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Trump makes surprise visit. TRANSCRIPT: 12/26/2018, All In w. Chris Hayes.

Guests: David Cicilline, Barbara Boxer, Ro Khanna

Show: ALL IN with CHRIS HAYES Date: December 26, 2018 Guest: David Cicilline, Barbara Boxer, Ro Khanna

STEVE KORNACKI, NBC NEWS NATIONAL POLITICAL CORRESPONDENT: And as the Democratic field takes shape in the coming months, who will emerge. And will the ultimate winner prove to be anywhere near as polarizing as Clinton? The polling now says that no Dem -- that no Democratic prospects are, how much will that change? Two years into the Trump presidency, Trump so far has not built on the support he had as a candidate. If he`s going to have any chance in 2020, he will need a Democratic opponent who`s even less popular.

That`s HARDBALL for now. Thank you for being with us. "ALL IN" with Chris Hayes starts right now.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We`re no longer the suckers, folks. And people are looking at us as suckers.

HAYES: A surprise Christmas trip to Iraq.

TRUMP: If you had seen what we had to go through with the docking of plane with all windows closed.

HAYES: Tonight, the President`s shaky holiday from the ongoing shutdown.

TRUMP: Whatever it takes. I mean, we got to have a wall.

HAYES: To the death of another child in U.S. custody.

UNIDENTIFIED MALE: This is extraordinarily rare occurrence.

HAYES: To the volatile stock market.

UNIDENTIFIED MALE: When markets are already jittery about the economic circumstances, the last thing they need to see is shakiness from Washington.

HAYES: To whatever it was Steve Mnuchin was doing in his phone calls to banks.

UNIDENTIFIED MALE: It`s very normal for the Treasury Secretary to call people up and say hey, how`s Christmas looking?

HAYES: When ALL IN starts right now.


HAYES: Good evening from New York, I`m Chris Hayes. Every day the President sounds more and more like a mob boss. That`s not right. The President has been working in the White House where he has been stewing over what has been happening to him. There is a lot of bad news up and down the roster for the President as this year ends.

He is right now in Ramstein Air Force Air Base in Germany where he is touchdown refueling after his very first stop in a war zone visiting Iraq - - troops in Iraq. He was there during a secret mission that was revealed today greeting the troops in Iraq. He stayed for three hours and did not visit the prime minister of Iraq before leaving.

That trip came at the tail end of would have been a tough four days for the President who was clearly in a big cranky mood, tweeting at one point. I am all alone. Poor me in the White House. And -- waiting for the Democrats to come back and make a deal on desperately needed border security. There were certainly plenty of issues to keep poor Trump in a bad mood. The government shutdown is now in its fifth day. There is no border wall. And Mexico won`t be paying for it.

His Secretary of Defense Jim Mattis resigned with a letter that politely torched the President`s worldview. Special envoy Brett McGurk, a top diplomat in the fight against Isis quit after the President`s abrupt decision to pull out of Syria. Stock markets have whipsawed back and forth as investors try to figure out what exactly is going on with the President insulting the head of the Federal Reserve and Treasury Secretary Steve Mnuchin calling banks to reassure everyone that nothing`s wrong, everything`s fine, no problems at all.

That instead spooked investors wondering what exactly prompted such an extreme measure from Mnuchin. And of course, there`s the ongoing Mueller investigation with its growing list of indictment and flipped Trump cronies.

So the President is a little well cranky and it`s unlikely to get better for him in the New Year. Democrats take power in the House of Representatives in just eight days and Nancy Pelosi the almost certain next Speaker of the House is making it pretty clear she`s not going to give the President his wall telling USA Today, "First of all, the fact that he says we`re going to build a wall with cement and Mexico is going to pay for it, well, he`s already backed off of the cement. Now he`s down to I think a beaded curtain or something. I`m not sure where he is.

Here with me now Congressman David Cicilline of Rhode Island, Co-Chairman the House Democratic Policy and Communications Committee. Day five of the shutdown, Congressman. What`s the game plan here?

REP. DAVID CICILLINE (D), RHODE ISLAND: Well, I think as incoming Speaker Pelosi said when Democrats take back the House on January 3rd, we will move swiftly to reopen the government. I think there was a deal already. 100 Senators, 100 to zero voted for a continuing resolution that would have passed the House. The President changed his mind I think in part because of all the things you just described in an effort to distract from a very bad couple of weeks.

The President shut the government down and that`s what he`s talking about. But Democrat is going to make sure the government reopens as soon as we come back into power on January 3rd.

HAYES: Well, so just to be clear. That`s on the first-day pass -- basically, the piece of legislation was already passed by the Senate by unanimous voice vote and then basically dare McConnell to not bring it up?

CICILLINE: Correct. Because they`ve already voted for it. So I think they`re going to be --

HAYES: Well, they got to do it again, right? It`s a new Congress.

CICILLINE: That`s right. No, that`s right. But I`m saying they`ve already voted so they`re going to be in a tough position to suddenly not vote for it. So I think the government will have been closed for several weeks by that point, two weeks. And the reality is there are more than 400,000 employees who are working and not getting paid. We need to reopen the government. We can have lots of disagreement about a bunch of other policies but we need to open the government and we`re going to vote to open it and then the Senate will do the same I expect, and then it`s up to the President.

HAYES: We should note of course that some of those people who are not working are subcontractors, people who do security, janitorial services, staff cafeterias who probably won`t be paid, right? I mean, there`s a bunch of people who are just out of luck.

CICILLINE: Well, I mean, I think we have to make sure that we do everything to insist that everyone gets paid. I mean, it`s outrageous that anyone will be expected to work and not get paid especially during the holidays.

HAYES: There`s an interesting story today about Elijah Cummings who will be the incoming chair of the Oversight Committee sending 51 letters to the White House requesting compliance with document requests. These are -- as far as I can understand, these are a variety of areas. things on the Trump Organization, foreign governments, Hurricane Maria, family separation, border stuff, and they`re all already outstanding document requests that had existed. This is reiterating now with the power of an incoming majority. What do you think is going to happen on that front?

CICILLINE: Well, I mean, I think it`s important to remember Democrats ran on an agenda articulating that we`re fighting for the people of this country, not for this special interest, not for the powerful lobbyists, and we committed to driving down health care costs, particularly the cost of prescription drugs, raising family incomes by rebuilding the infrastructures in our country and taking on the pervasive corruption in Washington.

We`re going to deliver on those promises. At the same time, people expect us to do oversight and to hold this administration accountable. In the Judiciary Committee, we have over 500 pages that really summarize our efforts in the last two years to do oversight that were blocked by the Republicans. I know it`s the same in the Oversight Committee. And I think there -- you know, we are going to do our job. We`re going to hold this administration accountable.

Elijah Cummings wants to make sure that a bunch of documents are preserved so we can do that work in form by data and material and documents so that we can do the oversight that the Constitution requires us to do.

HAYES: You`re going to be taking over a branch of Congress. You`re going to be ascending into the majority with the government shutdown and an immediate fight. I wonder how you, your colleagues are sort of thinking about gaming out the strategy of this House Majority which is walking into day one into essentially a kind of staring contest with the President.

CICILLINE: Well, I think, the way we`re walking into it, and the leader Pelosi has said this, we will promptly open the government. We understand their first responsibility we have is to open the government, to force the President to sign legislation or let it go forward without his signature that opens the government again so that we can continue to move forward on the agenda that we really articulate during this campaign. The issues that matter to the American people and at the same time do our oversight responses which our Republican colleagues have neglected almost entirely in the last two years.

You know, this is part of our work. The American people gave us the House because they want us to move forward on the issues that matter in their lives and they want to be certain that we`re doing our job and holding this administration accountable, and we intend to do that.

HAYES: All right, Congressman David Cicilline, thanks for being here. I want to bring a Barbara Boxer, former Democratic Senator from the state of California and Ben Rhodes former Deputy National Security Adviser under President Obama and an MSNBC Political Analyst. Ben, the President making his first stop ever to U.S. troops in a combat zone for Christmas. He`s right now in a refueling stop in Germany. This coming after that remarkable letter from Mattis. And then the President over that holiday weekend abruptly firing the man essentially and terminating him early. What do you think the consequences of that action are?

BEN RHODES, MSNBC POLITICAL ANALYST: Well, you know, I think what it`s done, Chris, is it`s given every other country around the world complete whiplash. Because what we`ve had is for a period of weeks of foreign policy articulated by the National Security Advisor and the Secretary of State about us staying in Syria. And staying there somewhat indefinitely and even expanding the mission to include countering Iran.

And then you have the President of the United of the United States pulling the rug out from under his own policy. So if your allies with the United States and you`ve been in the counter Isis fight, you have no idea which way the United States is going. If you are people who fought with us on the ground in Syria like the Kurdish fighters who`ve really done most of the groundwork against Isis, you`ve been hung out to dry and you are threatened by Turkish troops coming into your territory.

So again, even if you support as I do some phase drawdown of U.S. forces in Syria, the way this President went about doing it breeds chaos. Nobody knows who to call to find out what the position the United States is. We don`t have -- we have an outgoing Defense Secretary and we have an outgoing envoy who ran the counter Isis coalition that Trump said he never even met, right? So I think it just creates an environment of chaos around American foreign policy.

HAYES: Senator Boxer, you`ve been through a number of legislative battles and stair downs over things like budgets and the like. I wonder how much you think -- how the incentives to cooperate or not cooperate operate in this kind of environment.

BARBARA BOXER (D), FORMER SENATOR, CALIFORNIA: In terms of this shutdown, I`ll tell you what I think has to happen. We have to see some of the President`s constituencies call him and tell him what it really is like when the government shuts down and there`s small business whether it`s a restaurant or a local store or a hotel near Yosemite Park suddenly stops generating business.

I remember one government shutdown, the pain was so great not only on these workers. Many of whom earned $30,000, $40,000. They live paycheck to paycheck and they have decided they want to work for America. That`s what they do. In all kinds of capacities whether it`s the Justice Department, whether it`s TSA, and they keep us safe and they`re not getting paid. And that`s one part of the problem.

But again the private sector that Donald Trump prides himself on, they have to call them up right now if they`re listening to me and tell him, don`t do this. Don`t do what you did with tariffs. They`re hurting business as well and get this done.

But Nancy Pelosi is going to come in with the Democrats. She`s going to vote to open up the government. The Senate is going to get that bill. If they don`t take it up, if Mitch doesn`t take it up, Mitch McConnell, there`s going to be hell to pay in the country. And they can`t afford to sit on it.

HAYES: Well, that -- I mean, that is a I think astute observation of the dynamics, but McConnell, Ben, I mean, we watched him do this with Merrick Garland and he was happy to have the hell to pay on his shoulders. He -- McConnell has no constituency to who he answer other than I think the Republican donor class and the President essentially. So the question is like, does pressure work anymore on these -- on the operators in this sort of game?

BOXER: I think it does. I think with the Democrats coming in after this amazing blue wave, tsunami, whatever you call it. You know, doing the right thing, doing the grown-up thing, all eyes are going to be on the Senate. And Mitch McConnell`s running again and there are already lots of funds that are called ditch Mitch.

You know, he is an astute politician and he`s got to get this done. We`ve got to open up the government and do everything else that we have to do.

HAYES: So what do you think of that, Ben?

RHODES: Well, I have to say that Mitch McConnell is not someone who`s ever seemed to be particularly disturbed by hypocrisy. The man literally could go out one day and say he will never do something and the next day he will do the opposite, if that`s what he believes again his political constituencies demand. And as you said that really is a slice of donors and President Trump.

I hope Senator Boxer is right. We miss Senator Boxer in the Senate. My concern is again, there`s a kind of a nihilism to what Trump is doing. He feels cornered, Chris. You know, he has these scandals closing in. He`s not going to pass any legislation with the Democratic House.

And my concern is that you know, he`s kind of burns down the House with him as we go, ratcheting up trade wars, ratcheting up the dysfunction of our foreign policy, playing politics with government shutdown and in the paychecks of hundreds of thousands of Americans. That`s what I think should worry us. And I think the one thing that could possibly get through to him is the looming economic counter.

HAYES: Right.

RHODES: It`s tanking stock market, the negative economic indicators, all these actions they have a real consequence and they`re going to make his difficult reelection that much harder.

HAYES: You know, Senator Boxer you can -- you can see he`s spooked by that reporting suggest that he`s saying it in public. He`s berating the Fed chair and maybe threatening to fire him which is not something that happens that often. Do you think fundamentally there`s danger as we go into this next year with the President in the kind of mind state he`s in and with the objective conditions in the world in the economy changing so rapidly?

BOXER: Sure there`s danger. And I`ll tell you if you`re Kurdish, you`re already in a lot of trouble. They did the fighting for us. If you`re an American that has a 401(k), this man, you don`t know what he`s going to tweet, you don`t know what he`s going to do. And you know the irony? Janet Yellen, she was a great Fed chair, she always kept interest rates low for a reason. She was concerned about jobs and the economy. He takes her off there because he says he doesn`t look the part.

HAYES: She`s too short.

BOXER: I got very upset under five feet here because she`s short. He says, she takes her -- he puts this guy I don`t know him and then he rips the guy to shreds which is unheard of. It is unethical, it has never been done, and I`ll tell you Wall Street where I worked a thousand years ago, Wall Street, the thing they hate the most is this kind of chaos. This up and down and down and up. And you know, hey a thousand points up, that`s great. Is it going to go down a thousand points tomorrow?

This is not good for the country. So I think the last point I`d make about Donald Trump is he does look at his approval ratings. They are not good. And when Nancy Pelosi gets in there and the Democrats act like grown-ups and I`ll tell you, Mitch is going to be in a tough spot. Let them pass it. Let them send the reopening of the government. It could be short-term to the President and let them override his veto. If he`s still listening to President Rush Limbaugh, oh I mean radio talk show, Rush Limbaugh.

HAYES: Can you imagine how -- 2019 starting with a presidential override to open the government would be something. Barbara Boxer and Ben Rhodes, thank you both for your time.

RHODES: Thanks, Chris.

HAYES: Here with the legal perspective, Nick Akerman, former assistant Special Watergate Prosecutor and MSNBC Legal Analyst. I wanted to talk to you partly because I was watching -- well, I deleted Twitter off my phone for the holidays. A little gift I gave myself. But to the extent that I was -- I was sort of reading back in today like the President sort of alone stewing in this kind of you know, empty White House. When you read the inside accounts of sort of as Nixon`s presidency is going down the tubes and the sort of alienation increasing isolation, you know, he also was drinking a lot which this President doesn`t do, there was a kind of -- I felt sort of profound resonance.

NICK AKERMAN, MSNBC LEGAL ANALYST: Yes -- no, very much the same. I mean, Nixon really kept to himself. He wound up sitting in front of the fire and just kind of ruminating to the point where his Secretary of Defense was so concerned that there was an alert to go out to not take any of Nixon`s orders if he were to ask them to basically release any of the ICBMs, the missiles against Russia.

HAYES: Yes. This is an actual thing that happened.

AKERMAN: Right, this really happened. And people were really concerned. I mean, he has got the entire wall falling in on him at this point. He`s got three cooperating witnesses, three people who were very close to him. Michael Flynn, his former security adviser, Gates who was the deputy to Manafort and was running the campaign after Manafort left, and then you`ve also got Michael Cohen his personal lawyer. I mean, I don`t think we ever had any witnesses in Watergate that were that close to Nixon.

I mean, John Dean who was the lawyer in the White House didn`t really have the closeness to Nixon that any of these three people have.

HAYES: Part of what I imagine is sort of torturous for him and others around him is the secrecy of the proceedings in terms of Robert Mueller`s movements but also this sort of every day is there going to be something and every day it just keeps going longer and longer. What do you think about the time frame we`ve watched?

AKERMAN: I think the time frame actually if you look at it it`s been about 19 months since Robert Mueller`s been in the office. I mean it`s absolutely remarkable. He`s had 36 indictments or guilty pleas which is quite remarkable. He`s basically put together two pieces of the Russian investigation on the Russian side with respect to the break-in at the Democratic National Committee and the use of social media.

I mean, right now the only question is you know what Americans if any were involved in those conspiracies. You`ve got this thing with this Miss Butina who is now cooperating them and you`ve got this issue out there of whether or not the Russians had put money in through the NRA to fund the Trump campaign. I mean, that`s got to be worrying them.

And then on top of it all, you`ve got the Democrats coming into Congress, and before Robert Mueller does anything, he is going to want all of those statements released from the House Intelligence Committee because we know that Don Jr. was in there. We know that Jared Kushner was in there. And I think they`re going to be looking at those pretty closely before they start bringing indictments. They want to know what all of these people said, and none of this is good news for the White House.

HAYES: Yes. And they`ve already nailed Michael Cohen on a guilty plea of lying to Congress. We`ll see if there are more in the offing. Nick Akerman, thank you very much.

Up next, as the President makes his first trip to visit the troops, we discovered just how he dodged the Vietnam war himself. The mystery of Trump`s bone spurs is solved. That`s next.


HAYES: President Trump`s first ever visit with American troops stationed abroad in a conflict zone came in the wake of the stunning resignation of his Defense Secretary Jim Mattis and the resignation of Brett McGurk, the special U.S. envoy in the fight against Isis. Today Trump defended his decision to pull U.S. forces from Syria and said he no plans to pull troops out of Iraq though he did not meet with the Iraqi Prime Minister during his visit.

A surprise trip to a war zone also coincided with a remarkable report in the New York Times today that details one of the ways Donald Trump dodged military service back during the era of the draft in Vietnam in 1968. He`s sketchy diagnosis of bone spurs which kept him from being drafted. According to The Times, a podiatrist in Queens New York who rented his office from you`ll never guess, Trump`s dad, made the diagnosis "as a courtesy to the elder Mr. Trump."

Joining me now, Congressman Ro Khanna of California, Member the House Armed Services Committee. Congressman, you`re on the oversight committee for armed services. The President making his first trip to troops in a combat zone today where he reiterated the idea that troops could go into Syria from Iraq if need be in the future and that Erdogan has things covered as far as Syria goes. What do you think?

REP. RO KHANNA (D), CALIFORNIA: Well, I obviously don`t agree with those details, but any conversation needs to start with this basic fact. The war in Syria was illegal under U.S. law and under international law. Now, Democrats, many of us criticized President Trump when he had the serious strengths a few months ago. We have to be consistent. We have to be principled and say that the withdrawal is compliant with our law and necessary. The way he went about that withdrawal was not right.

We should have pressured Erdogan to at least have some agreement not to invade Syria and protect the Kurds. We shouldn`t have agreed to a patriot missile sale with them. We should have informed SDF that we were getting out. But we should be consistent about applauding the withdrawal of our forces.

HAYES: What do you think about the departure of Mattis and McGurk? The President saying the following: Brett McGurk who of course was -- had been a hold up of the Obama administration who I do not know was appointed by President Obama 2015. Was supposed to leave in February but he just resigned prior to leaving. Grandstander? The fake news is making such a big deal about this nothing event.

KHANNA: Well, that`s very concerning that the President who don`t know who he was. But on Mattis, look, Mattis is someone who has served this country well. But let`s not be ambiguous about who Mattis was. Obama demoted Mattis or forced him to retire because Mattis was a hawk about getting into war in Iran. Mattis has been largely responsible for the war in Yemen. So I don`t think that we should sort of look at Mattis` departure as some earth-shattering event.

I think the problem has been that there hasn`t been a coordinated effort of what`s going to fill the vacuum up of withdrawal. You should have had as Ben Rhodes your previous guest has said a six-month plan. There should have been details and coordination with our allies. There should have been more pressure on Erdogan. What we need is someone like George Shultz or Bill Perry or George Mitchell negotiating things and hopefully, he`ll find someone better than Mattis to replace him.

HAYES: You just mentioned the Saudi led war in Yemen which is backed by the U.S. both in terms of equipment and arms sales and even some targeting assistance was given them. Mattis was a huge defender. You have been one of the people in Congress working most doggedly to try to end that. There is a successful war powers resolution that passed the Senate. The House, Paul Ryan killed it in the sewer rules maneuver. What happens in the new year and the Democratic Congress on the Yemen front?

KHANNA: We`re going to pass it. Nancy Pelosi is going to bring up a vote in January. It`s going to pass the House with Republican support and it`s going to overwhelmingly pass the Senate. I hope the President will sign it. There is a humanitarian catastrophe in Yemen. Kids are dying every ten minutes. We need to stop the bombing and we need to allow food and medicine. We`re going to make that a huge priority as soon as we`re back in January.

HAYES: Do you have concerns about the fact there`s an acting now who`s going to take over a Department of Defense was the deputy of Jim Mattis. But throughout this administration, there`s a real staffing issue. And you when you think about what would happen in the -- in the context of an emergency, like a genuine national emergency, does it worry you at all?

KHANNA: It does that. And we saw the consequences of that in this withdrawal in Syria. The details on these things actually matter. Even if the instincts and gut is right to withdraw troops, it matters how you`re negotiating with Erdogan. It matters what you`re telling SDF. It matters if you can get Iran and Russia to the table with Turkey and have a complicated negotiation. And that`s why usually presidents who succeed in negotiation have huge teams with them and they have people who work with them with expertise. And that`s what`s been missing in this administration.

HAYES: All right, Congressman Ro Khanna, thanks for taking some time. Wild swings in the stock market as the administration indulges some truly bizarre behavior. The President versus economics, next.


HAYES: Markets rally today, up 1,000 points in the Dow, though not enough to make up for a month`s long slide. And President Trump`s erratic behavior and his attacks on Federal Reserve Chairman Jerome Powell were followed by the bizarre decision by Treasury Secretary Steve Mnuchin to issue an unprompted statement, basically trying to reassure people people not on a financial crisis, which sort of came out of nowhere and made people wonder.

Well, key economic numbers, like the unemployment rate, are still looking good, as well as holiday sales, there is a lot of, a ton, of anxiety in markets and among the economic observers about where we`re headed.

To help make sense of it all, let`s bring in Jonathan Chait, columnist for New York Magazine, Alexis Goldstein, former senior policy analyst for the advocacy group Americans for Financial Reform.

Alexis, I`ll start with you with the minutiae Treasury puts out this one paragraph statement, that`s basically like, look, we just checked, everything`s fine, everyone`s got enough liquidity. Basically, we`re not going to have a financial crisis. It`s like a waiter coming to you in the middle of a meal in a restaurant being like we want to assure you there`s no glass anywhere in any of these dishes you`re eating, just so you know it`s totally fine.

Like, what the heck was that?

ALEXIS GOLDSTEIN, AMERICANS FOR FINANCIAL REFORM: Yeah, I mean, the first rule of markets is when there`s already a panic you don`t tell everybody to relax. It`s sort of like markets 101.

But I think, you know, it`s sort of funny to laugh at Mnuchin, but he`s sort of your classic Wall Street guy. This is someone who came from Goldman Sachs. He ran this thing called One West. He foreclosed on 50,000 people. And I would actually argue that some of this market jitters and volatility is like the direct byproduct of the policy that all of these Wall Street bankers that Trump chose to fill his administration with have been making, right.

They deregulated a huge portion of the Dodd-Frank Act, which was passed after the last crisis, you know, Janet Yellen, the former fed chair, has been warning about debt markets overheating for corporate debt. Like, they`ve been making policy choices to let Wall Street run wild, and when Wall Street runs wild they get reckless and that`s dangerous and it can lead to crises.

HAYES: That`s a good point. We have, of course, seen this before.

John, you wrote a piece about the sort of -- the economy and the president`s political fortunes, I thought it was good, because one thing I think that we overlook is how just strong from a macroeconomic sense the economy has been under Trump because of the sort of extended recovery. And when people say, well, nothing matters, he still has 40 percent approval, the economy does matter for how people think about the politics of the presidency.

JONATHAN CHAIT, NEW YORK MAGAZINE: Yeah, the economy does matter and the point I was trying to make is you can make an argument for what Trump is saying about interest rates. You can make a decent case that we need to keep interest rates low because the economy is soft and has a lot of room to grow, but if you make that case it totally undermines everything he`s been saying in public about how this is the greatest economy ever.

So it`s kind of clear he doesn`t believe what he`s been saying for the last two years.

HAYES: Right. The idea being if the economy and the recovery are so robust, that then it can take a few -- it can take a few fed rate hikes because it`s strong and it will keep going, but if you`re freaking about that it shows that you actually think the economy is actually kind of weak and vulnerable.

CHAIT: Right.

Now, of course, we can`t put it past Trump to hold totally contradictory thoughts inside his head, but I just wanted to point out these things don`t make any sense together.

GOLDSTEIN: But the other thing, if I may, is that Janet Yellen would have been a lot less likely to raise rates than Jay Powell. And Trump made the choice to not reappoint Janet Yellen, because The Washington Post reported he thought she was too short. She`s 5`3", and therefore he wanted someone taller, like that`s what The Washington Post reported.

So, he wanted someone who wasn`t going to raise rates he could have stuck with Janet Yellen, but he didn`t.

HAYES: It`s honestly one of the most insane and delicious ironies in a sort of macabre sense of this era, that the first woman to ever run the fed reserve board, who did an incredibly good job, I think, by and large, who actually is sort of sympathetic to the dovish inclinations that Trump naturally has, gets canned because she`s, quote, "too short," replaced with a guy, who, John, Trump is now railing against in public in a way that, again, to play if Obama had done game, is the kind of like bright line towards dictatorship that conservatives tend to freak out about.

CHAIT: Right. And reportedly he`s telling people that Powell is going to turn him into a Herbert Hoover, that`s how concerned he is about the economy, which seems a little overheated to me, but it would be kind of ironic if he was hoisted by his own petard of sexism, firing the beloved and universally praised federal reserve chairman for not being tall enough, you know, maybe there`s some binders on high shelves at the federal reserve that he didn`t think she could reach, or something. You know, obviously a very sexist assessment of her fine work.

I don`t really know if she would be doing a different job, but at least he could wonder, maybe, if he has the self-awareness of maybe he made a mistake.

HAYES: You wonder, too, Alexis -- I mean, obviously the sort of political economy of the federal reserve is very complicated. There`s this idea of independence and the importance of that, and sometimes I think that`s been taken way too far to the detriment of the real economy.

This is sort of uncharted waters, the current dynamic between the sitting president of the United States and the fed chair at this moment.

GOLDSTEIN: I think so. But I also think, look, the president has a bully pulpit. So long as he doesn`t fire Chair Powell I think he`s allowed to mouth off on Twitter about it.

I think what`s sort of karmic in a way about this is that like Trump and Wall Street are the same. You know, and Wall Street was all in favor of backing Mnuchin, and you know they wanted to get their tax cut, they wanted to get their millionaire and billionaire tax cut, they wanted to get their deregulation, but if you find someone who`s ignorant enough to give you the entire store, you`re also going to have to deal with the crazy that comes with it, and like Trump and Wall Street they are the same, right, they blame everyone for their mistakes. They ask for everything. They organize their own demise, because they ask for too much. They have no self-restraint. You know, they can`t self-regulate, and, you know, basically they`re the same. They deserve each other.

And the sad thing is, you know, we`re all along for the ride.

HAYES: Well, there`s never been a cliche more true and more in evidence this year than the buy on the rumor, sell on the news cliche about Wall Street, where it`s like they bought on the rumor of that tax cut and boy are they selling on the news after it gets its way into the economy.

Jonathan Chait and lexis Goldstein, thank you.

CHAIT: Thank you.

GOLDSTEIN: Thanks, Chris.

HAYES: Next up, Democrats are promising to hold the administration accountable as a second child dies in U.S. custody at the border. Congresswoman Nanette Barragan is with me next.


HAYES: For the second time this month, a child has died in the custody of U.S. Customs and Border Protection. The agency reported yesterday an 8-year-old boy from Guatemala died shortly before midnight on December 24 at Gerald`s Champion Regional Medical Center in Alamogordo, New Mexico.

CBP has not released the boy`s name, but House Democrats have identified him as Felipe Alonzo-Gomez. And in a timeline released yesterday, CBP laid out what it said happened.

Last Tuesday, Felipe and his father were apprehended about three miles west of the port of entry in El Paso. Then on Christmas Eve, a number of days later, the boy had, quote, "glossy eyes about 9:00 a.m." He was hospitalized, diagnosed with a common cold. Despite a 103 degree fever, he was released and transported to a temporary holding facility. And that night, around 10:00, he appeared lethargic. In route back to the hospital, he began to vomit and lost consciousness. Less than two hours later he was pronounced dead.

He death coming just three weeks after a 7-year-old girl from Guatemala named Jakeline Caal died at a hospital in El Paso after being detained by border agents herself.

Maryland Democrat Steny Hoyer who is poised to become House majority leader announced plans for hearings into both these deaths and the conditions under which of thousands of children are being held.

Joining me now is Congresswoman Nanette Barragan, Democrat of California, who was last on the program when she was down on the border in the port of entry down in San Ysidro, San Diego.

What are the questions you want answered about what happened here?

REP. NANNETTE BARRAGAN, (D) CALIFORNIA: Well, I think one of the big questions is asking about the medical procedures and the screening.

We hear CBP often talk about how parents said that their kids were OK. What we really need is for CBP to do real medical screenings. That is a problem now. It was an issue with Jakeline, it`s an issue with Felipe. Making sure that they`re taking vital signs, and making sure that we`re monitoring there`s children. If you see there`s 103 temperature, I think there needs to be some better observation.

I`m not a medical expert, Chris, but let me tell you when you hear the news that it took roughly an hour just to get the child back to the hospital, and then you hear that he started vomiting and it took four hours to get the child back to the hospital, that`s a concern. So we need to ask those questions.

We also need to ask about some of the attitudes that some of the CPB officers have, having heard firsthand some of their attitudes at the border and their just disregard for human life, that is a question we also need to ask about.

There are lots of questions, and certainly resources.

HAYES: Let me stop you there, what do you mean by that? You were down at the border, we had you last on the program as you were working with the woman who, I believe, was from Honduras.


HAYES: Maria, who had been tear gassed with her children, that sort of iconic photo of getting her through and trying and failing and finally getting her through. And you tweeted about what you heard the kind of comments from CPB,, what do you mean by that?

BARRAGAN: Well, sitting there with two female officers talking about how migrants were terrible people, they were coming to commit crime, and she was even commenting, oh, when crime happens in the U.S., then we come begging for them asking for help. It is this attitude, this arrogance of what they feel, how they feel about migrants that is concerning. And it makes me -- it makes me wonder if that plays a role in not getting medical attention quickly and not really treating these people like humans.

If you talk to my colleagues who have seen these detention areas, it is inhumane to be treating people the way they are.

HAYES: This is what Kirstjen Nielsen said, her statement on the death of this young boy from Guatemala, "it has been more than a decade since CBP has had a child pass away in their custody. It`s now clear that migrants, particularly children, are increasingly facing medical challenges and harboring illness caused from their long and dangerous journey."

What do you think?

BARRAGAN: It`s disgusting. It`s plain disgusting. No compassion. Playing the blame game again instead of looking at their own policies.

This is the result of this president and this administration`s cruel, inhumane, anti-immigrant policies, turning people away at ports of entry when they get them, not making sure they have the proper medical screenings. To hear that, Chris, is just really sad, especially around this time of the year. It would be nice if the secretary takes some responsibility and making sure that we have accountability over this agency.

HAYES: Final question here, what -- do you think the administration`s policies at ports of entry, where they are doing what`s called metering. They are not letting people through. They are attempting to make it as hard as possible to come in and ask for asylum legally, do you think that`s causing more danger to the people in question?

BARRAGAN: There`s no doubt. When you`re in congress, we have hearings and they say just present yourself at a port of entry. I saw firsthand last week that is not the case. They`re turning people away, even have tactics to try to get them off U.S. soil to go back onto Mexican soil so that they can apprehend them. It is not the way it`s supposed to be done. And I believe it`s a violation to do those things that we saw last week.

People are desperate. They are going to go between the points of entry. And it is going to be more dangerous if they can`t just go present themselves at a port of entry. And so there`s no doubt we have heard stories of people saying I`ve been waiting, I`m desperate, and that`s why I had to cross in a different manner between the ports of entry.

HAYES: Congresswoman Nanette Barragan, thank you very much.

Still ahead, from the shutdown to the surprise trip to Iraq to the Christmas Eve tweet storm to the president we`ll try to put this extraordinary week -- well, it`s only Wednesday -- in perspective ahead.


HAYES: If you were looking for the perfect auditory accompaniment to this festive season, I`d suggest you check out our podcast, Why Is This Happening? It features a deep dive conversations about the big themes and ideas driving this moment in the news and in history. And has a special holiday treat, we are now revisiting one of my all-time favorite episodes with literally my favorite person. It`s on the rule of law in the era of Donald Trump, featuring the greatest lawyer per general, Kate Shaw, who along with having worked at the White House under President Obama clerked on the Supreme Court for Justice Stevens, also happens to be my wife. You can listen and subscribe wherever you get your podcasts.


HAYES: It`s been a week and it`s only Wednesday.

Here to talk through it all with me, Betsy Woodruff, politics reporter for The Daily Beast, Wajahat Ali, contributing op-ed writer for The New York Times, and Kurt Bardella, former spokesperson and senior adviser for the Republican of the House Oversight Committee..

Kurt, let me start with you, you used to work at Breitbart before you left, and I`ve been thinking about the ways in which out of like Breitbart, Fox News, and others, are really pulling -- calling the shots. Like, we -- it`s not an overstatement to say that we are in a government shutdown now because Rush Limbaugh, Ann Coulter, Breitbart, and Fox News were upset that the president didn`t get his wall.

KURT BARDELLA, FORMER CONGRESSIONAL SPOKESPERSON: We had a deal. The Senate passed unanimously a deal to avert a government shutdown, and as soon as the Breitbarts and the Ann Coulters and Rush Limbaughs went epileptic over it. Donald Trump blinked. He backed down from that deal, and then he precipitated the shutdown, because he has such a narrow group of support right now, Chris, he can`t afford to lose any of those people, because if he loses any part of that coalition that he has left it`s over for him. There`s nothing that would stand of the way between him and impeachment.

HAYES: And Betsy, that`s clearly the way he`s thinking about it, I think Kurt is exactly right. But I also think it`s part of a broader phenomena, which is that Republicans are just much more scared of their base than Democrats are, and I think partly that`s the media environment. There was interesting reporting about the last shutdown, where Democrats were worried about how the mainstream media would cover it and Republicans weren`t worried because it`s like their base doesn`t watch that, doesn`t believe any of it any way, and so what they are scared of is, their scared of their base and the media environment that their base listens to.

BETSY WOODRUFF, THE DAILY BEAST: I think that`s accurate.

Another piece of this that`s important and interesting as context here is that the way that the shutdown played also out points to the ascent of very conservative House Republicans having the president`s ear. I remember Representatives Mark Meadows and Jim Jordan were out front loud and clear saying that the president would essentially be, you know, be failing were he to backtrack on demanding money for the wall from the congress.

And what we`re seeing is a shift in terms of who the president is listening to. Rather than listening to the sort of the more traditional Republican voices who almost got him across the finish line of keeping the government open. At the last moment, Trump changed and instead deferred to the Mark Meadows of the world.

One thing I can tell you based on conversations today is that part of the calculation that people in that orbit, and close allies of the president, are making is that if this shutdown goes on through the beginning of Nancy Pelosi`s ascent to the speakership, their hope is that it will have the effect of overshadowing her taking that role and shifting the conversation away from whatever Pelosi wants to use to define her first weeks running the House and toward Donald Trump`s favorite topic, which is, of course, the wall.

HAYES: Waj, that`s remarkably cynical.

WAJAHAT ALI, THE NEW YORK TIMES: Yeah, but now we have Ann Coulter as the Jiminy Cricket of Donald Trump who wants a very white Christmas, unfortunately he`s not going to get it.

It is cynical, but we saw it in the midterm election, look he doubled down while unemployment was at, what, 3.7 percent, and there was job growth and he doubled down, tripled down on the caravan story, right -- terrorists, rapists, invasion, criminals, swarm, Middle Eastern suspects. And you sit there and think you have one of the most robust, bullish economies -- well, you did. And yet you double down on the caravan to cater to the small minority base, which is, I`m sorry to say, fueled by white nationalism and I unfortunately I think it`s correct. I think, look, the last -- the record for the longest shutdown was 21 days in 1995 under Clinton. I think he`ll extend it to placate that base. I think he will.

HAYES: Well, then the question becomes whether McConnell goes along with that, which I think he probably will, although, again when it goes on long enough, Kurt, it`s sort of anyone`s guess how the dynamics play.

What I do think is interesting, what Waj is you think about wedge issues and polarizing issues, I think about George W. Bush`s extremely cynical and morally bankrupt use of marriage equality in 2004.

At least they were right about what the majority view was, right? So, it was cynical, but they were on the right side of the wedge. They were on the 55 side of the 55-45 issue.

In this case, the more he talks about the wall, the less popular it gets. Everything that he touches on immigration manages to produce more support for the opposite view.

BARDELLA: But remember, they went all-in, no pun intended here, on the idea that building the wall, national security, stopping the caravan would be enough to try to stave off the midterm debacle that they just experienced.

It is amazing that they are doubling down on this -- what we knows is a failed strategy, rejected overwhelmingly by the American people, resulting in more than many 40 seats being lost in the House and they`re parading out there as if that didn`t just happen.

HAYES: And not only that, Betsy, but the fundamental thing is, he is trying to get money for American taxpayers and public money for a wall that he said Mexico is going to fund, like that money shouldn`t even be in there.

Let`s remember the whole sales pitch, it wasn`t -- it was a one, two. It was wall, Mexico is going to pay for it. I watched him say it 1,000 times, until my eyes started to fall out of my head. And now he wants Americans to pay for it. It`s just such an obviously losing political issue to me.

WOODRUFF: That`s not the view that exists in the White House, and in certain corners of Republicans on Capitol Hill. And one of the challenges when we talk about these immigration issues is that polling it can be really challenging, the way pollsters put their questions together, the folks that they ask, often the intensity and the mobilization levels of people who are very passionately in Trump`s camp when it comes to immigration, who are dogmatically committed to the idea of reducing not just illegal immigration levels, but legal immigration levels. That doesn`t always register in some of these polls, including polls of the Republican primary.

I mean, you can find poll after poll showing that the majority of 2016 primary voters supported an immigration policy that looks a lot more like what Jeb Bush was pushing for than what Donald Trump was pushing for, but history showed us that that type of documentation doesn`t necessarily reflect where these voters are at, and Trump believes, he believes that his intuition is more correct than these numbers that those of us are looking at .

HYES: That`s a great point about the preference intensity problem on immigration. And Waj, what we have seen in America, as long as I`ve been covering immigration policy, which is now, you know, 15 years or so, is that the Steve Kings of the world, and the Steven Millers of the world, and outright white nationalists essentially have a veto on American immigration policy, precisely because the intensity with which they feel it.

ALI: Fear, hate, anger sells. And facts matter, it`s no longer a wall, Chris, it`s beautiful, steel slats, it`s slats now.

HAYES: Aesthetically pleasing.

ALI: Yeah, aesthetically pleasing.

But look, I think facts matter. And over the past 17 years, there`s been 80 percent reduction of apprehensions by border patrol at the border, right. There`s actually not a border crisis. And foreign born individuals in America have less criminal history than those who are born here.

So, I think those facts matters. And this demonization process against immigrants, against Muslims, against Black people, against Jews, against Catholics, against the LGBT is the cynical, but successful strategy of politicians of past, present, and unfortunately Republicans right now.

HYES: Yeah. We`re going to see how long -- I`m really curious to see how the dynamics shift starting January 3 in terms of how long they can sustain this.

Betsy Woodruff, Wajahat Ali, and Kurt Bardella, thank you very much.

That is All In for this evening. The Rachel Maddow Show starts right now with Joy Reid in for Rachel.