All In with Chris Hayes, Transcript 1/21/2016

Guests: Rick Tyler, Betsy Woodruff, Robert Reich, Jon Soltz, Heather McGhee, Sam Seder

Show: ALL IN with CHRIS HAYES Date: January 21, 2016 Guest: Rick Tyler, Betsy Woodruff, Robert Reich, Jon Soltz, Heather McGhee, Sam Seder

(BEGIN VIDEOTAPE)

CHRIS HAYES, MSNBC HOST (voice-over): Tonight on ALL IN --

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Cruz is going down. He looks like a nervous wreck.

HAYES: A new poll shows Trump pulling ahead of Cruz in Iowa.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: We`re saying the Washington establishment run behind Donald Trump.

HAYES: Plus, Bernie Sanders runs into his own establishment woes.

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I was somewhat confused when senator Sanders said, well, you know, Planned Parenthood and Human Rights Campaign, they`re part of the establishment.

HAYES: Then, veterans slam Sarah Palin for connecting PTSD to President Obama.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: It starts from the top.

HAYES: Iraq war veteran and co-founder of Vote Vets, Jon Soltz, is here to respond.

And as a massive winter storm bears down on the East Coast, just where is governor Christie?

GOV. CHRIS CHRISTIE (R-NJ), PRESIDENTIAL CANDIDATE: The lieutenant governor`s there. And she`s handling things on the ground there.

HAYES: When ALL IN starts right now.

(END VIDEOTAPE)

HAYES: Good evening from New York. I`m Chris Hayes.

Just 11 days until the Iowa caucuses, the first actual voting of 2016. And, man, it is getting nasty out there.

The war of words between Donald Trump and Ted Cruz, who until recently refused to attack each other, has gotten downright ugly. After Trump won the endorsement of former politician and reality star Sarah Palin and Cruz countered with upcoming campaign appearances by radio host Glenn Beck, Trump responded this morning on Twitter, quote, "Wacko Glenn Beck is a sad answer to the Sarah Palin endorsement that Cruz so desperately wanted. Glenn is a failing, crying, lost soul."

He later retweeted a photo putting a spin on Cruz`s recent book, which is called "A Time for Truth," showing Cruz with a photoshopped, decidedly receding hairline.

Loath to be left out of the celebrity bidding war, today, Marco Rubio announced a shiny new endorsement of his own, from Rick Harrison, host of the A&E reality show "Pawn Stars."

(BEGIN VIDEO CLIP)

RICK HARRISON, PAWN STARS: The people see for themselves I don`t have to convince them it`s a good investment. I don`t have to show them the value for their family. When this guy walked into my shop, I knew he was the real deal.

(END VIDEO CLIP)

HAYES: In a radio interview Cruz compared Trump`s behavior to schoolyard children throwing taunts at each other, vowing not to take part. But he`s been rolling out a new line attack on Trump, tying him to what the base sees as a tainted Republican establishment.

(BEGIN VIDEO CLIP)

CRUZ: We`re seeing something fairly remarkable happen on the political train. We`re seeing the Washington establishment abandoning Marco Rubio. I think they`ve made the determination that Marco can`t win. And they`re rushing to support Donald Trump. If as a voter you think what we need is more Republicans in Washington to cut a deal with Harry Reid and Nancy Pelosi and Chuck Schumer, then I guess Donald Trump`s your guy.

(END VIDEO CLIP)

HAYES: On the campaign trail today, Trump dismissed Cruz`s new assault.

(BEGIN VIDEO CLIP)

TRUMP: You know, his new line of attack is that I`ve become establishment. Oh, give me a break. No, he`s having a hard time. He looks like a nervous wreck. He`s going down. He had his moment. He had his moment. He had his moment, and he blew it. But he`s -- you know.

(END VIDEO CLIP)

HAYES: Meanwhile, Marco Rubio told reporters there`s no way he represents the establishment either. Because he says the establishment is spending too much money against him.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R-FL), PRESIDENTIAL CANDIDATE: I`ve had over $20 million spent attacking me. That`s not grassroots money. That`s money from the establishment. We have always had to take on the establishment. We`ll do it again, because the Republican Party needs to turn the page and move forward. And we will.

(END VIDEO CLIP)

HAYES: According to the Rubio campaign, $22.5 million has gone into ads attacking their candidate. The vast majority, $20 million of that, from the pro-Jeb Bush super PAC Right to Rise.

With Iowa and New Hampshire both looming the ad wars are shifting into overdrive. And while team Bush has gone hard at Rubio, team Rubio`s been attacking just about everyone -- everyone except Donald Trump.

A pro-Rubio super PAC taunted Bush over his, quote, "train wreck campaign", hit Chris Christie for supposedly being President Obama`s favorite Republican governor, and attacked Cruz`s value-added tax. That`s a maple leaf, Canadian, not just for being too European but too Canadian. Not so subtly putting Cruz`s face inside that maple leaf there.

At this point only one group has spent a single cent attack the front- runner, Donald Trump.

(BEGIN VIDEO CLIP)

WOLF BLITZER, CNN ANCHOR: All right. With almost all of the vote now actually in, we can project that Hillary Clinton will win.

CHRIS MATTHEWS, MSNBC HOST: I`m watching Hillary Clinton receive the victory tonight.

UNIDENTIFIED MALE: They look at Donald Trump as the greatest gift from heaven, an easy person to beat in the general election.

UNIDENTIFIED MALE: And then she`ll become the next president of the United States.

CLINTON: Thank you all. God bless you! And may God bless America!

(END VIDEO CLIP)

HAYES: This is our rough rendering of who`s attacking who in the ad wars right now. It`s all over the place. And that might help explain why something Ted Cruz suggested a month ago has turned out to be just the opposite. As "The Upshot`s" Nate Cohn notes, Cruz tweeted, "The establishment`s only hope, Trump and me in a cage match."

But now that he and Trump really are in a cage match, with the other candidates going after each other instead of the front-runners and failing to make gains, the establishment isn`t exactly hopeful. It`s starting to freak out.

Here`s Senator Lindsey Graham, who recently endorsed Jeb Bush.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Whether it`s death by being shot or poisoning, does it really matter? Here`s my take. Dishonest, which is Hillary Clinton in the eyes of the American people, beats crazy. Dishonest loses to normal. So, let`s just pick somebody out of the phone book if we have to.

(END VIDEO CLIP)

HAYES: I`m joined now by Rick Tyler, communications director for Ted Cruz`s presidential campaign.

And, Rick, you guys have been talking about the sort of establishment embrace of Donald Trump. You`ve been attacking him on his sort of conservative bona fides and immigration.

But you literally spent -- you, your campaign, have spent six months praising the guy, bold and brash, willing to speak the truth, taking on the Washington cartel. He`s drawing significant crowds, significant passion, people who are pissed off, ticked off with Washington. I salute him for his immigration stance. I`m a big fan of Donald Trump`s.

So, were you being disingenuous then or are you being disingenuous now?

RICK TYLER, COMMUNICATIONS DIRECTOR, CRUZ FOR PRESIDENT: Come on, Chris. Good evening to you. And thank you for having me on.

Listen, no one`s being disingenuous. We`ve gotten to the point of the campaign where people want to note difference between Ted Cruz and Donald Trump and now, we are in a two-person race. I think that`s where we`ve arrived at, Ted Cruz and Donald Trump. So, let people make the choice and we`ll give them the differences.

The differences are rather stark actually. Donald Trump has been for a single payer health care system. Ted Cruz opposed Obamacare.

And Donald Trump has been for TARP. He`s been for stimulus. He`s been for partial birth abortion. He`s been for gay marriage. He`s been for a lot of things that he said suddenly now that he`s against.

So, one is a consistent conservative. And the other is I`m not sure, a celebrity, a reality star. But mostly it looks like a progressive liberal to me.

HAYES: But, Rick, if he`s a progressive liberal, your candidate said, "I`m a big fan of Donald Trump`s." Your candidate said he`s taking on the Washington cartel.

TYLER: That doesn`t mean --

HAYES: If he is a wolf in sheep`s clothing as you`re now saying, why did you guys spend six months praising him?

TYLER: I`m a big fan of yours, Chris, but I don`t always agree with everything you say. So --

HAYES: That`s well parried.

(CROSSTALK)

TYLER: And I respect their point of view. And you can like them. It doesn`t mean you have to agree with them.

Look,, we`re picking the president of the United States, the commander in chief, someone who`s got to be a steady hand, someone who has good judgment, someone who is predictable.

Ted Cruz is prepared for that. Donald Trump, I don`t know what his guiding principles are. For an unforeseen event, I don`t know that I would trust Donald Trump`s decision-making.

HAYES: OK. Let`s talk conspiracy theories here. All of a sudden today -- first of all, it`s the hunger games at this point, right? Everyone -- everything that happens has about nine different ramifications. All of a sudden you`ve got everyone out today, in the last few days. All these people, establishment people, whether it`s Bob Dole or others saying yes -- you know, Orrin Hatch saying actually, I`d take Trump over Cruz. Now --

TYLER: So happy for it.

HAYES: Of course. You guys love it. It`s absolute manna from heaven for you guys. That I get. But I`ve heard this theory that this is basically Jeb`s people trying to get their supporters to basically put the stake in Marco Rubio because if people are talking about accepting Trump over Cruz, what they`re really saying is Marco Rubio`s no longer viable.

TYLER: Well, I think that`s right. Cruz asserted that today. I agree with that. That the establishment candidate -- Marco Rubio, look, he`s an establishment candidate. He got in by the Tea Party but they abandoned him. He was taken to the dance by the Tea Party but got another ride home. So he`s an establishment candidate.

(CROSSTALK)

HAYES: By that ride home, you mean Chuck Schumer?

TYLER: People want to knock him off.

HAYES: What`s that?

TYLER: I`m sorry?

HAYES: I said the ride home that he got, you mean Chuck Schumer and the "gang of eight" bill?

TYLER: Yes. Thank you. I hadn`t thought of that. That`s pretty good. No, he`s just -- he is an establishment candidate. But he has another establishment candidate, Jeb Bush, who has spent a lot of money against him. And he`s really sort of stalled out. It doesn`t look like he`s going to go anywhere. It looks like it`s a two-way race now.

But, you know, things can change. But look, we`ve been working really hard in Iowa and we`ve got a great ground game there and a get out the vote effort. And people are very enthusiastic about Ted Cruz. Our crowds are raucous. So, we`re pretty excited that we`ll do well.

We`ve been the underdog candidate all along, we`re still the underdog candidate and we`re going to fight this out until February 1st. And from there on.

HAYES: There`s a line of thinking about Ted Cruz. And I know if you say, well, all these people that work with him in the Senate don`t like him. You`re going to say, well, he`s shaking things up. He`s made their life miserable because he won`t go along to get along. And I get that.

TYLER: That`s right. Yes.

HAYES: But more broadly there just seems to be a tremendous amount of people willing to come out of the woodwork to basically be like I dislike the guy intensely and personally, he`s unbearable to be around and work with. And do you think like fundamentally that`s going to hurt your candidate?

TYLER: No. Because the people that say that have a stake in the Washington status quo staying the same. In fact, the Gallup poll says exactly the opposite. Ted Cruz is the most likeable candidate in the GOP field bar none, including the Democrats. He is the most popular, the most well-liked candidate.

And, by the way, on your own network today, we saw all the negatives upside down. Donald Trump is. If he`s going to go to the general election, he would just get hammered. He`s upside down with African-Americans, with women, with Latinos, with virtually every group he`s in a very serious negative deficit. Those things are hard to overcome in a general election.

HAYES: That is a true thing you just said, Rick Tyler. Thank you very much for coming on. I enjoyed that. Come back.

TYLER: Appreciate it, Chris.

HAYES: All right. Joining me now, Betsy Woodruff, political reporter for "The Daily Beast", Josh Barro, correspondent for "The Upshot" at "The New York Times" and an MSNBC contributor.

So, Josh, you and I were going back and forth all day on twitter about this sort of how people are operating through this chess board, correct?

JOSH BARRO, THE UPSHOT AT THE NEW YORK TIMES: Yes.

HAYES: So this idea basically -- one of the things -- what has happened to Marco Rubio? When you stop and think, what have these news cycles been about? They`ve been about Trump-Cruz, some about Jeb Bush and the super PAC. But you`ve got to look around and say, where is Marco Rubio? Where is the Marco Rubio bump everyone was promised? And it doesn`t look very good.

BARRO: Well, I think it`s two things. I think the immigration thing has really stuck to him. He was on the wrong side of what`s emerged as probably the most important issue for the conservative base. It`s made it difficult for him to establish what were considered very strong conservative bona fides for him.

He is really to the right of Chris Christie, when Jeb Bush and John Kasich and he hasn`t been able to pull away from them. And in New Hampshire where he was supposed to consolidate moderates he has that problem of Jeb Bush and Chris Christie and John Kasich who are all persistently staying alive. It`s not that they`re catching fire in New Hampshire but if each of them is getting 8 percent or 9 percent of the vote, that`s an enormous share of the electorate that Marco Rubio needed. So I think was basically no path for him.

And then as you mentioned about the stuff where you have all these people who are really Jeb surrogates. How exactly did Trent Lott and Bob Dole come out of the woodwork this week to talk to reporters about, you know, how gee, you know, if it came down to Trump and Cruz, I`d probably go for Trump?

When people floated this idea that this was a conspiracy by the Bush campaign to undermine Rubio, at first, it was like it`s too complicated, wheels within wheels but as I thought about it more I did buy that, that this is part of a campaign by Jeb to make it look like there`s no backup plan to Donald Trump, try to blow everything up and then all that will be left is Donald Trump and Jeb who nobody really likes but who has a ton of money and then he`s the only option left.

HAYES: Betsy, what do you think? The Bush campaign and the Bush super PAC, they`re on a kind of kamikaze mission and they`re just -- they`re trying to take out everyone. Marco`s doing the same. Marco Rubio. And they`re all destroying each other in that kind of 9 percent, 10 percent New Hampshire level that they`re at.

BETSY WOODRUFF, THE DAILY BEAST: Without a doubt. And it makes this a wonderful week and month to be a Tea Party conservative or a Donald Trump fan. I don`t think there`s a sector of the American population having more fun than Donald Trump voters right now. It seems delightful.

Interesting thing about the Rubio slide is that his struggles to really get traction with some of these voters typify a theme that we`ve seen over the past years of American politics, and that is leaders in the conservative movement and the Republican Party totally losing control and logs clout over the voters they influenced. In the same way the Republican Party leadership has lost base voters, the evangelical Christian leadership has also lost a lot of influence over conservative evangelical Christian voters.

"World Magazine", a small magazine that`s very influential among these voters, every month surveys about 100 evangelical leaders. For the last seven months, Rubio has won that survey. For the last seven months.

HAYES: Fascinating.

WOODRUFF: Hasn`t materialized at all in the vote. These people don`t have the clout they used to have and that`s why Trump`s doing so well and why Rubio`s kind of barely treading water.

HAYES: When you look at this from the macro level and you say no one`s -- aside from that Jeb Bush ad that shows Hillary winning, right? No one`s dropped a cent -- there`s no negative ads up against Donald Trump in Iowa which is crazy to think about.

But when you think of the incentives, right, the problem for every individual campaign possibly other than Ted Cruz, taking on Trump only helps Ted Cruz. So, they`re not going to do Cruz`s dirty work for him.

BARRO: I think that`s even arguably true for the Cruz campaign. People in the media often tend to assume it`s like Trump and Cruz fighting over the same voters but when you look at the people who say they`re voting for Donald Trump he does as well with voters who describe themselves as moderate or liberal as he does with voters who themselves as very conservative. So, not all the Trump base would go to Cruz as a second choice.

But yes, there`s that issue of if you attack someone you don`t know where the votes are going to go. But then there`s also this additional issue that all the attacks on Trump so far don`t seem to have worked very well. There is, as Rick Tyler was going through, this litany of issues on which I Donald Trump got himself very far to the left. When he was considering running for president in 2000, he was for a 13 percent wealth tax on wealthy people to retire the national debt.

But none of this seems to matter. You tell Trump voters all this stuff, and they don`t care. And I think it`s because -- David Frum has been saying -- Trump is all about conservatism as identity, not conservatism as ideology. So, it doesn`t really matter what policy you`re for, so long ease gets your gut-level anger about whatever. So, you can`t attack him on policy.

HAYES: And, Betsy, that`s what the Palin endorsement as sort of vouching for him is all about. She is the sort of tribune of that kind of conservatism.

WOODRUFF: And remember, Sarah Palin historically has been one of the most hardcore purists when it actually comes to policy issues, right? Pushing conspiracy theories about the minutia of the Affordable Care Act, arguing that quotes are going to be dredged up from years before someone entered politics have a direct influence on how they would govern if they ran.

But now, all of a sudden, it`s like the same standards she used when she made every single other endorsement since 2008, all those standards are out the window, right? This idea that history might perhaps presage what happens in the future. She no longer seems to think that`s a valid way of figuring out what things are going to happen. That`s what we see, right? It`s more about personality than actual policy decisions which is why he`s killing it.

HAYES: It`s amazing to watch all this unfold in real time.

Betsy Woodruff, Josh Barro, thank you very much.

BARRO: Thank you.

HAYES: Still to come, pretty much, no one wants to be branded the establishment candidate. But what exactly is the establishment?

Plus, how the latest ads for Bernie and Hillary prove to be perfect snapshots of their respective campaigns. But first, as the East Coast braces for what could be a massive winter storm, where is New Jersey Governor Chris Christie? Those stories and more, ahead.

(COMMERCIAL BREAK)

HAYES: Meteorologists are running out of words to describe the blizzard bearing down on the East Coast. The worst of it may hit Washington, D.C., but the storm and potentially severe coastal surges will include the New Jersey shore.

(BEGIN VIDEO CLIP)

METEOROLOGIST: The Jersey Shore really feeling high impacts from this, not only heavy snow but also gusts as high as 55 miles per hour. Offshore, 15 to 20-foot waves, moderate coastal flooding is going to be a concern.

(END VIDEO CLIP)

HAYES: Although storm surge predictions for the New Jersey coast have lessened somewhat over the past few days, some models were showing surge levels close to those during super storm Sandy, it might be a good idea for the governor of New Jersey to be on hand. But the state`s governor, Chris Christie, is busy running for president.

Campaigning in New Hampshire with no plans to leave that state, where events are scheduled for Friday and Saturday.

(BEGIN VIDEO CLIP)

CHRISTIE: The lieutenant governor`s there. And she`s handling things on the ground there. And if I`m needed to go back I would. But at this point, it`s too speculative to know.

So, everybody on the call last night had their assignments. I gave everybody their assignments. I`ll be back on the phone again 10:00 tonight if they know if they need me before, that they just call me and get me.

(END VIDEO CLIP)

HAYES: Governor Christie literally phoning it in. But if we know one thing about New Jersey, it is that it is stronger than the storm.

(BEGIN VIDEO CLIP)

(MUSIC)

UNIDENTIFIED FEMALE: The Jersey Shore is open.

UNIDENTIFIED MALE: The word is spreading.

CHRISTIE: Because we`re stronger than the storm.

UNIDENTIFIED FEMALE: You bet we are.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RACHEL MADDOW, TRMS: There`s been a series of high-profile endorsements. Groups like Planned Parenthood and NARAL, they`ve gone out of their way to make very early endorsements for Secretary Clinton. Just today, Human Rights Campaign, the gay rights group, announced their endorsement.

SEN. BERNIE SANDER (I-VT), PRESIDENTIAL CANDIDATE: We`re taking on not only Wall Street and the economic establishment, we`re taking on the political establishment. So I have friends and supporters in the Human Rights Fund, in Planned Parenthood. But you know what? Hillary Clinton has been around there for a very, very long time. And some of these groups are in fact part of the establishment.

(END VIDEO CLIP)

HAYES: The comment by Bernie Sanders that groups like Planned Parenthood and the Human Rights Campaign are, quote, "part of the establishment" generated a huge backlash from Hillary Clinton and her allies.

(BEGIN VIDEO CLIP)

CLINTON: I`ve got to tell you, I was somewhat confused when Senator Sanders said, well, you know, Planned Parenthood and Human Rights Campaign, they`re part of the establishment and that`s why they`re supporting, you know, Hillary Clinton, because it`s all part of the establishment. I thought, boy, I wish it were. I wish we weren`t fighting all the time to protect women`s rights, to protect women`s health. If it were part of the establishment, that would be time for all of us to just quit having to work so hard and defend it and fight for it.

(END VIDEO CLIP)

HAYES: Now, as a purely descriptive matter I don`t think it`s unreasonable to say those groups are in fact part of the broader central-left establishment in Washington, D.C., along with other progressive-leaning organizations, the AFL-CIO, the Natural Resources Defense Council, the Sierra Club. But the thing with that word "establishment" is a four-letter word in the 2016 politics, so toxic, so pejorative that pretty much no one wants to be associated with it.

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL (D), MISSOURI: I have fought the establishment, run primaries, my entire career. I think that for Planned Parenthood or NARAL or the Human Rights Campaign to be considered the establishment, somebody`s not paying close attention to how American politics works.

(END VIDEO CLIP)

HAYES: Today, the group Emily`s List, which supports pro-choice Democratic women running for office and has endorsed Clinton, sent an e-mail claiming that Sanders treats women`s health as a, quote, "afterthought", adding, "Senator Sanders` attacks on Planned Parenthood are rooted in the exact same type of political calculation Republicans make when advancing their extreme agenda."

Sanders appears to be feeling the heat a bit. In a conversation this afternoon with our own Kasie Hunt which will air in full at 9:30 Eastern on "THE RACHEL MADDOW SHOW", Sanders walked back his comment.

(BEGIN VIDEO CLIP)

SANDERS: I am a fierce supporter of Planned Parenthood, NARAL, and gay rights in this country.

KASIE HUNT, MSNBC POLITICAL CORRESPONDENT: And they are not part of the establishment?

SANDERS: No. They are standing up and fighting the important fights that have to be fought.

(END VIDEO CLIP)

HAYES: Now, I asked Robert Reich, the former secretary of labor under President Clinton, if establishment is a meaningful term within the context of the Democratic Party.

(BEGIN VIDEOTAPE)

ROBERT REICH, FORMER SECRETARY OF LABOR: I think it is still clear because there are party leaders, big corporation, Wall Street. There are very wealthy individuals who kind of represent where the Democratic Party, the official Democratic Party was and to some extent still is.

HAYES: And what about these groups? I mean, the controversy over these comments, which as we noted Senator Sanders has walked back, he`s been attacked over them by Hillary Clinton, the context was Planned Parenthood and Human Rights Campaign, which I think a lot of people feel like, well, those are progressive organizations. It`s -- they`re not the establishment.

What do you think about that?

REICH: Well, they`re not really the establishment. And I can`t obviously speak for Senator Sanders or about Planned Parenthood. But what we do see, and we`ve seen for years in America, is that the establishment, that is, the big banks and the executives and the wealthy do support a lot of non- profits and make the non-profits basically walk to the tune of the establishment.

So, there`s sort of a chilling effect on non-profits and the media and a lot of other places because the establishment is so powerful. That`s where the money is.

HAYES: Yes, having been a political reporter in Washington, D.C., you know, there are a variety of groups, Human Rights Campaign, Planned Parenthood, NARAL, Sierra Club, that are groups that do very good work, that do a lot of things that I personally believe in, that are also as a descriptive matter they`re part of what you`re going to call an establishment in Washington of the sort of center-left probably, Center for American Progress. They are part of it.

What I think is interesting is that term is so pejorative or understood to be so pejorative and there`s a real difference between how Republicans, it seems to me, think of that and how Democrats do. I don`t think Democrats feel as negatively about the Democratic Party establishment as Republicans do feel about their party`s establishment.

REICH: Well, I`m not so sure about that, Chris. I think the big problem is you have a vicious cycle of wealth and power in America that`s just gotten completely out of control and you`ve seen it in politics.

I was there in Washington in the `90s. It was pretty bad then. It`s much worse now. And that vicious cycle is you`ve got again big corporations, executives, Wall Street, very wealthy individuals in both parties who are calling the shots.

And you`ve got to just follow the money. You see it. There`s no countervailing power.

HAYES: That may be true. But the Planned Parenthood -- I mean, is Planned Parenthood -- it just doesn`t seem to be plausible that Planned Parenthood is part of the establishment in that sense. Or maybe you think they are.

REICH: I don`t know, and I don`t -- I don`t think they are. But again, every organization, no matter who it is, just follow the money. I mean, I was just last week, I was asked to talk at a religious congregation about inequality. And just before I began, the minister who headed the congregation whispered to me and he said, don`t talk about changing the estate tax and don`t in any way attack the rich because we are dependent -- you know, we`re dependent on them.

Well, this happens to me again and again and again. So, what we really need to understand here is that it`s all about power. This is where the surge is coming from for Bernie Sanders. In some ways, it`s a very different -- it`s a different surge, but it`s coming out of the same sort of sense of fundamental powerlessness and anger and frustration for Donald Trump.

HAYES: But I think politically there is less juice to be squeezed out of that orange in the Democratic side. I mean, my feeling is your median Democratic voter, they`re angry at the banks or they`re not psyched about companies that outsource and things like that.

But when they think about a group like Planned Parenthood or Human Rights Campaign, when they think about even the Democratic Party writ large or elected Democratic officials, I don`t think they feel the same visceral anger toward those people, I think they generally trust them in a way Republican Party members don`t. Or maybe you think I`m wrong about that.

REICH: Well, I think -- I think generally speaking. Certainly I would trust the Democrats and the Democratic establishment more than the Republican establishment. But I think you`ve got to understand, Chris, and I mean this in the sense that what has happened is so dramatic in terms of people`s feeling that the establishment -- you know, the big corporations and Wall Street and the wealthy individuals even in the Democratic Party don`t really get it.

They don`t understand that they have had a huge impact on changing the rules of the game to favor themselves and hurt average working people. There`s not the same degree of resentment and anger, I don`t think, but there is a deep desire to change the power structure. That`s what this is all about.

HAYES: All right. Robert Reich, thank you very much.

REICH: Thanks, Chris.

(END VIDEOTAPE)

HAYES: Coming up, as Jeb Bush continues to wallow in the back of the pack, there might be some regrets of the $100 million raised for Jeb Bush. A suggestion for what that money could have been used for, next.

(COMMERCIAL BREAK)

HAYES: You know, with all the talk of socialism among Democrats on the campaign trail lately, there are actually quite a few people on the right looking at how resources and capital are currently distributed in this country of ours and thinking, you know, there`s got to be a better way.

Particularly donors to Jeb Bush`s super Pac, Right To Rise. Right To Rise raised more than $100 million last year on the belief that a Jeb Bush candidacy was a safe bet.

But as both The New York Times and Politico report today, as Bush continues to flounder on the campaign trail, backers are placing some of the blame on Right To Rise and its inability to sell their candidate.

At issue, concern over spending. Things like this, a video mailer that plays a 50-minute Jeb Bush documentary sent to supporters and potential donors.

And as Politico reports, multiple advisers to the Right To Rise super Pac concede privately that the $40 million spent on positive ads aimed at telling Bush`s story yielded no tangible dividends.

Tens of millions of dollars spent, all meant to get Jeb Bush elected president. He currently is polling on average at around 5%.

As one Bush supporter told Politico, you might as well light all of this money on fire.

Meanwhile, in Michigan, lawmakers have approved tens of millions of dollars in emergency funds to help address the crisis in Flint. Today the EPA issued an emergency order and announced the resignation of its regional manager.

As e-mails released by Governor Rick Snyder`s office revealed the city, under the control of a state-appointed emergency manager, switched its water source to save money. And they switched to that water source without corrosion control treatment, which is what prevents lead from leaching into the system.

The result of them doing that is that tens of thousands of people were exposed to lead poisoning, including nearly 9,000 children under the age of 6.

The city is still coming to realize the human and financial costs of that decision. Certainly outweighs the money they were going to save by switching water sources.

Which as the e-mails released this week showed, amounted to just 1 to 2 million dollars a year. Yes. Just 1 to 2 million dollars a year could have prevented this human catastrophe.

I`m not sure how many mailable video players that buys, but to put this in some sort of perspective, imagine if the donors to Jeb Bush`s super Pac, instead of lighting their money on fire had been approached about doing something useful with it. They could have kept Flint on its original water source for up to a century.

That was never going to happen in the first place, and it`s too late to go back in time and prevent what happened in Flint, but maybe there`s a lesson for the deep-pocketed plutocrats who`ve allowed their money to be burned by Jeb Bush and his allies.

Please, for the love of god, find something actually socially useful to do with your money. Because if you don`t, socialism`s going to start looking a lot better to a whole lot of people. (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SARAH PALIN, (R) ALASKA: When my son, like so many others, they come back a bit different. They come back hardened. It starts from the top.

The question, though, that comes from our own president, where they have to look at him and wonder, do you know what we go through?

So, when my own son is going through what he goes through, coming back, I can certainly relate with other families, who kind of fill these ramifications of some PTSD.

(END VIDEO CLIP)

HAYES: In her speech endorsing Donald Trump yesterday, former vice presidential candidate, Sarah Palin, suggesting her son`s arrest on domestic violence charges was a result of post-traumatic stress disorder and partially due to President Obama`s lack of respect for men and women in uniform.

Track Palin, who was deployed to Iraq in 2008, was arrested Monday night, and, according to police and court documents, charged in a domestic violence case in which his girlfriend said he punched her in the head and threatened to fire a rifle.

Donald Trump said it was his idea for Palin to bring up her son at the rally.

(BEGING VIDEO CLIP)

UNIDENTIFIED MALE: Did you ask her to address her son`s arrest?

DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: I told her it would be absolutely fine. I thought it would be appropriate. There was tremendous press, and I think it`s something that`s very important to discuss.

Not even for her son, but for so many other sons and daughters that are coming back from the Middle East, where they have traumatic problems. They have tremendous problems.

And I told her, I actually suggested it.

(END VIDEO CLIP)

HAYES: The backlash to Palin`s comments was swift, with veterans and veterans` groups criticizing the apparent politicization of PTSD.

Paul Rakoff, who heads the Nonpartisan Iraq and Afghanistan Veterans for America, said, quote, "it`s not President Obama`s fault that Sarah Palin`s son has PTSD... Now that she has endorsed Mr. Trump, I would encourage her to talk with him about it. His campaign is pretty light on specifics about what he would do for veterans."

And in a series of tweets, former army officer, Nate Bethea, who says he qualifies for PTSD disability benefits from the V.A., pushed back against the stereotype that veterans are violent and unstable.

He wrote, quote, "Underneath her nonsense lies a very dangerous allegation that all veterans are ticking time bombs, ready to brandish weapons. The fact is, people with PTSD still have dignity and they`re still expected to obey societal norms like anyone else, veterans or otherwise."

Joining me now, Jon Soltz, who served two tours in Iraq, now chairmen of VoteVets.org. Jon, your reaction to that moment in Sarah Palin`s speech yesterday?

JON SOLTZ, VOTEVETS.ORG: Well, I was shocked, because beating up, you know, your girlfriend, your spouse, or acts of violence aren`t one of the core symptoms of PTSD.

Not only did I feel, you know, hurt that she sort of misdiagnosed all of these veterans, but I think she sort of was wrong in the way she talked about the issue.

There are some core fundamental symptoms here, and one of them isn`t violence against your spouse. It was sort of par for the course. She said outlandish things before, but on this situation, not only did I think that she doesn`t understand what PTSD is, I thought she gave veterans a poor name by sort of arguing that this is something that`s common in our community.

HAYES: Yeah, I was following a lot of the back and forth among a bunch of veterans that I follow in social media about this. And it was fascinating to see, you know, a lot of people saying what Nate said, is that this sort of -- walking this fine line between, at one level acknowledging the kind of treatment needs that many veterans of Iraq and Afghanistan need, and the sort of support and resources they need, and at the same time not essentially creating the idea in the public`s mind that everyone are essentially damaged or they`re about to go off half cocked or they are dangerous.

SOLTZ: Her son did serve in Iraq, and she had an opportunity to actually talk about what PTSD is, and I think that`s why we have this debate.

There`s three sort of fundamental things that happen when someone`s suffering from these issues. First, they get intrusive thoughts. So, if you`re sleeping at night and you have nightmares, a lot of veterans face this.

The second issue is you become startled quickly. If you`re walking down the street and a firework goes off and you don`t know it, your body`s going to race.

And the third key point is it`s avoidance. So, maybe you don`t ever want to go to the beach again because you don`t like sand because of something happened that happened in the war. Or, you were ambushed driving a vehicle in Iraq so you don`t want to drive a car.

Those are the three sort of pillar fundamentals of what we consider post- traumatic stress, not violence against someone who`s close to you. There`s just a huge misunderstanding.

So, when she goes out there and says this is because of this, it`s actually not because of this. And now it sort of gives the idea that all veterans are going to pick up a weapon and shoot somebody, or all veterans are going to hit somebody.

And that`s not -- that`s just not fair to say that about the community as a whole.And I think that she really missed the chance to educate the public on what some of the challenges her son is actually facing.

HAYES: There was something so ironic which Nate pointed out last night about the fact that PTSD was trending briefly yesterday on Twitter because of this invocation in this sort of erroneous way as you point out.

SOLTZ: Yeah. People are talking about it at one level now. I think obviously that`s good, but I think it`s up to us, you know, who are going to comment on this or in the media, to sort of not regard the stupidity of her comment, which is obviously political in nature.

Her son went to Iraq under George W. Bush, but it gives us a chance to explain what PTSD is.

And I think if we really break it down and talk about it, it`s very different than the way she explained it.

It showed that she doesn`t quite understand the issue and, you know, if she`s going to continue to be in this space, hopefully she can do some homework and make some policy recommendation that are relevant to fixing the problem.

But she by no -- has any basic understanding of what PTSD is, so I think it gives the rest of us an opportunity to have a real conversation about some of these problems.

HAYES: Alright. Jon Soltz, always a pleasure. Thank you, sir.

SOLTZ: Thank you.

HAYES: Coming up, where did Carly Fiorina get those preschoolers? That caper is next. (COMMERCIAL BREAK)

HAYES: Presidential candidate Carly Fiorina made a speech at the Iowa Right to Life Presidential Forum on Wednesday morning and it was held at the Greater Des Moines Botanical Garden. According to the Des Moines register, Fiorina headed straight for a group of giggling 4 and 5 year olds as she walked into that botanical garden, and the result was this, children sitting around her with an image of a fetus in the background.

Fiorina`s spokeswoman told The Guardian, "we were happy these children chose to come to Carly`s event with their adult supervisor".

But at least one parent of one of the kids there is crying foul, according to The Guardian.

"The kids went there to see the plants," said Chris Beck, the father of a 4 year old appearing in that photo. "She ambushed my son`s field trip. I would not want my 4 year old going to that forum. He can`t fully comprehend that stuff. He likes dinosaurs, teenage mutant ninja turtles, and transformers."

(COMMERCIAL BREAK)

HAYES: All right, tonight, with polls tightening, just 11 days until the Iowa caucuses, Hillary Clinton is zig-zagging throughout the state.

Right now she`s holding a rally with Demi Lovato who`s there right now singing with her incredible voice at the University of Iowa. That`s Hillary Clinton`s third campaign event of the day.

Meanwhile, Bernie Sanders in New Hampshire, he`ll return to Iowa for a flurry of events over the weekend.

In Iowa a new CNN/ORC poll shows Sanders up by eight points. That is his largest lead yet.

That, however, stands in stark contrast with another poll also released today from Monmouth College, that finds Hillary up by a solid nine points.

The point being that with just over a week until the caucuses it is anyone`s game in Iowa. And both campaigns know that.

Sanders and Clinton both this week released their closing arguments as aimed directly at those early state primary voters, and they could not be more different.

In fact, I think they tell you just about everything you need to know about what separates these campaigns` approaches.

We`re going to show you those ads, next. (COMMERCIAL BREAK)

HAYES: That`s Hillary Clinton singing at her event. I`m just kidding. That`s Demi Lovato singing for Hillary Clinton in Iowa right now.

Joining me at the table, Sam Seder, MSNBC contributor, host of Majority Report, and Heather McGhee, who`s president of Demos Action.

I`m so glad you guys are here because I saw these two ads today and I thought, man, this is the perfect encapsulation of these two campaigns and how they are different.

So first let`s take a look at Hillary Clinton`s closing ad, her closing seal the deal ad. I think it`s mostly run in Iowa, but I think it`s running in both Iowa and New Hampshire.

Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The person who lives here has to solve problems as big as the world and as small as your kitchen table. That`s the job. Every day. And now, the first lady who helped get health care for 8 million kids, the Senator who helped a city rise again, the secretary of state who stood up for America and stared down hostile leaders around the world is the one candidate for president who has everything it takes to do every part of the job.

She`ll take on the gun lobby, finally get equal pay for women, and stop the Republicans from ripping all our progress away.

(END VIDOE CLIP)

HAYES: All right. So you got the full what the job is, what her qualifications are, what she`s going to do. Like the resume, the -- here`s Bernie Sanders. (BEGIN VIDEO CLIP)

SIMON AND GARFUNKEL, MUSICIANS: (singing) Let us be lovers we`ll marry our fortunes together. I`ve got some real estate here in my bag. Counting the cars on the New Jersey turnpike, they`ve all come to look for America.

(END VIDEO CLIP)

HAYES: Couldn`t possibly be more different. No resume, no he passed this, no he supports that. No Republican, no nothing.

Just Simon, Garfunkel, Sanders.

HEATHER MCGHEE, PRESIDENT, DEMOS ACTION: Well, it`s pure heart. Right? It`s pure heart. And it`s also purely about the movement and about the people. And that is banking on unlikely voters to surge and come to the caucus the way that folks did in 2008.

Hillary Clinton right now is banking on likely voters and she`s banking on people going with their head and not their heart.

HAYES: Do you think -- what do you think -- what hits you?

MCGHEE: So, anytime people talk about America in an inclusive way and talk about the people, the name of my organization literally means the people, so I get the feelings.

I absolutely get the feelings.

At the same time, though, there is a strand of pragmatism that actually is among young voters and independent voters where they did that for Barack Obama in 2008 and 2012 and watched him not be able to get anything done.

So, I think there are strengths and weaknesses to both approaches.

HAYES: The other thing I would say about this Sanders ad is, it`s real White, that ad. That ad is -- when you talk about sort of recreating - that ad is mostly shot in -- I think in Iowa and Vermont and New Hampshire and the states -- there`s a lot of Iowa in there. Iowa`s a very White state, so that`s not their fault.

But that is another thing that strikes me when you`re looking at part of the sort of strengths and weaknesses of this campaign, frankly.

If they want to go deep in this campaign, those crowds need to look different than they do right now.

SAM SEDER, MSNBC CONTRIBUTER: Yeah. That needs to be a different ad when you head down to South Carolina, but not so much for New Hampshire, either, I mean, frankly.

But to get back to the other point, Hillary`s ad was fairly White too, because it was really about Hillary.

And to a large extent I think that ad that she`s running is one that they`ve had planned for Jeb Bush, you know, six to eight months ago.

It`s very much about experience. It`s very much about sort of a defensiveness, like we`re going to hold what we have. But there`s no vision for America embedded in that ad.

HAYES: Well, holding what we have is a vision for America.

SEDER: Well, it`s not a terribly romantic one. The narrative there is very much of a defensive one. And, within the context of the Democratic primary, look, I don`t know which one`s going to be more effective. But the bottom line is the narrative there is like we just need to be static.

I mean, essentially we just want to stay where we are.

HAYES: But they also --

SEDER: And I`m the one experienced enough to do that --

HAYES: But also, Ted Cruz may take away all your stuff.

SEDER: Listen, I agree with you. But that`s what I`m saying. This looks like a general election ad to me on some level that is really a function of a Jeb Bush, because it is really just a technocratic ad saying we like where we are, stay the course, but I don`t know that the country is in a stay the course mood.

MCGHEE: Well, the country certainly is not in a stay the course mood, neither progressives nor tea party followers, and anybody in between. And I think that what is missing from the Clinton ad is the spirit that she brought to that first ad.

Where she was talking about -- where she was talking about the people. It was all about the people. She said the deck is stacked. And I just worry that right now in a desire to contrast with Bernie, she`s losing what`s the most important piece.

HAYES: Let`s play this ad. Can we play this ad?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My daughter`s about to start kindergarten next year, and so we`re moving, just so she can belong to a better school.

UNIDENTIFIED MALE: [ speaking spanish ].

UNIDENTIFIED FEMALE: After five years of raising my children, I am now going back to work.

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I`m getting ready to do something too. I`m running for president.

(END VIDEO CLIP)

HAYES: I love that ad. And that ad, first of all, it looks like the Obama coalition, right?

And it`s also about who are the people -- like the central thing for the Democrats in this election is, they put together a governing majority coalition twice in a row for the first time since FDR. Okay?

Can you do it a third time? That`s what it`s about. It`s about those people as much as it`s about the candidates.

SEDER: There`s a strange defensiveness coming from the Clinton campaign. The past day or two seems like literally the claxones were ringing, everybody has to be hands on deck.

HAYES: They`re fighting a --

SEDER: No, I get that. I get that. And I don`t think it`s actually that rancorous.

But I mean, there`s a confidence in that first ad.

HAYES: Yes.

SEDER: And there`s a narrative for where the country is. And all the stuff about her experience is what backs up that vision. But she`s not -- she`s left the vision part in saying I can deliver, but we`ve forgotten what the vision is she wants to deliver.

MCGHEE: But the other thing is it`s actually important to have both. And that is what I think is missing here from both of theirs, is saying that we have to recognize where we are in this country right now, which is in a place where, you know, basically only the donor class can get what it wants.

And so, you you need the people. You need a movement. You need unlikely voters, which is what Bernie is counting on. But you also need an ability to get things done.

HAYES: All right. Sam Seder, Heather McGee - I could talk about this forever, actually, fascinating. Thank you very much.

That is ALL IN for this evening The Rachel Maddow show is next.

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