2008. That year the Jesse
Helms Senate seat was up. After the far, far, far, far right Senator Jesse
Helms stepped down, that state had gone to Elizabeth Dole. In 2008,
Republican Elizabeth Dole, the incumbent Republican senator in the Jesse
Helms seat, in 2008 she lost that seat to a Democrat, Kay Hagan. She got
beaten badly in that race – Elizabeth Dole losing that race by nine
For the governor`s race in North Carolina, it was a little closer.
It was a three-point race. But, again, the governor won. Bev Purdue
became that state`s first female governor.
Barack Obama did not need North Carolina election to win the
presidency. He didn`t need Indiana either. But seeing states like North
Carolina and states like Indiana turn so unexpectedly blue was an emotional
thing. It was essentially the exclamation point on that Democratic victory
And so, the Democrats choosing North Carolina for their 2012
convention was sort of a bold move and an emotional move. Barack Obama and
Joe Biden won North Carolina as I said in 2008 by the slimmest of margins.
Look at that – 49.7 percent to 49.4 percent. They won by less than 15,000
votes out of more than 4 million cast, the slimmest of margins. And they
fought tooth and nail for every single one of those votes.
This was the difference in new voters registered by the two parties
for the 2008 election. Democrats out-registered Republicans in new voters
nearly 5-1 in North Carolina – nearly 5-1, North Carolina. Democrats` new
voter registration drives were very, very effective in North Carolina.
On Election Day, itself, there were actually more votes cast for John
McCain than there were for Barack Obama. But Obama still won the state
because organizing. They had racked up a huge advantage in early voting.
More than half of all North Carolina voters in 2008 voted early. And
early voters ultimately put Obama over the top. Early voting in those
voter registration drives were absolutely key to Barack Obama winning North
Carolina in 2008.
But the North Carolina the Democrats are going back to for their
convention, just four years later, will be a very, very, very, very
different North Carolina. Republicans in North Carolina are doing
everything they can to change the voting rules in that state. So, a
victory like the one Obama got there in 2008 can never happen again.
Republicans in the state legislature in North Carolina have proposed,
for example, reducing early voting time across the state – less early
voting. They have proposed eliminating early voting altogether on Sundays.
Why is that important? Well, Sunday is traditionally a day when a
lot of black churches bring a lot of their parishioners from the church to
Republicans in North Carolina have proposed eliminating same-day
registration for anybody who wants to vote on Election Day. They have
proposed new rules to make it more complicated and difficult if not
impossible to conduct voter registration drives in North Carolina.
Republicans in North Carolina decided that to vote in the next
election, North Carolinians would have to show ID that they have never
before had to show in order to vote. It`s estimated that 500,000 North
Carolina voters do not have that form of ID – 500,000. And, yes, those
500,000 are disproportionately minority voters and poor voters and
students, voting groups that disproportionately vote Democratic.
Now, remember, when Barack Obama won it last time, he won by 14,000
votes, largely on the strength of early voting and voter registration
drives. Looks like that won`t happen again. Not if North Carolina
Republicans change all the rules about those things.
Republicans wanting to make sure a Democratic victory like that does
not happen again, wanting to make it harder to vote and harder to register
to vote. That is not an unusual thing. We have been seeing that all over
the country recently.
What is new and what is sort of amazing about North Carolina in
particular, especially because the Democrats are going to hold their
convention there, what is new and sort of amazing is what has happened to
North Carolina since the night Barack Obama won there.
In the next election in 2010, North Carolina saw an unprecedented
flood of money into the races for state legislative seats. Not money going
directly to candidates but money going to the supposedly independent groups
that are really obviously not independent – very really obviously partisan
even though they are technically not supposed to be.
So much independent money spent on behalf of Republican candidates,
spent to attack Democratic candidates in the state legislature races. So
much money spent that North Carolina`s 2010 red tide was like no other
state. For the first time since 1870, the state legislature of North
Carolina went to Republicans in 2010.
And once they got control of it, they immediately set to work trying
to get rid of early voting and voter registration drives, Sunday voting –
sorry, black churches. And making you show ID to vote. Making you show ID
to vote that half a million North Carolina voters do not have.
Thanks to 2010, for the first time since 1870, North Carolina has a
Republican-controlled legislature and the supposedly independent, very
obviously partisan Republican money that got them there, that huge tide of
independent money that got them there in 2010 – get this – three-quarters
of that money can all be tied back to one person, one guy. Three-quarters
of the money that flooded into the North Carolina races into 2010 into the
state legislature races all tied to one guy – his family members, his
family foundation and his business. Money all pretty obviously controlled
by one guy.
He targeted 22 races. He got a Republican into office in 18 of those
22 races. One guy, three quarters of the outside money in the entire
election. One guy – one guy who just sat down for a four-hour interview
with Jane Mayer.
Joining us now is Jane Mayer, staff writer for “The New Yorker”
magazine. Her new article on North Carolina Republican kingmaker Art Pope
appears in this week`s issue of “The New Yorker.”
Jane Mayer, thanks for being here.
JANE MAYER, THE NEW YORKER MAGAZINE: Glad to be with you.
MADDOW: Should Art Pope sort of be seen as the one-man band that is
the Republican Party in North Carolina now, or is he something new and
MAYER: Well, in many ways he is the one man who is singlehandedly
bankrolling a kind of conservative takeover of the state – at least that`s
how the Democrats see it down there. It`s a state that as you said is just
completely key to Barack Obama`s re-election and it`s a state that is
traditionally neither completely red nor blue. It`s kind of a purple
state, but it went blue in 2008 and basically the Republican Party took one
look at it and thought they`ve got to make sure that it doesn`t go that way
again in 2012.
So, there`s been a lot of very careful and smart thinking going into
the state and a ton of money. As you say, almost all of the accounts,
three-quarters of the independent spending in 2010 were accounts that
linked back to this one Raleigh businessman named Art Pope, who has kind of
an empire of discount stores and is a longtime far-right activist.
MADDOW: In terms of – in terms of Art Pope`s political interests
now that have become so important to the fate of North Carolinians, as you
say, he`s sort of ahead of the empire of discount stores. He inherited
this business empire from his dad and his dad from his father before him.
Has Art Pope been pushing an agenda that is more broadly conservative than
just the sort of narrow advancing Republican partisan interests, things I
described in the introduction?
MAYER: Well, first of all, he makes a big point of saying he didn`t
inherit the business. It`s a family business. He certainly went right
into the family business and he now owns it. It`s privately owned much
like the Koch brothers own their own company also.
But are his interesting narrow? They are – he has a vision of
America that requires kind of turning back the tide of history to before
the New Deal, basically. And he will say it has nothing to do with his
business interests, but it does include things like opposition to the
minimum wage law and he hires an awful lot of people at minimum wages and
he also have opposition to most taxes and to all kinds of government
And, of course, because he has a fortune that includes something like
$150 million in a family foundation, taxes are something that he pays a lot
So, you can certainly see that his political vision dovetails with
his self-interest but it goes beyond that I think really with him. He`s
something of kind of an ideological purist and a zealot to some extent. At
least – I spent, as you said, many hours talking to him.
He`s a very smart man. He`s a lawyer who graduated from Duke Law
School and he`s conversant in political philosophy. But at the end of the
day, as one of the people I interviewed said there`s a puerile Ayn Randism
about him and it comes out.
MADDOW: Jane, why did Art Pope agree to talk to you? Part of
learning about the influence, especially in the post-Citizens United world
of these ideological billionaires who want to influence American politics,
particularly the Koch brothers, a lot of the reporting on that is about how
secretive these guys are and how much they want to avoid attention. Why
did he agree to talk to you?
MAYER: Well, I mean, he is actually secretive about his business.
He didn`t want to answer many questions about it. Again, it`s a privately
held company and he didn`t really want to talk about a lot of that.
But the thing about Art Pope that`s maybe different from the Koch
brothers is that – well, actually not, they also sought public office. He
sought public office. He was – he served four terms in the state
legislature and then he ran for statewide office and I think – as
lieutenant governor and he lost.
And I think in a way you can see him as a frustrated politician whose
ideas did not sell at the ballot box and when he didn`t really get power
that way, you can see he funded an empire of kind of a conservative opinion
machine and poured money into political races.
He`ll say that nothing he does is partisan or almost nothing. He
defines it all as sort of policy-oriented. But it always pushes the same
interests, which is the Republican Party and small government, almost anti-
government, and low taxes.
MADDOW: Jane Mayer, staff writer for “The New Yorker” – Jane,
congratulations on getting him to talk to you. And thanks for joining us
tonight. I really appreciate it.
MAYER: Thanks for having me.
MADDOW: We will post a link to Jane Mayer`s article on Art Pope in
“The New Yorker” at our Web site. I will encourage you to read it,
specifically to seek out one detail you will not hear anywhere else which
is that Art Pope left the libertarian party and ended up with the
Republican Party, because of something having to do with sasquatch as in
the yeti. Seriously. You have to check it out.
All right. Michael Lewis is here for the interview tonight. He knew
him from “Moneyball,” and “The Blind Side” and “Liars Poker” and “The Big
Short.” His new book is called “Boomerang.” That`s coming up.
And how Republicans have turned the “N” word surfaces from Rick
Perry`s presidential campaign into bad news not for Rick Perry but bad news
for the one African-American candidate in the race. That is ahead.
MADDOW: Republican political science is sometimes hard to predict.
Por ejemplo, if you were part of the administration that did not kill or
capture the terrorists who were at the top of your most-wanted list, but
instead you guys inexplicably insisted on starting a full scale nearly
decade long land war in an unrelated country, when the next president did
kill the terrorists on America`s most-wanted list, would you: A, wallow
privately in your envy and avoid public comments; would you, B,
congratulate the new president, or, would you, C, demand an apology? A, B
That is correct. Former Vice President Dick Cheney chose “C,”
demanding that the CIA strike that killed Anwar al-Awlaki in Yemen on
Friday was a good occasion for the Obama administration to apologize to
Dick Cheney for some reason. Why hot?
How about this one? Your politician that turns out to own a piece of
property that has a name and the name includes the “N” word. What do you
do when that fact becomes public? Do you: A, deny it and come up with an
elaborate cover story that you must have had in the work since the moment
you first thought about running for office because my God, it`s the “N”
word and it`s your property and understand it`s inflammatory and better
have a cover story? Do you use your cover story you undoubtedly must have?
Or do you B, just apologize for it and take responsibility. Or do you, c.,
declare war on Mexico?
C, again. You`re getting too good at this. Texas Governor Rick
Perry this weekend responded to the publicizing of his family`s “N” word
hunting camp in Texas this weekend by announcing apropos of nothing that he
might like to send American troops to invade Mexico.
Republican political science is not the same as other kinds of
political science. We will have more ahead.
MADDOW: The idea that New Jersey Governor Chris Christie might
possibly may be conceivably, weather permitting, think about running for
president even though he had said he wouldn`t a whole bunch of time, is one
of the political world`s most favorite rumors this campaign season. That
rumor back in the news yet again today. “Business Week” reporting word
from an anonymous Republican donor saying that Governor Christie is once
again actively considering entering the race and will make a decision
within a few days. The news about Christie`s reported reconsideration of a
potential candidacy being reported in the context of the larger dynamics at
work in the Republican field right now.
Notice that the Chris Christie rumors are almost always tied to a
fund-raiser of some kind. Either a fund-raiser is the source of a rumor or
fund-raising, itself, is the substance of the rumor.
It raises one really interesting point about all the Chris Christie
speculation for the other Republican candidates. The third quarter for
fund-raising just ended. The official numbers aren`t due for a few days
yet, but a Mitt Romney spokesperson tells “USA Today”, quote, we are going
to raise considerably less than what we did in our first reporting period.
“The Boston Globe” has reported as of late last week that Mitt
Romney`s campaign is on pace to raise between $11 million and $13 million,
a lot lower than the 18 million bucks he raised last quarter. It also much
lower than the kind of money he was bringing in the last time he ran for
president in 2008 when as “The Globe” points out, Mitt Romney was
relatively unknown on the national stage and was competing with a strong
field of fund-raisers.
So, Mitt Romney raising less money than he did before – meaning
previous election – and than he did last quarter. Mitt Romney is supposed
to be the Republican establishment guy who has the Wall Street money all
locked up. So, if he`s raising less money, if he can`t raise as much as he
did in `08 or last quarter, what`s the problem? What`s going on with Mitt
The theory floated by “The Globe” – GOP financiers still not sold on
Romney. Like maybe the ones who keep begging Chris Christie to run?
Well, Mitt Romney is still not selling the idea of himself to
Republican donors. He is trying to appeal to social conservatives. Mr.
Romney went on Mike Huckabee`s FOX News TV show over the weekend and
appeared to endorse a policy that Mike Huckabee has been lending his star
power to lately. It`s a state-based constitutional amendment defining
personhood beginning at conception. That`s a definition that is clearly
aimed at banning all abortion outright. It is also something that could
ban many common forms of birth control.
(BEGIN VIDEO CLIP)
MIKE HUCKABEE, FOX NEWS HOST: Would you have supported the
constitutional amendment that would have established the definition of life
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Absolutely.
HUCKABEE: So not that it would have had an easy sailing through the
ROMNEY: But – but – but –
HUCKABEE: I have to concede.
(END VIDEO CLIP)
MADDOW: But, but, but, I`m not sure what the awkward fussing at the
end of all about. But, now, someone has to ask Mitt Romney if he really
wants to ban the birth control pill because that`s what he just told Mike
Huckabee – everybody, follow-up.
Also at the top of the current non-rumor-based Republican race, “The
Washington Post” ran a piece this weekend about the name of a hunting camp
used by Rick Perry and his family. The name includes the “N” word and was
according to “The Post” painted in big black letters across a large, flat
rock standing upright at the camp`s gated entrance.
To be clear, it was not named by the Perry family. The place came
with the slur racial name in tact. Governor Perry told “The Post” that his
parents have painted over the rock in 1983 or 1984, but quoting now from
“The Post,” “Perry`s version event differs in many respects from the
recollections of seven people who spoke in detail of their memories of
seeing the rock with the name at various points during the years that Perry
was associated with the property through his father, partners, or his
signature on a lease.”
So, what did Perry campaign do about this bombshell revelation from
“The Washington Post”?
They said more or less the same thing to the rest of the press
Governor Perry told the “post” in the first place. Maybe they were hoping
Governor Perry`s plan for invading Mexico would take over the mood cycle
instead and everybody would forget about the racial slur ranch thingy.
(BEGIN VIDEO CLIP)
GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: It may require our
military in Mexico, working in concert with them, to kill these drug
cartels and to keep them off of our border and to destroy their networks.
(END VIDEO CLIP)
MADDOW: While the invasion of Mexico thing is a bold, bold plan, did
not make the entirety of the Beltway media forget about the giant
“Washington Post” story about the Perry hunting camp with the racist name
painted on the rock.
One of the governor`s rivals for the Republican nomination, Herman
Cain, was a guest on a couple of the Sunday political shows and he was
asked to comment on the “Washington Post” story and the Rick Perry details.
(BEGIN VIDEO CLIPS)
CHRIS WALLACE, FOX NEWS: The name of it written on a stone and was
“N” head. But, obviously, it wasn`t just “N” head.
HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Right.
WALLACE: And he was part of that camp even as governor. Your
CAIN: My reaction is, that`s just very insensitive. That is a much,
that is in a more vile, negative word and for him to leave it there as long
as he did, before I hear that they finally painted over it is just plain
insensitive to a lot of black people in this country.
UNIDENTIFIED FEMALE: It was painted over.
CAIN: Yes. It was painted over, but how long ago was it painted
over? So, I`m still saying that it is a sign of insensitivity.
(END VIDEO CLIPS)
MADDOW: So, here`s the state of play. Mitt Romney is not meeting
the fund-raising levels he met in 2008 or even earlier this year, perhaps
because everybody is still whispering and hoping about Chris Christie or
anybody else. That`s apparently making Mitt Romney totally willing to sign
on to any idea that will win him support including, at least it sounded
like this weekend, suggesting he would ban the birth control pill. Sure,
please vote for me and make the money people stop calling Chris Christie.
Also, Rick Perry has this whole racial epithet ranch thing to deal
Those two things taken together mean that naturally in Republican
Party politics, big picture, naturally, it`s been a really bad day for
Herman Cain. What?
Yes. Herman Cain. Herman Cain criticized Rick Perry`s racist ranch
name and racist rock at its gates. As you just saw. And then the
conservatives piled on to Herman Cain.
Rush Limbaugh accusing him of piggybacking on “The Washington Post”
smear of Rick Perry.
Matt Lewis at “The Daily Caller” calling Mr. Cain`s comments, quote,
“at best premature and worst highly irresponsible.” He goes on, it`s a
cheap shot and perhaps a signal that Cain is willing to play a race card
against a fellow Republican when it benefits him.
Erick Erickson of the conservative blog “RedState” calling it a
slander that he said Mr. Cain was picking up and running with as a way to
get into second place.
And by this afternoon, the day after his original comments, here`s
how Herman Cain was handling questions about the Rick Perry racist hunting
(BEGIN VIDEO CLIP)
CAIN: This question, this question of was I satisfied with Governor
Perry`s explanation about the name on that ranch where he went hunting –
and I said, yes, I am. Next question.
REPORTER: Are you disappointed any of the other candidates haven`t
expressed similar reactions like you have?
CAIN: Relative to?
REPORTER: Relative to this rock on the Perry –
CAIN: No, doesn`t bother me at all.
REPORTER: Some conservatives have said you bought into the liberal
media trying to smear Perry necessarily as a racist. Do you think you
played the race card? Do you regret at all what you said on “FOX News
Sunday” or ABC?
CAIN: All I said was the mere fact that that word was there was
insensitive – that`s not playing the race card. I am not attacking
Governor Perry. So people in the media want to attack him. I`m done with
(END VIDEO CLIP)
MADDOW: I`m done with that issue. The story breaks that Rick Perry
and his family have this land that`s named a racial slur, a racial slur
painted that`s been on the rock at the entrance to the camp. Herman Cain
raises questions about how long it took to paint over the racial slur. For
example, questions were also raised by the newspaper article. And Herman
Cain says, hey, that seems pretty insensitive.
And by the second full day of the story, Herman Cain is the one being
forced to back track. Herman Cain is the one in political trouble.
Really? America, meet the Republican Party. Republican Party, meet
MADDOW: This weekend in Iceland, the parliament opened a new session
that began with a religious service with Iceland`s elected dignitaries and
their spouses getting dressed all fancy and walking over to the cathedral.
This is supposed to be sort of a smile, smile, wave, wave deal.
As you can see here in this video picked up today by Xeni Jardin at
boingboing.net – as you can see here – this was not your typical easy
stroll over to the church for lawmakers.
Almost nothing is easy in Iceland anymore, not since the country`s
big banks collapsed three years ago and their little Icelandic corner of
the global financial crisis. Those banks turned little Iceland into a
giant insane clown casino, a great big phony financial world power that
went bust overnight. The whole country essentially busted. Your money`s
worth nothing and you`re billions upon billions of dollars in debt and
nobody can quite explain why.
If the U.S. was on a brink of a meltdown in 2008, Iceland sort of
went over that brink. What we fear for ourselves pretty much happened to
them. We`re seeing here the latest protests of the rich guys who ruined
Iceland and the government that let them.
People throwing eggs – people throwing yogurt. It`s Iceland.
People in one case I think even throwing firewood at Icelandic officials.
You see this person right here? That person right there is the first
lady of Iceland. She is the wife of the president. She`s basically the
Michelle Obama of Iceland.
And look what she does at these protests. Watch her. She`s with
this group of politicians, but she turns – oh, wait – there she is.
She`s broken away from them. She leaves them doing their best to get to
the church and kind of quick walks like she`s hoping her own handlers won`t
notice she`s slipping away.
And then she starts talking to and embracing the protesters. The
first lady of Iceland hot foots it to the barricades where the eggs, yogurt
and firewood have been coming from and people suffering for three years
after this crisis. She walks over, hugs them and then climbs over the
And then in her fancy “I`m the first lady going to church” suit, she
climbs over the barricade toward people who had been throwing stuff in her
Across Europe, thousands of people have been marching against bankers
and the ruins of the global economy. In Italy last month, the biggest
trade union shut down buses and trains and schools and government offices.
They called a general strike over austerity measures by the Italian
government, which is broke. And bankers telling Italian TV the nation`s
economy is too big to fail and too big to save.
In Spain, protests in dozens of cities last week over banks evicting
people who can`t pay their mortgages. Unemployment there more than double
the rate in the U.S. And the people of Spain have been turning out to say,
you can`t throw us out of our houses because we can`t find work because
there`s no work to find.
In New York City, the “Occupy Wall Street” movement entered its third
week of protesting tax breaks for millionaires and a variety of austerity
measures for the rest of Americans. Police this weekend arrested hundreds
of occupy Wall Street marchers on the Brooklyn Bridge. Hundreds of people
“Occupy Wall Street” now showing signs of becoming occupy everywhere
in America. Occupy Boston, occupy Chicago, occupy Portland, Maine, occupy
In Greece, riots continue over new austerity measures as that nation
tries to arrange a bailout from the rest of the European Union. Greece
learned today its recession will officially drag on for a fourth year, the
government broken by corruption and the people suffering because of it.
You know anybody who works in banking or finance or global economics?
You know any of those folks and they have seemed a little green around the
gills lately? Maybe they`ve been ticking items off their bucket list or
getting a little more religion than usual?
It may be because they have looked up and realized that, yes, we
survived falling off a cliff but now that cliff is apparently subject to a
landslide. The cliff is dissolving and heading right for where we are
In other words, the collapse of the American financial system that
started at the end of the bush presidency has been forestalled. As Michael
Lewis puts it in his book “Boomerang” – it has been forestalled but not
ended. As Mr. Lewis puts it, quote, “The financial crisis of 2008 was
suspended only because investors believed that governments could borrow
whatever they needed to rescue their banks. What happened when the
governments themselves ceased to be credible?”
This ongoing and potentially now worsening economic crisis of ours is
global and it is political. It is also local and occasionally tawdry and
weird. And one man who has gone to this tawdry and weird places around the
globe trying to figure out what went wrong, and why and how and who did it,
is back from his troubles and is here.
Joining us in studio for “The Interview” is Michael Lewis, the author
of bestsellers and eventual Hollywood films, “Moneyball” and “The Blind
Side.” His latest book is called “Boomerang: Travels in the New Third
World,” that is out today.
Michael Lewis, thank you for coming in.
MICHAEL LEWIS, “BOOMERANG” AUTHOR: Thanks for having me back.
MADDOW: Do you believe the sky is falling?
LEWIS: Yes, it`s more complicated than that. It is – I think what
we`re going through now is an extension of the financial crisis that began
in 2007 and 2008. We have forestalled it, but what happened was these
debts were created. They were private debts. They got – they tended to
be around the world nationalized, socialized.
And the governments now are ceasing to be credible. And the question
is: what happens when the governments aren`t credible? Who can step in and
say, we`ll put the panic to rest?
And I think, you know, I think what`s – we`re coming to a point of
reckoning. I don`t think it`s the end of the world. But I think – I
think we`ve got kind of radical change in front of us, yes.
MADDOW: I have been following the euro crisis as best I can and
getting increasingly worried about it. I`ve been doing a lot more reading
about it than you would think by how much we`ve talked about it, because I
haven`t quite figured out how to talk about it yet. But reading your book
made me more scared than anything else that I had been reading, because it
occurs to me that if you think that some things aren`t too big to fail,
then countries aren`t too big to fail.
But I don`t understand what happens when countries fail.
LEWIS: Yes. Neither do the people who run Europe. That`s the
The reason Greece isn`t just allowed to go. Greece can`t afford to
repay its debts. It will default in some way. It will not repay its
creditors 100 cents on the dollar.
The reason the European Union is desperate to forestall that is that
they don`t know what happens when it happens. I mean, they do know that,
for example, all the banks in Greece will be bankrupt because they own a
lot of Greek government bonds. French banks and German banks are going to
take big hits and then it ripples through the financial system one more
All of a sudden – you know, the banking system is really an act of
faith. People are willing to put capital into banks only if they kind of
believe in them. They`re black boxes largely to the investors who invest
in them. And if that faith starts to crumble, you get the 2000, you get
the Lehman-like environment all over again.
What was interesting to me, though, is it looks from 40,000 feet, it
looks like the same story everywhere, but it`s very different from country
to country. I mean, this financial event has been a kind of window into
local culture. You can see that it – it`s a series of regional events
really. Not just one event. What happened in Greece was very different
from what happened in Iceland, which was very different in what happened in
Ireland, which is different from what happened here.
MADDOW: Is the solution, though, actually a sort of – do you take a
best practices solution and apply it to all countries? Do you say, you
know what, Ireland, that was cute, and you realize that you got all excited
about your housing – that was cute in Iceland, that was cute, if you
thought you could trade assets that had no value whatsoever and call them
billion dollar assets that you could all end up being fake billionaires,
that was cute. You don`t actually get to say how you restructure the
system after it melts down. We figured out what the one – what the
countries that are resilient against things like this and everybody`s going
to get a one size fits all resilient financial system?
LEWIS: But who`s going to impose that? I mean, they got to impose
it on themselves, right? There`s no external authority to come in and
impose that. And it`s very unclear.
I mean, we now moved from an economic question or financial question
to a political question. Which way are these people going to jump? Are
the German people willing to bail out these countries on the periphery of
Europe? Polls say absolutely not. But their government, their leaders are
trying to drag them into that relationship.
The Greeks – the Greek people, for that matter, do they want to even
be bailed out? If the terms are that they`ve got to live in this endless
austerity? Probably not.
So, what you have is the center not holding right now. But the cost
of – I mean, what is going to ensue if Greece defaults and drops out of
the euro, it`s going to be ugly for a while. So everybody is doing their
best to prevent it.
MADDOW: Is there going to be a run on banks throughout Europe if
that happens? If people cease to believe that a euro-based economy can`t
survive, because it`s a euro-based economy, does every euro-based economy
LEWIS: Yes. I think the question, it`s not so much run on banks. I
expect what happens instantly is the government says we`re behind the
banks. Once again, everything is too big to fail, we`re back to where we
But then the question is, which governments can afford to bail out
their banking systems? We`re in a very funny situation here. As bad as
our banks were, our banks are really small in relation to the rest of our
economy compared to Europe. And so we can actually afford to bail out our
Germany can afford to bail out its banks. France not so clear.
Italy definitely not so clear. Spain neither.
So you got different situations. And the question is how the market
is going to respond to the countries once they say, you know, you can`t put
our banks out of business.
MADDOW: And once the full faith and credit of x country is rated as
being something of what it`s actually worth than an assertion of national
LEWIS: What we`re seeing is – the credit bubble was about people
ignoring risk. What`s happening is people are learning what risk is and
learning the price.
MADDOW: Michael Lewis. The new book is called “Boomerang: Travels
in the New Third World.” Absolutely terrifying, really like quite
literally kept me up night grinding my teeth.
LEWIS: I hope it didn`t bore you.
MADDOW: I don`t grind my teeth for things that bore me. It was just
upsetting. But important and beautifully written. Thank you for doing it.
LEWIS: Thank you.
Still ahead, some very clever subversion, all completely legal is
“The Best New Thing in the World” today. We will be right back.
MADDOW: This is a heads-up story. This is something to be aware of
because this may end up being a big deal but as yet, we do not know where
Here`s how it starts. Before retiring on Friday as chairman of Joint
Chiefs of Staff, couple of weeks ago, Admiral Michael Mullen told the
Senate something way more blunt than anybody expected, something that
sounded what you`d say to start a war or explain after the fact why you
already started the war.
(BEGIN VIDEO CLIP)
ADMIRAL MIKE MULLEN, CHAIRMAN OF THE JOINT CHIEFS OF STATE: The
Haqqani Network for one acts as a veritable arm of Pakistan`s internal
services intelligence agency. With ISI support, Haqqani operatives planned
and conducted that truck bomb attack as well as the assaults on our
(END VIDEO CLIP)
MADDOW: Speaking as chairman of the Joint Chiefs of Staff, Admiral
Mullen saying Pakistan has been more or less directly been killing American
soldier in this truck bombing in eastern Afghanistan which wounded 77
Americans on the eve of this year`s 9/11 anniversary and this big
coordinated attack on the U.S. embassy and international military
headquarters in Kabul last month.
Admiral Mullen saying that when a group called the Haqqani Network
mounts attacks like these on Americans, that Haqqani Network is Pakistan.
In his words, it is a veritable arm of Pakistan`s intelligence service.
That`s the kind of thing that does not usually get said out loud and
directly because when the U.S. government says another country is killing
U.S. troops out loud and directly, that`s pretty close to the U.S.
government saying, here we come, let us introduce you to the United States
But then, a few days after Mullen dropped that bombshell in the
Senate, another one dropped. “The New York Times” quoting anonymous
sources saying publicly for the first time that when U.S. and Afghan
officers were ambushed at a meeting in Pakistan in 2007, they weren`t
ambushed by militants, by locals, by the Taliban or something. They were
ambushed by the Pakistani officers the Americans were meeting with.
Quote, “At first, the meeting to resolve the border dispute seemed a
success. Despite some tense moments, the delegations ate lunch together,
exchanged phone numbers and made plans to meet again. Then, as Americans
and Afghans prepared to leave, the Pakistanis opened fire without warning.
The assault involved multiple gunmen, Pakistani intelligence agents and
Again, this happened in 2007 – which means Americans have been
keeping news of this ambush quiet for four years.
What were they waiting for for four years? Why have they decided to
tell the story publicly now after four years?
Then the unexpectedly brutal truth about Pakistan trifecta was
completed today by named U.S. sources on the record. The headline in the
“USA Today” newspaper, majority of IEDs are traced to Pakistan.
Quote, “From June through August, U.S. troops detected or were hit by
more than 5,000 IEDs. The most for any three-month period since the
Afghanistan war began in `01. Those bombs killed 63 troops and wounded
more than 1,200. More than 80 percent of the IEDs are home made explosives
using fertilizer produced in Pakistan.”
So, Pakistan effectively directs the activities of the group that
attacked the U.S. embassy in Afghanistan last month and set off a truck
bomb that wounded nearly 80 U.S. troops. Pakistani personnel directly
attacked and killed an American major and wounded three other U.S. officers
in 2007. Also, Pakistan the primary source for the material for the bombs
that are the primary means of killing Americans in the Afghanistan war.
OK. Single most shocking thing about those three news flashes is not
that they are true. These things are awful news, but they are not
shocking, given what we know about Pakistan. What is shocking is that
different parts of the U.S. government and the U.S. military are now
letting us, the American public, know all of these things, all at once, in
Why are they telling us this now? Are they trying to prepare us for
MADDOW: “The Best New Thing in the World Today” comes from the
“Occupy Wall Street” protest in Lower Manhattan. The protesters there have
been barred from electronically amplifying their voices. No bull horns, no
microphones. They instead have to rely on the human voice, alone.
Early on, though, in the now two-week-old occupation, they came up
with an ingenious solution the “people`s mike.” It goes like this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: On September –
CROWD: On September.
UNIDENTIFIED FEMALE: – Seventeenth –
UNIDENTIFIED FEMALE: 2011.
UNIDENTIFIED FEMALE: People from all across –
CROWD: People from all across.
UNIDENTIFIED FEMALE: – the United States of America –
CROWD: – the United States of America –
UNIDENTIFIED FEMALE: – and the world came to protest –
CROWD: – came to protest –
UNIDENTIFIED FEMALE: – the blatant injustices –
CROWD: – the blatant injustices –
UNIDENTIFIED FEMALE: – of our times perpetuated –
CROWD: – of our timers perpetuated –
UNIDENTIFIED FEMALE: – of the economic and political elites –
CROWD: – of the economic and political elites.
(END VIDEO CLIP)
MADDOW: You get the idea, right? So, one person speaks and the
crowd repeats their words in unison so everybody can hear what the
unamplified person said.
This weekend, Nobel Prize-winning economist Joseph Stiglitz visited
the “Occupy Wall Street” protest and his words to the protests were
similarly amplified by the people`s mike. Watch.
(BEGIN VIDEO CLIP)
JOSEPH STIGLITZ, ECOMNOMIST: Before talking about economics, I want
to say something about democracy.
CROWD: Before talking about economics, I want to say something about
STIGLITZ: In July, I was in Spain –
CROWD: In July I was in Spain –
STIGLITZ: – talking to the indignados there. The protesters.
CROWD: – talking to the indignados there. The protesters.
STIGLITZ: There I could use the bull horn.
CROWD: There, I could use the bull horn.
STIGLITZ: I didn`t have to go through this echo chamber.
CROWD: I didn`t have to go through this echo chamber.
STIGLITZ: I realized the pedagogy of having to repeat what I saw is
CROWD: I realize the pedagogy of having to repeat what I saw is very
(END VIDEO CLIP)
MADDOW: OK, let`s stop there.
First, Joseph Stiglitz throws them a Spanish word for protesters.
And then makes them say “I realize that pedagogy of having you repeat what
I say is very valuable.” And yet, the group is so practiced at this now
that even “I realize the pedagogy of having you repeat what I say is very
valuable” gets repeated lickety-split. They did very well.
So, obviously, this is something that can pretty easily break down,
but even when it does break down, it is still kind of awesome.
(BEGIN VIDEO CLIP)
STIGLITZ: Our financial markets –
CROWD: Our financial markets –
STIGLITZ: – have an important role to play.
CROWD: – have an important role to play.
STIGLITZ: They`re supposed to allocate capital, manage risk.
CROWD: They`re supposed to allocate capital, manage risk.
STIGLITZ: But they misallocated capital and they created risk.
CROWD: But they misallocated capital and they created risk.
(END VIDEO CLIP)
MADDOW: I love the look on the guy`s face behind him when he didn`t
quite get that last line right. They misallocated capital and they created
The people`s mike as not just a translator and amplifier but also an
awesome, artifying factor in this process. The translation and
amplification of Nobel Prize-winning economic thought and everything else
happening there, too, I have to say, as a technology, “The Best –
CROWD: “The Best –
MADDOW: – New Thing –
CROWD: – New Thing –
MADDOW: – in the World –
CROWD: – in the World –
MADDOW: – Today.”
MADDOW: And now –
CROWD: And now –
MADDOW: – “THE ED SHOW.”
CROWD: – “THE ED SHOW.”
MADDOW: Good night.
CROWD: Good night.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>