All In with Chris Hayes, Transcript 12/27/2016

Guests: Sarah Isgur Flores, Jon Lovett, Dennis Murphy, Tera Dowdell, Ben Jealous, Eric Boehlert, Charlie Pierce

Show: ALL IN with CHRIS HAYES Date: December 27, 2016 Guest: Sarah Isgur Flores, Jon Lovett, Dennis Murphy, Tera Dowdell, Ben Jealous, Eric Boehlert, Charlie Pierce

CHRIS MATTHEWS, MSNBC HOST:. Thanks for being with us. "ALL IN WITH CHRIS HAYES" starts right now.

(BEGIN VIDEO CLIP)

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

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: The United States has only one government and one president at a time.

HAYES: President-elect Trump injects himself into current foreign policy 24 days before he takes office. Plus as Trump suggests expanding America`s nuclear arsenal, we`ll look at how close the world actually came to annihilation.

UNIDENTIFIED MALE: In the matter of two minutes, a third, fourth and a fifth missile were reported launched.

HAYES: Then the Obama effect.

PRESIDENT OBAMA: I think I could have mobilized a majority of the American people.

HAYES: I`ll speak with President Obama`s former speech writer about the state of the Democratic Party. And remembering Carrie Fisher.

(VIDEO CLIP)

HAYES: A look back at the legends lost this year when ALL IN starts right now.

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HAYES: Good evening from New York. I`m Chris Hayes. We are now 24 days away from Donald Trump becoming president, which means, of course, that Barack Obama remains president of the United States for the next 24 days.

But you would not know it from listening to Donald Trump, who has repeatedly violated a longstanding and quite important norm in American politics, one that President Obama himself stressed in his first news conference just days after he was elected way back in November 2008 amidst the worst financial crisis since the great depression.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: The United States has only one government and one president at a time, and until January 20th of next year, that government is the current administration. I have to reiterate once again that we only have one president at a time. And I want to be very careful that we are sending the right signals to the world as a whole that I am not the president and I won`t be until January 20th.

(END VIDEO CLIP)

HAYES: President-elect Obama had a good reason to be careful, his words had the potential to undermine then President Bush on the world stage in the midst of that global financial crisis and hurt American interests in the process.

Donald Trump hasn`t just discarded that approach. He has been working directly with a foreign government in a concerted effort to undermine the current administration.

On Friday, the United Nations passed a non-binding resolution demanding that Israel stop building settlements in Palestinian territory in the West Bank and East Jerusalem declaring the settlements in violation of international law. Now, the U.S. has long opposed those settlements particularly in the West Bank as an impediment to peace, though, it has generally stopped short of calling them illegal in the wording of the U.N. resolution. The Obama administration could have used its veto power to block the resolution but instead abstained which allowed the measure to pass on a 14- 0 vote. Before that vote, President-elect Trump intervened to try to stop it. Reportedly after direct requests from Israeli officials with Trump posting on Facebook, the resolution should be vetoed. The Israeli ambassador to the U.S. then tweeted that quote, "Israel deeply appreciates the clear and unequivocal call of President-elect @realdonaldtrump to veto anti-Israel resolution at the U.N." So you Donald Trump and Israel working in concert against the current administration`s foreign policy efforts. When the resolution passed anyway, Israel responded with fury. Israeli Prime Minister Benjamin Netanyahu pointedly saying he looks forward to working with Trump and accusing the Obama administration of orchestrating the U.N. vote, something the administration denies. Here`s the Israeli ambassador, Ron Dermer, making that claim.

(BEGIN VIDEO CLIP)

RON DERMER, ISRAELI AMBASSADOR TO THE U.S.: We have proof. I don`t believe it. We know it. We`ll share it with the incoming administration through the appropriate channels and they can decide whether they want to share that with the American people. We obviously won`t share it with this administration because this administration is behind it.

(END VIDEO CLIP)

HAYES: The administration he`s talking about, it`s worth noting, finalized a deal in September to give Israel $38 billion in military aid over ten years, a new record, for U.S. military aid to Israel. As for Trump he claimed in a tweet that, quote, "The big loss yesterday for Israel in the United Nations will make it much harder to negotiate peace and vowed ominously as to the U.N., things will be different after January 20th.

Trump later adding the United Nations has such great potential but right now it is just a club for people to get together, talk and have a good time. So sad. I asked Democratic Congressman Steve Cohen what he makes of Trump inserting himself into U.S. foreign policy before he takes office.

(BEGIN VIDEOTAPE)

REPRESENTATIVE STEVE COHEN (D), TENNESSEE: The time he was elected in January 20, he should leave foreign policy to President Obama. The Constitution gives the executive foreign policy and certainly doesn`t give the president-elect. And what President-elect Trump has done I think is out of character with our traditions in America and it`s disrespectful to the president and it`s harmful to our foreign policy.

HAYES: What do you say to those who some of them are Democrats, who have been quite critical of the president`s decision not to veto this resolution before the U.N. Security Council to say these were extraordinary times and it`s a good thing that Israel has an ally in Donald Trump?

COHEN: Israel has an ally in Barack Obama and Israel has an ally in the United States of America. We have supplied the president and the Congress the largest foreign aid package ever to Israel. We keep them one step ahead of others in the Middle East with improved defense and improved offensive weapons and we give them iron dome.

We have tried always to bring about peace in the Middle East and people who are supporters of J Street, as I am, are not capos like Mr. Friedman says. We love Israel. We want Israel to survive, but we have a different thought on how they can get there. Better to get through to it through diplomacy and a win-win proposition with the Palestinians than through the force of take it or leave it.

HAYES: You know, it strikes me when you look at the Israeli government`s reaction to this, have you ever seen anything quite like how the Netanyahu administration has handled this in which they have essentially said we will no longer listen to the sitting president of the United States.

We prefer to communicate with the president-elect. We are going to share information with him and essentially saying the current president is effectively dead to us.

COHEN: Well, you know, I think the ambassador from Israel to the United States used to be American citizen, too. He gave up his citizenship and became Israeli. That`s OK. He has right to do that, but I have to question some of his positions.

Prime Minister Netanyahu, he basically laid down a gauntlet with the president and with others when he came to speak to congress and went through Speaker Boehner rather than approaching the president. He has, I would say, extreme chutzpah and that`s not what you should have as the prime minister of a nation who needs the United States as its friend and ally and it`s almost like, all right, you`ve helped me so much and you`ve helped me now but now you`re going out of office and I don`t need to be friends with you anymore. It`s a bad character trait on the part of the prime minister to be treating President Obama this way and a bad character trait to be treating the United Nations this way and to call in all of the ambassadors on Christmas day was somewhat unfortunate because people do have religious holidays. And the ambassadors were predominantly Christians and to call them in on a Christmas day was impolitic. I think this whole situation has been unfortunate. He shouldn`t have gone to Donald Trump and Donald Trump shouldn`t have gotten involved in it. Donald Trump has enough to do right now with trying to get some people in his administration and to get a few entertainers to come to the inauguration.

(END VIDEOTAPE)

HAYES: My thanks to Congressman Steve Cohen. Joining me now is Republican strategist, Sarah Isgur Flores, former deputy campaign manager for Carly Fiorina. Sarah, what do you make of this sort of norm, the one president at a time norm? Particularly it strikes me on matters of foreign policy when this kind of unified voice seems important.

SARAH ISGUR FLORES, FORMER DEPUTY CAMPAIGN MANAGER FOR CARLY FIORINA: Yes, so I think we do have one president at a time, which is why the Obama administration was able to abstain from the vote in the first place in a particularly shameful foreign policy misstep. What Donald Trump was doing was stating his opinion, which he said very clearly in his tweet that the U.N. would change on January 20th --

HAYES: So you don`t think there`s --

FLORES: -- he`s not confused about who is president.

HAYES: You don`t think there`s a limiting condition on expressing those opinions? For instance, if Donald Trump tweeted, "I intend to go to war with China on January 21st. It would be a lot of fun." That that would be OK with you?

FLORES: Well, for a lot of reasons, it wouldn`t be OK, Chris.

HAYES: Good. We found a limiting condition here. Let`s walk this hypo back until we hit pay dirt.

FLORES: The limited condition is announcing that we`re going to war weeks and weeks in advance. That would be dumb. But in this case, no, I actually don`t think there`s a limit on the president-elect expressing their opinion, same as he would in the campaign. Why does he somehow lose that ability once he`s been elected?

The one president at a time rule is not doing things on foreign policy or domestic policy that contradicts so that foreign leaders don`t know who to listen to. That`s not what happened here.

HAYES: He`s done that. He`s broken the one-China policy with the call to Taiwan, which reversed decades of longstanding precedent, right? So that was an actual action he took. In this case this wasn`t just an expression of something on Facebook, this was the president of the United States essentially intervening, calling on a vote to happen a certain way in concert with foreign leaders.

And also now you have foreign leaders basically calling the sitting president a liar and saying they will produce evidence to the next president, which does seem to be an infringement on the one president at a time.

FLORES: I think that we`re all getting a little sick of the mean girl foreign policy where you say something nice to an ally`s face then undermine them behind their back when they`re turned. What we have here is political payback --

HAYES: Do the $38 billion count in the mean girl foreign policy, the record setting 10-year $3.8 million a year military aid package pushed through by the president of the United States for Israel?

FLORES: This was political payback because President Obama didn`t like that Netanyahu came at Boehner`s invitation to speak to Congress and said he was against the Iran deal. But let`s take a moment and think about how Cuba and Iran have been treated versus Israel and England to a large extent.

And you`ll see that when America is treating its allies that way and treating its enemies that way, you will end up with a lot fewer allies and a lot more enemies, which is why we`ve seen Putin and Assad and others walking all over this administration. Their weak foreign policy has led --

HAYES: Wait a second. That was quite a tour of the world. How do we end up in Russia? I guess my question here is that you do think there`s a limiting condition? If he announced war, that would be bad. What do you think about -- retroactively, it`s funny, I was looking at the tape, right?

So Barack Obama had a very strange transition period because it was in the depths of the most severe and acute financial crisis in seven years in which the current administration was taking extraordinary steps, right? I mean, there`s all sorts of things they were doing that were way outside the sort of purview of what had been done before and that president-elect was quite careful not to step on the toes. Was he wrong to do that or should he have been more vocal during the time?

FLORES: Well, certainly during the campaign he was extremely vocal which is part of the reason that he won and good for him for winning, but this idea that you can`t express your opinions after you`ve been elected is silly. I think the one-president rule is really about not calling, for instance, our ambassador to the United Nations and saying this is President-elect Trump, veto that measure.

HAYES: OK. Well --

FLORES: That`s a violation, for sure.

HAYES: I agree and I`m glad that we agree, the president-elect should not be calling up members of the United States government. Sarah Isgur Flores, thanks for your time. Have a great holiday.

FLORES: You too. Bye, Chris.

HAYES: Coming up, as President-elect Trump tweets about expanding America`s nuclear arsenal, a reminder of just how close the world has come to nuclear annihilation. We`ll show you the man, the man, one individual, the Russian dude who singlehandedly prevented that 30 years ago.

But first, President Obama suggest he could have defeated Trump. Obama`s former speechwriter joins me just ahead.

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HAYES: President Obama ignited outrage and debate over the past 24 hours by suggesting he could have won a third term running against Donald Trump. While the president is undefeated in his last two races, who is responsible for widespread Republican gains at the federal and state level over the past eight years? I`ll ask the president`s former speech writer just after this break.

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HAYES: President Obama is perched in a very interesting place in terms of his legacy. His approval rating are as high as other popular two-term presidents as they approach the end of their terms. As for the longest continuous stretch of private sector job growth on record, the economy is near full employment.

And yet the opposition to the president, the Republican Party, has taken the White House and retained both Houses of Congress after eight years of very steady dramatic gains across statehouses in the country. An interview with his former adviser and chief strategist, David Axelrod, President Obama said he still believed in his particular vision for America one of inclusion and diversity and thinks he could have prevailed again.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I am confident in this vision because I`m confident that if I had run again and articulated it, I think I could have mobilized a majority of the American people to rally behind it.

(END VIDEO CLIP)

HAYES: President-elect Donald Trump somewhat predictably responded in a tweet, "President Obama said he thinks he would have won against me. He should say that but I say no way, job leaving, ISIS, Ocare, et cetera."

Today Trump tweeted again, "President Obama campaigned hard and personally in the very important swing states and lost. The voters wanted to, all caps, make America great again." Now here`s the thing. An entire generation of Democratic Party leadership, operatives and staffers are tied to Obama`s presidency. They are now reckoning with just what happened.

Joining me now is Jon Lovett, a former speechwriter for President Obama. I wanted to have you on because the interview with Ax was really interesting for a lot of reasons. How is Obama world processing what happened?

JON LOVETT, FORMER OBAMA SPEECHWRITER: I think we`re figuring this out like everybody else. You know, I`m a little bit outside the orbit now in L.A., but I actually think what the president said overall was pretty articulate, right?

It was a variety of factors that Hillary ran a good race in many ways, but a lot of factors played into what happened. And I think we`re reckoning with where we`re at here which is, you know, we kind of -- we weren`t focused enough as a party, right? This is not about Obama coalition. This is about Democrats across country. We kind of rested our laurels on this idea of this demographic shift and we would win the White House. We didn`t win the White House, it turns out. And that maybe we had it backwards which was it wasn`t what Obama didn`t do down ballot. It`s actually the incredible feat that Obama achieved at the national level.

HAYES: That`s an interesting way to spin it, right?

LOVETT: You`re welcome.

HAYES: So there`s two ways of looking at this. Barack Obama did something that no Democrat had done since FDR, consecutive majorities of voters voting for him. Amazing to think about that hasn`t happened since FDR. Incredible political feat. I wrote in a piece for the nation that a hundred years now, kids will celebrate his birthday. He`ll be a titanic figure in American history.

LOVETT: See that`s a big lead-up. That means what is coming next is terrible.

HAYES: But look at this, you got lost 900 state legislative seats, 27 state legislative chambers, 12 governorships, 62 House seats and 11 Senate seats. Now that is all -- that doesn`t count whatever James Comey and whatever crazy flukes happened in this particular (inaudible), which says to me is there was something happening before this election and do you think Barack Obama owns that? Is he responsible for that?

LOVETT: I think he`s responsible for his part in it. I think that we -- look, no one knows. If anyone tells you the last person I`m interested in is the person who says they have all the answers because Democrats across this country, we`re in the wilderness and we need to figure out why.

I see a lot of people coming up with different reasons and anyone that says that`s the reason, it`s not true. Let`s say yes to all the reason, right? You know, you see this debate going on. Is it too much of a focus on diversity at the expense of the white working class which was motivated by racism, maybe a little. You say it`s about the fact that maybe we haven`t been too far to the left on economic policies? I`m open to that.

HAYES: Right.

LOVETT: You know, there is a lot of reasons wherein this position. And you know, one of the things --

HAYES: But here`s my question, how much does that connect to this particular president`s performance, his vision, the people around him because what I encounter when I encounter people from Obama world and I know a lot of them, I worked in the White House. They`re extremely loyal and proud of what they accomplished.

And there`s not a ton of -- you see the president`s interview with Axelrod, there`s not a lot of self-flagellation going on. Not that I`m saying there should be, but that`s the general posture.

LOVETT: I don`t know. Let`s take some time to figure out what`s going on here. Something`s going on here, Chris, and we got to figure it out. But you know, I don`t know. I think that it`s hard to Monday morning quarterback the policies. I think there`s a lot of people saying oh, it`s because Barack Obama didn`t do x, y or z on policy.

And I was in the White House for instance on Obamacare. Some people said it wasn`t generous enough in the subsidies. People didn`t understand how good it was doing for them. We should have had a new deal. Well, we did a massive stimulus that spent hundreds of billions of dollars on tax cuts, infrastructure, and all kinds of things. You know, we did this massive health care reform and it could have been more liberal and could have been more generous in subsidies, but we had a vice grip between this incredible pushback on the right and also this kind of timid middle of the Democratic majority in the Congress which, by the way, didn`t come from Barack Obama.

HAYES: Right, right, right.

LOVETT: It was an inheritance of the people that were elected in 2006 and before. You look back on what some of the things that Donald Trump is saying right now, we`ll spend so much money, it`s going to be bananas. And then you think back to the fact that there were all these decisions made. I think of Joe Lieberman stripping out a public option on a whim right before the bill is passed --

HAYES: Medicare by him which he briefly and walked back on. It`s funny because I was having a conversation with Trump voters when we did our town hall and one was telling me his experience with Obamacare, which was a legitimately bad experience because he essentially tried to retire early and get in the exchanges as a 61-year-old individual with health problems. And I thought to myself, man, there`s that moment where that could have happened.

LOVETT: I will never forgive Joe Lieberman. He didn`t just pull it back. He personally stripped it out of the bill at the last moment because remember, we needed 100 percent of Democrats on board because after an incredibly delicate dance for six months with Grassley and the main Republicans, we needed --

HAYES: So here`s my question. One way of looking at it is political capital is like a bank account you draw upon to make investments or purchases.

LOVETT: Sure.

HAYES: And Barack Obama had a lot of political capital and he sure as heck used it. There`s this tremendous line of accomplishments. Basically do you think the trade was worth it at the end?

LOVETT: Yes, I do.

HAYES: I mean, I think the president thinks the same thing.

LOVETT: I do.

HAYES: The question is how do you --

LOVETT: Let`s keep in mind we are in this position because we`re talking about roughly, what, 80,000 votes in three states. You know, Barack Obama says I could have won. You know who else could have won? Hillary Clinton.

HAYES: Which is why actually --

LOVETT: I`m not ready to throw out --

HAYES: I totally agree. That`s why I think it`s important to distinguish between this particular presidential election result and the stats up on the street because there`s something happening more broadly in the Democratic Party.

LOVETT: Absolutely.

HAYES: And then you have the 80,000 votes across three states which the Lord knows it could have been --

LOVETT: And I think actually what you should do is instead of thinking about it as national versus local, think of it as presidential versus everything else. We have an extremely good, strong coalition this close to winning.

HAYES: Six or seven majorities.

LOVETT: You go to the congressional elections and the state, we have a problem.

HAYES: All right, Jon Lovett, thanks for your time.

Up next, we`ll introduce you to the man who broke protocol more than 30 years ago to prevent Russia and America from launching a flurry of nuclear weapons and possibly annihilating humanity. That incredible story after the break. Do you know the story?

(COMMERCIAL BREAK)

HAYES: For the better part of the 20th Century during the Cold War the world stood on the precipice of nuclear annihilation and that was just a fact that everyone knew and lived with and had in front of their minds. Since the end of the Cold War, I think there`s a sense of that`s in the past and we`re fine now.

But the United States and Russia still have enough nuclear war heads to end life on this planet as we know it, which is important to remember. In fact, on Sunday, September 25th, 1983, we were basically one Soviet colonel away from a full scale nuclear disaster. Colonel Stanislav Petrov was working at a Soviet military installation 16 miles south of Moscow when a Soviet satellite and computer system set off an alarm indicating the United States had launched a nuclear missile against Moscow, which would strike in less than half an hour. Here`s part of that story reported by "Dateline" correspondent, Dennis Murphy, back in 2000.

(BEGIN VIDEOTAPE)

DENNIS MURPHY, "DATELINE" CORRESPONDENT (voice-over): Colonel Petrov was a cog in the chain of command but his read of the situation was still critical. He had all the incoming data. With the alarm blaring, his men saying it`s real, his computers saying it`s real, the colonel made a decision way beyond his pay grade, beyond even his authority. He decided it had to be a false alarm because it simply didn`t smell right to him.

UNIDENTIFIED MALE (through translator): this is not the way to start a war. Already it was that a war starts with a massive launch. So I made a decision that it was a false alarm. I picked up the phone and reported that to my commander.

MURPHY: And the more Petrov thought about it, the more he convinced himself that he was right. After all, he thought, why would the United States fire just one missile? The colonel was still confident as he advised the supreme command to stand down. But at the very moment he was on the phone, the flashing start screen went off again. The satellite was seeing more missiles, a U.S. salvo, one then another.

UNIDENTIFIED MALE (through translator): In a matter of two minutes, a third, fourth and fifth missile were reported launched.

MURPHY: Could this be it, the big one, the nightmare come true? What would he advise his commanders now? Colonel Petrov knew very well that the Soviet response might not be tit for tat, a city for a city.

The Russians could launch everything. The targets, American cities that his satellites passed over, New York, Washington, Chicago, Los Angeles. (on camera): All of them were targets of what would have been the Soviet response?

UNIDENTIFIED MALE (through translator): There`s no question about it. The aftermath in the United States would have been horrible.

(END VIDEOTAPE)

HAYES: Even after the Soviet computer system indicated those additional U.S. missile launches, Colonel Petrov stood his ground insisting to his superiors that the Soviet system had generated false information. His argument prevailed. And this one Soviet Russian figure is one of the great heroes literally of mankind.

Up next, Charlie Pierce on America`s current and future state of nuclear rationality.

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HAYES: President Obama and Japan`s Prime Minister Shinzo Abe appeared together today at Pearl Harbor to mark the Japanese attack there 75 years ago. Their joint appearance coming seven months after President Obama had traveled to Hiroshima, Japan, to honor those killed in the U.S. nuclear attack there in1945 and called for, quote, a world without nuclear weapons.

President-elect Donald Trump, by contrast argued in a tweet last week that, quote, "the United States must greatly strengthen and expand its nuclear capability such that -- until such time as the world comes to its senses regarding nukes."

Trump later telling MSNBC, quote, "let it be an arms race. We`ll outmatch them all at every pass and outlast them all." We don`t know who "them" is.

Trump`s comments about nuclear weapons have experts worried he could literally inadvertently trigger a catastrophe. Imagine we`re in a crisis. If he recklessly tweets, people could read these things in the worst possible light," nuclear non-proliferation expert Jeffrey Lewis told The Washington Post.

Adding "the North Koreans have a plan to use nuclear weapons very early in a conflict. They`re not going to wait around."

Joining me now, Charlie Pierce, writer at-large for Esquire.

And Charlie, you know, I have not thought as much about nuclear weapons in a long time as I have been thinking about them in the last few weeks.

CHARLIE PIERCE, ESQUIRE: Yeah. I am older than you are. So I was 9 years old and in grammar school during the Cuban Missile Crisis, which was my first general awareness of what nuclear weapons are and what they can do.

And at this point nuclear weapons are the genie that doesn`t fit into the bottle anymore. We have what, I think the total is 7,100, individual nuclear warheads. I don`t even want to know the destructive capabilities there. And we`re about to hand the launch orders over to a guy who can`t stay away from his phone for 15 minutes.

You`ve got, you know, India and Pakistan have them. That`s probably the most dangerous part of the world right now. So yeah, I think we`re all going to need a refresher course in what nuclear weapons are all about.

HAYES: You know, when I was re-watching that amazing Dateline bit, when they ran -- at 12 minutes, it`s a totally incredible story. And one of the things that comes through with the colonel is, you know, he`s basically making this calculation about rational action, right.

He looks around. There had been an airline that the Russians had downed, so there had been some international crisis. But largely he`s thinking to himself, this doesn`t make any sense. Like, there`s no reason the U.S. is starting a war right now. And it made me think of how important just a general assumption of predictability and rationality is in the kind of theoretical decisions made around nuclear weapons.

PIERCE: Yeah, I think if you go back and listen to the -- the tapes are available now. If you go back and listen to the tapes of the deliberations within the Kennedy administration during the Cuban missile crisis you can hear President John Kennedy making that same calculation in his head.

Why would he do this? Let`s figure out why he did thi, so we can figure a way to let him get out of what he`s done. Of course, Colonel Petrov had to do this with an alarm blaring in his ear and most of his superiors breathing down his neck and with about 15 seconds to make the call.

HAYES: We also have a situation in which it is now the tweeted and then reported to Mika Brzezinski stated policy I guess of the incoming president that we should have more nuclear weapons. We should have a quote, nuclear arms race.

And it`s a reminder to me of the sort of false sense of security I think a lot of people achieved around nuclear weapons at the end of the Cold War because people felt like they`ve been taken off hair trigger alert. And I envision it is going to be a much more front of mind political issue in the years to come.

PIERCE: Yeah. I think if you remember in the 1980s, there was another spate of nuclear terror both on the ground with the nuclear freeze movement and in popular culture with The Day After and War Games, you know there was this burst of nuclear Armageddon movies the way there were in the `60s with Dr. Strangelove and Failsafe and On the Beach. And that was because people didn`t trust Ronald Reagan with the button or Ronald Reagan was joking about bombing Russia in five minutes or whatever it was. And it turned out at Reykjavik Ronald Reagan almost gave away the store.

He almost said, OK, fine, we`ll get rid of all of them, to Mikhail Gorbachev.

So, I think whenever you have an unlikely president and god knows we have the unlikeliest president we`ve ever had coming into office on January 20, people`s minds get concentrated wonderfully over the fact that we have 7,100 nuclear weapons all of which are as near as we can tell functional.

HAYES: The point you make there about Reagan is an important one. Because the big sort of turning point in reduction of American stockpiles really does start with Reagan and has been essentially a bipartisan continuous drawdown and negotiated bilateral trajectory for American foreign policy across many different presidents from both parties.

PIERCE: Sure. And I think you also had, you know, you had a partner at least up until this point in Russia, you know, the other major nuclear power, you know, with a willingness to cooperate on it.

Now, I don`t know what`s going to happen with the current guy in there, but you know, it seems to -- we seems to as is the case with our president- elect seems to identify his national manhood with the number of warheads he has.

Boy, there`s some Freudian levels of that I don`t want to get into. But in any event, as you said right at the top, this is back on the front burner again.

HAYES: Yeah.

PIERCE: And anybody who -- I`ve lived long enough to have lived through it being on the front burner a couple of times. And like I said, it concentrates your mind wonderfully on what can happen if things spiral badly out of control.

HAYES: We should note that this president and the current Russian president did negotiate SALT II. SALT II was signed -- I don`t know if that was Medvedev actually, but it was essentially the Putin apparatus.

Charlie Pierce, writer at-large for Esquire. Thank you for your time. Happy holidays and happy birthday.

PIERCE: Thank you, sir.

HAYES: All right. Coming up, Trump claims credit for President Obama`s economy. We`ll look at what the president-elect is inheriting just ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Carrie Fisher, who plays the princess, nobody recognizes you?

CARRIE FISHER, ACTRESS: Just one guy who had seen it 12 times. And he...

UNIDENTIFIED MALE: What`s his reaction? He asked you out?

FISHER: Princess!

I first told him that I was surprised that 20th Century Fox (inaudible) had heard he`d seen it 12 times. And he got a free day with the princess and a bucket of popcorn, but he believed him.

(END VIDEO CLIP)

HAYES: Remembering Carrie Fisher and the many other icons we lost in 2016 after the break.

(COMMERCIAL BREAK)

HAYES: Way back in January 2009, the month of Barack Obama`s first inauguration, the country lost nearly 800,000 jobs in just those 31 days, this time around things are different, to say the least. Politico`s chief correspondent put it right after the election, President-elect Trump inherits an economy that is growing at 3.2 percent, record high stock and home prices, 4.9 percent unemployment and rising wages.

The unemployment rate has continued to fall, now at 4.6 percent. Yesterday, Donald Trump, not for first time in his life, claimed his inheritance as his own success story.

"The world was gloomy before I won," he tweeted. "There was no hope. Now the market`s up nearly 10 percent and Christmas spending is over a trillion dollars."

Now, it was a big holiday season. National Retail Federation says holiday spending is on track to reach a combined $656 billion in November and December. I suppose you could round that up to over a trillion dollars, but claiming credit for it is still a stretch.

There was one that study that said total 2016 holiday sales are expected to exceed $1 trillion but that was from September which is, of course, six weeks before the election.

Joining me now, Ben Jealous, senior fellow at the Center for American Progress, former president and CEO of the NAACP, Tera Dowdell, Democratic political strategist, Eric Boehlert, senior fellow at Media Matters.

You know, it is amazing to contrast the economy of President Obama to the baton that he got and the one he`s handing off.

But there`s a real question about how much it matters. Like does it matter basically what is happening on the ground macroeconomically or is it all just refracted through people`s partisan perception?

There`s this piece out about Elkhart (ph), Indiana, which is just interviewing people who the place is doing much better, but just they`re like yeah, we`re doing better, but it`s not just because of Barack Obama. Andy Ermis (ph) told me the news sources she consumes most are Fox News, Rush Limbaugh, local conservative radio show. She says the biggest signs are hope in the economy and the Carrier deal. He`s not even president yet, already helping the economy.

Do you think it will matter? Do you think what happens on the ground matters?

BEN JEALOUS, CENTER FOR AMERICAN PROGRESS: I think what happens on the ground absolutely matters. I think that the real test for Trump is whether he`s going to live up to the standards he set for himself. I mean, he said that he will only have two tests: will this create more jobs here and will it create better wages here?

And all signs show that this is a guy who is bringing in people who actually don`t think we should have a minimum wage. He said that he thinks wages are too high. So, he`s contradicted himself. But there are a lot of working people who voted for him believing he will create more and better jobs.

And now it will be up to him to do just that.

HAYES: But it`s also, Katherine Rampell had this piece today about what happens, you know, economies are cyclical. We have not had a recession in a long time because the last one was so deep and took so long to come out of, but you know presumably there will be a recession, and then you wonder how the sort of credit blame switch gets flipped.

TERA DOWDELL, DEMOCRATIC POLITICAL STRATEGIST: Well, I don`t wonder. I know exactly what Donald Trump is going to do, he`s going to blame President Obama. He`s going to take credit for the economy that President Obama presided over, the record success that`s occurred, the auto bailout, all these things that led to this economy improving. He`s going to take credit for it.

Where I think the problem is for Democrats is they need to fight back. They can`t let his messages and what he says go out and not push back against these messages. I`m saying Trump supporters, yes, they will believe whatever Trump says, most of them.

HAYES: OK, but part of the problem there, it strikes me, or has been the problem so far is the fact that this economy at a macro level looks much better than it was. And then you zoom in and there`s huge pockets of the country that are not doing very well and there`s all sort of distributional problems, and you end up position, which I think was a position the Democrats got caught in a little bit, this year being like telling people it`s OK.

ERIC BOEHLERT, SR. FELLOW, MEDIA MATTERS: Right. Just a quick, look at the economy Bill Clinton gave George W. Bush.

(CROSSTALK)

BOEHLERT: Democrats are very good at handing off robust economies and we cross our fingers, the last one was kind of driven into the ditch.

So, look, I think is going -- you get the sense he`s been surrounded by these sycophants for 30, 40 years. Every Trump organization idea that worked was his, right, he takes credit for it, every bad idea he blames someone else. So, as you said, of course he`s going to blame Obama. And taking credit now, he`s kind of buying into this fake news idea, right, he`s just going to create his own reality.

Every tweet, now, has like not one, it has like two or three lies per sentence. There are only 140 characters in his tweets about the economy are crazy.

DOWDELL: A lie left un...

BOEHLERT: That`s right. It`s up to Democrats...

DOWDELL: Good point, though. I get your point.

HAYES: So this becomes this question about this sort of propaganda battle.

BOEHLERT: Yes.

JEALOUS: Perception of reality.

HAYES: Perception of reality or like my gut instinct always about politics is that like gravity exists, and the gravity is are people`s lives getting better or worse in the aggregate.

And I don`t know if that`s true anymore, right, so it`s you take away health insurance from 20 million people and does gravity reassert itself, or do you have to win the messaging war?

JEALOUS: There is no doubt that he has the best propagandaists on the right working for him. That`s why Bannon is there. At the same time at some point it actually matters what happens to real people.

And the problem that the mainstream Democrats have right now, is they don`t -- we`ve done a good job of fixing this economy, what they don`t know how to do yet is how to explain to people how they`re going to fix the troubles that are coming.

In the Silicon Valley right now...

HAYES: Or the trouble that people feel right now.

JEALOUS: But all this tension over trade is really driven over by tension over what`s happening, people`s jobs are being replaced by technology.

HAYES: Right, right.

JAELOUS: And the only question in the Silicon Valley right now is whether 20 or 40 percent of jobs disappear in the next 10 or 20 years. And the party takes a lot of money from the Valley and has no -- frankly doesn`t have the -- the fortitude to really challenge folks and say let`s have a real conversation about the future of work in this country.

HAYES: And the thing I think about is, if this is what American politics looks like at 4 percent, 4.6 percent unemployment and 3.2 percent growth what does American politics look like...

JEALOUS: At 10 percent.

HAYES: Right, at 10 percent unemployment...

DOWDELL: I think at 20 percent you have a civil war in this country. I`ve always said that.

HAYES: Please, let`s hope not.

DOWDELL: People probably think that`s a very cynical statement to make, but I think that this country does not do well -- we have a history of not doing well when people feel that their backs are against the wall.

HAYES: Although one of the things that happened.

JEALOUS: There`s a different possibility which is that people actually start to come together around their situation.

And that`s what we were focused on in Bernie`s campaign.

HAYES: Right.

JEALOUS: And that -- and the future of our country.

DOWDELL: But that takes leadership.

JEALOUS: But the future of our country...

DOWDELL: And if a leader wants to divide using those things, those very issues to divide then there`s no pushback from other people, then you have...

JEALOUS: And that`s just it. And that`s -- is that we are ultimately going to have to choose whether we want an inclusive left-wing populist movement, or a fascist right-wing populist movement campaign.

HAYES: That`s really stark in 1930s sort of...

JEALOUS: Well, this is a 1920s kind of time that we`re in.

BOELHERT: I mean, politically, if Republicans control the House, the Senate, the White House, Supreme Court, every state legislature basically.

HAYES: They will own it.

BOELHERT: And it does go back to the messaging and the propaganda. And eventually, you can`t blame people who have gone for two or three years if unemployment suddenly spikes.

HAYES: One of the things I think we`ve seen, also, is that there are such deep structural issues and people feel like their not getting ahead or they feel like their lives are tough, that there`s a sort fo cycle of serial discontent against whoever is in power. And like they do own it now all in the Republican Party.

I`m going to ask you guys to stick around. Lots more to talk about. Don`t go anywhere at home.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FISHER: My father has gotten these very expensive hearing aids. You know, they fit right in - they`re like $8,000 apiece. So he put them in his pillox so that he would remember where they were.

UNIDENTIFIED MALE: No.

FISHER: Yes.

UNIDENTIFIED MALE: So he took them?

FISHER: He ate them the next morning.

UNIDENTIFIED MALE: Did he pass them?

FISHER: Well, all the next...

UNIDENTIFIED MALE: You have to listen.

(CROSSTALK)

HAYES: We were yelling into him and his ass so he could, you know, hear what we were saying. And my daughter...

ALEX BALDWIN, ACTOR: Now, he hears out of his ass rather than talks out of his ass.

FISHER: He hears out of his ass now, yeah.

(END VIDEO CLIP)

HAYES: The great Carrie Fisher once said, quote, if my life wasn`t funny it would just be true and that`s unacceptable. Fisher, remarkable screenwriter, remarkable screenwriter, best known perhaps as Princess Leia in the Star Wars movie, died this morning. She was 60 years old. She had suffered a heart attack on board a flight from London to L.A. on Friday. She was, of course, not the only huge star to pass away this week. On Christmas Day, singer George Michael died at his home in England

On Christmas Day singer George Michael died at his home in England at the age of 53. His manager told the Hollywood Reporter he died of heart failure.

2016 has undoubtedly been a brutal year for the artists we lost as well as some of the most towering and iconic figures in history.

Still with me to talk about some of this, Ben Jealous, Tera Dowdell, Eric Boehler,

All right just in music, just in music -- I mean, first of all, Carrie Fisher was an incredible person and an incredibly talented writer if you haven`t seen "Postcards from the Edge," also lived a crazy life -- L.A. Times 1956 headline of like when she was conceived she was on the front page.

No, seriously, like they`re expecting.

Bowie, just these folks, Bowie, Prince, Leonard Cohen in one year.

BOEHLERT: And George Michael.

HAYES: And George Michael, and then also Phife Dawg, people in my generation growing up in New York City, a Tribe Called Quest. I mean, it really was like -- obviously, every year you lose people, but this year felt like particularly music it felt like a particularly..

BOEHLERT: No, it`s going to happen as this generation ages Bowie, George Michael, Prince, all died young, but I mean, the iconic amount of iconic music, right, 35 top ten single just between those three right there, 300 million records worldwide, particularly in the `80s, right, they really dfined pop music in the 90s. And I think culturally for a very conservative cultural decade they really made a stamp, they really expanded and rewrote kind of the idea of masculinity in pop culture, what`s acceptable.

HAYES: That is a great point.

BOEHLTER: George Michael, Bowie and Prince, they were all doing their own thing, doing it on MTV, doing it on top 40 radio and opening a lot of eyes that were really closed in the `80s.

HAYES: Also this year one of the most important kind of cultural figures in the history of American sports and politics, Muhammad Ali, who it`s so funny because when you come to figures at different points in your own life, right, so I wasn`t around for all the big iconic Ali fights. I knew Ali as sort of this, almost as sort of Santa Claus kind of figure, right, like he had Parkinson`s and was beloved by everyone. And when he died this year, had a lot of occasion to go back and read so much and watch original footage of just how insanely polarizing he was.

JEALOUS: Look, I remember -- well, and liberating. For us as black men, he was the assurance that we could be men amongst men and the encouragement to go ahead and take the risk to do that. This is something who resisted the Vietnam War and gave up probably the most lucrative years of his life. And frankly, we can only see him as Santa Claus because Parkinson`s had taken his mouth from him.

But the one time that we met, you could see that sharpness in his eyes. There was no. What I wanted here is the tape that was running through his mind all those years, all the things he wanted to say and couldn`t say, because he could slice and dice.

HAYES: Because no cognitive impairment with Parkinson`s, we should be clear, it`s all -- it`s all sort of motor faculties.

JEALOUS: And he was probably the most searing critic of this country`s failings of his day.

HAYES: And probably the most popular one ever, right? Like I don`t think there was a figure who was both more popular and more radical at the same time.

DOWDELL: No.

JEALOUS: Than Muhammad Ali probably ever in the country`s history, right? I mean, the guy`s politics were way out there compared to the majority of Americans in, quote, the mainstream and he was also...

JEALOUS: In this country, wherever you go, north, south, east, west, Midwest, if you know that guy can kick your ass in any other...

HAYES: That`s something...

JEALOUS: From like a whole range who may not agree with your politics.

HAYES: The other big -- one the most consequential deaths this year is Antonin Scalia on the Supreme Court. I couldn`t even believe that was this year, too, because the year was so insane. That was a huge loss for the conservative legal movement, obviously one of the sort of most I would say admired conservative legal jurists certainly of his time and probably in a lnog time.

But also in the very consequential political vacancy that it left open.

DOWDELL: Exactly.

I mean, the context within which he passed...

HAYES: Exactly.

DOWDELL: I mean, in the middle of this presidential election. And so I think the notion that his passing didn`t play a role in this election, I think, that`s something that...

HAYES: No, it clearly became...

DOWDELL: But I feel there`s not been enough commentary around the impact that his passing played in this election.

HAYES: totally agree.

DOWDELL: It really -- I would argue that it mobilized the right more than it mobilized the left with the exception of maybe the Choice movement on the left, but beyond that, there was not this mobilization that you saw.

HAYES: I totally agree and I talked to voter after voter who were sort of Trump skeptical Republicans who ultimately the sort of reason they came home and fell in line was that...

BOEHLERT: Conservative Catholics in states like Pennsylvania.

HAYES: Ben Jealous, Tera Dowdell, Eric Boehlert, thanks for joining me. Have a great holiday, and a happy new year. If don`t see you again.

That is ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts right now with my friend Ari Melber in for Rachel. Good evening, Ari.

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