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All in with Chris Hayes, Transcript 4/27/2017

Guests: Jackie Speier, Ned Price, Nayyera Haq, Dan Donovan, Josh Barro

CHRIS MATTHEWS, MSNBC HARDBALL HOST:  And that`s HARDBALL for now.  Thanks for being with us.  "ALL IN" with Chris Hayes starts right now.



ELIJAH CUMMINGS, UNITED STATES CONGRESSMAN FROM MARYLAND:  I honestly do not understand why the White House is covering up for Michael Flynn.

HAYES:  A brand-new Michael Flynn probe is announced as the White House blames Obama?

SEAN SPICER, WHITE HOUSE PRESS SECRETARY:  All of that clearance was made by the Obama - during the Obama administration.

HAYES:  Tonight, new charges of a cover-up and what it means for the Trump- Russia investigation.

Then, the new push for Trumpcare runs into the same old trouble.

UNIDENTIFIED FEMALE:  Can you reassure people with pre-existing conditions that they won`t be worse off under your plan?

HAYES:  And as the President`s bluff gets called again, this time on NAFTA -

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA:  I said, I will hold on the termination.

HAYES:  Why just about everyone is grading the President`s first 100 days on a curve.

TRUMP:  There`s a very extreme emphasis placed on this 100 days, Joanie.

UNIDENTIFIED SPEAKER:  When ALL IN starts right now.


Happy to take your kid to work today and good evening from New York, I`m Chris Hayes.  How and why did President Trump allow a literal foreign agent into the situation room?  That continues to be the big question facing the Trump White House nearly 100 days into office.  And today, we found out there is a new investigation to get to the bottom of it.  That foreign agent, of course, is disgraced National Security Advisor Michael Flynn, seen here leading a "lock her up" chant at the Republican National Convention, who last month retroactively registered with the Justice Department as a foreign agent for his lobbying work on behalf of the Turkish government. 

Lobbying, he was doing for half a million dollars secretly last year while - and this is quite crucial - simultaneously advising Trump on foreign policy.  And this is just one of the bright red flags about Flynn.  He was also paid nearly $34,000 to speak at a Moscow gala celebrating Russian state TV in 2015.  That`s Flynn sitting next to Vladimir Putin and somewhat weirdly across from Jill Stein.  Plus of course, Flynn was fired in February from his post as National Security Adviser after just 24 days after allegedly lying about the content of secret conversations with the Russian Ambassador during the Presidential transition on the crucial day that sanctions against Russia were imposed. 

On Tuesday, Flynn was accused by lawmakers from both parties of potentially breaking federal law for having not disclosed payments from foreign governments including the Russians, a crime punishable by up to five years in prison.  And today, new developments, Democrat Elijah Cummings releasing documents showing that Flynn was specifically warned in2014 not to take money from foreign governments without advance permission and that he is now facing a formal investigation by the Pentagon for potentially violating the law.


CUMMINGS:  The Pentagon`s warning to General Flynn was bold, italicized, and could not have been clearer.  I don`t care what his lawyer says.  There is no such document saying that he requested permission to get money - to get the money or a document saying that he received it.


HAYES:  For the record, Flynn`s lawyer maintains Flynn did brief the Department of Defense about his paid speech in Russia, and his presser today, Cummings also hit the White House for refusing to release documents related to Flynn requested by the House Oversight Committee, documents the White House maintains it does not have.


CUMMINGS:  I honestly do not understand why the White House is covering up for Michael Flynn.  I don`t get it.  After the President fired him for lying, they should be bending over backwards to help us.  It does not make any sense, and it makes the American people think the White House has something to hide.


HAYES:  Sean Spicer was peppered with questions about Flynn at the White House press briefing today, and he kept returning to a singular defense - blame President Obama.


SPICER:  When General Flynn came into the White House, he had an active security clearance that was issued during the Obama administration with all of the information that`s being discussed.

UNIDENTIFIED MALE:  General Flynn came in, and he walked through the door with just the clearance that was conducted by the Obama administration?  That doesn`t make any sense.

SPICER:  Sure it does.  Why would you re-run a background check on someone who is the Head of the Department of the Defense Intelligence Agency, that had and did maintain a high-level security clearance?


HAYES:  Putting aside the fact the Trump administration apparently felt it didn`t need to do anything to vet its own National Security Adviser, which is frankly crazy, Flynn was fired in 2014 as the head of the DIA and while he maintained a security clearance, former NSA Attorney Susan Hennessy tweeted today that Spicer`s claims are false.  That there`s always re- investigation after someone is out of access as Flynn was.  And the issue of who Trump has brought into the government goes far beyond Michael Flynn or for that matter.  People like Steve Bannon or Jared Kushner - remember this man, Sebastian Gorka, Top Counterterrorism Adviser to President Donald Trump.


SEBASTIAN GORKA, TRUMP`S TOP COUNTERTERRORISM ADVISER:  You know, the message I have, it`s a very simple one.  It`s a bumper sticker, Sean.  The era of the pajama boy is over January 20th, and the alpha males are back.


HAYES:  This is Gorka wearing the honorary medal of the Hungarian NATIONALIST organization linked to the Nazis, which he wore to Trump`s inauguration.  A Jewish newspaper, The Forward reported that Gorka worked with openly racist and anti-Semitic groups and public figures in Hungary.  Gorka for his part maintains he was unaware of their affiliations.  Gorka has little in the way of qualifications to work on counterterrorism in the White House.  And a remarkable new report in BuzzFeed finds that in 2002, he was denied security clearance to work in the Hungarian parliament with Hungarian counter-intelligence citing his repeated claims of contact with British Intelligence.  Joining me now, Congresswoman Jackie Speier of California, a member of the House Intelligence Committee.  And Congresswoman, let`s start at the sort of top level.  Do you trust the process in the White House in terms of who they are bringing into the White House after what we`ve seen with Flynn and Gorka?

JACKIE SPEIER, UNITED STATES CONGRESSWOMAN FROM CALIFORNIA: I think that we all have to wonder whether anyone has been properly screened, and it goes to the core values of our country to have persons that we can trust in these positions of ultimate trust.  And Mr. Gorka is a great example of someone in his own country calling him a snake oil salesman, that he was not given a security clearance in Hungary and lost for mayor.  So he comes trotting into the Trump administration as a counterterrorism expert when really what he was, was an editor at Breitbart.  He was one of Steve Bannon`s voices.

HAYES:  What about the White House`s contention on the case of Flynn that basically they had no reason to do anything over and above a security clearance review that had happened years earlier?

SPEIER:  Well, that`s just false.  And to somehow lay that on President Obama is really preposterous.  President Obama fired him, and he had a responsibility to have him properly researched and checked out, and the fact that he has violated the law - this is a General in the UNITED STATES Army who was told not just once, but twice in letters from the Department of Defense that he cannot receive money from a foreign source without first getting the consent of the Army.  A consent doesn`t come orally, it comes in a form of a letter.  He received no consent, and it`s interesting to point out that after all of this comes out, he is now seeking immunity to speak to the Intelligence Committees of both the House and Senate. 

Well, he realizes - and I think his attorney realizes that he has violated the law.  I have joined with a number of colleagues, both republican and democrat, we`ve now seeking the Secretary of the Army to do what he has the authority to do, which is to investigate fully and then to recall all the money that he has received from these foreign sources by taking that money out of his pension because U.S. military officers who retire can always be called back to active duty.  And that is why it is incumbent on them to provide information about any interest in seeking foreign-source monies and why they need to get consent first from the Department of Defense.

HAYES:  You mentioned the reporting - it`s been reporting.  I don`t know if you have a more direct source.  You may since you sit on one of the relevant committees, the House Intelligence Committee about his offer of immunity, an offer I think that`s been rejected at least by Richard Burr in the Senate.  I don`t know if there`s a formal rejection from the House side.  But of course, Flynn is a particularly important figure because the thing that got him fired was a conversation, a series of conversations with Ambassador Kislyak of the Russians on the day of the sanctions, conversations he apparently lied about to everyone in the government.  And I want to read you what the President has to say about the Russia story.  "The Russia is a faux story.  It`s made up.  Democrats lost an election.  They used the Russia story as a way - as best they can - as a way of justifying how they lost the election.  It`s a fake story."  Are you doing that?  Are you using the Russia story as a means of essentially exculpating the sins and flaws of democrats in the last election?

SPEIER:  You know, sometimes I think we`re living in parallel universes.  We have had Director Comey say in an open hearing that the - that the FBI was investigating whether or not Trump operatives were coordinating with the Russians in trying to intervene in our election.  That`s what they`re investigating right now.  We already have an unclassified document that makes the case that the Russians did, in fact, intervene in our elections.  We had a President who took forever to finally agree that, yes, maybe the Russians did try to intervene.  I mean, he`s reluctant to ever call out Vladimir Putin, whether or not he is sending ships along our coast to spy on us or buzzing our planes, he is very reluctant to call out President Putin.  So you got to ask the question, why?

HAYES:  Congresswoman Jackie Speier, thanks for your time tonight.

SPEIER:  Sure.

HAYES:  And joining me now, Nayyera Haq, former White House Senior Director and State Department Spokesperson and Ned Price, former CIA Analyst, Special Assistant to President Obama, Spokesperson, Senior Director of the National Security Council.  Ned, let me start with you on this question of vetting.  My understanding is that there are a bunch of vets that folks would go to - go through to go into the White House.  There`s an FBI background check that is part of the clearance process.  There`s also just vetting that the staff does.  Is it surprising to you that apparently General Flynn walked in the door with, as far as we can tell, zero?

NED PRICE, PRESIDENT OBAMA FORMER SPECIAL ASSISTANT:  Well, it`s absolutely surprising, Chris.  And frankly, I don`t believe it.  Look, I think you have to stop looking at these revelations about Michael Flynn in isolation.  When you take a step back and you look at the totality of what we`ve learned about this individual in recent weeks, a very dark portrait emerges.  We`ve had these potential violations of the Logan Act, the 18th Century Statute that makes it a crime to subvert U.S. policy.  We`ve had his failure to register as a foreign agent, his lying to the vice President, and potentially even to FBI investigators.  And then this strange kidnapping plot.  When he was working as a foreign agent on behalf of the Turkish government, to abduct a U.S.-based Turkish cleric in the Poconos.  So, look, when you add all of this up, is it possible that Michael Flynn just forgot or omitted this payment and this disclosure in his vetting and security clearance forms?  Sure, it`s possible.  But is it likely?  Absolutely not.

HAYES:  But there`s also - Nayyera, it also strikes me there`s an affirmative - I mean, I remember the beginning of the Obama administration watching this sort of the wheels of the background check process sort of come alive.  And it was remarkable how much work went into it, how it slowed the process, but how important everyone involved in that process took it as central to making sure the people that are going to be in the White House every day have been vetted, that their resumes have been checked, they are who they say they are, they`ve done what they say they`ve done.  And I just have to wonder if that basic thing has happened here.

NAYYERA HAQ, FORMER WHITE HOUSE SENIOR DIRECTOR:  It doesn`t seem to be.  And actually, it points to what we`ve all suspected that this is an administration that was simply not prepared to run government.  You don`t have people in key positions at the Pentagon, at the State Department, and clearly, vetting wasn`t done for senior people who are in the White House.  The process alone is pretty straightforward.  Your security clearance does not go with you when you leave government.  So if he left in August 2014, even if he re-upped it for a maximum of two years, that is August 2016, well into the campaign, plenty of time to say, OK, if we`re looking at you to be the National Security Adviser, advising the President on everything from sanctions to human rights issues, that he should be re-investigated, declare all of his payments. 

That should have been part of the conversation then.  So what this points to is that the White House not only neglected the background briefing process, they probably gave him access to classified information he should not have had access to at this point.  That is probably why you have Sean Spicer at the podium bending over backwards to throw this on politically on President Obama because this points to serious White House negligence of the lock him up type.

HAYES:  Well, and I would note the mishandling of classified information, that phrase has a kind of particular bite to it given the last campaign.  You`re nodding your head, Ned.  I mean, Michael Flynn is a person who said, if I did one tenth, I think was the line, one tenth of what Hillary Clinton did, referring to her e-mail server, I would be in jail.  He was sitting in intelligence briefings - I mean, remember, he was in those briefings once the major parties had their nominees.  They get versions of the Presidential daily brief if they want it.  He was in those briefings while he was taking money from the Turkish government to advocate for Turkish interests in ways presumably he could have traded on that information to further their interest.

PRICE:  Absolutely, Chris.  And it sounds like frankly, he did.  If the stories about his involvement in this kidnapping plot against Fethullah G�len, this Turkish-based cleric in the Poconos are true, it certainly suggests he was swayed by this Turkish money to take a policy position.  He is also, as National Security Adviser designate, he was a key point person on the Raqqa campaign.  And as you know, Chris, the Turks have objected vociferously to any plans to arm the Kurds -

HAYES:  Right.

PRICE:  - which Michael Flynn by all accounts objected to as well.  Did he do that on policy ground -

HAYES:  That is - that is a great point.  This incredibly, incredibly fraught diplomatic negotiation about the Kurds and the YPG, who have been one of the best anti-ISIS fighting forces in existence, possibly the best, that the Turkish are very suspicious of, thinks their terrorist, etcetera.  He`s in the middle of all that Nayyera, while this is all going on and into the new administration.

HAQ:  Right.  He`s not able to look at any of these issues, whether it`s the counterterrorism challenge in Turkey or the - certainly the issues going on with Russia and Crimea and elsewhere, their undermining of even the U.S. election and U.S. democracy.  Michael Flynn is not able to look at that objectively when he is taking money from those governments.  That is the entire point of having a FARA sign-up and also having -

HAYES:  Right.

HAQ:  - background investigations, so that you bring people into the process who are going to be helping the American public and putting the American public first.  Flynn was compromised.  I mean, maybe he at some point, he thought that confuse the Russian engagement with what was supposed to be happening with the campaign, but certainly compromised to be National Security Adviser.

HAYES:  Nayyera Haq and Ned Price, thanks to you both.

Still, to come, will President Trump`s first 100 days in office be capped off with another failed attempt to repeal and replace ObamaCare?  Late word tonight that Trumpcare is in trouble again after this two-minute break.



UNIDENTIFIED FEMALE:  Can you reassure people with pre-existing conditions that they won`t be worse off under your plan?

PAUL RYAN, UNITED STATES REPRESENTATIVES SPEAKER:  People will be better off with pre-existing conditions under our plan.  That`s the whole goal here.


HAYES:  It`s almost impossible - it is impossible to see how that`s true.  Since this latest iteration of Trumpcare would allow states to get rid of the ObamaCare provision that prevents insurance companies from charging higher prices for people with complex health problems, which include pre- existing conditions.  And perhaps this is why republicans are having a hard time building support for their revamped plan to repeal and replace ObamaCare. 

According to The Huffington Post, Matt Fuller, Mario Diaz-Balart who was a yes on the previous AHCA is now wavering saying quote, "at this stage, I`m not seeing much that I like."  Representative Mike Coffman who supported the health care bill that got pulled from the floor last month told a reporter from Politico that "if the vote on AHCA were today, he`d vote no."  Representative Ryan Costello who voted in committee to push forward the last round of this health care bill told The Hill, "he would be voting no because of pre-existing conditions."  The latest whip count from NBC News has 17 no votes. 

According to The Hill, which is running this headline, new ObamaCare repeal bill on life support, at least 21 republicans have said they would vote no on the revised GOP health care bill.  Since no democrats are expected to vote for this measure, this means republicans can only afford one more no vote if The Hill is correct before this bill suffers the same fate as the last one.  It appears that some republican lawmakers are worried that what Congresswoman Nancy Pelosi had to say today might be true.


NANCY PELOSI, UNITED STATES CONGRESSWOMAN FROM CALIFORNIA:  If they vote on it, the minute they cast that vote, they put doo-doo on their shoe, tattoo on their forehead, and they have to explain it to their children.  At some point they`re going to have to explain it to their children, what did they do to make America sick again.  And then, say they pass it, even worse, they really have to be accountable for it.  And it`s largely unpassable in the Senate, so they walk the plank for nothing.  Thank you, Mr. President.


HAYES:  Joining me now, Congressman Dan Donovan, Republican from New York.  And Congressman, is that an apt description of the situation?

DAN DONOVAN, UNITED STATES CONGRESSMAN FROM NEW YORK:  You know, I don`t know, Chris.  I`m not privy to the whip vote.  I was a no on the original proposal to replace the Affordable Care Act.  The amendment that was proposed this week, the McArthur-Meadows amendment that dealt with and allowing states to opt out of a wave from providing essential benefits to people and the pre-existing condition clause that you just spoke of earlier didn`t address the concerns I had with the original proposal.  So I remain a no vote.

HAYES:  So do you think - here`s one thing that Chris Collins I think said this.  And I believe he`s from New York state.  And his point was, look, hey, I don`t like this, but it`s not going to affect my people.  We`re New York.  New York never going to go for these state-based waivers to get rid of these protections and you know, if the House Freedom Caucus and the folks in Alabama want to screw their people with pre-existing conditions, so be it.  Why don`t you have the same logic?

DONOVAN:  Well, because I represent New York City.  One of the amendments in the manager`s amendment for the original proposal, which was proposed by Representative Collins, exempted his county and 56 other counties in New York for their responsibility for paying their portion of Medicaid.

HAYES:  Yes.  That was - that was a cute one.

DONOVAN:  Yes, by exempting them, Chris, it put the burden on New York City, the people I represent.  And you know, even before that, that`s a strong reason for my no vote.  But in addition, you know, the tax credits that were supposed to help families who are paying $20,000 in insurance premiums and have $6,000 deductibles and astronomical co-payments, you know, we`re offering tax credits to those people to help them buy insurance.  Those tax credits are not available to the people in New York.  It`s illegal to use tax credits to support policies that will provide abortion procedures, and in New York, we require every insurance -

HAYES:  Right.

DONOVAN:  - company to provide abortion procedures.  So the help that we were going to give those hard-working people who don`t get their insurance from their employer or who don`t qualify for government assistance, who have to buy insurance themselves, we weren`t providing them the relief that they deserve.

HAYES:  Wait a second.  I don`t think I figured this out policy-wise before.  So what you`re saying is that there`s actually this kind of train crash for blue states that - or democratic states or pro-choice states that have these requirements for abortion coverage, and the current tax to the republican bill in terms of the applicability of the subsidies.

DONOVAN:  Yes, the tax credits are unusable.  So that and the fact that one of the third things that -

HAYES:  Wait.  How is anyone - how is any republican in California and New York going to vote for this thing?

DONOVAN:  I don`t know.  I can only account for myself, Chris.  And the other thing is, I mean, the current law now on the Affordable Care Act allows insurance companies to charge seniors three times as much as they charge a young, healthy person.  Their proposal that`s before us now allows those insurance companies to charge a senior five times as much as they charge a young, healthy person at a time in most seniors` lives when they`re on a limited income, and they probably need health care more than they did in their younger years.  The CBO report came out and said a senior citizen living on a fixed income of $26,000 may be liable to have to pay up to $14,000 in premium for their health care.  I mean that`s just unsustainable.

HAYES:  I want to ask you about one provision in there, which is that republican lawmakers - there`s an exemption.  And the managers - in the - in the current version of the bill text, an exemption to keep the popular ObamaCare provisions for members of Congress and their staffs, who of course have to be on the ACA because of a republican amendment that democrats took back during ACA.  Do you think that`s defensible?

DONOVAN:  Not at all.  I mean, if we`re going to repeal or replace, we have to be subjected to everything that the American public`s going to be.

HAYES:  Yes.  We have Rep. Tom McArthur after that information became public said they`re going to do something to fix it.  So we`ll see if that happens.  Congressman Dan Donovan, always a pleasure.  Thank you.

DONOVAN:  Good to be with you, Chris.

HAYES:  All right, ahead, an emerging theme from the Trump administration.  A lot of blusters followed by a swift retreat.  Now, President Trump with a major change of course on NAFTA because of a couple friendly phone calls.  That story coming up.


HAYES:  The strange new era of Donald Trump`s Presidency, you never know just who is watching your cable news show.  As The Washington Post reported a few days ago, sometimes at night the President hate watches cable shows critical of him while chatting on the phone with friends.  Now, there`s nothing to hate here obviously, but a few nights ago we did report on the 22,000 retired coal miners who will lose their health benefits by the end of this weekend unless Congress takes action as part of the government funding bill.  And there`s been bipartisan support for long-term fix, but Senate Majority Leader Mitch McConnell from Kentucky all places has been standing in the way.  And despite touting his support for coal miners both during the campaign and since taking office, the President, who likes to comment on everything from you know, special elections to ratings to The Apprentice, declined to weigh in.  Now, I spoke on Monday with Ohio Senator Sherrod Brown, proponent of the benefits deal who said the miners have taken notice.


SHERROD BROWN, UNITED STATES SENATOR FROM OHIO:  They are just perplexed.  A number of coal miners voted for candidate Trump.  They heard him talk about giving - about bringing coal jobs back, and they are simply saying government should do what it`s done since the days of Harry Truman, and that is, provide health insurance for coal mine retirees and the widows of coal miners.


HAYES:  The very next day after my interview with Senator Brown, the Senate Majority Leader announced he changed his mind.  "I`m in favor of a permanent fix on miner`s healthcare.  It`s my hope that that will be included in the final spending package."  McConnell told reporters on Tuesday.  And this morning on Twitter, the President himself finally spoke up, though in typical fashion he got things completely backwards, quote, "I want to help our miners while the democrats are blocking their health care."  As we`ve noted, democrats like Sherrod Brown have been pushing to fund miners` benefits for months, but we`re glad the President finally appears to be paying some attention.

Something else he`s paying attention to - of a little late, is how important trade deals are to our neighbors` allies in Canada and Mexico, and that is next.


HAYES:  The Trump White House keeps repeating what has by now come to be its signature pattern: a blustery threat to make some big destabilizing move, triggering outrage and alarm, and then eventually walking it back with an attempt to save face.

The latest face saving measures may have been the most spectacular yet of Donald Trump`s young presidency.  It was reported yesterday that the president was considering an executive order, co-written by Steve Bannon, to withdraw the U.S. from the North America Free Trade Agreement known as NAFTA. Now, the exiting the trade deal with Canada and Mexico would have a huge impact on the American economy.  The reaction was swift with Republican lawmakers urging the White House to hold off on its plans.

By last night after phone calls to the leaders of Canada and Mexico, the president had changed his mind.  Today he explained what happened.


TRUMP:  I was going to terminate NAFTA as of two or three days from now.  The president of Mexico, who I have a very, very good relationship, called me and alsothe prime minister of Canada, who I have a very good relationship.  And I like both of these gentlemen very much.  They called me, and they said rather than terminating NAFTA, could you please renegotiate.  I like them very much.  I respect their countries very much.  The relationship is very special, and I said, I will hold on the termination.  Let`s see if we can make it a fair deal.


HAYES:  I`m joined now by Republican strategist and MSNBC political Steve Schmidt.  And steve, something tells me if you were in a bar with Pena Nieto and Trudeau having a few beers, their versions of the sequence of events would be a little different.


Look, this is a $500 billion a year trading relationship with Mexico, it`s upwards of nearly $1 trillion with Canada.  For 35 states, the number one trading partner is Canada.  For the ones that it`s not, in the number two, and the rest, the trading relationship is with Mexico.

This would have plunged the American economy into a recession.  It would have tanked the stock market.  There are millions and millions and millions of American jobs dependent on the free flow of trade and goods across the borders in North America.  And I think increasingly, Chris, you know, we talk about competitiveness over the next decade, the decade after that, and we look hemispherically.

North America from a creativity perspective, from an innovation perspective, this is the most competitive region in the world.

HAYES:  Right.

SCHMIDT:  And I think that Donald Trump is bumping up against reality here, and good because this would have been terrible for the country and the American workers.

HAYES:  The reason I want to talk to you about this is precisely on this, because I remember actually Barack Obama and Hillary Clinton both promised to renegotiate NAFTA or said they were going to renegotiate NAFTA in 2008.  You`ve got the situation where if you poll Americans on these trade deals, they`re quite skeptical of them.  There`s also good macro economic data to show they have had an affect in rising inequality, middle income wage stagnation, which is not to say they haven`t been a boon overall.

But I wonder how much this sort of sense that we`re seeing across the entire sort of west, right, of people feel like they`re not in control and the globalists are -- how much does this add fuel to the fire when Donald Trump runs on I`m going to get us out of and renegotiate NAFTA, and then he gets in and says, well, it would tank the stock market?

Like is there something we should be uncomfortable with about democratically about that?

SCHMIDT:  Well, I think when Steve Bannon and people talk about the quote, unquote, globalists, you stop and pause on that.  I`m in Los Angeles tonight.  I could get on a plane and fly to Abu Dhabi and be there in 16-and-a-half hours.  And it`s not that there`s no alternative to a globalized  economy, it`s crack pot talk to suggest otherwise. 

You know, we talk about manufacturing jobs.  You know, we make two times whatwe made in 1984 in this country.  We do it with one-third the number of workers.  It`s innovation.  It`s technology.  It is automation, robots that are displacing these blue collar workers out across - not these trade deals.

HAYES:  Right.  But then the question becomes like how do you -- we`re seeing this really interesting change in public opinion, and one of the things that`s happened is we saw huge changes in Republicans` views on trade.  And it was unclear to me whether Trump was a kind of leader of that or a follower, right, that there was a base that was really trade skeptical that wasn`t being played to or whether the way that partisan politics work is that people adopt their leader`s views.

What do you think about where the Republican Party, the Republican base is on this right now?

SCHMIDT:  Look, the Republican Party has become a grievance party in large measure.  It`s an aggrieved party.  You listen to talk radio.  You listen to some conservative cable networks, it`s all grievance.  Someone is doing something to you, someone is doing something bad to you.  And so that NAFTA is bad, that trade deals are bad, that we`re getting screwed by these other countries fits in nicely to this grievance narrative.

But, you know, now that you`re the president of the United States, there`s this tractor pull of, you know, reality, you know, a gravitational force that says, hey, Mr. President, you can dump NAFTA, but the consequences are going to be such.

And I think still in the congress, though the members will be scared of Republican voters on this issue, overwhelmingly these members support free trade agreements.

HAYES:  I thought it was just so interesting to watch this sort of Canada part of the dispute ratchet up because it almost felt like a reductio ad absurdum (ph) of this whole thing.  You know, it was like one thing it was like, wait, how are we now in a war of words with Canada?  That was not where I saw all this going during the great populist uprising in America.

SCHMIDT:  I was in Canada last week when the dairy kerfuffle broke out.  And I said I had no idea you`re the North Korea of milk.  And to episode 92, right?  War with Canada.

HAYES:  Steve Schmidt, thanks for joining us.

SCHMIDT:  You bet.  Good to be with you.

HAYES:  Still ahead, as White House staff figures out how to deal with a president that`s learning on the job, so are his fellow world leaders, and they`re already using it to their advantage.

Plus, when you`re 11 stars short of an American flag, possibly my favorite Thing One, Thing Two ever and that`s a high bar starts after the break.


HAYES:  All right.  Thing One tonight, every politician campaigns with American flags, but Donald Trump really loves to show how much he loves the American flag.  On multiple occasions on the campaign trail, he literally hugged the flag onstage.  And for Trump if you`re not physically wrapping yourself in the stars and stripes, it`s a reflection on your patriotism.

For instance, he spent an entire week criticizing Hillary Clinton for not having flags onstage at  the convention.  She did, of course, but that`s not the point.


HAYES:  We had American flags.  You know, they forgot to put them on.

They didn`t have flag representation.  Not good.

They had no American flags up on the stage.

Did you notice on the stage there was no flag?

It was a disgrace.

We had a lot of flags.

They don`t really want the flag, but they ran up.

They ran up with two very small little flags, one that we saw.

They forgot for two days to put up the American flag.  You know, minor details, right?


HAYES:  Right.  Minor details.

Yesterday President Trump tweeted out a happy birthday to the first lady, and of course he included a flag on the graphic.  But there`s just one big problem with that flag, there aren`t enough stars, not even close, and it`s not the first time.  That`s Thing Two in 60 seconds.



TRUMP:  We salute one flag, and that is the American flag.  And we`re going to make sure the American flag gets the respect it deserves, all right?


HAYES:  That was popular with the flag guy in the back there.

President Trump tweeted out a happy birthday to the first lady yesterday with an American flag  at the bottom.  But that flag only has 39 stars.  It`s 11 stars short of an American flag.  In fact, this is even weirder, historically there has never even been an official American flag with 39 stars, because North Dakota and South Dakota joined the union on the same day, becoming the 39th and 40th states.

And no big deal, but this is also not the first time this White House has used the unofficial 39-star flag.  The president tweeted this photo collage last month with a 39-star flag at the bottom.  And whoever has this particular flag clip art saved on their computer also appears to have helped the meticulously produced video the president tweeted out last week, which ends with that very same flag.





SEN. MITCH MCCONNELL, (R) KENTUCKY:  I think he`s learning the job.  I think President Trump is learning the job.  And some of the things that were said during the campaign, I  think he now knows are simply - aren`t the way things ought to be.


HAYES:  Nearly 100 days in, it`s not entirely clear what President Trump is learning.  What is very clear is that everyone working around him is beginning to learn how to deal with him.

According to Politico, White House aides have figured out that it`s best not to present Trump with too many competing options when it comes to matters of policy or strategy.  Instead, the way to win Trump over, they say, is to present him a single preferred course of action, then walk him through  what the outcome could be and especially how it will play in the press.

And it`s not just White House aides, foreign leaders are also beginning to figure out how to deal with President Trump.  For example, when it comes to Trump`s bluster on NAFTA, one Mexican legislator put it this way: it seems like he`s sitting at a poker table bluffing rather than making serious decisions.  In front of a bluffer, you always have to maintain a firm and dignified position.

And when it came to Trump`s campaign promise to label China a currency manipulator, and as promised before meeting with the Chinese president, that, quote, if China is not going to solve North Korea we will he backed off both of those positions as soon as he actually met President Xi Jinping.  "After listening for ten minutes, I realized it`s not so easy.  I felt pretty strongly they had tremendous power over North Korea," Trump said, "but it`s not what you think."

And face time with German Chancellor Angela Merkel reportedly helped clear up another Trump misunderstanding about the fundamentals of trading with countries in the European Union.  The Independent Newspaper, citing an unnamed senior German official, ten times Trump asked Ms. Merkel if he could negotiate a trade deal with Germany.  Every time she replied, you can`t do a trade deal with Germany, only the EU.

On the 11th refusal, Trump finally got the message, oh, we`ll do a deal with Europe then.

Then there`s NATO, which Trump called obsolete until this month when he said it`s not obsolete after meeting with the NATO secretary general.  In an interview with the Associated Press, he explained his change of heart saying that a cable news show was the, quote, "first time I was ever asked about NATO, because I wasn`t in government.  People don`t go around asking about NATO if I`m building a building in Manhattan, right?" Adding, "so they asked me about NATO, and I said NATO is obsolete not knowing much about NATO."

Grading on a curve in the Trump presidency, next.


HAYES:  If you were to imagine the title of the book chronicling President Trump`s his first 100 days, what would it be called?  A Twitter user named Daniel Lynn did just that.  It caught our eye today.  The key is you have to keep updating it.  Version one, I Alone Can Fix It by Donald J. Trump, then Nobody Knew it Could be so Complicated, second edition.  Then, After Listening for 10 Minutes I Realized it`s not so Easy, third edition.  And finally People Don`t Go Around Asking About NATO if I`m building a Building in Manhattan, Right, so they Ask Me About NATO and I Said NATO is Obsolete Not Knowing Much About NATO, fourth edition, Donald J. Trump.

All actual quotes.

Joining me now, Joy Reid, host of A.M. Joy.  Josh Barro, senior editor at Business Insider.

So, I want to make a case that I sort of believe and sort of don`t, but I think is a case you can make, which is all these about about faces, it`s better than the alternative.  I mean, I really mean this.  If he had bad, ignorant views and then comes into contact with people saying it`s not so easy, and then he adjusts his views, that`s better than the alternative.

JOSH BARRO, BUSINESS INSIDER:  It`s better, but there are a couple problems with it.  Like one is it seems like the key person who educated him on the complicatedness of the North Korea situation was the president of China.

HAYES:  Who has a stake in the particular version of the story.

BARRO:  Right which is not necessarily the one that aligns directly with American interests.

HAYES:  Right.  This is the thing I worry about with everything, right, tax - like who is telling him about, explaining something about tax policy to him or the health care bill to him.  Is it an insurance exec?  Like, who is doing that?  They`re going to be able - have tremendous power to be like, actually, this is the way it works.

JOY REID, MSNBC:  And it`s not even just who`s explained to him, it`s who explaining to him last, because he could also agree with the first person to explain something to him and then say, oh, OK that is my understanding now my understanding of tax policy or insurance policy.  And then the next person comes in, they`re nicer to him, and then he prefers what they think.

BARRO:  This happened with the health care bill where it was basically put front of him and they were like that, oh, this is good bill and then he endorses it and talks about how terrific it is and it`s going to be great, and you`re going to be so happy when we pass it.  And the reporting was that - when the bill started to go sideways, he was asking people in meetings, is this really a good bill?  And it was that he was told it was a good bill by the people who were the supposed experts, but the Republican Party is full of people who claim to know about health care and don`t know actually know anything.  And there are a number of issues where there`s that risk that the people who ends up listening to are just not going to be very smart.

REID:  And then there`s other issue that people can also use Trump`s plain ignorance to empower themselves.

HAYES:  Right.  This is big fear.

REID:  Worry that Steve Bannon placed himself on the National Security Council principles committee and Trump didn`t even know really that he had done it or why.  That`s the worry is that you could have people who want - have bad sort of motives and who can use Trump`s ignorance for their personal benefit.

HAYES:  And that`s particularly true in the case of the kinds of interactions he ran on being the best at, which are fraught negotiations with adversarial or powers that have different interests, right.  I mean, it does seem like there`s this - that foreign leaders are learning how to manage Donald Trump.  That really does seem like a - even the whole kind of thing today with Pena Nieto and Trudeau about like -- they`re letting me - they begged to renegotiate, not get out of it.  You wonder how much they now have this profile built up of like, you flatter him and you`ll get your way.

BARRO:  Right.  And again that`s concerning.  Like, Justin Trudeau is a smart guy who I think is mostly well intentioned, but if he`s the person explaining trade to Trump, he`s getting trade explanation from the Canadian perspective and we want to be going into the deal making you know a positive, friendly deal but one that is made from the American perspective.  So, the ironic thing is that Trump, who is so noisy about America first.

HAYES:  Exactly.  This is the amazing irony of this whole thing was a whole idea was the narrative is you had these idiot leaders for so long who don`t know how to get you a good deal.

I mean, literally these people don`t know how to get - the terrible leaders.  We`ve gotten our butts kick by Japan, by China, by everyone.  I`m going to go in.  And now he`s getting there like, oh, I didn`t know all this and he`s the naive.  He ran as the hard bitten cynical one, and he`s now stepping in as the native...

REID:  And it turns out that the most sort of salient quality about Donald Trump is his neediness, that whoever is kind to him and nice to him or flattering to him can get what they want.  But the secondary problem, and this is a real emoluments problem is that the second way to get to Trump besides being really nice to him is to do business with him so that you could essentially know that his business interests, his pecuniary interests, his hotels that he wants to buy, Ivanka`s pecuniary interests, becomes the reason he does policy, not the interests of the United States.

HAYES:  Right.  And you wonder, that`s another question about like what people are learning.  You wonder how that`s happening too.

REID:  Check into his hotel.

HAYES: What the Trump - every Trump son meeting that`s happened, who is - we don`t know.  Let`s just be clear.  We have no idea who has been showing up in those meetings, telling them what for what reason.

BARRO:  Although, on the flip side of this, where this is better than it could have been, I think some of the people he`s listening to are better than who I would have expected them to be.  The replacement of Michael Flynn at the National Security Council with General McMaster is a positive development.

I think some of the - even some of the economic policy choices.  You know, Mnuchin is not the ideal person to be Treasury secretary, but you think of some of the other people who are on that list who might have been in this position, Mnuchin seems to be. 

HAYES:  You sure, he`s the Treasury secretary, right, because...

BARRO:  I know, they said he`s the commerce secretary in a release yesterday.

HAYES:  Well, I want to - this is a small thing.  I don`t care about little petty - you know, the 39 star thing.  It`s funny.

But there`s the brown M&Ms idea, right.  That the brown M&Ms idea is that, you know, Van Halen notoriously had no brown M&Ms in their contract because they were doing these very complicated shows.  They would walk into the green room.  If they saw brown M&Ms they know - the people who set it up didn`t read the contract carefully and the wiring might not be right, right.

So, it`s like they called Mnuchin the commerce secretary.  They`re tweeting out 39 star flags.  Today we`re saying we`re going to get rid of the 401(k) preferential treatment and they had to run it back.

It`s like - you do start to worry are they getting better and at what point do these basic basic issues of spell checking and proofreading indicate there are far bigger things happening.

REID:  And here`s the thing is that every administration that is an outsider, a person that was a governor or state senator or something becomes president that hasn`t been in Washington very long has this issue of a learning curve to learn how Washington works.

Here`s the problem, normally what they do to solve this is they hire a chief of staff that knows something about the way this all works.  So, even...

HAYES:  That`s a great point.

Right, because we think of Reince Preibus, because he`s so familiar.  It`s like, oh, but he`s never worked in a White House.

BARRO:  He`s never worked in government.  He`s a political operative.  And I think he was a decently good political operative, but he doesn`t have relevant experience.

HAYES:  That thing you say about a learning curve, like I have experience of that firsthand, like I came into cable news being like, oh, particularly prime time like, all that received wisdom is ridiculous.  And then it`s like, oh, well, it`s actually, it`s not all ridiculous.  You sort of learn.

REID:  That`s right.

HAYES:  And that is a thing that happens I think for everyone.  An outsider who comes in, it`s like sifting through what`s the conventional wisdom that`s true and what can we reject.  But that also take - like, I was benefited by the people I was working with, people who had done prime time cable news.

REID:  And then here`s the other thing, you talked about the people who are learning Trump and who now know not that they don`t necessarily have to fear or respect him, that`s the same as on Capitol Hill, by the way.  Because normally part of what that chief of staff is doing is negotiating with those hostile forces, including in your own party, who don`t necessarily mean you`re good.  They don`t even have someone can do that.

BARRO:  Yeah.  Id i worry about this in situations where the White House doesn`t have the default option to do nothing, because they`re screwing up a bunch of stuff...

HAYES:  Right.  That`s such a great point.

BARRO:  They`re screwing up a bunch of stuff on tax reform.  And the likely outcome is that we won`t have tax reform.

HAYES:  Right, that`s right.

BARRO:  But there will be situations where the White House has to do something for the benefit of America.

HAYES:  Yeah, that`s exactly right.

At one level, I am heartened by the fact that it seems like all different parties, whether from Capitol Hill to the citizens to the media to the foreign governments have decided that`s just the guy at the end of the bar talking.  No, seriously, like you don`t have to - he`s just going to say stuff.  It`s fine.  Don`t worry about it.

At a certain point that isn`t going to work.  And that`s the thing that I actually worry about us adjusting this way.

Josh Barro and Joy Reid will be hosting the 11th-hour tonight.  Any time Joy Reid hosts anything, I watch it and you should to.

That is All In for this evening.  The Rachel Maddow Show starts right now.  Good evening, Rachel.