The Rachel Maddow Show, Transcript 05/01/12

Guests:
Steve Clemons, Paul Krugman
Transcript:

RACHEL MADDOW, MSNBC ANCHOR: Good evening. Thank you. Thanks to you at
home for staying with us for the next hour, on what has turned out to be a
surprising and historic day. This is one of those rare days where the
daily schedule put out by the White House about the whereabouts of the
president of the United States turned out to be a deliberate fabrication,
because for security reasons the president today made an overseas trip
under the veil of secrecy. It is always dramatic when this happens, but it
is, of course, not precedented.

In moderns, in fact, this is essentially standard operating procedure
now for presidents visiting America`s various war zones. Shortly after the
2008 election in which Barack Obama was elected president – so after the
election but before the new president had been sworn in, in December of
2008, then still President George W. Bush took one of these surprise trips,
unannounced trips to Baghdad.

It was December 14th, 2008. That`s when this happened.

(BEGIN VIDEO CLIP)

(CROSS TALK)

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Yes.
Everybody calm down for a minute. First of all, thank you for apologizing
on behalf of the Iraqi people. It doesn`t bother me. If you want the
facts, it`s a size 10 shoe that he threw.

(END VIDEO CLIP)

MADDOW: Boy, if you were not surprised enough to find out that the
president had, surprise, gone to Iraq unexpectedly, the president having a
shoe hurled at him once he was in Iraq was definitely a surprise that day.
When you look at the official transcript from this – we actually posted a
link to it on our blog tonight, so you can see it.

When you go through the transcript of this event, when you get to the
part where the guy throws the shoe at President Bush, it`s described in the
transcript as, quote, “audience interruption.” Understatement much?

What President Bush was in Baghdad to do that day was to sign the
Status of Forces Agreement between the United States and Iraqi governments,
which essentially committed the United States to end our war in Iraq. It
was an agreement that President Obama then followed through on.

The last U.S. troops, of course, left Iraq in December.

Today, in Afghanistan, it was not a status of forces agreement. It
was called instead a strategic partnership agreement between the U.S. and
the Afghan governments. But essentially the idea is the same. It`s to
commit both of our countries to a plan by which the United States will end
our war there.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today I signed a
historic agreement between the United States and Afghanistan that defines a
new kind of relationship between our countries, a future in which Afghans
are responsible for the security of their nation and we build an equal
partnership between two sovereign states, a future in which war ends and a
new chapter begins.

As we move forward, some people will ask why we need a firm timeline.
The answer is clear. Our goal is not to build a country in America`s image
or to eradicate every vestige of the Taliban. These objectives would
require many more years, many more dollars, and most importantly, many more
American lives.

Our goal is to destroy al Qaeda. And we are on a path to do exactly
that. Afghans want to assert their sovereignty and build a lasting peace.
That requires a clear timeline to wind down the war.

The agreement we signed today sends a clear message to the Afghan
people: as you stand up, you will not stand alone. Within this framework,
we`ll work with the Afghans to determine what support they need to
accomplish two narrow security missions beyond 2014: counter terrorism and
continued training.

But we will not build permanent bases in this country. Nor will we be
patrolling its cities and mountains. That will be the job of the Afghan
people.

I recognize that many Americans are tired of war. As president,
nothing is more wrenching than signing a letter to the family of the fallen
or looking into the eyes of a child who will grow up without a mother or
father. I will not keep Americans in harm`s way a single day longer than
is absolutely required for our national security.

But we must finish the job we started in Afghanistan and end this war
responsibly.

(END VIDEO CLIP)

MADDOW: That was President Obama speaking tonight live from
Afghanistan about the strategic partnership agreement he just signed with
Afghan President Hamid Karzai, to essentially spell out how America`s
longest war, our war in Afghanistan ends.

Unlike the end of the Iraq War agreement that Bush signed on shoe
throwing Sunday back in 2008, the Afghanistan agreement promises continuing
involvement in Afghanistan for another 10 years after the troops leave.
That means training. That means some unspecified support. It means money.
It is not supposed to mean American war fighting.

But still, Afghanistan has pretty much been in a continuous state of
warfare for more than 30 years now. If we are promising to stay involved
through 2024, through 2024, frankly, that means there is a six-year-old
alive somewhere in America today for whom this speech and this agreement
today means that they will be spending the summer of 2024 in Kandahar.

Contrast that with Iraq, where we have an embassy now, but other than
that, pretty much bubkiss. The president`s secret trip to Afghanistan
today, though, was not just to sign this agreement about the end of the
war. The White House acknowledges that the president could have just as
easily signed the agreement in Washington. There was no technical need to
be there in person.

But the other reason for the president to make this trip to
Afghanistan today is clearly because of today`s date.

(BEGIN VIDEO CLIP)

DAVID GREGORY, “MEET THE PRESS” MODERATOR: We can report the
president will announce that Osama bin Laden is, in fact, dead, that Osama
bin Laden is dead. That is the major development tonight, something the
United States has sought to accomplish since the deadly attacks on 9/11.

BRIAN WILLIAMS, NBC NEWS ANCHOR: I want to take a moment and show you
this picture. We showed it briefly, but I want to go back here. This is
across the street from the White House in Washington.

CROWD: USA, USA, USA, USA.

(SINGING)

(END VIDEO CLIP)

MADDOW: That was one year ago today. It`s not an accident that the
president is marking the anniversary of the death of Osama bin Laden by
being in Afghanistan. The 9/11 attacks on the United States were planned
and directed and carried out by the al Qaeda organization that was
headquartered in Afghanistan, that trained its membership in Afghanistan,
that was given sanctuary by the Afghan government and that was led by Osama
bin Laden.

That is why within three and a half weeks of the 9/11 attacks, U.S.
forces were on the ground in Afghanistan. By five weeks after that, the
Taliban was gone from the Afghan capital of Kabul. And four weeks after
that, a military operation in Tora Bora, in the mountains between
Afghanistan and Pakistan was thought to have a chance of killing this man,
killing Osama bin Laden.

But bin Laden was allowed to escape from Tora Bora into Pakistan, into
the wind, to escape also any real sense that the United States had a
continuing bulls eye on him.

(BEGIN VIDEO CLIP)

BUSH: I don`t know where he is, nor do I – you know, I just don`t
spend that much time on him, to be honest with you. I truly am not that
concerned about him.

(END VIDEO CLIP)

MADDOW: After losing bin Laden at Tora Bora, the Bush administration
never again got a bead on him. George W. Bush`s former CIA director,
Michael Hayden, told “Time Magazine” this week, quote, “I can only speak
with authority through February 15th, 2009. But at that point, when people
would ask, when is the last time you really knew where he was, my answer
was Tora Bora in 2001.”

A little over a year after losing him at Tora Bora, the Bush
administration had moved on in a big way. They had already started a whole
new unrelated war in Iraq. The defining and radical assertion of the
George W. Bush era was A, that the United States would now start preemptive
unprovoked wars, and B, we would fight terrorism not just by fighting
terrorists, not just by fighting terrorist groups, but by fighting the
whole world, remaking the world in America`s image.

You`re either with us or against us. We will topple unfriendly
governments. We will stand up new governments. We will stand up whole new
kinds of governments that have never before existed in areas where we are
trying to install it. We will wage global war.

They called it a global war on terror, a global war justified by 9/11.
But as for the people who attacked us on 9/11.

(BEGIN VIDEO CLIP)

BUSH: I don`t know where he is, nor do I – you know, I just don`t
spend that much time on him, to be honest with you.

(END VIDEO CLIP)

MADDOW: When it came time for a new president after George W. Bush,
the Democratic critique of that era`s neoconservative adventures,
specifically the Barack Obama Democratic critique of that era`s
neoconservative adventures, was that actually Osama bin Laden is important.

The idea of a global war to remake the world in our image is folly.
What we ought to wage instead is war against those who attacked us on 9/11.
Al Qaeda specifically should be the target. Its leader, Osama bin Laden,
really should be a priority for the United States.

The president should spend some time thinking about Osama bin Laden.
That was the sharp break proposed by the new president after George W.
Bush. And honestly to the chagrin of many people who had been alarmed by
the expansion of executive power in the George W. Bush administration, the
Obama administration has not represented a significant break from that.

The Obama administration radically, for example, expanded the use of
assassination by drone. The number of drone strikes in Pakistan spiked in
2009, once President Obama took over from President Bush. And then in
2010. those already spiked numbers from 2009 doubled. This was not going
to be a more pacifist approach under President Obama.

President Obama, for another example, tripled the number of troops in
Afghanistan. The Obama administration has not thrown less American weight
around and it has not thrown it away in a less unilateral way in terms of
executive authority.

The Obama administration has just thrown American weight around in a
much more specific direction. It was not a difference in aggression. It
was a difference in focus. So for this president in particular, it makes
sense that on the anniversary of Osama bin Laden`s death, he would put
himself in Afghanistan, he would explicitly, with this trip there today tie
the end of the war in Afghanistan to the killing of the head of al Qaeda.

And because the news gods are numerologists, it is, of course, also
perfect for us understanding the sharp and specific turn we have taken as a
country on national security under this new president. It is just as much
key to understanding that that today`s announcement about the end of the
Afghanistan war is not just on the anniversary of Osama bin Laden`s death.
This announcement today about the end of the Afghanistan war is also on the
anniversary of this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is an NBC News special report, a presidential
address. Here is Tom Brokaw.

TOM BROKAW, NBC NEWS ANCHOR: Good evening. Tonight President Bush
speaks to the nation from the aircraft carrier USS Abraham Lincoln, which
has been at sea for almost 10 months, much of that time in the Persian
Gulf.

UNIDENTIFIED FEMALE: A victorious commander in chief thanking all men
and women in uniform for a mission accomplished.

(END VIDEO CLIP)

MADDOW: That was nine years ago today. The previous president put on
a flight suit, pretended to fly a jet onto the deck of an aircraft carrier
that was parked off the coast of San Diego and standing under a banner that
read “mission accomplished,” he declared that in the battle of Iraq, the
United States and our allies have prevailed.

That was less than three months into what turned out to be an 8.5 year
long war. What President George W. Bush was celebrating on that aircraft
carrier nine years ago today was that we had successfully invaded Iraq. We
had successfully started a second, simultaneously land war alongside the
one he was still muddling through in Afghanistan, while he didn`t pay very
much attention to Osama bin Laden.

Now with another presidential election campaign under way, the new
president, President Obama, is celebrating in his own way having
decapitated al Qaeda and having signed the frame work for the second of
George W. Bush`s wars that he is ending.

Presumably, he is also celebrating his good fortune of running against
a Republican opponent this year who chose as his spokesperson on these
issues, on today of all days, this guy, Dan Senore. There he is in Iraq
before. There he is here on today TV.

The face of public relations for George W. Bush`s invasion of Iraq now
the face of national security public relations for the Mitt Romney for
president campaign.

Joining us now is Steve Clemons from the New America Foundation. He
writes at “The Washington Note” and at the “Atlantic Magazine,” where Steve
is Washington editor at large. Mr. Clemons, it`s great to see you. Thank
you for being with us tonight.

STEVE CLEMONS, “THE ATLANTIC”: My pleasure, Rachel.

MADDOW: Let me ask you, as somebody who has been not only been
involved in the is as a general expert on national security and foreign
policy issues, but somebody specifically involved in trying to come up with
the way this war might end in the Afghan Study Group, what do you see as
the significance of the president`s trip to Afghanistan today, him making
this address to the nation, signing this agreement, and doing it on the
anniversary of the bin Laden killing?

How important is the anniversary here?

CLEMONS: I think it`s hugely important. I think you framed it
absolutely right before, that what the president has done is said that what
we have spent so much treasure on, and frankly not only trillions of
dollars already, but trillions of dollars of outlays in the future on
something that was considered to be a strategic objective. We were
attacked in the United States. Lots of resources were thrown at that.

The president is fundamentally saying today that that conflict is
coming to an end. He`s beginning to frame the end state of that. So tying
this so directly to Osama bin Laden`s demise and the roll up of really the
original core al Qaeda network is giving him a chance to basically tell
Americans this war is over.

You have to remember, as you`ve written in your own book, it`s really,
really hard to end a war. Not many presidents survive wars they inherit,
because it`s so hard to shut them down, because they become subject to
criticism of being appeasers or weak in the face of challenges.

So what Obama is doing is he is saying I was tough. I`m now showing
strategic restraint. We`re going to draw this down and begin to redeploy
America`s assets into other challenges.

So it is a brave moment and it`s one that`s extremely important. I
think it puts Obama in the history books because of how he is saying to
cane John McCain, Lindsey Graham, Joe Lieberman, we`re not going to have a
perpetual war where we constantly highlight the face and disaster that
Osama bin Laden and his allies created, and use that to justify never end
conflict and never ending growing military budgets.

MADDOW: Steve, do you see – I made this case a little bit in the
introduction. I`m just curios as to whether or not you agree. I`m not –
I can`t assume that you do, but do you think that the Obama administration
did have a qualitatively different type of focus of focused on bin Laden
and on al Qaeda specifically?

I was struck in John Brennan`s speech yesterday about drone warfare,
the administration sort of coming more clean about using drones than they
have in the past, that he talked consistently and specifically about al
Qaeda, al Qaeda, al Qaeda. Not that this is tactic that we used against
any kind of enemy and anywhere in the world, but that the United States
reserves specific tactics against al Qaeda in a way that represents a real
I guess – a real focus.

Is that different than the Bush administration?

CLEMONS: Yes. I think what is really interesting is the frame you
had of President Bush saying he didn`t spend much time speaking about him?
Let`s take him at face value. Maybe that`s true. Maybe it`s not.

But what President Obama has done – and a lot of people don`t realize
this – is that every morning, he meets with John Brennan, his deputy
national security advisor, Dennis McDonnough (ph), his national security
advisor, Tom Donilon, Vice President Biden and his adviser, Tony Blanken
(ph), as well as his chief of staff.

And part of that every day meeting is focused on very laser like focus
on where are we at in rolling up the al Qaeda network? Where are we at
with our counter terrorism challenges?

It`s a remarkable focus of the president of the United States on a
daily basis that most Americans don`t know about, hasn`t been much written
about. But it has been part of the really big sea change from the Bush
administration.

You have to remember that one of the real problems we`ve had with al
Qaeda is that it basically metastasized around the world. It was given
that opportunity in part because the Bush/Cheney administration took its
eye off the ball and began to focus resources and attention on Iraq, as you
said, allowed bin Laden to escape, but more than that, basically let all
the trails go dry.

I remember talking to senior CIA and Department of Defense officials
during the Bush administration who often asked me the question do I really
think he`s still alive. So there was at least a period of time – I don`t
think the Bush administration ever fully stopped looking. We should make
that clear.

But I don`t think the resources were there. I think Barack Obama came
along and, while I was opposed to the surge in Afghanistan and thought it
would be detrimental and create a lot of blowback and what not, at the same
time, he doubled down, realizing he had to get al Qaeda.

I`ll never forget a senior White House official, right after President
Obama`s inauguration, said to me because of my concern about Afghanistan,
Steve, there is no way out for us in Afghanistan. And John McCain will
ultimately win if we don`t get bin Laden. There is no narrative for us to
leave Afghanistan unless bin Laden is shut down and captured or killed.

MADDOW: Once we get him, we know exactly how we will leave. That
seemed clear today as the sort of – the closing clause of that sentence.
Steve Clemons of the New America Foundation, publisher of “The Washington
Note,” Washington editor at large for “the Atlantic Magazine.” Steve,
thank you very much for joining us tonight. I really appreciate it.

CLEMONS: Thanks so much, Rachel.

MADDOW: Nobel Prize winning economist Paul Krugman is here tonight
for the interview which I`m really looking forward to. That`s still ahead.
Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Any president of the United States,
given that information, would have done the same thing. But I give great
credit to the president.

The point is, though, do you use that in political campaigns to attack
your opponent? Mitt Romney would have done the exact same thing. I am
confident. Any leader would have. So to say that Mitt Romney wouldn`t
have, I mean, is politicizing what – an event that all Americans applauded
enormously.

(END VIDEO CLIP)

MADDOW: In the 2004 election, there was an October surprise right
before we all voted. Remember that? Four days before the election – the
election was November 2nd and four days before that, on October 29th, 2004,
Osama bin Laden released a tape threatening the United States, just as
Americans were going to the polls to vote for either George W. Bush or John
Kerry.

Asked for comment at the time, Senator John McCain said about that
tape – he said about Osama bin Laden threatening the United States, quote,
“I think it`s very helpful to President Bush. It focuses America`s
attention on the war on terrorism.”

That`s very helpful. Thank you Mr. bin Laden. Your threats to the
United States have helped focus Americans on electing George W. Bush
instead of John Kerry. See, it`s OK to say something like that if you are
a Republican. That was the same election, 2004, in which Vice President
Dick Cheney declared that a vote for the Democratic candidate for president
that year, a vote for John Kerry, would be a vote for the United States to
be attacked by al Qaeda again.

(BEGIN VIDEO CLIP)

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: It`s
absolutely essential that eight weeks from today, on November 2nd, we make
the right choice. Because if we make the wrong choice, then the danger is
that we`ll get hit again, that we will be hit in way that will be
devastating from the standpoint of the United States.

(END VIDEO CLIP)

MADDOW: Is that politicizing national security, to say if you vote
for a Democrat, you`re voting for al Qaeda to attack America? Is that
politicizing national security or is that OK if you`re a Republican?

In the next election in 2008, when John McCain himself was the
Republican party`s candidate for president, you might remember that the
Republican convention featured a long 9/11 tribute video.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is a war we never chose to fight and for too
long we`ve looked the other way. But the enemy is wrong. This is a war
America will win. We`ll have a president who knows how.

(END VIDEO CLIP)

MADDOW: As opposed to the Democrat, who clearly doesn`t even want to
win, let alone know how. One of John McCain`s central arguments for why he
should have been elected instead of Barack Obama in 2008 is that he said –
in 2008, he said that he, John McCain, had a secret plan to kill bin Laden.

(END VIDEO CLIP)

WOLF BLITZER, CNN ANCHOR: You`re president of the United States. You
vowed that you will capture Osama bin Laden and bring him to justice. We
know that President Bush since 9/11 has been doing the best he can. What
would you do differently?

MCCAIN: I`m not going to telegraph a lot of the things that I`m going
to do because then it might compromise our ability to do so. But look, I
know the area. I`ve been there. I know wars. I know how to win wars. I
know how to improve our capability so that we will capture bin Laden or put
it this way, bring it to justice. I know how to do it.

(END VIDEO CLIP)

MADDOW: John McCain campaigned for president on the basis of his
secret plan that he knew how to kill Osama bin Laden and Barack Obama
didn`t. Then in real life, Barack Obama actually did kill Osama bin Laden,
and now John McCain says it is very unseemly to campaign on something like
that.

Obama a announced a year ago that Osama bin Laden had been killed.
There were with spontaneous celebrations outside the White House and
elsewhere. I was at the White House that night. I remember seeing people
climbing the lamp posts and the trees outside the White House fence. The
crowd grew bigger and bigger as the night wore on.

It started off as essentially the people who could get there the
fastest. It was the fleet of foot at first, sort of a college aged crowd
when I first arrived at the White House, there on the street, right between
the White House fence and Lafayette Park.

By the time I left, it was everybody. It was families with kids and
baby strollers out in the middle of the night. It was older people. It
was diverse. The street just kept filling up.

It was one of those things that you really remember being part of.
For the first time today, we are experiencing the anniversary of the
killing of bin Laden. This is a day that we will mark now as a country.
This is a new day that we will mark every year on our national calendar.

We will still mark the anniversary of being attacked on 9/11, of
course, but we will also mark this day, when the head of al Qaeda, who
attacked us on 9/11, was killed by American forces.

Because this is an election year, Republicans have decided this year
to say they are outraged by this. You heard Senator John McCain there a
moment ago. Mitt Romney also proclaimed himself disappointed today. He
said, quote, “I think it was very disappointing for the president to try
and make this a political item.”

How dare you commemorate this anniversary of killing bin Laden. How
dare you seek campaign advantage, political credit, political
acknowledgement of the anniversary of killing Osama bin Laden. That`s what
Mr. Romney said this morning on a TV morning show.

Then this afternoon,. Mr. Romney spent the afternoon with Rudy
Giuliani, who was the mayor of New York City at the time of the 9/11
attacks. Together they visited New York City firefighters at a Lower
Manhattan fire house today, on the anniversary of the killing of Osama bin
Laden.

That was Mitt Romney`s political campaign event today, him on the
campaign trail with Rudy Giuliani surrounded by cameras commemorating the
anniversary of the killing of Osama bin Laden. See, President Obama doing
that is very disappointing, but if you are a Republican, it`s – it`s OK.

(COMMERCIAL BREAK)

MADDOW: Mitt Romney is the presumptive Republican nominee for
president. Does that mean that Mitt Romney is the leader of the Republican
party now? You would think so, but when other Republicans talk about him,
that is really not the way it comes out.

(BEGIN VIDEO CLIP)

GROVER NORQUIST, AMERICANS FOR TAX REFORM PRESIDENT: We are not
auditioning for fearless leader. We don`t need a president to tell us what
direction to go. We know what direction we want to go. We want the Paul
Ryan budget, which cuts spending six trillion dollars.

The leadership now for the modern conservative movement for the next
20 years will be coming out of the House and the Senate. So focus on
electing the most conservative Republican who can win in each House seat
and the most conservative Republican who can win in each Senate seat, and
then pick a Republican with enough working digits to handle a pen to become
president of the United States.

(END VIDEO CLIP)

MADDOW: So Mitt Romney is the Republican nominee for president
because he has enough working digits to handle a pen. The real leader of
the Republican party, though, is this guy, Mr. P90X. He`s the congressman
who writes the Republican party`s budgets in the House, Paul Ryan of
Wisconsin, Paul Ryan of The Paul Ryan Kill Medicare budget fame. The
Beltway is in love with Paul Ryan.

But Paul Ryan`s nemesis, the person who calls him a garden variety GOP
extremist, the chief debunker of Paul Ryan mania in our commentariot is
Paul Krugman, the Nobel Prize winning economist. And Paul Krugman is here
tonight for the Interview, next.

(COMMERCIAL BREAK)

MADDOW: Paul Krugman`s new book contain a scary idea right in the
title. Mr. Krugman`s new book is called “End This Depression Now.” Yes,
that is depression, as in Great Depression, as in people can call what we
are slogging through an economic downturn, a tough time, a slow of despond.
You can call it a recession. You can even call it the Great Recession,
which I probably did about 500 times last year.

Paul Krugman in his new book says this is not just a recession. This
is a depression. We are used to thinking of depressions in terms of things
collapsing, in terms of the economy falling off a cliff. This graph, for
instance, shows what happened to the economy in broad strokes terms in the
Great Depression.

That hollowed plunge is no place to be. And neither is this hallowed
out plunge. This is what happened to our economy in the downturn formerly
known a s the Great Recession, the falling off a cliff again. So that`s a
depression.

It`s defined in the most colloquial of terms by things falling down.
But you can also find something that goes up around the time of great
economic calamity. Right around the time that so much is falling down in a
depression, this one thing in our economic stats starts going up.

That one thing is the distance that you have to stretch between the
average poor American and the average rich one, like this. This chart was
included in a report by the U.S. Congress in 2010. We`ve added a couple of
red circles to make it easier to see on TV.

But the point here is the same. The distance between rich and poor in
this country goes way up around the Wall Street crash of 1929 and the Great
Depression. And again, the distance between rich and poor in this country
goes up around the end of the Bush administration financial crisis, our
generation`s plunge off the cliff.

So correlated with depressions, huge growth in the gap between rich
and poor, income inequality. Why is this so? Why do you have spikes in
income inequality around economic catastrophes? We`re going to ask Paul
Krugman that in just a moment.

But first, one more idea to put on the table, my personal chart of the
day, my epiphany chart of the day. It turns out that as income inequality
has gone up – income inequality is the blue line here. As income
inequality rises, huh, look at that. At the same time, Congress gets more
polarized. That`s the red line.

Congress becomes more partisan, less likely to compromise, less
willing and/or able to get anything done. This chart belongs to the very
smart people at VoteView.com. I thank them, because for me, this chart
explains an awful lot about what`s happening in our current politics. It
explains we can`t get anything done to fix the economy.

Income inequality creates its own political weather. Or as Paul
Krugman says in his new book, “the gravitational political pull of the rich
become stronger when the rich are richer. Since 1980, the Republican party
has moved right in tandem with the rising incomes of the elite. And
political compromise has become almost impossible.”

So maybe the reason Republicans in Congress will not fix the economy
and therefore Congress can`t fix the economy is because they think that
fixing the economy would not help the richest people in the country, and
that`s who`s interests they feel they must serve. Bong.

Joining us now for the interview is Mr. Epiphany himself, Paul
Krugman, Nobel Prize winning economist and Princeton professor of economics
and international affairs. He`s, of course, a columnist for the “New York
Times.” And his eagerly anticipated new book is called “End This
Depression Now.”

Dr. Krugman, thank you for being her.

PAUL KRUGMAN, “THE NEW YORK TIMES”: Hi there. Good to be on.

MADDOW: I`m glad to be able to ask you this question. Why is income
inequality, a big gap between the rich and the poor, correlated with
economic catastrophe?

KRUGMAN: Two things I think going on. One is that when the economy
is bad, it`s the people with the least power who can`t protect themselves.
So the most vulnerable get hurt. That`s why the gap between rich and poor
widens when catastrophe hits.

But the other thing is that a polarized political system, a system in
which one party has been pulled way off to the right, is not able to cope
with the difficulties of the economy. They – you sort of ask why – we
know how to fix this.

That`s the theme of my book, that we know how to fix this, but we`ve
managed – a lot of us have managed – a lot of important people have
managed to forget. Why have they managed to forget? Because admitting
that the government can fix a depression is also admitting that the
government can do good things.

If you admit that the government can do things, then you might think
maybe we have to tax rich people to pay for those good things. So this
kind of anti-government, hard line, markets are Gods, the rich have the
answers, has left us a psychologically, intellectually incapacitated in the
face of this depression that we`re in.

MADDOW: The thing that is palpable in the book, it frankly does not
surprise me that there was an exclamation book at the end of the title of
your book. As I watch – read your writing every day, read your blog and
read your columns, you can sense your increasing frustration that it`s not
that there are people in power who disagree with you on economic arguments,
but that economic arguments are now bad arguments, that people who are
right and who have been proven right still are not allowed to win the
argument.

KRUGMAN: It`s been an amazing thing. If you believe in basic
Keynesian – the basic story I`ve been telling, you would have been right
about a whole lot of things. If you believed, let`s say, “The Wall Street
Journal” editorial page and you had actually invested on that basis, you
would have lost enormous amounts of money. We`ve been told deficits will
drive interest rates sky high, printing money to try and fight the
recession is going to lead to runaway inflation, none of which has
happened.

Austerity, cutting spending is good because it will increase
confidence. Take a look at Spain and Ireland and Portugal. We`ve had an
overwhelming vindication of the ideas that say that this is the time for
governments to spend. This is the time not to cut back. The urgent
priority is jobs. Deficits should wait.

Yet that`s an argument that nobody wants to hear in power because it`s
inconvenient for – for inner circles. I have to say, in the end, it`s
inconvenient for the one percent or the 0.1 percent.

MADDOW: Do you think that there is – in terms of the point of that
graph that I showed in the introduction, do you think it is that people who
have more literal capital accrue more political capital automatically, that
you end up getting listened to more because you have more money to spend on
politicians?

KRUGMAN: It`s a mixture of things. Yes, it`s the power of money.
It`s worse in both crude ways and subtle ways. There`s the revolving door,
politicians thinking about what are they going to do after they leave
office. That`s a huge incentive.

There`s campaign contributions. Then there`s just the – I`ve been in
meetings where you have the guys from Wall Street. The guys from Wall
Street are impressive. They are smart. They`re funny. They`re rich.
They have great tailors.

And they tend to get treated seriously, even if they have just
destroyed the world. They tend to have a weight that bearded college
professors don`t in these discussions. So there`s a pull of power of
wealth which you need to actively lean against.

And you try to convince politicians with good hearts that that guy may
sound impressive and look impressive, but fundamentally he is not on your
side.

MADDOW: Do you see the arguments on the right changing in character?
I was struck, having read your book to prep for talking to you today, and
then seeing the “New York Times Magazine” posting this profile of Mitt
Romney`s old boss at Bain Capital, who has a new book coming out that
argues – and I`m quoting – that “having a small elite with vast wealth is
good for the poor and middle class.”

KRUGMAN: Yes.

MADDOW: That used to be what people like I would accuse people of
believing. It`s now the overt argument.

KRUGMAN: You`re watching the hereditary principle starting to make a
comeback. You know, I`ve seen that a little bit from Mitt Romney. We used
to think it was all about equal chance at the starting line. Now it`s
well, of course, people who – people should have the right to pass
advantages on to their children.

So no, we`re – this way to the 14th century. We`re really trying to
get back to the old values of hereditary wealth and power. Of course. And
it`s – we`ve moved to a level of shamelessness in many of these things.
The other thing to say is if you look at past economic debates, Milton
Friedman would be on the left side of the political spectrum right now,
right?

He favored stronger aid to the poor. He favored really active
policies to fight depressions. And he would now be considered an
inflationary socialist in current debate.

MADDOW: In terms of what you think we can do to end this depression
now, you argue for the primacy housing, that housing was not only the cause
of – one of the causes of where we ended up, but it is the thing that we
have to tackle in order to get ourselves back.

KRUGMAN: It`s one of the things. I actually think first thing that -
- it`s kind of important. Three years ago the question, where do we spend?
How do we stimulate the economy was actually somewhat hard? You had to
find the right projects. Now all you have to do is reverse the terrible
things we have been doing these past three years.

We`ve had massive layoffs of government employees at the state and
local level because they`re not receiving the aid they need from
Washington. We`ve laid off 300,000 school teachers, 600,000 government
employees in total, when we should have, just to keep up with population
growth, added 700,000. Right there, you have 1.3 million people you can
put to work with no need to do anything adventurous or innovative, just get
back on track.

Right there, just by doing that, we can probably get the unemployment
rate below seven percent. So the – now that`s the start. You also have
this overhang of bad debt from the housing crisis which we have not tackled
properly.

It would help if the Fed was doing more. But it – there`s a bunch of
things, but the core of it is actually right now is the time to be spending
on useful stuff. It`s easy. We could do this if we had the political will
and the intellectual clarity, 18 months from now we could be very solidly
on the road to recovery.

MADDOW: And that`s the recipe herein. Paul Krugman, the new book is
called “End This Depression New.” It`s just out. Thank you so much for
coming in to talk to me about it.

KRUGMAN: Thank you.

MADDOW: I appreciate it. Good luck with this.

Right after this show on THE LAST WORD, Alec Baldwin – yes, that Alec
Baldwin – joins Lawrence live. I`m going to have to talk to him about
borrowing the haircut for this weekend.

But here, coming up, not the best new thing in the world today, but
something pretty fricking close. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Back on March 24th of this year, then presidential candidate
Rick Santorum won Louisiana. He won the Louisiana state Republican
primary. Rick Santorum won with 49 percent of the vote. Mitt Romney got
27 percent. Newt Gingrich 16 percent. Ron Paul six percent.

The great state of Louisiana will send 46 delegates to the Republican
convention in Tampa this summer. But even though Ron Paul came in dead
last in Louisiana, even though he came in fourth out of four in Louisiana,
when Louisiana sends its delegates to the convention in Tampa this summer,
Louisiana will retroactively become a dead heat between him and Mitt
Romney.

It is looking like right now, maybe 19 delegates for Mitt Romney and
17 for Ron Paul. Rick Santorum who is now out of the race will still
having the remaining 10 that he got that March night. But Ron Paul
supporters overwhelmingly dominated the Louisiana caucuses this past
weekend.

Almost three quarters of the Republicans elected at the caucuses in
Louisiana say they support Ron Paul for president.

Also this weekend, there was chaos at the Republican caucuses in the
great state of Massachusetts. Less than half of Mitt Romney`s delegates
were elected to represent him at the convention. Voters instead chose Ron
Paul delegates. They even rejected Mr. Romney`s former lieutenant governor
from his time as governor of the state.

She lost as delegate, so Ron Paul delegates could win. Also this
weekend, Ron Paul supporters in the great state of Alaska quite literally
took over the state party`s convention. A Ron Paul guy won the state party
chairmanship. The Paul supporters were so fired up in Alaska, they were
just so loud that Senator Lisa Murkowski, who is a Mitt Romney supporter –
hear that – could not deliver her planned speech in the room.

Neither could her guest, Wyoming Senator John Barrasso. The crowd is
chanting “Ron Paul, Ron Paul, Ron Paul,” and nobody else is getting a word
in edgewise. As a result of all this, a Ron Paul supporter won the
election for state Republican party chairman. He beat out the guy backed
by the current Alaska chairman, whose had the job for over decade.

Alaska`s going to end up sending six Ron Paul delegates to the
Republican National Convention in Tampa. We have seen this Ron Paul plot
before. Do you remember the Iowa Republican caucuses this year? First,
they said that Mitt Romney won it. But then it turned out that no, that
wasn`t right. Then they tried to say it was a tie.

Then Rick Santorum was declared the winner. But then it turned out
none of it actually mattered in a practical sense because the Iowa caucuses
did not allocate a single delegate. A state Republican party committee
does that, a state Republican party committee picks the delegates who go to
the Republican convention.

Last month, Ron Paul supporters took over that committee, guaranteeing
Ron Paul at least half – at least half of Iowa`s 28 delegates. So in the
end, forget all that nonsense, Ron Paul won Iowa. And by the way, a Ron
Paul supporter now chairs the Iowa Republican party as well.

Ron Paul supporters have used state party rules and conventions and
processes to victories large and small that will have a practical affect on
the Republican party, if not the nominating process for president this
year, maybe the convention itself.

Ron Paul`s strategy hasn`t been to convert nonbelievers or to swing
Romney delegates over to his side. The Ron Paul strategy has been to get
his own supporters inside, to get them inside the process. And we cannot
say we didn`t see this coming.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How do you from the outside make positive change
as you`re not the party`s nominee and as president – being on outside.

REP. RON PAUL (R), PRESIDENTIAL CANDIDATE: Have the outside become
the inside. We don`t win over the insiders by becoming like an insider.
We win the inside over by making the outsiders become more appropriate.

(END VIDEO CLIP)

MADDOW: Making the outsiders become more appropriate, like making
them take over the state parties. In addition to those coups this weekend
and before in Louisiana and in Massachusetts and in Alaska and in Iowa, Ron
Paul has won more than half of the delegates in Minnesota and in Washington
State.

So yes, Ron Paul won Minnesota and Washington State. He`s got his
eyes on Maine, on Missouri and Nevada as well. He is scheduled to speak at
the Nevada Republican State Convention this weekend.

If Ron Paul wins a majority of delegates in five states, his name will
officially be entered in nomination at the Republican National Convention
in Tampa. And there will be a lot of Republican Ron Paul delegates there
to cheer or do something when that happens.

And then what? Republicans fight it out like gladiators at the
coliseum? I love this stuff.

(COMMERCIAL BREAK)

MADDOW: Back in February, a reporter for Politico.com was covering a
speech President Obama gave in Wisconsin at the Masterlock factor in
Milwaukee. The “Politico” reporter assumed that the flag behind the
president at the event was a union flag, as in Local 1848.

But it was actually the Wisconsin State Flag. Wisconsin entered the
union, as in the United States, not as in a trade union, in 1848.
“Politico” had reported this scandal of the president speaking before a
union flag in Wisconsin. But they were wrong. They issued a correction.
The president may be a socialist, Marxist, Commie, pinko, union stooge
Kenyan whatever, but standing near a flag with Wisconsin and 1848 on it is
not proof of that.

Mistakes happen. “Politico” was embarrassed. They ran the
correction, story over. But now something similar is happening.

(BEGIN VIDEO CLIP)

OBAMA: I believe America is on the way up. Thank you, God bless you.
God bless the United States of America.

(END VIDEO CLIP)

MADDOW: That`s the end of a seven-minute Obama campaign video
unveiled yesterday. It appeared to be maybe the birth of a new campaign
slogan, Forward. It took less than a day to uncover the sinister origins
of that. Here is Michael Walsh of “The National Review” tying the slogan
“Forward” to the name of the newspaper of Germany`s Social Democratic
Party.

That`s social as in socialist. Walsh goes on to say, “if you don`t
think David Axelrod doesn`t know this, you really ought to think again.”

“Washington Times” blogger Victor Morton notes that Forward has a long
and rich association with European Marxism. His source, Wikipedia,
specifically a page called “Forward, generic name of socialist
publications,” which is currently being considered for deletion at
Wikipedia.

You should check out its recent edit history. It`s really fun.

The British newspaper “The Daily Mail” had this: “Mao, Lennon and a
century of Marxist Radicals, the Controversial Origins of Obama`s New
Campaign Slogan, Forward,” along with handy side by side pictures of
President Obama and Chairman Mao.

So that is happening. Applying Occum`s Razor to this story, I would
like to put one thing that anti-Communist fear mongering laves out of the
analysis of the Forward slogan, which clearly comes from some godless pinko
movement from the 1930s bent on the destruction everything awesome and free
and American.

Forward is also the motto of the great state of Wisconsin. It is
actually on the flag. That union flag has the communist motto on it. And
hey look, wait, there it is on the official Wisconsin state quarter, with a
cow and an ear of corn and a wheel of cheese.

You thinking what I`m thinking? Yeah, that cow looks like a Commie to
me. You know what I have heard? I heard that Trotsky loved cheese.

What is next, Comrade Obama, e pluribus Unum, out of many one? Sounds
a little collective. David Axelrod knows it too, I bet.

END

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