The Rachel Maddow Show, Transcript 07/14/11

RACHEL MADDOW, HOST: Hey, happy Thursday night. Happy 15th birthday, as well, to this network, to MSNBC. Thanks to you at home for joining us at this hour. At this hour, all of Washington stands on pins and needles waiting to see if a deal can be reached, if a crisis can be averted. If Democrats and Republicans can come to an agreement on the big fight that has been frankly smothering American politics for weeks now. President Obama announced earlier today that he wants to see a deal done by tomorrow on the big debt ceiling fight that has consumed every bit of oxygen in D.C. for the last few months. The president saying tonight that congressional leaders are on the clock. They have 24 to 36 hours to get a deal done. As planning a vote that the U.S. government should not default on our debt and shut down comes down to the wire, we are inching close enough to the edge here, that two of the world‘s major credit rating agencies have warned that our national credit rating may be downgraded as a result of this standoff. The day that the U.S. would actually hit the debt ceiling and start going into default and shutting down is August 2nd. But this does not mean that we have until August 2nd before we lose our national credit rating. That could just happen right now, because of the uncertainty and because of how long it is taking to get this done. Right now, politicians in Washington are trying to avoid default by striking a grand bargain on big spending issues and big taxing issues. But the fact remains that the country can avoid this crisis, can avoid default, without some big deal. They could avoid default simply by saying, we don‘t want to default. That‘s all they have to do. If Democrats and Republicans can agree on just that and nothing else, the idea that we don‘t want to default, that is good enough. It does not need to be a big expansive deal. And it is looking like that is probably how this will end. No big deal will be reached. Both sides will only agree that we shouldn‘t default. And so, therefore, we won‘t default. But even if it ends like that, simply this is coming down to the wire now. The president saying tomorrow‘s the day. And just by definition, this is a fight that has to end soon. The fuse is already lit. We‘re going to be talking about Democratic Congressman Barney Frank in just a moment about how he sees this all ending. But as we head toward an end to this crisis, an end that is likely to reveal the utter pointlessness of the last few weeks of wrangling over a deal that never happened, in the midst of that storm of pointlessness, from presidential politics, of all places, came today a reminder of what is not pointless—of the real crisis that the country wants Washington to be working on, the real crisis that Washington hasn‘t been working on that maybe they can finally start working on once this pointless crisis of their own making finally gets settled. Today, Politico.com got access to a political ad that never ran against Mitt Romney when Mitt Romney was running for the United States Senate in Massachusetts in 1994 against Ted Kennedy. This never aired, but it was given to Politico.com today. Check it out. (BEGIN VIDEO CLIP) NARRATOR: Mitt Romney says he saved Bain & Company. But he didn‘t tell you on the day he took over, he had his predecessor fire hundreds of employees, or that the company was rescued with a federal bailout of $10 million. According to “The Globe,” Romney‘s company failed to repay at least $10 million to a failed bank and the rest of us had to absorb the loss. Romney—he and others made $4 million in this deal, which cost ordinary people $10 million. Mitt Romney—maybe he‘s just against government when it helps working men and women. (END VIDEO CLIP) MADDOW: That is from 17 years ago. The only thing you would have to change in order to run that ad against Mitt Romney now is you‘d have to like change Mitt Romney‘s hairdo slightly. See? There you go. That‘s all you would have to do, and you could just run that ad today. He is running for president now on the exact same basis on which he was running for Senate 17 years ago. He is running on his business record as a job creator at Bain Capital. Again, that was an ad that did not run against Mitt Romney when he was running for Senate back then. But the campaign ads that did run against him in that campaign are just as prescient and just as astonishing. (BEGIN VIDEO CLIPS) NARRATOR: Mitt Romney‘s ads claim he created jobs. But what‘s the record? His firm bought a company in Holyoke and moved its headquarters to Dallas, Texas. Romney‘s firm bought a company called ACM, fired all 350 workers, told some they could reapply at a 25 percent pay cut. But many who were pregnant or older were denied jobs. And Romney made $11 million in two years. Mitt Romney, he‘s misled us twice, with negative ads distorting Senator Kennedy‘s record and the phony claims about his own. UNIDENTIFIED FEMALE; I would like to say to Mitt Romney, if you think you would make such a good senator, come out here on Marion, Indiana, and see what your company has done to these people. UNIDENTIFIED FEMALE: We had no rights anymore. UNIDENTIFIED MALE: They cut the wages. UNIDENTIFIED FEMALE: We no longer had insurance. UNIDENTIFIED FEMALE: Basically cut our throats. UNIDENTIFIED FEMALE: I‘d like to say to the people of Massachusetts who think it can‘t happen to you, think again, because we thought it wouldn‘t happen here either. NARRATOR: Mitt Romney, “I don‘t mean to be callous, about you there are people all over the world who would love a job flipping hamburgers in America.” Romney—in business, he specialized in low wage jobs but made $11 million for himself in two years. Now, he favors policies to benefit the wealthy at the expense of working families. Romney favors a $100 billion tax cut for the wealthiest 1 percent of Americans, and billions more in other tax breaks for the rich. Romney—trickledown economics and a millionaire‘s tax cut. Whose side is he on? (END VIDEO CLIPS) MADDOW: All those ads are from 1994. But you know what I think this is? I think this may be the ghost of the dear departed Ted Kennedy who ran those ads against Mitt Romney reminding the Democratic Party the way it is supposed to run campaigns—what it is supposed to be running on, and what it is supposed to be working on. These ads aren‘t just important because of Mitt Romney being the front-runner in presidential politics right now on the Republican side. Running again is the guy who can create jobs because of his great work experience at Bain Capital. These ads are not just about him as a candidate. These are as fresh today as they were in 1994 because these are about the differences between Democrats and Republicans on what really matters to Americans. And frankly, it‘s not this stupid debt ceiling fight that could be settled at the drop of a hat if Congress wanted it to be over. It‘s jobs. It‘s unemployment. What was the unemployment rate in July of 1994? It was 6.1 percent. Today, it is 9.2 percent. We are now coming out of the deepest, most jobless recession since World War II. And the Republicans are proposing again the same kind of stuff that Mitt Romney was campaigning on in 1994. Policies that will help the job creators, policies that will help the richest people in the country at the expense of people who are hardest hit by this brutal economy. And what people want to hear about frankly is not long-term proposals for debt reduction three decades from now. What people are waiting to hear from Washington is: how are we going to get more people back to work. And while Washington is convulsed right now with something else entirely, with the same fake debt ceiling fight, once again, you can look to the states to see this real fight happening in earnest and articulated very well. The best political ad I think so far of 2011 is being run right now by left-leaning Wisconsin group that is trying to oust one of the Republican state senators in that state. I think this is the best ad of the year so far. Watch. (BEGIN VIDEO CLIP) NARRATOR: To balance Wisconsin‘s budget, seniors, nurses, small business owners, firefighters and families are all paying their fair share, but corporations and the super rich are being let off the hook. Thanks to Senator Luther Olsen‘s vote for Governor Walker‘s budget, families will pay more in taxes, but big corporations and the rich will get millions in tax breaks. Olsen is making devastating cuts to our schools and health care programs instead of asking those who can afford it to pay their fair share. (END VIDEO CLIP) MADDOW: If you could run those 1994 Bain Capital ads directly with just updated hairdos, you could run that Wisconsin Luther Olsen ad by just swapping in Paul Ryan, or swapping in Sean Dappy (ph), or swapping Ron Johnson or swapping in any Republican not from Wisconsin who has been supporting Republican economic proposals about jobs and how we should be dealing with our lousy economy by shoveling more resources to the rich and away from our hurting population. It is called economic populism. And in the Beltway, the phrase economic populism is something that almost has to be bleeped. Here‘s the actual Beltway around Washington, this freeway. It‘s the I-495 Capitol Beltway. Within the circumference of that little awkward circle there, you are not allowed to say economic populism without sneering or maybe even spitting. But in the rest of the country, in the states, it is how people understand why there is a Democratic Party in this country at all. Economic populism is the basic concept that there is a force in politics to defend the rights of people who have to work for a living or people who would like to work again if they could find a job against corporate interests and reach peoples‘ interests draining the country dry. A poll just released in Wisconsin this week articulates this point better than anything else. Wisconsinites were asked this question for whose benefit is Wisconsin‘s state government being run? For who‘s benefit is Wisconsin‘s state government run. The percentage of Wisconsinites saying their state government is being run for a few big interests is 65 percent, nearly 2/3. The number saying that Wisconsin state government is run for all of the people, just 28 percent. That‘s what it looks like in the polls in Wisconsin. That‘s why these messages resonate. And here‘s what it looks like on the ground in Wisconsin. (BEGIN VIDEO CLIP) EMILY PEASE-CLEM, TEACHER: Governor Walker and the Republicans just gave over $100 million in tax cuts to corporations. And now, they are asking teachers and nurses to pay for it. And attacking workers‘ rights to negotiate for fair benefits. UNIDENTIFIED MALE: It will probably cost us between $400 to $500 a month in income. I tried not to think about it, just be out here on the square. It‘s not selfish. It‘s just survival. UNIDENTIFIED MALE: I have looked at the issues that are being discussed here in Madison are not unique to Madison or state of Wisconsin. These are national issues. Money is being taken away from workers and tax breaks given to millionaires and corporations. UNIDENTIFIED FEMALE: This is Republican class warfare, an attack on the middle class. This is a battle we need to win. (END VIDEO CLIP) MADDO: That ad was run by the Progressive Change Campaign Committee in the throes of the Wisconsin union stripping fight. And you can see from the polling, right, that this message resonates for a reason. You can also see that from the election results there this week, as there was huge turnout in the Democratic primaries to unseat Republican state senators in Wisconsin who sided with Scott Walker and the Republican plan in these primaries to cause chaos on those elections frankly failed miserably. Over in Minnesota, the showdown between the two sides there has resulted in a shutdown in the state government for two weeks now. And the Democratic governor of Minnesota having le this go on now for two weeks today tried to break the impasse by saying, OK, Republicans, you can have some of the things that you wanted that forced this shutdown. But you know what? I‘m not caving on, you know what I want in exchange for ending the longest shutdown in state history, I want $500 million to pay for infrastructure projects to put people back to work in this state, thousands of jobs. A half billion dollar bond issue for infrastructure, for jobs, for building our way out of the economic crisis and putting people back to work and rebuilding the spine on which the whole private economy hangs on that state or any state. The Democratic governor of Minnesota, Mark Dayton, that is his condition for coming to an agreement. He told Republicans you can‘t lay off the thousands you want to lay off from state government, stop with putting more people out of work, and we are going to do jobs, jobs, jobs. If everything else has to go, we have to do jobs. Democrats in the states, and the states like Wisconsin and Minnesota, are fighting like heck for jobs, jobs, and jobs and jobs and jobs and jobs. Ted Kennedy beat Mitt Romney for Senate in 1994 on jobs, jobs, jobs and jobs. And yet, Democrats in Washington right now, tonight, are, what, at this point, they are reduced to trying to save the country‘s credit score. This fight in Washington was forced by congressional Republicans. And congressional Republicans are losing it. The country trusts President Obama and the Democrats to deal with this matter more than they trust Republicans. If catastrophe happens because of this standoff, people will blame the Republicans for making it happen. Republicans picked this fight. They forced this fight. They picked this fight. And they are in the process of losing this fight. So, here‘s the big question: Will Democrats be able to pivot from winning this stupid fight in Washington that didn‘t have to happen, will they be able to pivot from that into winning the real fight for jobs, for infrastructure, for stimulus, for a freaking WPA or something, some other big, bold proven thing to save the economy from this jobs disaster that is turning out to be even worse than we ever could have expected even a few months ago? The real crisis. Will Democrats in Washington take their cues from what‘s happening in the states and wage and win the real fight? That‘s next. (COMMERCIAL BREAK) MADDOW: We have breaking news at this hour. President Obama is challenging the immediate end of the “don‘t ask, don‘t tell” policy. The president, of course, signed the repeal of the law back in December, but “don‘t ask, don‘t tell” is still technically in effect, while a long, slow, careful repeal process plays out. That long, slow, careful repeal process is due to keep the policy in place until approximately this fall. That was the plan until last week, when the ninth circuit U.S. court of appeals ruled that the “don‘t ask, don‘t tell” policy could not remain in place any longer, that the Pentagon had 10 days to stop enforcing it altogether. That ruling, that court decision, is what the Obama administration says tonight it is challenging. The injunction against enforcing the policy is being challenged by the Obama administration. They are appealing, even as the administration supports the eventual end of the policy. We will keep you posted on how this all shakes out. We‘ll be right back. (COMMERCIAL BREAK) MADDOW: Hey, here‘s something that didn‘t the go the way it was supposed to today. Yesterday, the companies that rate America‘s creditworthiness started to admit they are a little worried. Moody‘s announced it was putting America‘s super nice AAA rating up for review. We might even lose one of our A‘s if Congress doesn‘t vote to raise the debt ceiling so America can keep paying back what we already owe. I know this little press release doesn‘t look like very much, but this is Wall Street-ese for “please consider freaking out now.” Today, we learned that another credit ratings agency, Standard & Poor‘s, has warned Senate Democrats that it might lower its opinion of U.S. creditworthiness if Congress doesn‘t get it together and raise the debt ceiling, if Congress lets America default on its debt. Late in the day today, we learned that Standard & Poor‘s has placed its AAA long-term and A-one-plus short-term sovereign credit ratings of the United States of America on credit watch with negative implications. In other words—everybody, freak out! But look what happened this afternoon with Congress and the White House seeming no closer at all to a deal on this thing. Today, the U.S. treasury asked investors to lend America $13 billion, $13 billion, OK? It‘s a fair bit of money for loans that would last 30 years. So real money, real time. What happened when America asked investors if they wanted to invest in America, loan it some money? Investors came running to lend America money. “The Bloomberg” news headline, “Treasury bond auction demand defies warning.” Quote from a banker guy, “The market seems to believe that the debt-limit situation will be resolved satisfactorily. Quote from another banker guy, “It‘s a great auction.” Clearly, Wall Street at least so far has not been thinking that we are stupid enough as a company to bumble our way into defaulting on our loans with no real reason to do so, to commit the economic and political the equivalent of an own goal, to kick the ball into our own blessed net. Wall Street apparently does not seem to be reacting much to the political crisis that is consuming Washington, D.C., right now. But you want to see what is making Wall Street really jumpy, though? Yesterday morning, Federal Reserve Chairman Ben Bernanke went to Capitol Hill. He told the House Financial Services Committee that the nation has a serious problem with unemployment, which is the frankly the opposite of news to people in the part of America that is not Capitol Hill. Mr. Bernanke told them the Fed is watching for signs that the economy is really, truly faltering again. He says if he sees those signs, the Fed is ready to provide another round of stimulus. The Fed is willing to try to goose the economy to get it going, to help create jobs and put people back to work. The hearing started at 10:00 a.m.—and this is what Wall Street did in response. Buy, buy, buy, everybody, buy, quick, invest in the economy again. This thing is moving. After the House yesterday, this morning Mr. Bernanke gave his report to the Senate. And he dialed things back. Mr. Bernanke said maybe, all in all, now—meaning right now, maybe now, as in right now is not really the right time for goosing the economy, or helping, or stimulating, or however you want to put it. Not necessarily right away. Again, the hearing started at 10:00 a.m., a few opening remarks followed by Mr. Bernanke walking it all back and saying, no, no, maybe no stimulus—and then this is what happened, everybody out of the pool. Run away. The ship is sinking. Pick your metaphor and get out of here with it in a hurry. At least for now, Wall Street is not lying awake nights over this Washington, D.C., self-made crisis about Republicans refusing to vote that the country shouldn‘t go into default and shut down. But the real American crisis, the one about jobs and the economy, that is a problem. That is a real problem. You do not always find Wall Street taking the side of the American people on economic issues—but today, yes. Joining us now is Democratic Congressman Barney Frank of Massachusetts. He‘s the ranking member of the House Financial Services Committee and co-sponsor of the Dodd-Frank Wall Street reform, a consumer protection act passed last year. Congressman Frank, it is nice to see you. REP. BARNEY FRANK (D), MASSACHUSETTS: Thank you, Rachel. MADDOW: Right before the show tonight, news crossed that Standard & Poor‘s has put the U.S. on credit watch with a one in two chance it could lower the U.S. credit rating. What do you think of the impact of this is? FRANK: Well, it‘s going to be negative. But I have to say, I have been very critical of the ratings agencies, and I think they did a terrible job of overrating mortgage securities. They are unfair to states. But in this case, I think they had no choice. It‘s important to note that—and you made this clear, it‘s not because our economy is in any serious trouble or that we can‘t repay. It is that the right wing that has taken control of the Republican Party might temporarily refuse to pay because they don‘t think it will make any difference. And there may be some sense on the part of some that, oh, people can‘t be that crazy. But they haven‘t lived with these people for six months the way I have. And, yes, they are that divorced from reality. That‘s a better word than crazy. And this is an indication that if we don‘t make the payment, you are going to see serious trouble. Now, noted that the auction went well, but that‘s I think, as you know, that‘s a 30-year auction. And nobody thinks that the default if it happens it‘s going to last for a very long time. So, if you are talking about a 30-year time period, yes, you‘ll get your interest over that 30 years. But there are short-term things that have to be done. And I think it‘s very clear with those ratings coming out that if the date passes, August 2nd, when we are now going to be unable to make some of these payments that we‘ve got, that‘s going to cost us some money. It‘s going to cost us, you know, we‘re in the—we‘re fighting as you said to get a recovery. And paradoxically, the Republicans have told us the biggest problem is uncertainty, that that‘s the biggest problem. Nothing has created more uncertainty than this right-wing threat not to pay our debts. MADDOW: President Obama says that he is willing to negotiate with Republicans for big spending cuts. Republicans have been demanding trillions in cuts. Today, the Fed chairman warned the Senate against that. He said the recovery is still rather fragile. And he said sharp and excessive cuts in the very short-term would potentially be damaging to that recovery. How do you explain those two things going on simultaneously? FRANK: Well, it‘s a timing question. In fact, I had exactly that conversation with Chairman Bernanke yesterday. He listed headwinds in the economy that might cause a short term—a slowdown in recovery. And one of the headwinds he listed was effective fiscal timing. In fact, I noted in my opening statement that since the summer of 2009 when we had just gotten the benefit of the stimulus, we have lost half a million jobs in state and local government. In fact, all this year, and every month, the private sector has gained jobs, averaging about 160,000. Not as much as we‘d like. But every month the state and local government has lost jobs. That‘s teachers, firefighters, public works employees, and day care workers being laid off. And the way you put those two together is this—in the near term, that is for the rest of this year, we should not be cutting. In fact, we should be spending more. And the quickest and best way to do that is provide some greater assistance to state and local government, because the right wing in the House is going the opposite direction, planning to cut the cops program by which we provide federal help to keep the police on the street. What I make—what I think makes perfect sense is, in fact, to say, yes, over the longer term, we have to bring down the deficit. But those cuts, whatever we do, the increase of revenue, which you ought to be a part of this, increase taxes, well, it shouldn‘t go into effect for the rest of this year so that for the next six months, we should be stimulative, but within the context of a long term program with one exception. We could make cuts now of over $100 billion a year on an annual rate that would have no negative effect on jobs. Well, it would. I take it back. It would have negative effects on jobs in Baghdad, in Kabul, in Kandahar, in other parts of the Baghdad—of Iraq and Afghanistan. And the irony of course is that we are being told that we are in this terrible crisis, when the Republicans brought out a military bill that increased the military by $17 billion, gives more money to Iraq and Afghanistan, and I have to say I am very nervous that the president might agree to keep troops in Iraq next year, which is longer than George Bush wanted to keep them there. So, yes, I think we can in the short-term save a lot of money by bringing the troops home with no negative job impact. But to get back to your question, what Mr. Bernanke said correctly is, yes, over the long-term, you should have a plan for deficit reduction from both higher taxes in my judgment and spending cuts. But in the short-term, if you were to do that, you would slow down the recovery. And that‘s why it‘s a timing issue. MADDOW: In terms of what you just said there about defense cuts, and what might be possible in this Congress, I feel like the things that I have heard from Republicans that seem like they have sort of silver linings around them economically are that they say they do like infrastructure spending, even though they have been voting against it, and there are some Republicans who are saying the wars in Iraq and Afghanistan should be wound down and quickly. There are savings there. Is there any way that there could be sort of a third way solution, wherein some defense money is put toward infrastructure in the United States directly? FRANK: Sure, if the votes are there. The problem is that we made gains on this. I had an amendment, I was being very moderate. I suggested that—I moved that instead of giving $17 billion additional to the Defense Department, we give them only $8.5 billion, cut it in half, wining my colleagues from this commitment to one limited defense spending, and I got 182 votes. That‘s better than we would have gotten last year, but unfortunately 40 votes short of a majority. I mean, unfortunately, right now when the Republicans talk about supporting infrastructure, it‘s in Iraq and Afghanistan. We‘re doing a lot of infrastructure spending there, along with the corruption we encounter in those places. We don‘t get much of a bang for our buck. But the Republicans who oversee—they see corruption more than it exists in programs here in America and can‘t see it when it hits you in the face in those countries. MADDOW: Congressman Barney Frank of Massachusetts, it‘s always a pleasure to have you here, sir. Thanks for your time. FRANK: Thank you, Rachel. MADDOW: Bill Moyers will be joining us tonight for “The Interview.” That is just ahead. Stay with us. (COMMERCIAL BREAK) MADDOW: The FBI opened an investigation today into the possibility that journalists hacked or tried to hack into the phone records of people killed on 9/11. FBI sources telling “The New York times” that the FBI inquiry is still in its preliminary stages. It will probably be handled by two squads here in New York, one that covers cyber crime—that‘s the hacking part—and one that covers corruption. Republican Congressman Peter King of New York had written to the director of the FBI requesting the investigation after news about potential 9/11 hacking emerged in the Rupert Murdoch “News of the World” scandal in England. Former New York Mayor Rudy Giuliani is the next most obvious person to be asked to react to these allegations about 9/11 victims having their phones hacked. And these days, Rudy Giuliani is sort of unavoidable for comment. He is sort of half running for president with three stops in New Hampshire just today, as news broke of the FBI‘s 9/11 investigation. Rudy Giuliani is a contributor at the Murdoch property that is the FOX News Channel. He is a politician who has benefited greatly from the support of Mr. Murdoch‘s lurid New York City tabloid “The New York Post.” Today, Mr. Giuliani talked about debt, the economy, health reform, the Republican primary, going to law school in the 1960s, and why being the mayor of New York on 9/11 gives him a special connection to members of the military fighting in Iraq and Afghanistan. (BEGIN VIDEO CLIP) RUDY GIULIANI ®, FORMER NYC MAYOR: Because I feel that the reason they are there started in my city on September 11th, 2001, that is where they came and attacked us. (END VIDEO CLIP) MADDOW: It was not until later in the day at a biker rally in New Hampshire and an interview with CNN that Mr. Giuliani addressed the address of Rupert Murdoch and this scandal. And when I say he addressed Mr. Murdoch, what I mean is that he defended Mr. Murdoch. From the “Associated Press,” quote, “Rudy Giuliani told New Hampshire voters late Thursday that the company‘s chief executive, Rupert Murdoch, is a very honorable, honest man. Giuliani says he has confidence in Rupert Murdoch, a regular acquaintance, despite allegations that one of Murdoch‘s companies may have tapped into the voicemail of 9/11 victims.” Rudy Giuliani in fact is going to make another run for the presidency on the platform, famously described by his rivals last time around as a noun, a verb, and 9/11 -- anything borne out under investigation about Mr. Giuliani‘s friend, Mr. Murdoch, hacking the cell phones of 9/11 victims, is going to be a hard one for him to spin on the campaign trail. That is going to be a big deal in tomorrow‘s news, I am guessing. “The Interview” is next tonight. It is the great Bill Moyers. Please stay tuned. (COMMERCIAL BREAK) MADDOW: Last night on this show, we hosted a former federal prosecutor named Jay Fahy to try to understand whether or not the scandal engulfing Rupert Murdoch‘s media empire, particularly in Britain so far, is likely to change that media empire here as well. Mr. Murdoch‘s company is not just a massive company. It is massively influential in U.S. politics, particularly in conservative U.S. politics, because his properties here include “The Wall Street Journal,” the most influential business newspaper in the country; also, “The New York Post,” the most influential tabloid newspaper in the country; and the FOX News Channel, which is a very successful full employment program for Republican political candidates, their owner and patrons, as well as a couple of journalists named Shep Smith and Greta Van Susteren. When the Rupert Murdoch scandal broke about bribery and illegal phone hacking and obstruction of justice as a regular way of doing business at his news properties, Rupert Murdoch had to drop his $12 billion bid to buy a satellite television channel in Britain. Had the deal gone through, he would have controlled 40 percent of all commercial television in Britain. Here, it‘s 27 TV stations and “The Wall Street Journal” and the FOX News Channel and “The New York Post” and, and, and, and. I think the high noon light of day question to ask about all this is how vulnerable that empire is now that it‘s all come crashing down. That is the high noon question. The midnight question, though, how vulnerable have we been all along, living under that empire‘s influence? Joining us now for “The Interview” is the big thinker among all us, Bill Moyers, the founding organizer of the Peace Corps, press secretary for four years to President Lyndon Johnson, a journalistic veteran of Newsday, of CBS News, and of many award-winning PBS series, including “Bill Moyers Journal.” The deepest, brightest, most fascinating interviews from “Bill Moyers Journal” are collected now in this book of the same name. Bill, I‘m so happy to have you here. Thank you for being here. BILL MOYERS, “BILL MOYERS JOURNAL” AUTHOR: It‘s a pleasure to be with you, Rachel. MADDOW: One of the things I was struck by in reading your book and watching the show is the respect that you have for individual journalists. And the contrasting worry you have about the media as an institution today. How do you think we are doing at explaining our role to each other? MOYERS: Not that well. I mean, some journalists do it very well, and others don‘t. But we don‘t explain it very well to the public at large. And I guess we can‘t. The Murdoch scandal doesn‘t help. A group of people already held in low repute by the public at large. In fact, it‘s very interesting that what Rupert Murdoch had been doing to the royal family, to parties of England, to the celebrities, didn‘t create much stir. In fact, lots of people liked it. But when this hacking apparently and allegedly went into the family of the phones of this little girl, who was murdered, and they thought for a while she might be alive because the phone calls were deleted, the public finally saw that they were being had. The public finally saw that these so-called champions of the working class, the Murdoch empire, were really not. And what‘s that turned it around. We‘re not held in great repute, but we have to keep at it anyway. MADDOW: In terms of the Murdoch scandal and that sort of change in the public‘s mind—does this end up stopping, then, with a promise from them or punishment from them that proves they‘ll never do that specific thing again? Does it extend to a larger critique of the Murdoch media empire and how much he controls what people are allow to see and know about their countries? MOYERS: When this broke, I began to see repercussions of—similar to the Watergate scandal. Everyone thought that Nixon kept closing it off and shutting it down and making mea culpas and putting it behind him. But one revelation after another unfolded. And what we have here is an expanding police investigation. No one knows where it‘s going to stop. And it could reach right here to the “Wall Street Journal,” whose present head, appointed by his friend Rupert Murdoch, was the head of the Murdoch newspapers in London when Gordon Brown was subjected to this sort of behavior. MADDOW: How much do you think it would change America, American media, and American politics if this scandal turns out to be as big as it might be? If Rupert Murdoch‘s corporate sphere of influence falls apart in this scandal? MOYERS: This is how societies, particularly democracies, self-destruct. There‘s the collusion—we have seen the danger of collusion between private power, Rupert Murdoch‘s empire, and the police. Allegedly, his minions bribed officials for information, dirt, on other officials and on some ordinary people as well. We‘ve also seen the danger of the collusion between political parties and powerful media conglomerates. I mean, both parties in England caved to Murdoch. The politicians were cowed. They would not stand up to him. And that too is what happens to democracy when the political class becomes frightened of and in league with these incredibly powerful media conglomerates. I mean, my concern is not for individual journalism. There‘s world class journalism going on right now in American journalist. My concern is that we—most of us winding upon working for big conglomerates that have big interest in government policy, and that brings about a kind of self censorship that affects the journalists because the executives and the investors and the managers have a stake, as they did in England, of kowtowing or going into collusion with government. That‘s the big danger I think we face with these big media conglomerates. I was very intrigued that when this scandal started breaking in London, Rupert Murdoch was actually in Sun Valley, Idaho, for that annual gathering of what is virtually a cartel of very powerful media barons. And, you know, they look up to him because of the money he makes with his philosophy of anything goes. And the fact that they were all there in Sun Valley when this began to happen, I hope, is perhaps an unintended message about whether their allegiance is to the American people or their own bottom line. MADDOW: And that—and it was at least should have been embarrassing, and maybe the test is whether or not they feel embarrassment when something like that happens. I mean, I work at a big corporate conglomerate controlled media outlet. And I feel like the way to handle this as an individual journalist for me is that I have carved out a sphere here of editorial independence. And on MSNBC, my deal with the company is I will do shows on MSNBC, and you will not tell me what to say. And they are very comfortable with that. And I think a lot of individual journalists find ways to do that. But you think that we‘re still in an environment even with that editorial freedom in which we‘re limited in what we can do? MOYERS: I served time at CBS News, enjoyed it, seven years in all. I was here at MSNBC for the launch of it 15 years ago. I worked at NBC. But I saw in every one of those environments the growth of the shadow of self censorship when—I mean, I happen to know that when I was here, Newt Gingrich and Henry Kissinger did their best to mute my influence on “The Nightly News” because of the freedom and independence Andy Lack, who was then the president of NBC News, had given me. It‘s up there all the time, like gathering storm clouds. You do a terrific job of maintaining your independence. And I must say out of the Murdoch scandal has come a reminder of the importance of a free and independent press. The journalists who have been dogging this story for the last six years worked for “The Guardian,” which is one of the great newspapers in the western world. “The Guardian” is run by a trust— MADDOW: Public trust. MOYERS: -- a public trust, set up by the founding family to make sure that “The Guardian” would always be commercially and editorially independent. Wouldn‘t you have liked to have been in the editorial room at “The Guardian,” when they decide—they knew what they had—they had the evidence, they would not have gone this way if they had not had the evidence. And they knew they were taking on the most powerful media baron in the world, the Berlusconi of England and the United States, but they did it because they were independent. We have been reminded that in the end, democracy depends upon maybe even just a few independent voices, free of any party or commercial allegiance. MADDOW: And I will say, in that environment, knowing people who work at “The Guardian,” too, it helps that there is competition there because part of what they knew they are doing was taking out the knees from the guy who outsells them, and that‘s going to be their great motivator, too. MOYERS: True. MADDOW: Bill Moyers, I really super honored to have you here and have the chance to talk with you about this. And the new book is a great achievement. Thanks you so much. MOYERS: Thank you, Rachel. MADDOW: Thank you, Bill. Good to see you. Tea Partiers in North Dakota, it turns out, want small government until the Missouri River floods. Then, not so much with the small government anymore. Ed Schultz is all over that story right after the show. And here, Texas governor and Republican establishment darling Rick Perry says he was called to the ministry in his 20s, but it does not appear that Rick Perry thinks the ministry means what everybody else thinks it means. That‘s coming up. (COMMERCIAL BREAK) MADDOW: In a FOX News Channel interview this week, John Boehner had the most amazing pregnant pause when he was asked about what happens if the country does not vote not to default on our debt. This is what is next to the phrase “pregnant pause” in the dictionary. (BEGIN VIDEO CLIP) BRET BAIER, FOX NEWS: So what is next? What if you don‘t get a deal? REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I don‘t know. (END VIDEO CLIP) MADDOW: In the Olympics of pregnant pauses, that one is really, really super pregnant. Tonight, a new contender for the pregnancy title. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Just remind us how big a name he is in the sport of baseball. (END VIDEO CLIP) MADDOW: That is not even the best part. What happens next is “The Best New Thing in the World” tonight, coming up. (COMMERCIAL BREAK) MADDOW: In April, when Mississippi Governor Haley Barbour decided not to run for president, it is one of those moments where the common wisdom about that decision was totally different among political insiders than it was among the rest of us. For people who aren‘t political insiders, the idea that Haley Barbour would run for president seemed a little farfetched. What he made national news for over the last year was stuff like claiming the civil rights era in Mississippi was no big deal—in fact, it was kind of fun, claiming that Conservative Citizens Councils sometimes known as White Citizens Councils kept everything peaceful in Mississippi. If you are not a political insider, the idea of Haley Barbour being elected president is like the idea of Boss Hogg elected homecoming king. It just doesn‘t seem doable. But political insiders really thought that Haley Barbour might be the guy for the Republican Party this year. He‘s former chair of the party. He‘s well-liked and respected among the establishment and big money guys inside that party. And people in the know, not the hoi polloi, but people in the know, thought this guy was the establishment choice. When he said he decided not run in April of this year, who was the establishment going to support instead of him? Apparently, that support went to Mitch Daniels. Sure, he was to George W. Bush‘s budget office that Michael Brown was to FEMA. And, sure, he‘s very, very small and has sort of confusing politics, but it‘s just what seemed like to the hoi polloi. To the Republican insiders, Mitch Daniels was the inheritor of all the establishment money and attention and support after Haley Barbour decided to pass. But then in May, Mitch Daniels decided to pass, too. So, no Haley Barbour, no Mitch Daniels—where‘s the establishment support going to go now? It doesn‘t going to Mitt Romney. By all accounts the man is gravely disliked among lots of parts of the Republican Party including the establishment. It‘s not Sarah Palin. It‘s not Tim Pawlenty. It‘s not, who, Fred Karger? No one locked up the Republican Party establishment support. Next in line for the establishment support from the Republican Party appears to be, in all seriousness, Rick Perry. One of George W. Bush‘s biggest fundraising bunglers is bringing in uncommitted, big dollar Republican fundraisers to talk about whether they could support a Perry bid for president. The political operatives who fled Newt Gingrich‘s campaign when it sunk on launch appear to be swinging toward Rick Perry‘s potential campaign. And crucial is Haley Barbour‘s nephew, Henry Barbour. Henry Barbour is a member of the RNC. He‘s seen by many people as the arbiter of the where all that establishment support that was going to go to his uncle is going to go now instead. Henry Barbour said this week of Rick Perry, quote, “I hope he does run.” Telling “The Washington Post” he would endorse Rick Perry if he did. Going on, quote, “I‘ve talked to number of folks who are going to support Haley had he run, and a good percentage of them are very favorable to a Perry candidacy. He‘s go a great record in Texas, we align with him philosophically and he can win. It‘s that simple.” So, for all the media excitement about Sarah Palin or Chris Christie - hello, George Pataki, I don‘t know, for all those speculation about anybody else, it looks like the one to watch is Rick Perry—which makes it all the more amazing that Mr. Perry is going ahead with the stadium prayer event in a couple of weeks which is—with these guys. (BEGIN VIDEO CLIP) BRYAN FISCHER: President Barack Obama nurtures this hatred for the United States of America and I believe nurtures a hatred for the white man. (END VIDEO CLIP) MADDOW: If Rick Perry with events with guys like that, really does get the establishment support, it will also be amazing to see how the Republican establishment will deal with what is today being reported in Texas papers. What‘s being reported is that late last month, Rick Perry has said this at a meeting with east Texas business leaders. He said, quote, “At 27 years old, I knew that I had been called to the ministry. I‘ve just always been really stunned by how a big a pulpit I was going to have. I still am. I truly believe with all my heart that God has put me in this place at this time to do his will.” Called to the ministry? Is Rick Perry a minister? No, Rick Perry is not a minister. What does he mean when she says he was called to the ministry? What is the ministry exactly? He means running for office. He sees himself as clergy. Can the Republican Party become the church of Rick? You guys on board? Is he going to be the Republican Party‘s savior this year? (COMMERCIAL BREAK) MADDOW: In politics, people accuse each other of lying all the time, but when you are testifying under oath before Congress and you lie, that is a crime. And so, the baseball star Roger Clemens has been on trial in federal court in D.C., accused of lying to Congress about taking performance enhancing drugs. The case against Mr. Clemens fell apart today almost as soon as it started. The judge declaring a mistrial on day two of the proceedings, which I‘m sure was fascinating. But for our purposes, the most important thing about it is that it brings us our “Best New Thing in the World Today.” The Clemens file is a big enough deal that media in foreign countries are covering it or at least trying to. And because they know nothing about baseball or about Roger Clemens, they have to book American experts to help them out and led to an incredible moment on the BBC World News. This is only about 30 seconds or so. What happened to the end, the payoff is so great. Please just watch. Watch. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Joining us now is Ben Walker. He‘s the baseball editor for “The Associated Press.” Ben, I know that you have been covering Roger Clemens‘ career for the best part of the last 23 years, just remind us a big name he is in the sport of baseball. I beg your pardon. I‘m not sure Ben can hear us. Ben, can you hear me in New York? It‘s (INAUDIBLE) for us in London. MICHAEL WOLFF: You know, it‘s even a worse situation than that because I am not Ben Walker. And I know nothing about baseball. I do, however, know a lot -- UNIDENTIFIED MALE: I beg your pardon. We have the wrong guest. We‘ll move on to the Women‘s World Cup in Germany -- (END VIDEO CLIP) MADDOW: I am not Ben walker and I know nothing about baseball. That was, in fact, journalist Michael Wolff, contributing editor to “Vanity Fair” and the author of a biography on Rupert Murdoch clearly waiting to talk about that story instead. But he has not giving up on TV already. We are glad to say Michael Wolff joins us now live. OK. That‘s not Michael Wolff, you guys. That‘s Richard Wolffe. Do we have Michael Wolffe here? Do we have Michael—no, no, that‘s Michael Steele. That‘s not Michael Wolff. Do we have Michael Wolff? Do we? Seriously, come on. That is Bill Wolff in a wolf t-shirt. That is not. All right. Forget it. Forget it. Here‘s “THE ED SHOW.” Come on, you guys. Seriously? Come on. Goodbye! THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END