The Rachel Maddow Show, Transcript 12/28/11

Guests:
Nate Silver, Brian Hicks, Ed Fallon
Transcript:

RACHEL MADDOW, HOST: Good evening, Ed. Please tell Senator Santorum
I said hello when you see him.

SCHULTZ: I will do that. I watched you last night. You`re waiting
for the Santorum wave. It might be coming on to shore.

(LAUGHTER)

MADDOW: It`s so disturbing. Thank you, Ed. I really appreciate it.

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

We actually do have some legitimate breaking news to report right now
out of Iowa. With six days to go until the Iowa caucuses there has been a
rather dramatic development just moments ago tonight in the Republican race
for president.

What you`re looking at right there is a campaign event that is under
way right now in Des Moines. It`s a campaign event for Republican
Congressman Ron Paul of Texas who you see speaking there.

The two latest polls out of Iowa show Congressman Paul in first place
in the PPP poll and in the second place in the CNN poll. More on that in a
moment.

But the breaking news tonight is that Ron Paul appears to have scored
a bit of a coup in his effort to win Iowa. Shortly before Dr. Paul took
the stage there, in Des Moines tonight, an Iowa Republican state senator
who`s named Kent Sorenson was introduced to the Ron Paul supporting crowd.

Now, up until tonight, Mr. Sorenson had been serving as an Iowa state
co-chair for the Michele Bachmann campaign. The reason he was being
introduced at a Ron Paul rally was to announce he`s switching sides.

(BEGIN VIDEO CLIP)

ST. SEN. KENT SORENSON (R), IOWA: Tonight`s been tough for me. I`ve
been serving as Michele Bachmann`s state chair over the last two years.
And while Michele has fought tremendously for my conservative values, I
believe we`re at a turning point in this campaign. I believe that we have
an opportunity to elect a conservative, somebody that holds our values
dear.

I just want to tell you guys that I`m going to do everything the next
few days to help in Iowa and beyond, and we`re going to take Ron Paul all
the way to the White House in 2012.

(CHEERS)

(END VIDEO CLIP)

MADDOW: The co-chair of Michele Bachmann`s Iowa campaign tonight
jumping ship and saying he is supporting Ron Paul. Shortly after making
that announcement, the Ron Paul campaign did put out a press release saying
that man you just saw speaking there, State Senator Kent Sorenson, has
resigned from the Bachmann campaign effective immediately.

It should be noted that Mr. Sorenson was in attendance at a Michele
Bachmann campaign event earlier today in Iowa. So, he apparently woke up
today as a Michele Bachmann Iowa campaign co-chair but is going to bed
tonight as a supporter of the campaign of Ron Paul. So, big news tonight
out of Iowa and big news certainly for the Ron Paul campaign.

This is one of MSNBC contributor Ezra Klein`s graphs of the year of
2011. He did graphs of the year to give you a snap shot of where things
are in American politics and the American economy. This is one of them.
He said it helps explain what the year has been like.

This is a graph of the standings for the Republican nominating process
among Iowa residents polled over the course of this year. This is the Iowa
Republican polling this year.

When you look at that graph, what does that graph say to you? Any one
thing?

Yes, that graph says one thing. It says chaos. And if not chaos, at
least constant motion.

Even before this dramatic news about the Michele Bachmann campaign co-
chair jumping ship to Ron Paul tonight, this was already proving to be the
really, really fun part of the political year.

Stuff is just a mess in Republican politics right now. There are a
million things going on. Behold, first we now have the first post-
Christmas Iowa polling.

So if you want a snap shot of what the race is like in Iowa since the
holiday this weekend, these are the first numbers that we`ve got on that.
As you can see here, the Ron Paul surge in Iowa appears to be holding
steady or even getting better.

This is the poll out from Public Policy Polling. They`re putting Ron
Paul as the front-runner in Iowa, holding a four-point lead over Mitt
Romney. This is the second straight PPP poll in Iowa that`s put Ron Paul
in the lead.

Also of note from this poll, look at Newt Gingrich. Newt Gingrich has
fallen to 13 percent in this poll, which puts him in third place. Over the
last 3 1/2 weeks in this poll, Newt Gingrich has gone 27 percent in Iowa on
December 5th, from 27 percent to 13 percent now. That is a 14-point drop
in three weeks.

Here`s another headline out of this poll, though. Look who comes in
last place in the PPP poll. Former Louisiana Governor Buddy Roemer, there
in last place. That is actually a good thing for Buddy Roemer relatively
speaking because PPP never even asked about Buddy Roemer before this poll.

Last week, PPP sent out this tweet. It said, quote, “Buddy Roemer
just called and personally asked to be included in our polls and was very
nice about it. So, we`ll do that for the duration.” Buddy Roemer asked
nicely and voila, now PPP is polling on Buddy Roemer, along with the other
candidates.

So, officially now, he`s in last place, 2 percent. Moving on up.

You contrast that with another bottom of the barrel candidate making
news today. The former Republican governor of New Mexico, Gary Johnson.
Gary Johnson actually gave up on the Republican nominating process
altogether today. Mr. Johnson in Santa Fe this afternoon announcing that
he is leaving the Republican race.

And he`s had it better than Buddy Roemer. Gary Johnson at least got
into a couple Republican debates so far this year. He said today his deep
disappointment with the process thus far is leading him to dump the
Republican Party and instead run for the libertarian party`s presidential
nomination instead.

In terms of dissatisfaction, though, with the available options in the
Republican primary so far, there was also this news today about Sarah
Palin, Governor Palin once said on an Alaska radio show that it would take
a lot – it would take a huge, natural disaster, in fact, to get her to
jump into the race for president. Remember this?

(BEGIN AUDIO CLIP)

RADIO HOST: Are you sure that we`re not going to hear tomorrow that
Sarah Palin has decided, you know what, I`m going to run for president of
the United States?

SARAH PALIN (R), FORMER ALASKA GOVERNOR: You know, that would take an
earthquake the size of the `64 Great Quake in, you know, the personal life
and local political life to change that up. So I don`t anticipate it.

RADIO HOST: All right. If, in fact, there`s a 10.3 earthquake
somewhere on the globe today, you have to promise me you`ll call this show
first and tell us you`ve decided to run for president.

PALIN: I will. It`s kind of morbid thinking, but yeah, 10.3. That`s
the marker.

RADIO HOST: All right. Very good.

(END AUDIO CLIP)

MADDOW: Ten-point-three, for the record, is significantly bigger than
the Great Quake in Alaska in 1964. Those comments were enough to inspire a
group of Iowa Sarah Palin lovers to form themselves into a group called
Sarah Palin`s Iowa Earthquake. In other words, they would like to be the
earthquake that causes her to get into the race.

And today, we learned that they have started running this radio ad in
Iowa.

(BEGIN AUDIO CLIP)

ANNOUNCER: Are you unhappy with the current GOP field?

Let me tell you something. You are not alone.

Join thousands of Iowans as we vote rogue. It`s the caucus for Sarah
Palin on January 3rd.

Let Iowa and the entire country know we want real leadership and real
reform in D.C.

So come on, Iowa, vote rogue on January 3rd.

Paid for and authorized by Sarah Palin`s Iowa Earthquake who is
responsible for the content of this ad. Not authorized by Sarah Palin,
Sarah PAC, any candidate or candidate`s committee.

(END AUDIO CLIP)

MADDOW: Vote rogue on J 3rd, disclaimer, disclaimer, disclaimer,
disclaimer.

We called Governor Palin`s office today to ask whether she thinks it
is a good idea for Iowans to vote rogue, for Iowans to caucus for her on
Tuesday. So far, we`ve had no response from her office. But hope does
spring eternal.

We`ve also got a second round of polling out of Iowa today from CNN
and from “Time” magazine. Now, like the PPP poll that I just described,
this data did come out today. But in some cases, these were Iowa voters
being polled before the Christmas holiday.

So, it`s being released on the same day. In some cases, these
questions were asked earlier than the PPP poll. But while that PPP poll
had Ron Paul first and Mitt Romney second, this one has the top two
reversed. Mitt Romney in first and Ron Paul in second with 25 percent and
22 percent of the vote respectively.

That interestingly reflects a five-point gain for each of them since
the last time this CNN/”Time” poll was done.

Where are they getting the five points each from? Well, again, look
at Newt Gingrich. Mr. Gingrich`s support falling from 33 percent to 14
percent in this poll in less than a month. Hey, I guess negative
advertising works.

When you lose 19 points in less than a month, there`s plenty of your
former supporters to spread around. So not only do Ron Paul and Mitt
Romney get a five-point bump each in this latest poll, courtesy of Newt
Gingrich`s failure.

But also the littlest bubble gets some help, that would be Rick
Santorum rocketing up to third place in Iowa. Mr. Santorum going from 5
percent to 16 percent in less than a month. Again, some caution is
warranted here.

First of all, this is Rick Santorum. Most famous for being un-
Googleable for something he once said about having sex with dogs and for
losing his own Senate seat in a landslide. So, caution is warranted here.

Caution also warranted because as I mentioned the other poll out
today, taken more recently, the PPP poll. If you look at Rick Santorum`s
numbers in the other poll, they show no movement whatsoever in Rick
Santorum`s numbers. So, caution.

But if you are Rick Santorum, this kind of surge even in one poll at
this late stage in the political calendar, has got to be very excited.
What better timing for the emergence of the Rick Santorum super PAC?

Yes, Rick Santorum has one, too. It`s called the Red, White and Blue
Fund. And today, they launched this pro-Rick Santorum ad in Iowa.
Apparently, they`re spending a quarter of a million dollars on it, which
for the other top tier candidates in Iowa is a drop in the bucket. But for
Rick Santorum, that`s a huge deal.

I would say next things to watch on Rick Santorum are probably whether
or not any other candidates take him seriously enough to go negative on
him, and also, whether or not FOX News gets onboard with Mr. Santorum.
They have mostly ignored him thus far. But I think those two factors we`ve
seen make a big difference in the durability of other candidates` non-Mitt
Romney bubbles, thus far.

So, I think if you`re trying to figure out if Rick Santorum might be a
factor next week, those two factors will be worth watching.

But what do I know? I`ve been dismissing Rick Santorum all along.

All right. One candidate who is not getting any headlines out of the
polling from Iowa today, not only not getting any headlines but not getting
any sub-headlines out of the new polling from Iowa today is Rick Perry who
comes in fifth in both the PPP and the CNN polls that are out today.

Of note in the Rick Perry campaign right now is a new Rick Perry stump
speech. “The Des Moines Register” reporting today the Perry campaign
revamped his stump speech in what they`re billing as his closing argument
to Iowa voters. The revamped speech “The Register” observed, quote, “ends
with a religious flourish borrowed from chapter six of the biblical book of
Isaiah.”

This would be said religious pick Perry flourish.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: When the Lord asked
the Prophet Isaiah, he said, whom should I send and who will go for us?
Isaiah said, fear not, send me.

This is your country. Taking her back is your call. Join me in this
mission. Echo the words of Isaiah. Here am I. Send me.

(END VIDEO CLIP)

MADDOW: Rick Perry now very focused obviously on closing the deal
with religious conservatives in Iowa. Another sign I think of Rick Perry
banking hard for the evangelical social conservative vote, his announcement
at a campaign event in Iowa last night sort of striking announcement that
he`s changed his mind on abortion.

He said, seeing Mike Huckabee`s DVD about abortion has caused him to
change his stance on the issue. Even though Rick Perry is very, very
antiabortion, he is for criminalizing it. Mr. Perry used to believe the
government shouldn`t force rape victims or victims of incest to bear the
child of their rapist or of their incestuous attacker.

Now, though, after seeing Mike Huckabee`s movie, Mr. Perry has decided
that the government should in fact forced victims of rape and incest to
bear the child of the rape or incest. He even teared up a little bit when
he was explaining it.

So, the new Rick Perry, after seeing Mike Huckabee`s movie, is for no
exceptions for rape or incest in his desire to criminalize abortion.

One note, though, on the Rick Perry abortion thing, the question to
him was also whether he believed it should be legal to have an abortion not
just in cases of rape or incest but also if that would be the only way to
save the life of the woman who is pregnant. He did not answer about that.
He only answered about rape and incest.

So given that he`s gone through a transformation on this, thanks to
watching Mike Huckabee`s DVD, we called the Perry campaign today to ask
whether Mike Huckabee`s DVD also made Rick Perry change his mind about
whether a woman should be forced to give birth, even if doing so will kill
her. So far, we had no response from the Perry campaign.

Also, no word on whether or not Rick Perry plans to keep watching
movies about abortion and if that means we should keep expecting new
positions from him on the issue. I`m thinking of sending him over the
handmade sale, for example.

But in an interesting and risky gambit from the Perry campaign today,
one of the Perry headline, Governor Perry decided to weigh in on one issue
that up until now had not been fodder in this presidential race.

(BEGIN VIDEO CLIP)

PERRY: It really disturbs me that nearly after nine years of war in
Iraq, that this president wouldn`t welcome home our many heroes with a
simple parade in their honor.

(END VIDEO CLIP)

MADDOW: We`ve been talking about this issue for the last few days on
this show. I guess I should not be surprised to see this turning up as a
partisan issue in a presidential campaign. But I am surprised. And Rick
Perry does seem really desperate right now.

I am a person who leans toward the idea that there ought to be a
parade to mark the end of the Iraq war. But I recognize that it`s
complicated.

And everybody should note that this is by no means an uncontroversial
position among Iraq and Afghanistan veterans, and current service members.
A lot of whom feel that it would be inappropriate to have an end of the
Iraq war parade while the Afghanistan war is still raging. This is a
sensitive and complicated issue.

But Rick Perry has put himself out on a limb on this. He`s decided to
make it a partisan issue. To make it something over which he will attack
President Obama as if not holding a parade means Barack Obama doesn`t
support the troops. And Rick Perry will get to bring that home to Texas
with him to keep him warm at night as soon as this is all over for him,
which should be in about six days.

Do you want to talk about the truly growing caution to the wind in the
race right now. How about this today from Ron Paul?

“Talking Points Memo” today, look at this, interviewing a pastor that
the Ron Paul Iowa campaign recently touted as a Paul supporter. The
supporter`s name is Reverend Philip Kayser of the Dominion Covenant Church.

It turns out Reverend Kayser is a “kill the gays” guy. Reverend
Kayser with Ron Paul Iowa campaign has been putting out press releases
about, praising his enlightening statements and his support for Ron Paul.

This guy also believes homosexuality in the United States should not
just be outlawed but the punishment for being gay should be execution in
the United States of America. How is that for small government? The Ron
Paul campaign so far refusing to comment on “TPM`s” reporting on this. And
so far, at least as far as we can tell, the Ron Paul campaign making no
efforts to distance themselves from their “kill the gays” supporter who
they`ve been touting.

If there`s a big picture story to tell about Iowa less than a week
out, it`s a story of constant motion, desperation and chaos. Yay.

The bottom line today is probably ultimately the same bottom line you
would have had a year ago today, which is that for all of the ups and downs
and headlines and gaffes and scandals, if you had to pick which candidate
you wanted to be today in this race, you would probably want to be Mitt
Romney.

Mitt Romney, in fact, telling a Republican audience last night, I
think I`m going to get the nomination if we do our job right.

Again, the breaking news in Iowa this hour, the state co-chair of the
Michele Bachmann campaign just up and jumped ship and endorsed Ron Paul.
Live and in the flesh at an event tonight in Des Moines.

We`ll be back with Nate Silver in just a moment to find out what that
might mean. We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: Again, tonight`s breaking news out of Iowa, the state co-
chair of the Michele Bachmann for president campaign has tonight turned up
at a Ron Paul event in Iowa and announced that he is jumping ship. He is
leaving the Michele Bachmann campaign of which he is state co-chair and
throwing in with Ron Paul instead.

Joining us now is “New York Times” spreadsheet psychic and founder of
the political calculus blog FiveThirtyEight.com, Nate Silver.

Nate, thanks for being here.

NATE SILVER, NEW YORK TIMES: Yes, thanks, Rachel.

MADDOW: I realize this is breaking news and it is spectacularly non-
quantitative. But if there was going to be a benefit to Ron Paul from he
who formally supported Michele Bachmann, what would we look at to discern
that?

SILVER: I mean, the polls are going to change on a daily basis from
here on out. One thing we learned, the newest poll really is usually the
best. People are still making up their minds, about 6 percent of voters
will decide in the last week essentially, and if they are leaning right
now, just looking for any movement at all.

I mean, I think this is more bad news for Michele Bachmann than it is
good news for Paul necessarily where Bachmann, and Perry and Santorum are
all competing for the same group of voters. They all were at about 10
percent.

Each time the candidate is not viable, that the ship is not sailing
the right direction, could lead voters to abandon that ship and jump on to
Santorum`s campaign or Perry`s campaign instead.

MADDOW: Is there any evidence of any consolidation of we`ve been
calling non-Romney voters, toward any of the other campaigns?

SILVER: Well, you know, you can make the argument for Santorum based
on one of the polls today, based on the fact that he got this sort of
tentative endorsement from the Family Leader, the evangelical group last
week. That he has a lot of staff in Iowa.

The press seems to have decided it`s his turn to have a surge.

MADDOW: Right.

SILVER: I mean, the media is really important in dictating momentum
in the primaries. It seems like right now, that, hey, you know, it`s the
story – it`s a slow news week so people are boarding up to cover Rick
Santorum`s campaign. But he does have some support in the numbers. He`s
run a traditional campaign.

In the CNN poll, he`s up to 16 percent, which is not that far out of
first place.

MADDOW: In terms of the significance of the polling at this point and
trying to understand not just what`s going to happen in Iowa, but the
importance of Iowa, though. You`re saying it`s more important to watch
movement in the polls than in is to watch any one poll?

SILVER: Yes. Well, what`s weird is that, yes, you want to look at
momentum, right? But you also want to look at who`s going to perform well
relative to expectations.

In 1984, Gary Hart finished second place with 17 percent. Walter
Mondale had 50 percent. But Hart got the momentum somehow because he was
only supposed to get 9 percent instead. It seems a big failure for
Mondale.

So, candidates really have to watch how they manage expectations. You
also have voters behaving tactically, where if Rick Santorum looks like he
can win, a lot of people think of him favorably in Iowa. His approval
rating – excuse me, favorability numbers are pretty good.

But if he`s not viable, they might vote for a Gingrich, Perry or
Bachmann instead. So, that`s why voters really are smarter than they`d be
in a lot of campaigns give them credit for, where they want to make sure
their vote counts. And that calculation can change day-to-day and actually
be effected by the polls.

MADDOW: And I think that point you just made there is so key to
understanding the viability of Ron Paul, because if the Republican
establishment, including all of the other candidates never see Ron Paul as
viable, they will never go negative on Ron Paul. And if they never go
negative on Ron Paul, voters who are not part of the establishment, because
they`re just voters, may never see the downside of Ron Paul that the
establishment assumes everybody knows. And he may be able to hang in there
longer than people expect.

SILVER: Well, Ron Paul could hang in there until the convention. I
do think he most likely has a cap on his support, though, because if you
want to get past the 20 percent of true libertarians or true believers in
Ron Paul, whatever you want to call it, then he has a lot of positions that
aren`t within the Republican mainstream.

He`s basically not really a Republican. He`s probably more a
Republican than a Democrat. But h positions are different and unorthodox
in Republican primary.

MADDOW: But voters have to know that. And if none of the other
candidates put out nasty attack ads against Ron Paul pointing that stuff
up, I guess it`s up to FOX News.

SILVER: Well, you know, the Romney people can throw – a few of the
Romney PACs I guess can throw a few elbows. If Rick Perry recovers, he
loves to throw punches.

You know, if Ron Paul wins Iowa, you`ll see more negativity. If he
wins New Hampshire, you`ll see –

MADDOW: Complete chaos.

SILVER: Complete chaos and complete panic. I think Romney is smart
enough to know maybe Ron Paul winning Iowa prevents a candidate like
Gingrich who might be more viable, that might be good for Mitt Romney. But
it`s not good for Mitt Romney if he were to lose New Hampshire under any
circumstance at all. You could have a Huntsman rebound or have someone
come back in South Carolina and make the race more complicated.

So, Mitt will go negative on Paul I think as soon as he needs to.

MADDOW: And as soon as he figures out how to.

Yes, Nate Silver, I will say what you were saying about South Carolina
there is what we`re going to talk about next. I almost feel like horizons
are already turning to South Carolina because of the chaos here. This is a
great deal of fun to cover. Thanks for helping us.

SILVER: Thank you, Rachel.

MADDOW: Nate Silver does the FiveThirtyEight blog at
NewYorkTimes.com.

All right. When you call up cabinet agencies in the great state of
South Carolina, the person picking up the phone tells you it`s a great day
in South Carolina. They do that because the small government, Tea Party-
backed governor of South Carolina mandates that they say that. No matter
what kind of day it is in South Carolina.

In just a moment, why that is proving to be a really annoying decision
not just for anybody calling the state of South Carolina, but also for the
governor whose bright idea that was. That`s coming up next.

(COMMERCIAL BREAK)

MADDOW: Occupy the Iowa caucuses. You knew it was coming. Nobody
had any idea how much it would freak out the Iowa Republican Party. That`s
coming up.

(COMMERCIAL BREAK)

MADDOW: On Tuesday, someone will win in Iowa. If it`s Mitt Romney,
who everybody said could never do that because he`s not conservative
enough, that will be a big deal. If it`s not Mitt Romney, it`s kind of
hard to imagine that the caucus will have much of an effect at all –
unless of course you`re one of the people for whom the earth shook in 2008
when Mike Huckabee won in Iowa.

New polling today from CNN and “Time” magazine shows Mr. Romney,
though, way ahead in the race that will follow Iowa, Mr. Romney way ahead
in the New Hampshire primary which takes place a week after Iowa on January
10th. Quote, “Romney who owns a house in New Hampshire earned 44 percent,
followed by Mr. Paul with 17 percent.”

So, if it`s one of this year`s Huckabees who wins, a Ron Paul, a Rick
Perry, a Michele Bachmann, a Rick Santorum – if one of this year`s
Huckabees wins Iowa and Mitt Romney wins New Hampshire, everything will
have gone pretty much according to plan. We will be no closer to knowing
who the Republican nominee for president is going to be. In fact, the
first race will be an open question politically will be on the Saturday,
January 21st contest in South Carolina.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: You have to win South
Carolina. Everyone who`s won South Carolina has been the nominee, every
single one.

(END VIDEO CLIP)

MADDOW: Iowa and New Hampshire are fascinating to watch, but South
Carolina might really be the race to watch in terms of how things are going
to go in this nominating process. Mr. Gingrich there describing South
Carolina as a must win. He`s previously described it as his firewall.
South Carolina is the kind of place where Mitt Romney is not expected to be
able to win, just as he`s not necessarily expected to be able to win in
Iowa.

But it should be noted that Mitt Romney`s locked up an endorsement
from South Carolina`s Republican governor, Nikki Haley.

(BEGIN VDIEO CLIP)

WOLF BLITZER, CNN: Governor, thanks very much for coming in.

GOV. NIKKI HALEY (R), SOUTH CAROLINA: Thank you, Wolf. It`s a
pleasure to be with you. It`s a great day in South Carolina.

STEVE DOOCY, FOX NEWS: Joining us now is the governor of the great
state of South Carolina, Nikki Haley. Good morning, Governor.

HALEY: Good morning, it`s a great day in South Carolina.

NEIL CAVUTO, FOX NEWS: The Republican governor of the fine state with
us right now, Governor Nikki Haley. Governor, good to see you.

Do you have any horses in this race?

HALEY: Hi, Neil. Well, first of all, it`s a great day in South
Carolina.

(END VIDEO CLIP)

MADDOW: Noticing a pattern? It is not just a personal crusade that
the Governor Haley is on there. She actually makes people in South
Carolina say that, by her order. Seriously.

(BEGIN VIDEO CLIP)

HALEY: Whenever someone calls your department, we need to say, “It`s
a great day in South Carolina. How can I help you?” Every person, not
just the main line. Every single person that is called, “It`s a great day
in South Carolina. How can I help you?”

(END VIDEO CLIP)

MADDOW: By order of the governor.

Well, today, two South Carolina legislators filed legislation saying,
oh, please stop it, saying that nobody should be forced to answer the phone
with Governor Haley`s mandated cheery greeting, quote, “unless is really is
a great day in South Carolina.”

This thing has a trigger. The legislation says no state agency can
force its employees to answer its phone with “it`s a great day in South
Carolina” as long as state unemployment is 5 percent or higher. It would
also outlaw the greeting as long as all South Carolinians do not have
health insurance.

And it`s not just the great day thing that is sticking in the craw of
some South Carolinians. A recent Winthrop poll shows Governor Haley`s
approval rating dropping by double digits in the state even among
Republicans this year.

Governor Haley also now facing a scandal over e-mails that show her
apparently, improperly influencing a supposedly independent, a panel that
was supposed to be studying how best to implement the federal health care
law in South Carolina. But e-mails unearthed by “The Charleston Post and
Courier” newspaper showed the governor actually dictating what the
supposedly independent health panel would find.

When “The Post and Courier” tried to get access to the governor`s e-
mails to report their story, emails that were public records, the
governor`s office refused to turn them over.

Governor Haley`s problems are not necessarily the biggest problems for
Republicans in South Carolina. Last Friday, the federal Department of
Justice shot down, well, much of what South Carolinian Republicans have
been working on this year. They shot down South Carolina`s new Republican-
backed voter ID law – an ID law that would require voters to show
documentation in order to vote that they`ve never before had to show and
that thousands of South Carolina residents do not have. The Justice
Department saying the law would target minority and lower income voters.

And the day before the Justice Department struck that South Carolina
law down, a federal judge also rejected key provisions of something else
South Carolina Republicans have been working on all year. The state`s new
Republican-backed immigration law, blocking the most contentious part of
the law which requires law enforcement officials to check the immigration
status of any suspect they believe may be in the country illegally. The
judge also banning provisions that make it a crime to harbor or transport
an illegal immigrant.

So, the fate of the Republican nominating process at least in its
early stages may really hang on Republicans in South Carolina. It`s really
not looking like a great day in South Carolina now for that state`s
Republicans.

It`s not looking good when it comes to running the actual South
Carolina primary, itself. Earlier this month, Stephen Colbert – yes,
Stephen Colbert offered to pay for a chunk of the South Carolina Republican
primary because, quote, “The South Carolina Republicans and local officials
were at odds over who would pay for the election.”

Colbert says he reached out to the party to offer to subsidize the
cost through his Colbert super PAC. Mr. Colbert says he was told it would
cost $400,000. Ultimately, though, the state Republicans rejected Stephen
Colbert`s offer. Now, the taxpayers will have to pay the bill instead.

Ultimately, the South Carolina Supreme Court decided the state`s
counties will have to foot the bill for the cost of the election.

So, South Carolina can`t even figure out how to pay for its Republican
primary. It`s thinking about sticking the bill with the taxpayers and it`s
having to turn down a comedian born in the state who says he`d like to help
out.

So I say, again – is it really, really a great day in South Carolina
for all of the nation`s attention to be about to turn there on the state`s
Republicans?

Joining us now is somebody who`s been writing extensively about this.
It`s Brian Hicks, a columnist for the Charleston, South Carolina “Post and
Courier.”

Mr. Hicks, thank you very much for joining us tonight.

BRIAN HICKS, CHARLESTON POST AND COURIER COLUMNIST: It`s good to see
you, Rachel.

MADDOW: Let me ask you first if I got anything wrong in the
description of what`s going on in South Carolina politics right now. You
watch it from a much closer vantage point.

HICKS: Well, it`s a great day in South Carolina if you`re a political
columnist. But I don`t –

MADDOW: Let me just ask you, if as a political columnist, if you
could tell me if this is sort of unique in South Carolina politics right
now or if it is always this great.

HICKS: Well, every year it`s abundantly clearer that these are the
descendants of the people who started the Civil War, but they`re really
raising the bar this year. It`s – lunacy is off the charts.

MADDOW: When Mitt Romney announced his endorsement by South
Carolina`s governor, Nikki Haley, the first thing that made me think was,
oh, I bet Newt Gingrich is annoyed by that, because Newt Gingrich has
described South Carolina as his must-win state.

But the second thing I wondered is whether or not an endorsement by
Governor Haley goes very far with the Republican electorate in South
Carolina.

What do you think the effect of that endorsement will be?

HICKS: I don`t think it has a very big effect at all, Rachel. In
fact, the only thing I really think it`s going to do it alienate her from
the Tea Party a little more than she already is.

MADDOW: Why is she alienated from the Tea Party now?

HICKS: They`ve – well, she ran on transparency. That was her only
issue. And she`s not been very transparent and the Tea Party has been
calling her out on that.

And so, cozying up to Mitt Romney who`s no friend of the Tea Party is
not going to help her very much.

MADDOW: In terms of the overall sort of state of the party, South
Carolina knows that it`s going to be important in the national race by
virtue of the earliness of its primary contest this year on January 21st.

But in the sort of immediate aftermath of the Mark Sanford scandal,
with Governor Haley proving to have problems as you`re describing even with
the people who you think would be most closely allied with her, with the
logistical problems they`re having over who`s going to pay for the primary,
the thing they`re having with Stephen Colbert, the other scandals going on
with their main legislation all being overturned by the federal government
and federal judges – should the rest of the country understand South
Carolina Republicans as sort of having, I guess, organizational
difficulties that will effect this nominating contest?

HICKS: That`s a very nice way to put it. Yes. It`s a little bit of
chaos down here right now. The party`s really split into two pieces.
There is the mainstream Republican Party and then there is the Tea Party
that`s sort of the tail-wagging the dog here.

And the Republican Party is just livid. They can`t stand the Tea
Party people, but they`re scared to death of them. And so, they`re going
out and doing all this crazy stuff that they`re asked to do and gritting
their teeth.

And it`s really – it`s really a train wreck.

MADDOW: Brian Hicks, columnist for the Charleston, South Carolina
“Post and Courier.” I`ve been enjoying reading you on South Carolina
politics for a long time. I`m happy to talk to you tonight, sir. Thanks a
lot.

HICKS: Well, thank you very much.

MADDOW: Appreciate it.

All right. Just ahead, Newt Gingrich`s fix for the economy – a
glorious policy he likes to talk about as if it`s theoretical but we have
actually tried for a very long time and it worked very, very poorly. Stay
with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GINGRICH: I`m in a way their mortal threat. I just don`t threaten
Obama electorally. I threaten him intellectually and I threaten their
model of how the world works with the Reagan/Kemp supply side model.
They`re very fundamental fights.

(END VIDEO CLIP)

MADDOW: That`s Newt Gingrich on the bus today in Iowa speaking with
NBC`s Chuck Todd. Mr. Gingrich describing himself there as an electoral,
intellectual, mortal threat to President Obama.

As for the part about being a mortal threat, the new CNN/”Time”
magazine poll number out of Iowa today shows the formally front running Mr.
Gingrich dragging around in Rick Santorum land in Iowa, which Santorum
surely is delighted with but I`m sure Newt Gingrich isn`t.

If you take the other part of what Mr. Gingrich was saying on the bus
today, not just the typically grandiose thing about the mortal threat, but
the part about the Reagan supply side model and how that`s a fundamental
political fight to have in the country, there he may be on to something.

A few months after taking office in 1981 in the middle of a tremendous
recession, President Reagan announced his plan for saving the economy. His
plan was tax cuts. Big tax cuts. Even for the highest income brackets.

Be brave, he told America. Drop the reins and let wealthy people
getting even wealthier pull the country back to prosperity.

The year Ronald Reagan was elected, the wealthiest 1 percent of
Americans earned $110,000 a year. By 1990, after a decade of Reaganomics,
good times – look at that – for the top 1 percent. Good times for the
rich – wages for the top 1 percent rising by 80 percent.

But let`s check on the others, shall we? These are the average wages
at the bottom of the economic ladder, at the time that Ronald Reagan was
elected, after a decade. That same decade of trickle down, supply side
Reaganomics, yes, not so much, flat as an Iowa corn field. A whopping 3
percent rise in wages which might as well be nothing.

So, the already wealthy get an 80 percent rise in wages. Everything
else gets squat.

Here`s another way to look at it, family income growth under supply
side, trickle down Reaganomics. For the top 1 percent, family incomes up
74 percent. Woo, deck the halls with lots of money. Everybody else, hope
grandma sends something nice because your family income is going nowhere.

And the poorest Americans actually slid back by more than 4 percent
under Reagan-style economics. Supply side, trickle down Reaganomics is not
a theory. We tried it. This is what it did.

This is also what Newt Gingrich would like more credit for.

(BEGIN VIDEO CLIP)

GINGRICH: In `78, I run as a supply side candidate. Reagan at that
point is not a supply side candidate.

(END VIDEO CLIP)

MADDOW: Newt Gingrich saying in essence, I got there first. This
chart should have my name on it. I`ll be the mortal threat on here.

Today in Iowa, 100 or so people from occupy the caucuses turned up to
occupy Mitt Romney`s campaign headquarters in Des Moines. They said Mr.
Romney should release his tax returns, which he`s thus far refused to do.
These images come from “The Des Moines Register” which has done a great job
covering this story like it matters and it does.

Today, the occupiers of Mr. Romney`s office also said he should give
back campaign contributions he has received from corporations, including
from executives at banks like Wells Fargo. Seven occupiers were arrested
at Romney H.Q. today. Another three protesters were arrested at the bank,
at Wells Fargo.

The protest was held from all over – a lot of them from Iowa, but a
lot of them from elsewhere. One of them was from a town called Ten Sleep,
Wyoming, which is the middle of the middle of nowhere.

Occupy the caucuses has been in the works for months now. Last night,
they held their own caucus, deciding where to protest first today, voting
with their feet as regular caucus goers do in Iowa.

Newt Gingrich says he wants political credit for inventing what
amounts to the modern economics of the 1 percent, he says that`s the fight
of the election. Maybe that is the fight of the election, but if it is,
not just the 1 percent but the 99 percent are determined to have their say
in that fight, too.

Joining us now is Ed Fallon. He`s a former Iowa state legislator, a
Democratic candidate for governor and Congress, and a very small scale
chicken farmer. Also, one of the occupiers who on the streets in Des
Moines today.

Mr. Fallon, thank you very much for joining us tonight.

ED FALLON, OCCUPY DES MOINES: Good to be here, Rachel.

MADDOW: I don`t mean to be casting aspersion on the size of your
chickens or your chicken farming. But I think a lot of people are looking
at the occupy caucuses and wondering now, is that just people just going
from Zuccotti Park to Iowa or are there Iowans doing this too? How would
you describe who has been protesting?

FALLON: Well, 95 percent of us are Iowans. And most of us have jobs.

And contrary to what Newt Gingrich says, we also bathe regularly.

(LAUGHTER)

FALLON: It`s really rank and file people who have jobs or who have
lost jobs and looking for them who are making time in their busy lives, in
their busy days to camp out, to organize, to protest, to try to move this
country back in the right direction.

MADDOW: Iowa`s Republican Party sounded today a little freaked out by
the 99 percent movement, by the occupation. They said they will tabulate
the results of the caucuses in a secret location this year because of their
concerns about security.

Should the Iowa Republican Party be afraid enough to be doing that?
What`s your reaction to their decision?

FALLON: The Iowa Republican Party tends to like secrecy, period.
We`ve seen that in the Governor Branstad administration this time around.

But, no, we`ve made it clear time after time that we are not
disrupting the Iowa caucuses. I`ve been going to Iowa caucuses since 1988.
I love the Iowa caucuses. I`m going to keep doing it. I`m going to go to
it this year.

Most of us involved in the occupy movement will probably be going.

But, again, no matter how many times we say we`re not disrupting the
actual caucus. We don`t want to get in the way of people`s right to vote.

You know, the head of the Republican Party and the voices on the right
are going to continue to try to malign us in order to make us look like
we`re some kind of a threat to people`s democratic right to vote. Simply
not true.

MADDOW: How do you think Iowans should expect to see the occupy
movement, to see the 99 percent movement unfold over the course of this
week? What should they expect to see you doing in the upcoming days and on
caucus day?

FALLON: Well, the people`s caucus last night was a great kickoff. It
was our way of saying, hey, you know, we`re tired of seeing the average
person go last. We`re going to jump ahead of the Iowa caucus. Iowans
jumping ahead of Iowans – you know, Florida usually does that to us.

But we jumped ahead. We had the people`s caucus. We had our
resolutions introduced. We broke into preference groups.

About 30 percent wanted to occupy Obama`s headquarters. So, this is
certainly not just an anti-Republican movement.

About 60 percent wanted to occupy a Republican candidate`s
headquarters and 10 percent were undecided.

Today was really the first day where that occupation began, focusing
on Mitt Romney.

Tomorrow, I think Obama, since he was fairly popular at our people`s
caucus will probably be a target of the movement. It`s hard to say where
it will go from there.

MADDOW: Obviously, you have run for office. You`ve served in the
state legislature as a Democrat. With no Democratic caucuses, no
Democratic contests this year and the focus really on the different
Republican candidates, in the discussions that you`re having with people,
the demonstrations that you`re doing, and in the I guess the interactions
that your direct action is sparking – do you feel like there is overlap,
at least room for discussion between the occupy movement and the Republican
Party, its ideals and its policies?

FALLON: Well, I think there`s plenty of room for discussion on both
sides of the aisle. People are pretty dissatisfied with Obama, even people
like me who worked hard for him are very dissatisfied.

And I think a lot of Iowans will be going to the Democratic caucus and
voting uncommitted. You can do that. Uncommitted has actually won the
Iowa caucus three times in the past. So, that won`t be unprecedented.

I think on the Republican side, there are people who are going to go
uncommitted there as well, but there are certainly people interested in Ron
Paul because of his stand on the wars, Afghanistan and wars that might be
breaking out elsewhere. And also his opposition to the Patriot Act and to
the recently passed detention provisions in the National Defense
Authorization Act.

There are people who find Fred Cargill`s message of quality for gay
and lesbian Americans empowering. He`s a Republican activist running as
well on that side. I think what some people liked what Gary Johnson had to
say about immigration reform. Some people were pleased with what Huntsman
said about climate change.

But overall, there is grave dissatisfaction with the field of
candidates across the spectrum.

And I think that`s why this movement is so important that it`s not –
I mean, to me, voting is very important. We also have to have a protest
movement in order to let it be known that people are really, really fed up,
are sick and tired.

Again, one thing we`re trying to do in Iowa is connect the dots
between the corrupt political culture and corporate culture, and that line
of money that flows between the two. We saw that today with the action
moving from Romney`s headquarters just down the street to Wells Fargo.

MADDOW: Ed Fallon, former Iowa state legislature, current occupy the
caucuses activist. I keep thinking I`m saying occupy the caucuses, as if
Caucasia.

FALLON: That would be a little far for us. We`d miss our –

MADDOW: At this point it doesn`t seem that unprecedented the way
these things are spreading.

Go ahead.

FALLON: I would miss my chickens.

MADDOW: Fair enough, with the delay and everything.

FALLON: Don`t send me there.

MADDOW: Ed Fallon, thank you very much for helping us explain this to
our viewers tonight and good luck over the next few days. We really
appreciate it.

FALLON: All right. Thank you.

MADDOW: Right after the show on “THE LAST WORD,” Lawrence O`Donnell
introduces you to the comedy stylings of former Pennsylvania Senator Arlen
Specter. It turns out he`s a raunchy late night comic. That`s coming up.

(COMMERCIAL BREAK)

MADDOW: A couple of updates on the breaking news out of Iowa tonight.

First, the story of the co-chair for Michele Bachmann switching sides
tonight and endorsing Ron Paul. Here he is tonight explaining his
decision.

(BEGIN VIDEO CLIP)

SORENSON: We watched the last few weeks as the Republican
establishment has come against Ron Paul. And I believe that he came to my
side in my Senate race. I had a tough Senate. I had a tough House race
before that. Both himself and his team has come to my aid.

I believe it`s my duty to come to his aid as well and help put him
over the top. Am I going to be the deciding factor? You know, I don`t
know. We`ll know more on January 4th.

But the fact of the matter is I want to do everything I can the next
few days to help him get elected the president of the United States.

(END VIDEO CLIP)

MADDOW: That is the state senator who was campaign co-chair for the
Bachmann campaign in Iowa for the past year. Tonight, a dramatic
development him showing up in person at a Ron Paul event to announce that
he is now endorsing Ron Paul.

The latest PPP poll showing Paul in first place in Iowa with Mitt
Romney close on his heels.

“THE LAST WORD” with Lawrence O`Donnell starts now.

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

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