IE 11 is not supported. For an optimal experience visit our site on another browser.

The Rachel Maddow Show, Transcript 08/04/11

Guests: Ezra Klein, David Corn, Michael Isikoff, Robert Frank

RACHEL MADDOW, HOST: Lawrence, I got to tell you, your standing ovation for Chris Christie`s comments in your "Rewrite" tonight itself earned a standing ovation. That was so perfectly done. O`DONNELL: Hey, the guy deserves it. I`m not expecting him to get another one any time soon, but this was the night. MADDOW: I could not agree more. It was just perfectly done. Well done, my friend. Thank you. O`DONNELL: Thanks, Rachel. MADDOW: And thanks to you at home for joining us this hour. Today was one of those days when even people who do not pay attention to business news and economics news were forced to pay attention to those things. Today was a day that every TV network became a business news network. (BEGIN VIDEO CLIPS) UNIDENTIFIED FEMALE: Take a look now, down 407 -- 407. Massive plunge. UNIDENTIFIED MALE: Red across the board. The Dow Jones Industrial Average down more than 400 points. UNIDENTIFIED FEMALE: The Dow Jones Industrial Average down more than 450 points. The NASDAQ composite down right now 117 points. UNIDENTIFIED MALE: Down nine of 10 days for the Dow. UNIDENTIFIED FEMALE: We have the S&P 500 down more than 4 percent, our biggest loss since 2009. UNIDENTIFIED FEMALE: We`re hearing words like alarming, panic, devastating. UNIDENTIFIED MALE: Rather panic-stricken selloff continues. Look at that, 476.54 down, and going further down. UNIDENTIFIED MALE: Now, the Dow is down more than 500 points on this session alone. The S&P 500 and the NASDAQ down similar percentage points. Wow. UNIDENTIFIED MALE: We`re down now more than 500. UNIDENTIFIED MALE: The market is now down 503. UNIDENTIFIED FEMALE: What a day. And you will see the headlines tomorrow. There is no positive way of spinning this. The Dow Jones Industrial is down 512 points. UNIDENTIFIED MALE: Stocks dropping 4 percent on the day, concluding their worst nine-day decline in two years` time. UNIDENTIFIED MALE: Since December 1st of 2008 was the last time we were down more than 400 points. UNIDENTIFIED MALE: Blue chip suffering the 10th biggest drop on record today, down 513 points at 11,384. UNIDENTIFIED MALE: You can`t say you can`t be worried. That`s a big number, 4.3 percent, to lose in a day, more than 10 percent in the last 10 days or so. That`s worrisome. UNIDENTIFIED FEMALE: And it is 4:00 on Wall Street. Do you know where your money is? (END VIDEO CLIPS) MADDOW: The Dow fell nearly 513 points today -- 155 of those points in the final very dramatic hour of trading, some of which you saw there. That`s a drop of 4.3 percent in one day, the market`s worst day since December 2008. And yes, December 2008 is when we were still in end of the world territory. The NASDAQ and the S&P 500 did even worse than the Dow did today. Why is this happening? Why is the stock market doing this again? It`s not because of one policy fight or some vote in Washington. This is not even mostly a United States story. The markets here are global. Italy now said to be in danger of defaulting on its debt and taking out the Euro with it. In the Spanish capital of Madrid, people are protesting austerity measures by the government there, much like they have been doing in Greece, which is still in trouble and still at risk of default. Look what happened to the European stock market today, all of them hitting their lowest levels in over a year, down an average of 3.4 percent. Even in an environment of global markets, why couldn`t the United States be more insulated from this if this was not primarily an American problem? After all, we decided not to default on our debt on purpose this week. Even if Greece or Italy might be forced to. It`s starting to look like there are two American messages here. One of them is just that our economy is bad. The United States may be about to head into a double dip recession. Our economy, which has been coming back from the horrible Wall Street disaster since early 2009, may be now starting to crater again. Ek! The other message here, the other warning sign that this Dow disaster may have been for us today is not just that the United States isn`t an exception to bad economic news around the world, that we`re in bad shape, too. It`s that we`re not likely to get out of our bad shape anytime soon - - at least not if action in Washington is part of what we need to do to get out of our bad shape. In a global economy, when all of the industrialized economies are really linked, the world frankly needs a leader. The world needs a big economy to have a big strong recovery to help buoy markets in other countries right now. And that apparently is not going to be us. At least that is the judgment of us right now. And part of the reason why is that if there were any big policy solutions need to turn the American economy around, to bring down unemployment, nobody can really imagine Washington today as capable of enacting those needed policies. Joining us now is MSNBC policy analyst Ezra Klein, columnist for "The Washington Post" and also for Bloomberg. Hello, Ezra, of many new titles. Congratulations on all of that. EZRA KLEIN, MSNBC POLICY ANALYST: Good evening. MADDOW: How strong of a connection is there between the American economy, American economic policy, and what we saw in the market today? Is this mostly international news that is driving this sort of thing? KLEIN: This is everything. And this is really the problem with it. I mean, you heard in your intro there that we didn`t just lose 5 percent or 4 percent today. We have lost about 10 percent over the last 10 days. And the reason is that the market cannot find anything to tell a story of hope, of recovery. It isn`t going to be Europe. Europe is in worse shape than we are. It isn`t necessarily going to be China and the emerging markets, which there had been some hope for, because it looks like China is slowing down. And now, there`s a question of how well the Chinese government can actually manage a slowdown in growth, which they now have to deal with in sometime. And as we`ve seen in the last couple of weeks here, it isn`t going to be us either, because not only is our economy in much worse shape than we realized it was even three or four weeks ago when we got the new Commerce Department numbers showing that our cratering in GDP over the last couple of years have been massively understated, even as bad as we thought it was. But our political system is deeply, deeply, deeply broken. And even though that we in Washington all patting ourselves on the back because we decided not to put a gun to our head and pull the trigger, the markets are sort of wondering how we`re going to get out of this hole after we finish playing our games. MADDOW: Is there anything that Washington could do, if Washington was a more functional place, that might be reassuring to the markets, that might offer the kind of hope that would make America seem like a way out of this mess and not just somebody else who was in the mire? KLEIN: I think there are things we can do that would be reassuring. I don`t know that there`s a lot we can do that would show we are the way out. For instance, reassuring would be that we don`t continue having unnecessary arguments about whether or not we will pay back our bills. That would be a good thing to do. Reassuring would be to show that we understand the severity of the global crisis and that we`re going to do the clear things we need to do as a country to begin recovering. So, on the one hand, we do have a deficit problem that. That is true. We need a long-term deficit reduction. It`s good that we are getting started on that. Although it`s bad that one side of the argument refuses to admit that revenues might be part of the solution. On the other hand, though, we have a huge short-term growth problem. We have no growth, very, very high unemployment. And we have all of these things we can do. There was a "Bloomberg" story, one of my employers, who said -- and this was fascinating. Our yields on the Treasury, which is how much the market charges us to borrow, are lower than they have been at any point since Eisenhower`s administration. And what that means is that the market cannot borrow from us quickly enough. That we are still the safest thing to do out there, and they want more of our debt. And so, as they beg us to give them more of our debt, beg us to borrow, and we could use that money to rebuild our crumbling infrastructure, to pass a large payroll tax cut, to pass a hiring tax credit, we are saying no. We are saying that no matter how good of a deal you give us, we refuse to take the money you`re offering and try to speed a recovery in this country. And no matter whether or not that would make us the hope for the world, it would certainly make our economy better off. MADDOW: Ezra, you know as well as anybody, that Washington is not a unilateral thing. It`s not a monolithic thing. And when people look at there being stasis in Washington right now, really, what`s happening is that nothing can get through Congress. We see also a White House, seemingly, at least saying that they are reinvigorated in terms of focusing on unemployment, focusing on jobs. Are there things that the White House can do, without having to go through Congress, that would have a meaningful effect in terms of the kind of reassurance that you`re talking about and a meaningful effect on jobs? KLEIN: There isn`t an enormous amount they can do. They have some money in the funds they were using to do a housing recovery. They could do more with that. They could obviously push harder on jobs. It is obviously not the case they have a ton of control over this Congress. The actual actor who could do something in Washington who is necessarily part of this gridlock is the Federal Reserve. There are a number of extraordinary measures they can take up from price level targeting in which the basically forces to move into a type of a catch up growth on inflation, to a much larger version of the quantitative easing, maybe a quantitative easing that goes further into real assets as opposed to simply buying treasuries. And many respected economic conservatives began pushing for this type of thing, like Christina Roamer, the former chair of the Council of Economic Advisers. But they appeared to be pulling back somewhat. They appear to be trying to exit the building. The Federal Reserve has been under a lot of criticism particularly in the Republican Party lately, and it has clearly shocked them a little bit. And they don`t want to necessarily lose their political independence. So, they are not doing nearly as much as they could be or frankly should be doing. And that`s a problem because when Congress gridlocks, they become our only hope. MADDOW: Ezra Klein, columnist for "The Washington Post" and for "Bloomberg," and MSNBC policy analyst -- and tomorrow, the host of "THE MARTIN BASHIR SHOW" here at MSNBC at 3:00 Eastern -- Ezra, thanks very much for helping us with this. I appreciate it. KLEIN: Thank you. MADDOW: For a second perspective, we turn now to Robert Frank, professor of economics at Cornell University`s Johnson School of Management. Professor Frank, thanks for coming in. I really appreciate it. ROBERT FRANK, CORNELL UNIVERSITY: My pleasure, Rachel. MADDOW: Let me ask you if you agree with Ezra`s assessment there that while this may not be an American problem that the markets were responding to in total, there are things that the U.S. government could do to make America more reassuring place right now in the markets. FRANK: Absolutely we could. I think Ezra is right that the political prospects for that happening are dim, but I think it`s very important to keep explaining to people that the problem we face is not really a very complicated one. We don`t have enough demand to put people to work. Businesses aren`t spending. Why should they spend? They have already got enough capacity to produce more than consumers want to buy. Consumers are worried they are about to lose their jobs, if they haven`t already. They are worried too that the price of goods and services may rise at some point, although there`s no evidence of that. They are holding back. They have got debt to service. Consumers won`t lead the way. Businesses won`t. That leaves government. And we`ve known for over 60 years that in a situation that we`re in now, where there`s persistent shortfall of demand, government can invest in public works projects and other things that will get the economy back on its feet. It could be done. It`s quite easy to do. The workers are there who know how to do the jobs. The market`s happy to lend us the money, as Ezra said. They are eager to loan us more money at very low interest rates. The cost of debt compared to the cost of unemployment is incredibly low. A $1 trillion deficit costs us $25 billion a year to pay the interest on that. If we have an extra 10 million unemployed, that`s $250 million lost forever each year. And so, it`s a 10-1 tradeoff. We`re focusing on deficit reduction when we really ought to be focused on job creation. And we know how to do it. MADDOW: Even if we all we care about is the deficit, still the solution is to focus on jobs creation. FRANK: Focusing on the deficit, cutting spending, that`s going to make the deficit bigger. What we`re doing now is just unimaginably stupid. MADDOW: Right now, it seems to me like -- well, I`ll just say it this way. We are not a show that very often leads with, what happened on the stock market today? That is not generally the way I at least look at the landscape of American news and think that. I very rarely think that`s the most important thing. I also spend a lot of time talking about what`s politically realistic in America. So, now, we`ve got this combination where I`ve got a 500-point drop of the Dow at the top of the show, and we`re talking about the things that America needs to do to deal with our economy not being politically realistic. At what point does the economy become shocking enough, a 500-point drop on the Dow, becomes shocking enough that it changes what`s politically realistic? How do we understand the magnitude of a day like today on the Dow? FRANK: Yes. Maybe there`s a ray of hope there. If it were going to lose 500 points, better to lose them in an afternoon than over the course of two months. People I think are jolted into recognizing that there is a problem. It`s time to discuss these issues, because, again, there really are simple solutions. A payroll tax holiday -- that would put extra money into workers` pockets. The problem is not enough demand. They`ll have more money, they`ll spend more. Give the employers a break for the next year on the payroll tax for newly hired workers. That would make it cheaper to hire new people. There are thousands of projects, bridges that are collapsing that need to be fixed. People available to fix them. People are happy to lend us money to finance the jobs. Materials cheapen world markets. Machines sitting idle in the yards. This is all quite doable, and politically, that`s the road block, as you point out. But people shouldn`t get a free pass just by being the road block. People should continue to point out that we could be doing something about this, and the road blocks had better get out of the way. MADDOW: And a sharp shock like we saw today may be the sort of thing that gets those road blocks out of the way. FRANK: We can hope. MADDOW: Robert Frank, professor of Economics at Cornell University`s Johnson School of Management, we called you on short notice today, and I know you cancelled other plans to be here. I`m really grateful. Thank you. FRANK: Always a pleasure. MADDOW: Thanks. For his 50th birthday, I`m sure that President Obama did not ask for the stock market to fall like Wile E. Coyote going off a cliff. That said, when President Obama turned 47, I bet he didn`t ask for conservatives to spend three solid years demanding to see other random forms of his birth certificate. Please stay with us. (COMMERCIAL BREAK) MADDOW: The biggest story in the presidential politics of the day, Mitt Romney and the magical million-dollar donation to him that nobody is owning up to. That story is coming up. (COMMERCIAL BREAK) MADDOW: OK. It was February 1961. An 18-year-old girl from Kansas named Ann Dunham got married against her parent`s wishes. She got married to a Kenyan man five years older than she was. Their marriage took place on the island of Maui in Hawaii, and was three months pregnant at the time of the wedding. Sometime between the wedding and when her child was actually born, in that six-month window, Anne Dunham, while quite pregnant and only 18 years old, decided to fly halfway around the world to Kenya to give birth to the couple`s son there. The plan this young couple was hatching at the time was that their baby, this terror baby, if you will, would become the president of the United States in about 50 years. Why give birth to him then in Kenya instead of just staying in Hawaii? I don`t know. And you don`t either. But they had to know in advance that he was going to run for president 50 years later, because within days of giving birth to him in Kenya, the 18-year-old Ann Dunham, or perhaps one of her co-conspirators, paid a newspaper in Hawaii, "The Honolulu Advertiser," to run this false birth announcement saying that Dunham`s son was not born in Kenya, which, of course, he was, but rather that he was bon in Honolulu. Now, you don`t have to be born in the United States to be a governor or a senator or any other thing, it`s just president. So, Ann Dunham, 18 years old, or her co-conspirators, they knew in 1961 that this baby would specifically be president one day, which is why they had to pay for the fraudulent birth announcement in 1961. Knowing he would be president is also presumably why they named him Barack Hussein Obama, so as to arouse no suspicion whatsoever of his maybe foreign-born nature. So, now, we have a foreign-born, innocuously-named president-to-be terror baby, presumably indoctrinated for his eventual covert ascendance to secret, illegitimate leader of the world -- leading to one of the few unanswered questions in this very clear story, which is over and above the fake birth announcement in the newspaper, who arranged for the fake birth certificate? The fake birth certificate? The fake birth certificate to be put on file in the Department of Health in Hawaii? Was it Barack Obama`s 18-year-old mother? His 23-year-old father? Was it some of their unnamed co-conspirators? Could it have been the terror baby himself? The governor of Hawaii at the time was this man, William Francis Quinn. I`m just saying. Where was he at the time? As part of their plan to make young Barack look like he was American, which, of course, he was not, they brought him from Kenya to Hawaii, where they made sure he gained a little weight, sort of becomes a husky boy for a little while. That looks more American. And then he gets put through American-seeming education at places like Occidental College, although that still sounds a little foreign -- also, Columbia University and Harvard Law School. And with only the fake birth announcement and the forged birth certificate to go by, the American public eventually stumbles into allowing a secret foreign-born Kenyan terror baby to run for president of the United States. And now, 50 years later exactly, maybe, the plan has worked. I think there are a few different varieties of that story. But broadly speaking, that is the story. That is the theory to which 13 members of Congress, 13 elected members of Congress have signed onto, the co-signors of the birther bill to demand birth certificates and not like that probably forged one from anyone running for president, like, say, a certain someone who will have to run for re-election next year, so we as a country don`t get duped again. (BEGIN VIDEO CLIPS) RADIO HOST: So, you believe the president is a U.S. citizen? REP. RANDY NEUGEBAUER (R), TEXAS: You know, I don`t know. I have never seen him produce documents that would say one way or the other. RADIO HOST: You think he is an American citizen and a Christian? You know what I`m saying. REP. PAUL BROUN (R), GEORGIA: I`m not going to get involved in that. What -- I`m talking about -- RADIO HOST: You can`t say that he`s an American citizen? BROUN: Well -- RADIO HOST: You can`t say the president is an American citizen? BROUN: I don`t know. UNIDENTIFIED FEMALE: What is your position on Barack Obama if he is in fact a Kenyan born, Indonesian Muslim? REP. STEVE PEARCE (R), NEW MEXICO: He himself raises the greatest questions. I think that those questions need to be answered. CALLER: My question is, do you believe that this president was born in America? Because I have not seen enough evidence to say that he is an American citizen. And do you believe he is a Muslim? REP. TIM WALBERG (R), MICHIGAN: You know, I don`t know. I really don`t know. (END VIDEO CLIPS) MADDOW: Is he a citizen? I don`t know. There`s this other theory which seems so plausible. It`s that theory, the whole like flying to Kenya to give birth to the baby and the fake announcement -- yes. It`s that theory that led Republican lawmakers in at least 10 states across the country to introduce birther bills, requiring more birth certificate proof before anybody allows another terror baby on the ballot in any of those great states. Republicans in Arizona went so far as to actually pass their bill. It was later vote owed by Arizona`s governor, Jan Brewer. You know, come to think of it, where was Jan Brewer in 1961? Even Republicans laying the groundwork for presidential election run for 2012 ran with the birther certificate conspiracy theory right from the get-go. (BEGIN VIDEO CLIP) REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: Look, this is the easiest problem to solve. All the president has to do is show it. And all I`m saying is there`s only one person who can attest to the authenticity, and that`s the clerk of court in the country where he was born. (END VIDEO CLIP) MADDOW: Let`s all line up to go to talk to the clerk of court. One presidential run this year actually seemed to be based entirely on the Kenya conspiracy theory as its whole platform. (BEGIN VIDEO CLIPS) DONALD TRUMP, BUSINESSMAN: Why doesn`t he show his birth certificate? And you know what? I wish he would, because I think it`s a terrible pall that`s hanging over him. He should show his birth certificate. If you are going to be the president of the United States, you have to be born in this country. And there is a doubt as to whether or not he was born. UNIDENTIFIED MALE: Come on. TRUMP: Why doesn`t he show his birth certificate? Why has he spent over $2 million in legal fees to keep this quiet and to keep this silent? (END VIDEO CLIPS) MADDOW: As that TV celebrity/real estate developer fake presidential run based on the presidential birth certificate conspiracy theory occluded all other news in America earlier this year, the White House decided to just end all of that by producing further duplicative documentation that he wasn`t secretly moved from Kenya as an infant to obscure the true, inexplicable conspiracy of his birth. (BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: No one is happier, no one is prouder to put this birth certificate matter to rest than the Donald. And that`s because he can finally get back to focusing on the issues that matter, like did we fake the moon landing? What really happened in Roswell? And where are Biggie and Tupac? Michele Bachmann is here, though, I understand, and she is thinking about running for president, which is weird because I hear she was born in Canada. Yes, Michele, this is how it starts. (END VIDEO CLIP) MADDOW: That was the White House correspondence dinner earlier this year. And while those jokes at Michele Bachmann and Donald Trump`s expense were sort of devastating, what was really the most devastating thing about that whole time in American politics was the fact that while the president was taking the hide off of Donald Trump at the White House correspondence dinner, at that very moment, at that moment in time, what was he also doing? He was also killing Osama bin Laden. So, yes, this whole thing is over. It`s really -- it`s just the dead enders now. The Web site World Net Daily, you might remember their where`s the birth certificate merchandise page, they made a ton of money off of the conspiracy theory, marketing it to gullible conservatives. They have now had to revise all of their merchandise, so it now says where`s the real birth certificate? They are still trying to eke a few bucks out of this thing. You may also remember Orly Taitz, the queen birther, Orly Taitz still trying to make a go of it as well. Dave Weigel reporting at today that Ms. Taitz is now asking her followers for, quote, "information about Hawaiians or leftists who, in theory, could have aided the Obama parents in a massive conspiracy." So, yes, in other words, it`s over. I will say -- I thought at the time when President Obama released the second form of the birth certificate that that would not put this thing to rest, that it wasn`t fact-based, and giving more facts wouldn`t help, but it did put it to rest. I was wrong. It put it to rest. On the president`s 50th birthday today, it is now just the dead-enders and the profiteers at this point who is plugging this thing. There is nobody who has any pull at all in conservative politics or Republican politics at all who has -- seriously? Are you sure? Are you sure this is not from last -- this is this week? This is from yesterday? OK. Play it. (BEGIN VIDEO CLIP) RUSH LIMBAUGH, RADIO TALK SHOW HOST: Tomorrow is Obama`s birthday. Not that we`ve seen any proof of that. We haven`t seen any proof of that. They tell us August 4th is the birthday. But we haven`t seen any proof of it. Sorry. (END VIDEO CLIP) MADDOW: Sorry. Apparently, it`s not over. Joining us now is David corn, Washington bureau chief for "Mother Jones" and an MSNBC political analyst. David, it`s good to see you. Thank you for being here. DAVID CORN, MSNBC POLITICAL ANALYST: Good to be with you, Rachel. And happy birthday, Mr. President. MADDOW: Happy birthday, Mr. President! Rush Limbaugh is still a birther? I mean, isn`t birtherism over now? CORN: Well, you know, you do think that birtherism is over. I think you put it well a few moments ago when you said it was really relegated to this realm of dead-enders and people who just are, you know, one step away from Area 51 Roswell conspiracy theorists. Or even maybe one step beyond. But, you know, the interesting to me is while birtherism is dead, otherism isn`t dead. And you see in the Republican presidential field, you see the conservatives, they are still out there trying to promote the notion that Obama is really not quite American, which is a more subtle version of birtherism. And I think in some ways more insidious. And if you want examples, I can give you some. MADDOW: Tell me some examples, otherism. Go. CORN: Mitt Romney when he was talking about health care a couple of months ago, actually after the long form birth certificate came out and he said that he didn`t question Obama`s citizenship, what did he say? He said -- I`m going to read this here -- "The Obama administration fundamentally doesn`t believe in the American experiment." Hmm. He doesn`t believe in the American experiment. Sarah Palin, just this week, said that American ideals are foreign to Barack Obama. They are foreign. He doesn`t believe in America either. And today, you played Rush yesterday, but today what did he do? He compared Barack Obama to Robert Mugabe, the dictator, leader, thug, corrupt leader of Zimbabwe. And he said Mugabe is his new role model. And why? Because Mugabe took away white people`s farms. Now, that`s like racism, otherism, birtherism, you know, the Kenya, Africa connection all rolled into one sound bite. I don`t know how he does it. MADDOW: Do you foresee a 2012 campaign in which we get more of the "Obama is a Muslim" stuff, in which we get more of the completely unveiled racist attacks on the president, like some of the stuff that we saw late- breaking in the 2008 campaign? Or do you think that the death of birtherism actually take some of that away, since so much of that stuff was channeled into birtherism? Do you think the stuff is going to be just as bad? CORN: I think you`re going to see it in the Republican primary. Because the general public, independents, moderates, people they`re going to be playing to in the general election don`t care about this and really don`t, you know, aren`t susceptible I think to these types of arguments. But in the Republican field, you have voters in the electorate, the GOP electorate, who still want to bash Obama as some sort of foreign subversive element who is trying to turn America into a Muslim socialist country. It`s kind of confusing to me too. But -- and so candidates who want to get those votes, Republican candidates, are going to have to play to those fears and paranoid sentiments. And that`s what I think you have seen with Mitt Romney, Michele Bachmann, and others. And they are going to find other ways of doing that in the months ahead to get that nomination. MADDOW: David Corn, MSNBC political analyst and Washington bureau chief for "Mother Jones" -- David, thank you for dipping into the madness with me. I appreciate it. CORN: Thank you, Rachel. MADDOW: As Michele Bachmann gets mainstreamed from the really far wing nut edge of Republican politics into a supposedly credible presidential candidate, I think it will be fascinating to see whether or not her past embrace of birtherism will actually be held against her being taken seriously. It`s going to be a potpourri of things to choose from. All right. Biggest political scoop in American news today was thanks to some dogged following the money reporting by NBC`s Michael Isikoff. Mr. Isikoff joins us next. (COMMERCIAL BREAK) MADDOW: Another day, another deal -- another day, another deal, over something that was not a crisis until congressional Republicans made it one. Congratulations, America, we once again have a Federal Aviation Administration. Hurray! The FAA has been partially shut down for almost two weeks ago, 4,000 workers furloughed, hundreds of construction projects on hold, tens of thousands of construction workers out of work, safety inspectors working without pay and travelling on their own dime -- all because House Republicans held up reauthorization of the FAA to try to force Democrats into letting them strip union rights from people who work for airlines and railroads. The Democrats did not cave on that. The deal reached today provides for no change in union rights. But it`s only a very, very short-term deal. The Senate will approve it tomorrow. President Obama says he`ll sign it immediately. But then we get to have this fight all over again when this short-term authorization runs out in just over a month. Meanwhile, though, those 4,000 furloughed FAA workers will be back at work as of the stroke of pen tomorrow. As for the construction projects and those tens of thousands of construction workers, they will take a bit longer to fire up again. A lot of those workers took other jobs if they could find them, while the agency shut down, so it`s now a matter of waiting to get all of those crews back together again. Before the shutdown, they were working on improvement projects at more than 250 American airports, things like upgrading air-traffic control towers to make them more earthquake resistant, working on runway lighting systems and airport surface radar systems to prevent collisions at airports. Restarting those projects after they were stopped by Congress will cost a ton of money, a ton of money that would not otherwise have had to be spent. The partial shutdown itself has been costing the government $30 million a day in lost tax revenue we`d otherwise be getting. Had it remain unresolved until Congress returned from recess, the total cost would have been well over $1 billion. Local communities, too, have been trying to calculate what the FAA shutdown means for them and their local economies. Local press reports on this show -- local press reports on this issue show worries over 1,200 jobs on the line in Minnesota and millions of dollars worth of projects at the Wilmington, North Carolina airport; $1 million of grant money in Maryland; $16 million worth of projects at the Memphis airport; an aviation school in Fort Wayne, Indiana; $8 million to extend a runway at the Detroit Metropolitan Airport; two projects at the Peoria, Illinois airport put in jeopardy. Those will, theoretically at least, all restart now. After about $400 million was lost directly, plus the cost of restarting all those projects that were stopped, plus the cost to the economy of all of those furloughed workers and construction workers being idled and therefore not getting paid and therefore not spending money on things they`d otherwise spend on and thereby having -- thereby having a magnified effect on the economies around them. That is the cost incurred, already in this particular hostage standoff over Republican efforts to strip union rights. After the debt ceiling deal was agreed to, finally, Senate Republican leader Mitch McConnell told "The Washington Post," "I think some of our members may have thought the default issue was a hostage you might take a chance at shooting. Most of us didn`t think that. What we did learn is this -- it`s a hostage that`s worth ransoming. And it focuses the Congress on something that must be done." So, it`s the full faith and credit of the United States of America that makes for a hostage worth ransoming or it`s the Federal Aviation Administration. That apparently makes for a hostage worth ransoming. This is how Republicans plan to work apparently from here on out -- hostages. They`re not saying don`t call us hostage takers. They are saying, yes, we`re taking hostages, causing real harm to the country, particularly to the economy, to try to get by force what they do not have the votes for. That is how Republicans say they are going to handle the responsibility of governing from here on out. Flotation devices are beneath your seat. (COMMERCIAL BREAK) MADDOW: "The Best New Thing in the World Today," I`m very happy to say, is a piece of really good news for American soldiers and for their families. Tomorrow, we`re hearing there`s also due to be some very good news for Iraq and Afghanistan veterans. Today`s soldiers and today`s veteran are groups about whom frankly we do not often get to say, hey, there`s a bunch of good news to report. But tonight, good news for them -- big good news for them. I swear. That`s coming up right at the end of the show tonight. (COMMERCIAL BREAK) MADDOW: One of the stranger half secret little twists this year`s presidential politics is that the presumed Republican front-runner, the candidate who says he is the one to beat, whomever everyone seems willing to agree is the one to beat, actually has a lot of people on his own side who do not like him. In South Carolina, one group of Republicans responded to news of Mitt Romney the front-runner by trying to draft New Jersey Governor Chris Christie to run against him. The Tea Party FreedomWorks says it will fund an effort to block Mr. Romney from becoming the nominee. Another Tea Party group, the Western Representation PAC, has a stop Romney campaign. Also, the Club for Growth, a heavyweight these days in Republican fiscal policy, calls Mr. Romney a flip flopper. And those are just the folks on the right, his own side, who do not like Mitt Romney for his politics or the way he combs his hair or wears his khakis or whatever. This guy, Fred Karger, is actually completing against Mitt Romney for the Republican nomination. Mr. Karger is a little known candidate, which is a polite way of saying he doesn`t really have a chance. But Mr. Karger has made what seems to be a substantive legal complaint about Mitt Romney. In June, he wrote to state officials in Massachusetts saying he thinks Mr. Romney may have violated Massachusetts voting laws in 2009 and 2010 when he voted in the special election for Ted Kennedy`s old Senate seat won by Republican Senator Scott Brown. Mr. Romney voted once in the primary and once in the general election in Massachusetts. At the time that he cast those ballots, he claimed he was living in his son`s basement in Belmont, Massachusetts, having sold his own multimillion dollar estate there in April 2009. His son`s basement at the time was an unfinished space -- meaning that Mitt Romney, a multimillionaire, was claiming himself to be the legal resident of his son`s unfinished basement. He is claiming under Massachusetts law that his son`s unfinished basement was the center of his domestic, social, and civic life. Massachusetts officials told us when we asked there would be no investigation into these claims against Romney made by Mr. Karger. But despite having a number of people on his own side who really ostentatiously do not like him and are willing to say so out loud, Mitt Romney, of course, also has his fans -- people who do like him and write rather large checks to further his political career. He has powerful and wealthy people who really like him, want him to run and want him to win. We`re just not necessarily allowed to know who those people are. In March of this year, "The Wall Street Journal" reported that the Romney campaign had begun a 15-city tour to shake the trees for big donations, as in $50,000 big donations. The campaign set a goal of $50 million to be raised by early summer, saying they thought that would be enough to scare off anybody thinking of wondering into Mitt Romney`s race. We know now from campaign records that some of Mitt Romney`s very rich friends got out their fancy checkbooks and their Montblanc pens and started inking zeros, even though they didn`t make their $50 million goal. One of the big donations he got was from W Spann LLC. Now, W Spann LLC is a little mysterious. It is listed -- its headquarters are listed as being on Madison Avenue in New York City. But this group, this Spann Company, was only created when it was registered with the state of Delaware, land of mysterious corporations, back in March. The incorporation papers were filed by this young Boston lawyer. We don`t know who her client was or what this new corporation planned to do as a business. We do know that this particular lawyer specializes in something called wealth transfer strategies. And the very next month, after she filed the incorporation papers for W Spann LLC, W Spann LLC did, in fact, transfer a whole bunch of wealth. In April, W Spann transferred $1 million -- not to Mr. Romney`s campaign directly, but to a PAC that`s being run for his benefit. Despite seemingly to exist as a single page with three stock photos and a giant "contribute" button and some boilerplate talked about candidates, plural, that PAC Restore Our Future, is really all about Mitt Romney. Restore Our Future is run by Mitt Romney`s backers. They say they are raising money for Mitt Romney. They have had Mitt Romney solicit donations for their pro-Mitt Romney PAC at the PAC`s events. It`s a Mitt Romney gig. They raised more than 12 million bucks in the first half of the year. And 1/3 of what they raised came in million dollar chunks from four sources, including the aforementioned mysterious W Spann LLC, a company that seems to have done pretty much nothing besides give $1 million on April 28th for the betterment of Mitt Romney`s political career. On July 11th, two weeks before this Mitt Romney PAC had to file its report with federal elections officials, two weeks before that PAC was to reveal its donors, this company, W Spann LLC, shut down. Its wealth transfer specialist lawyer filed this certificate of cancellation with the state of Delaware. So, whatever this company was supposed to be, whatever it was, after founding itself, submitting a single $1 million check on Mitt Romney`s behalf, the mysterious W Spann LLC was then officially dissolved. That`s all it did as a company. That`s what the company was for, apparently -- to deliver 1 million bucks for Mitt Romney`s political benefit via a source that soon disappeared, a source that could not be traced. So, where did that million dollars come from? Who gave that money? Mr. Romney`s old investment firm, Bain Capital, says W Spann was not affiliated with them or anybody that works for them. Next guess, anyone? Was it a Girl Scout troop maybe? You know, cookie sales this year, I hear, were great. Could it have been the government of China maybe? How about a Mexican drug cartel? How about Mitt Romney himself? We do not know. We just do not know. Joining us now is the investigative reporter who got everybody asking these questions today by putting these dots together -- Michael Isikoff, NBC News national investigative correspondent. Michael, congratulations on breaking this story. Appreciate having you here. MICHAEL ISIKOFF, NBC NEWS NATIONAL INVESTIGATIVE CORRESPONDENT: Well, thank you, Rachel. Good to be with you. MADDOW: Do we know whose money this is? Is there any way to find out? Could it be foreign money? Could it be Romney`s own money? Is there any way to know? ISIKOFF: It certainly could be anything. It`s actually a rather intriguing Washington mystery. You know, you certainly laid out a -- one scenario that people have speculated about, the Bain Capital connection. Ropes & Gray, the law firm that Cameron Casey works for, has long represented Bain Capital, the firm that Mitt Romney once headed. Bain Capital does have an office in that 590 Madison Avenue skyscraper that W Spann listed its address as. But Bain Capital`s spokesman in a rather emphatic denial to me said nobody at the firm is part of this entity. Now, that does raise the question, could it be clients of the firm or could it be somebody else in 590 Madison Avenue? There`s UBS. There`s Bank of America. There`s CEMEX. There`s a lot of other blue chip firms that have this address. What we do know is I spoke to the management company at 590 Madison Avenue. They say they never heard of W Spann and have no such tenant. MADDOW: Why did you figure this out? Why did you start chasing the W Spann connection in the first place? What about it stood out to you? ISIKOFF: Well, first of all, the million dollars. You don`t see that every day. And when you see a huge check like that, it does kind of raise your eyebrows. And I saw caught -- this was filed in the Restore Our Future filings with the FEC late on Friday. There were a couple stories over the weekend that said people couldn`t explain where this was. And that got my juices going. We did a full LexisNexis search, database search on Monday, and found the Delaware court papers. I called the Delaware secretary of state`s office. I ordered the court incorporation and dissolution papers, saw the dates, saw the name Cameron Casey, and was able to sort of piece what we`ve gotten so far together. MADDOW: Is there any evidence that this company ever did anything other than form, give a million dollars to Mitt Romney, and disband? Is there any evidence they did anything else? ISIKOFF: Not in the public record. And that`s precisely the question. And that`s why there`s going to be calls tomorrow from some campaign finance reform groups for a Justice Department and Federal Election Commission investigation into this. Look, it is a federal crime to give money in the name of another. That`s called a straw donation. The Justice Department has made vigorous prosecutions of this over the years. This is sort of can be a form of this. If W Spann had no other purpose but was only set up for -- to funnel money to restore our future, the PAC, then it is arguably a straw donation. Somebody is trying to conceal their identity by using this arguably sham company to make this donation. MADDOW: Michael Isikoff, NBC news national investigative correspondent -- Michael, I love the way you think. I love this work. And the way you do it on this. Thank you for following this trailing and thanks for joining us. ISIKOFF: Thanks, Rachel. MADDOW: The big recall election day in Wisconsin is Tuesday. I have big news about that. Ed Schultz is going to be doing his show in Madison starting on Monday. Tonight, all the latest in the big money fight over Governor Scott Walker`s union-busting play in Wisconsin. That`s coming up on "THE ED SHOW." And here, "The Best New Thing in the World Today" is great news for American soldiers. And American soldiers have had a best new thing coming to them for a really, really long time, frankly. News I`m really happy to report, coming up. (COMMERCIAL BREAK) MADDOW: In the decade since 9/11, about 2 million Americans have fought in our wars in Iraq and Afghanistan -- 2 million Americans is a lot of people. It is also, however, less than 1 percent of the U.S. population. Our Iraq and Afghanistan veterans have borne a hugely disproportionate burden as the 1 percent that`s them have done deployment after deployment after deployment in the name of the 99 percent of the rest of us who have not done these things. In 2007, having that tiny proportion of our population fighting two of the longest wars in our history simultaneously meant that combat deployments were lengthened to 15 months -- 15 months at a stretch in the war zone. And the Bush administration shortened the troops` minimum guarantee of how much time they would have at home before being deployed at home. Today, NBC News has learned that, finally, that is about to change in the United States Army. Tomorrow, the Army is expected to announce that most combat deployments will decrease to nine months total time on the ground in the war zone. The announcement is also expected to include an increase in dwell time, which is the time troops have at home between their deployments. MADDOW: To have been a soldier this decade for the United States of America has meant two, three, six, eight deployments to war. We have never before as a country asked this much of our men and women in uniform for this long -- shortening these deployments, increasing their guaranteed time at home, frankly, it is "The Best New Thing in the World Today." It`s due to be announced tomorrow. It`s not everything, but it is a very, very welcome start. That does it for us tonight. Now, it`s time for "THE ED SHOW." Have a good night. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END