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The Rachel Maddow Show, Transcript 12/08/11

Guests: Frank Phillips

ED SCHULTZ, "THE ED SHOW" HOST: I think it`s very, very dangerous. I cannot believe this is happening in America. Good to have you with us tonight. That`s "THE ED SHOW." I`m Ed Schultz. Next up, THE RACHEL MADDOW SHOW. Rachel, great to have you with us tonight. Good to see you. RACHEL MADDOW, HOST: Thanks very much, Ed. I`m going to be covering a little bit further on that story you that just covered tonight about Michigan. I agree with you that I think this is probably the biggest story in the country. SCHULTZ: Look, if Michigan gets away with this, if they get away with this, then the next radical governor`s going to try it, and you know where it`s all going to go. It`s just absolutely amazing. MADDOW: More ahead on that subject this hour. Thanks a lot, Ed. Really appreciate it. SCHULTZ: Thanks, Rachel. MADDOW: And thanks to you at home for staying with us through the next hour. All right. Let`s just level with each other about this because we all know the truth, and that`s that polls are boring. I mean, I realize that polls less than a month out from the Iowa caucuses are important in terms of understanding what`s going on in the race for the presidential nomination and the presidential nomination is a really important thing. But polls are boring -- especially when there are important minute details between each of these polls that come out now in big bunches every single day, including on weekends. Keeping track of all the finite distinctions, which are important and which aren`t important, it can be a little glazing. Fortunately, today is one of those days when understanding the polls is very simple. Here`s what`s going on in the polls right now. Are you ready? This is what`s going on in the polls. Yes, that`s pretty much it. The new national Gallup poll shows Newt Gingrich up by nine. Florida Quinnipiac poll Newt Gingrich up by 13. Florida Survey USA poll, Newt Gingrich up by 22. Ohio Quinnipiac poll, Newt Gingrich up 18. Pennsylvania Quinnipiac, Newt Gingrich up by 14. Georgia poll by Survey USA, Newt Gingrich up by 53. He`s not winning 53 percent of the vote in that poll in Georgia. He`s winning by a 53-point margin in Georgia. And yes, that is his home state. But if you have not been relishing the prospect of keeping up on all the little details of all the different polls, at this point, you don`t have to. Not today. There are no details. It`s only one story. Actually, if you are interested in absorbing just one nuance in the polls, that national polling number for Newt Gingrich from Gallup, that shows him with a nine-point lead over Mitt Romney today, that lead was 15 percent over Mitt Romney just a few days ago. So there has been a down tick in Mr. Gingrich`s national Gallup prospects in the last few days. But still, he`s nine points ahead right now nationwide. And that lead that Mr. Gingrich -- that uncomplicated lead that Mr. Gingrich has jumped out to, that frankly explains this. (BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think people understand that I`m a man of steadiness and constancy. I don`t think you`re going to find somebody who has more of those attributes that I do. I`ve been married to the same woman for 25 -- excuse me, I`ll get in trouble -- for 42 years. I`ve been on the same church my entire life. I worked for one company, Bain, for 25 years and I left that to go off and help save the Olympic Games. If I`m president of the United States, I will be true to my family, to my faith, and to our country, and I will never apologize for the United States of America. I`m Mitt Romney, and I approve this message. (END VIDEO CLIP) MADDOW: Mitt Romney was probably going to run as a family values guy anyway. They all do. But what better time to start the family values part of the campaign than when Newt Gingrich shoots by you in the polls with his third wife in tow? The thing that has Democrats really excited about Mitt Romney today, though, is that Mr. Romney`s newfound energy, the get up and go in his campaign that seems to be inspired by Newt Gingrich beating him all over the country now has caused Mr. Romney to throw caution to the wind on a really important thing. Earlier this year, all but five Republicans in the House and seven Republicans in the Senate, the overwhelming majority of congressional Republicans, voted for something so politically toxic it makes Democratic operatives break out in spontaneous applause whenever you bring it up. Republicans voted for the Paul Ryan budget, the kill Medicare budget. Dave Weigel at reports that Paul Ryan is lobbying right now -- in this video right here -- lobbying that anybody saying his plan kills Medicare should be accused of telling the lie of the year in politics. The thing is the Paul Ryan budget does kill Medicare. Instead of Medicare, old people will have a system where they have to buy private insurance on the private market, and Paul Ryan will give them coupons to get discounts. So, if you want to call a system like that Medicare, telling granny to go buy private insurance on the open market but with a coupon, then sure, call it Medicare. Call it macaroni. I don`t care. But what everybody understands Medicare to be, guaranteed government health insurance for old people, for what Medicare actually is, the Paul Ryan plan kills Medicare. When almost every Republican in the House and the Senate voted to kill Medicare, when they voted for the Paul Ryan plan, there was much rejoining on the Democratic side, and that`s because Democrats knew they could stop this thing from actually becoming law. President Obama would never sign anything like that. But they also knew that Republicans had just hung this giant albatross around their own necks. For the rest of their careers now, they will have to explain or live down or apologize for the fact that they voted in 2011 to kill Medicare. Senator, the mob from the nursing home with pitchforks is here. They`d like to have a word with you. Thank you. At the start of the Republican presidential campaign, we spent weeks. Jaws dropped, eyebrows raised, agape as all of the major Republican candidates for president one by one swallowed hard and said that yes, they too would have voted with congressional Republicans for the Paul Ryan plan to kill Medicare. Newt Gingrich initially said he wouldn`t. He called it right-wing social engineering on "Meet the Press." Remember? But after a right-wing uproar, Mr. Gingrich caved immediately and said, oh, OK, he was on board too. The only candidate who hedged, the only one who squirmed away from the issue for weeks, we asked his campaign repeatedly for weeks what his position was on it. And he squirmed out of it. He wouldn`t answer. The only one of them who seemed smart enough to hold off, to try to at least avoid answering the "would you kill Medicare" question, was Mitt Romney. And that`s over now. Now, Newt Gingrich is beating Mitt Romney in almost every poll across the country. Did I mention the 53-point margin in Georgia? And so, Mr. Romney has decided to go after Newt Gingrich who initially said something about the Paul Ryan plan before changing his mind. But in so doing, in attacking him for that, in order to appear un-flip-floppy in contrast to Mr. Gingrich, Mitt Romney has now stopped hedging on this issue finally. And in no uncertain terms he has declared, he has put it in print, we`ll just show you on his Web site. Look. Quote, "As president, Mitt Romney would sign the Paul Ryan plan." That sound you hear is spontaneous applause throughout blue America. Greg Sargent of the "Washington Post" compiled some of that glee today. Bill Clinton`s former chief strategist Paul Begala saying, quote, "The fact that Mitt Romney would call for essentially ending Medicare should disqualify him from the presidency in the eyes of millions of middle-class voters." A Democratic operative e-mailed a one word response to Greg Sargent. The one word? "Rejoicing." Steve Benen at "Washington Monthly" added, quote, "This is the line Democrats have waited eight months for Romney to take." I think we will look back and see this as a banner day when the general election comes around, or at least when Mitt Romney drops that off his Web site and pretends it was never there. We`re going to see this is a big deal in the general election, because unless there is some miracle, and it`s neither Newt Gingrich nor Mitt Romney nominated, if one of those two guys is nominated, the Republican nominee for president is going to be a guy who wants to kill Medicare. It`s going to be a guy who says he will kill Medicare. So here`s your coupon instead of your Medicare, grandma. Ow, ow. Pitchforks hurt. Ow. So Democrats are very excited today for what the dynamics of the Republican primary have caused Mitt Romney to step in. I mean do. But the first voting of course is in Iowa. Less than four weeks away. And you know who else is right up there in the polls in Iowa alongside Mr. Gingrich and Mr. Romney? It`s Ron Paul. And Ron Paul`s campaign is taking a turn as well. Since Mr. Gingrich started surging, Ron Paul has been running a series of pretty blistering anti-Newt Gingrich ads. But this week, Ron Paul also started running ads for himself as an F- 150 truck. Here`s the Ford F-150 truck ad. You have probably seen this before. (BEGIN VIDEO CLIP) NARRATOR: OK. Odds are if you`re one of the people in America with a pickup truck, it ain`t a luxury, it`s a way of life. And chances are, you`re not making your money pushing a pencil or hand modeling. You`re actually working for every dollar and need your truck. (END VIDEO CLIP) MADDOW: So, that`s the F-150 ad. That`s just for comparison`s sake. Now here`s the Ron Paul ad. (BEGIN VIDEO CLIP) NARRATOR: What`s up with these sorry politicians? Lots of bark. When it`s showtime, whimpering like little shih tzus. You want big cuts? Ron Paul`s been screaming it for years. Budget crisis? No problem. Cut a trillion bucks year one. That`s trillion with a t. Department of education, gone. Interior, energy, HUD, commerce, gone. Later, bureaucrats. That`s how Ron Paul rolls. (END VIDEO CLIP) MADDOW: What are you, some kind of hand model? No, the F-150 is a very popular vehicle. I have one myself. So maybe this ad will also popularize Mr. Paul, make him as ubiquitous as an F-150. The ad did already get him onto the Conan O`Brien show. (BEGIN VIDEO CLIPS) CONAN O`BRIEN, COMEDIAN: Check out Ron Paul`s other new ad that was released just a couple of hours ago. VOICE: I got a little deficit. Wah. ANNOUNCER: Put a sock in it, America. This country needs a budget enema. Only one candidate has the sac to get the job done. Ron Paul. You want cuts? You got them. He`ll cut one skrillion dollars of gocht spending week one. That`s skrillion with a skrill. Department of Health, gone. Food stamps, gone. Regular stamps, gone. Roads, bridges, power grid, gone, gone, gone! Then, every U.S. citizen will be given a rusty pipe to fend off an army of starving marauders and a cleansing blood will run through the streets. (END VIDEO CLIPS) MADDOW: Ron Paul? Mission accomplished, sir. You have changed the conversation. As for the other candidates in the race, in this late Gingrich surge period we`re in right now, Jon Huntsman, former Utah governor, frankly seems to be winding down his campaign. Jon Huntsman gave a speech today in Washington, D.C. that took on his opponents, but it was billed by his campaign as a closing argument. You don`t have to go home, but you can`t stay here. Rick Santorum, bless him, said today he will have a big announcement tomorrow in Iowa. There are no indications that the big announcement is that he`s quitting. But it`s never a good sign that when you say you`re having a big announcement the first thing everybody asks is, are you quitting? Governor Perry of Texas, an underappreciated fact of his campaign is that he`s still got a lot of money left over from the time when he seemed viable. Mr. Perry is using that money to make and run a bunch of new ads that are really bluntly old school right wing. Today`s ad is on health care, and it ends with him calling both Mitt Romney and Newt Gingrich, "big government liberals." The ad before this from Mr. Perry was his big anti-gay gambit, complaining about "don`t ask, don`t tell" being repealed. This is risky on one level because the repeal of "don`t ask, don`t tell" is actually very popular, it polls very well. But it`s risky on a whole other level because Rick Perry did his anti-gay ad while wearing the Heath Ledger jacket from the heart-warming gay cowboy movie "Brokeback Mountain" -- which is the best mime on Twitter in at least a week. See? It`s a thing now. Well done, Governor. You`re a thing. Everywhere. Links to that Tumblr that produced that and others at Maddow Blog right now. But as for the front-runner, as for Mr. 53 points ahead in Georgia, Newt Gingrich is using his front-runner status to make a little cash. Not for his campaign. For himself. As noted in the "New York Times" and the "Washington Post" today, the only event on Mr. Gingrich`s public schedule for tomorrow is a Washington, D.C. book-signing at Hudson News bookstore, which means that he will not be campaigning. Less than four weeks from Iowa, he`ll be selling books on the East Coast to make money for himself. On Saturday, he has to go to Iowa because there`s some debate that he`s in. Drag. But before that debate, Mr. Gingrich, quote, "plans to squeeze in an afternoon book signing" to make himself some more money. Even as the front-runner for the Republican presidential nomination less than a month out from the voting in Iowa, turns out there is still time for Newt Gingrich to -- ka-ching. Joining us now is Jonathan alter, MSNBC political analyst, "Bloomberg View" columnist, and author of "The Promise: President Obama Year One." Mr. Alter, it`s good to see you. Thanks for being here. JONATHAN ALTER, MSNBC POLITICAL ANALYST: Hi, Rachel. MADDOW: To your knowledge is there present for Mr. Gingrich`s concurrent efforts to run for president and make a buck? Isn`t this usually kind of a full-time job running for president? Usually, this is what you do in spring training. So you had, for instance, John McCain in 1999 when he was getting ready to run, he used his book tour to launch. Other candidates have done that. Barack Obama did some of that in 2007. But this has never been done before. It`s very peculiar just a few weeks before the Iowa caucuses. It reflects the -- I guess unquenchable greed of Newt Gingrich. But it also has a chutzpah and hypocrisy element to it. You remember that Gingrich first became important in American politics when he used a book deal that Speaker Jim Wright had to get Wright out as speaker of the House. Then when Gingrich himself was speaker, it was a book deal that involved a course that he was teaching that led him to be fined $300,000 by the House Ethics Committee and pushed out as speaker of the House by his fellow Republicans -- over a book. So you would think that at this point he would, you know, sensing that he might actually win the nomination, give it a rest. MADDOW: I understand that technically it is illegal to run a campaign for federal office that is also for personal profit -- running it in a way that is designed to profit you or that ends up profiting you personally. Aside from whether or not anybody ever looks into that, it doesn`t seem like the FEC is the most aggressive enforcement agency in our federal government right now. ALTER: Right. MADDOW: Does it hurt him politically, to be seen to be cashing in on the campaign like this? This is not some fringe lefty critique of him. This is a mainstream media story about how he`s running his campaign now. ALTER: I don`t think it hurts him politically because the Republicans have apparently decided that they like his anger, they like the fact that he`s an authentic conservative -- not a fake one like Romney -- and they don`t care about his past. So he`s using kind of an American amnesia. He`s practiced in the art of amnesia, in giving people a sense that all these things that the so-called liberal media is saying about him are not important, that he`s thinking lofty thoughts about nanotechnology and, you know, the future when young people -- poor kids can be janitors in schools. And whatever other nutty futurism he has going, that Republicans will care more about that and his record as a guy who expresses their anger and they won`t care about all of this. They don`t even care about the hypocrisy on Freddie Mac so far, the fact that he was saying that Barney Frank should be in jail for his connections to Freddie Mac and Fannie Mae, at the same time he had been on the payroll for $1.6 million. These are new indoor records in hypocrisy, Rachel. But they don`t seem to have much of an impact on Republican primary voters. MADDOW: This close to the voting in Iowa, this rise of Newt Gingrich right now is sort of turning out to be the first stress test for the Mitt Romney campaign. How do you think the Mitt Romney campaign`s doing under the pressure? ALTER: You know, not so well. I guess they probably will take some comfort in the fact that they`ve cut Gingrich`s lead in the national Gallup poll. But they are I`m sure extremely nervous right now, because polls as you indicated at the top of the broadcast, they are not important. They`re not important. They`re not important. And then suddenly they become really important because they are snapshots about what`s going on at a particular moment. But when the -- you know, when the caucuses are just three weeks away, it`s pretty nerve- racking for them. Because remember, Romney made a pivotal and perhaps fatal decision to go back into Iowa recently. For a while he was going to blow off Iowa and concentrate in New Hampshire. Now he`s put his chips into Iowa. So, if he gets beat badly there, then Gingrich has some momentum going into New Hampshire and he could really lose this thing quickly because he`s not going to do well in South Carolina. I think their goal will be to use these debates to really take it to Gingrich as a hypocrite on thing like Freddie Mac and see if they can get back into this game. MADDOW: Jonathan Alter, MSNBC political analyst, the author of "The Promise: President Obama Year One" -- Jonathan, it`s been too long since we`ve had you here. Thanks for being on. ALTER: Great to see you, Rachel. MADDOW: All right. What Karl Rove and Arthur "The Fonz" Fonzarelli suddenly have in common. Rove and Fonzi. Stay tuned. (COMMERCIAL BREAK) MADDOW: This is sort of a triumph of metaphor. The Republican Party, the RNC, is holding its holiday party a week from today. Yes, that`s right -- the RNC holiday party. The folks at got a hold of the invitation. As you can see, the Republican Party has already surrendered in the war on Christmas. But the beautiful metaphor here is that the Republican Party`s holiday party is being hosted by the Chamber of Commerce. The biggest lobbyist for corporations in the whole country is hosting the Republicans` holiday party. That is a triumph of metaphor. But I see your triumph of metaphor and raise it, these protesters outside. As part of the week-long "Take Back the Capitol" protests, 99 percenter protesters showed up at the Chamber of Commerce building, which was reportedly hosting its own holiday gala tonight, and this is how they protested. They rolled out a red carpet for people arriving to the Chamber of Commerce party. As you can see, the carpet is sort of lumpy. That`s because protesters are lying underneath it, thereby inviting corporate and business lobby bigwigs to walk over the 99 percent bodily as they walk down the red carpet. The only more perfect metaphor in today`s politics would be if Rick Perry did his anti-gay ad wearing the "Brokeback Mountain" jacket. Oh, right. The remarkable growth of the Occupy and Occupy style protest movement was just named the number one U.S. news story of 2011 by "Time" magazine. What`s happening in that number one news story right now is that the movement is not just growing, it`s moving, and it is evolving. Many of the cities that still have encampments are now having them cleared out, including some of the largest ones left this week. The Occupy New Orleans encampment was broken up by New Orleans police early Tuesday morning, though a judge`s order later in the day allowed them to return temporarily. According to the "San Francisco Chronicle," there were 142 tents at the Occupy San Francisco encampment when police came in to break that up early Wednesday morning. In Boston, Massachusetts, Occupy protesters are facing a midnight deadline to decamp tonight. The Occupy Boston encampment has been set up since the end of September. Protesters there say there are between 100 and 150 people living outdoors at that encampment. There have been 99 percenter Occupy camps in cities large and small all over the country, and in some places where they have cleared out, they have sprung back up. So it`s not really possible on a day-to-day basis to have a daily inventory of where the encampments still are. They move, they spring up, they get evicted, they come back. One of the last really large ones we know of is in Washington, D.C. I was in Washington the last couple of days. And while everybody saw the arrests this past weekend, what a wooden structure that they put at the camp was taken down, dozens of protesters were arrested, you should know that the Occupy D.C. encampment is still there. It`s big. It`s very close to the White House The "Washington Post" estimating that the D.C. site includes a range of up to hundreds of protesters sleeping out. The encampment has been there for about two months now. And it is big when you are there in person. Even as their public spaces are getting cleared out all over the place, occupiers appear to be on the move. It`s a movement that does not seem willing to be evicted, no matter what`s going on with the police or mayor in that particular moment. Occupy and Occupy-style protesters just aren`t going away. Listen to what they were chanting here on their way to protest outside House Speaker John Boehner`s office today. (BEGIN VIDEO CLIP) OCCUPY PROTESTERS: One, we`re unemployed. Two, we are united. Three, you tell the speaker we`re not leaving. One, we`re unemployed. Two, we are united. Three, you tell the speaker we`re not leaving. (END VIDEO CLIP) MADDOW: They are not leaving. Labor and faith groups also held a large prayer vigil in Washington today, praying for Congress to pass a jobs bill and to pass an extension of unemployment benefits. Occupy-style protesters are showing up all over the place now, and in unexpected places. They showed up at a Mitt Romney campaign event today in Iowa, an event which was held at the come and go convenience store headquarters. Yes, that`s a thing, don`t laugh. And it was an event that featured guest speaker, New Jersey Governor Chris Christie. As it turns out, despite his reputation for being awesome with hecklers, Chris Christie is not always a man who deals well with hecklers, or at least he wasn`t last night. (BEGIN VIDEO CLIP) GOV. CHRIS CHRISTIE (R), NEW JERSEY: While there are things that are depressing right now about our situation in America, there is one thing that is extraordinarily uplifting -- UNIDENTIFIED MALE: Mic check! PROTESTERS: Mic check! UNIDENTIFIED MALE: Chris Christie and Mitt Romney! PROTESTERS: Chris Christie and Mitt Romney! (YELLING) CHRISTIE: Oh, yes. (INAUDIBLE) CHRISTIE: You know -- no, no, no. No. Hey. (END VIDEO CLIP) MADDOW: Hey. Yes. You can`t just shush them. They`re not there on your terms, Governor. Protesters also showed up at a Newt Gingrich fund-raiser. According to Andy Kroll reporting for "Mother Jones" who was there and shot this video, the protesters snuck in through an unlocked back door to interrupt the event. Occupy Wall Street in New York is still going although it`s become a set of loosely connected geographically dispersed action and working groups since they got kicked out of Zuccotti Park by Mayor Bloomberg. But as long as we`re talking about perfect metaphors here, I should also tell you that the company that owns Zuccotti Park, where this whole movement got its physical space in which it started when the first encampment went up and was ultimately taken down by police, the company that owns Zuccotti Park, turns out that company owes $139,000 in back taxes. (COMMERCIAL BREAK) MADDOW: On September 20th, 1977, at the start of the fifth season of the show "Happy Days," there was an episode set not in Milwaukee but in Los Angeles. In Los Angeles, Fonzie was challenged to prove his coolness slash toughness by getting on water skis and jumping through the air over a shark. Behold. (VIDEO CLIP PLAYS) MADDOW: More than 30 million people watched that episode. But in retrospect, that turned out to be kind of the end for "Happy Days." I mean, the shorts, the leather jacket, the shark. It was like the thing the show had done really, really successfully had kind of run out of gas. I love "Happy Days" still. But one of "Happy Days`" legacies has turned out to be the phrase "jumping the shark" -- the point at which something good or effective has stopped being good or effective. Ladies and gentlemen, Karl Rove`s favorite political tactic has jumped the shark. A shark in the form of Elizabeth Warren. That`s coming up. (COMMERCIAL BREAK) MADDOW: I still get surprised every time I look up at the TV and I see Karl Rove on the FOX News Channel as an analyst. Ah, yes, an analyst. He`s just an observer of what`s going on in American politics. It`s like asking a race car driver live in the middle of the race if he would please like to do a little play-by-play about how the race is likely to turn out, about who`s ahead, about who`s racing well. Dude is in the middle of the race. He cannot explain it. He`s in it. But still, there`s Karl Rove, providing analysis of races that he is participating in. Having newsmakers on TV shows, the people who are making political news, is what all of us in TV do. Having the people on who are making the news as if they are analysts of the news they are making, that is something that`s just for FOX News. If he weren`t still a partisan combatant, if Karl Rove weren`t still running a lavishly funded, obviously partisan political operation that may rival the size of the Republican presidential nominee`s actual campaign next year, it would make sense to put him on TV analyzing Republican politics. Mr. Rove is a pillar of modern Republican politics, not just for the campaigns he has run, but for how he has run them. Most famously, he all but patented the strategy of taking your opponent`s greatest strength and using it against them. Don`t go after them on their greatest weakness. Go after them on their greatest strength. So, for example, knowing that America knew John Kerry as a senator from Massachusetts and that Senator Kerry`s campaign would be trying to reintroduce him to America as the Vietnam War hero that he was, Karl Rove took John Kerry`s heroic war record, his Purple Hearts and his Bronze Star and his Silver Star, and he made them bad somehow. Karl Rove used those things against John Kerry as if John Kerry`s war record was somehow bad, especially in comparison to the Vietnam War record of George W. Bush, who never left Alabama, but he did get the outfit. That`s the Karl Rove chapter in the big book of modern American political tactics. However wrong or dishonest it is, it can work when you get out ahead of the public, when you are out ahead, when you`re able to define your opponent before they can define themselves. You can take their best quality, and you can twist it to make it bad. It`s sort of astonishing when you look back at it from a distance, but when this Karl Rove tactic works, it really works. When it doesn`t work, though, it really, really doesn`t work. Take the Scott Brown versus Elizabeth Warren senate race that is shaping up in Massachusetts. Karl Rove and his lavishly funded Crossroads group have been running hundreds of thousands of dollars` worth of ads in Massachusetts attacking Elizabeth Warren, attacking her before she`s even secured her position as the Democratic nominee. Now, as a popular incumbent, Senator Brown as recently as October was polling five points ahead of Ms. Warren, the consumer advocate and Wall Street critic. Karl Rove`s group then started running ads against Elizabeth Warren, claiming she was just as horrible and left wing and distasteful as those awful, awful Occupy Wall Street protesters. Elizabeth Warren`s poll numbers shot up. The latest poll is showing her seven points ahead of Scott Brown. The new Karl Rove ad against Elizabeth Warren does a 180. Instead of painting her as a wild-eyed, anti-Wall Street protester like they did last time, now, Karl Rove`s newest ad says she`s Wall Street`s best friend. Whatever sticks, I guess. (BEGIN VIDEO CLIP) NARRATOR: Congress at war and overseeing how your tax dollars were spent, bailing out the same banks that helped cause the financial meltdown. Bailouts that helped pay big bonuses to bank executives while middle-class Americans lost out. Later, Warren went on a charm offensive with some of the same banks who got bailed out. (END VIDEO CLIP) MADDOW: Seriously? Stock footage of a private jet? Really? That`s how Karl Rove is trying to run the man described by "Forbes" as one of Wall Street`s favorite congressmen, that`s how they`re trying to run him against Elizabeth Warren, who invented a whole new agency to regulate Wall Street, which Wall Street hates because it is supposed to help the middle class against them. I get why Karl Rove and his well-funded PAC want to be able to make this argument. It is the strongest thing about Elizabeth Warren, so they want to attack it. It is politically the worst thing about Scott Brown, and so they want to smoke-screen that about him. But the other thing that this ad means is that Occupy Wall Street is winning the argument. America thinks Wall Street and the rich have too much power and a politician on the side of Wall Street and the rich is not someone who you should vote for. At least judging by his latest advertising in the great state of Massachusetts, Karl Rove thinks that Occupy Wall Street has won that argument in America. Let`s bring in the "Boston Globe`s" statehouse bureau chief, Frank Phillips. Mr. Phillips has been covering local and state politics in Massachusetts for nearly 40 years. Mr. Phillips, thank you very much for joining us tonight. FRANK PHILLIPS, BOSTON GLOBE: It`s a pleasure, Rachel. MADDOW: This Elizabeth Warren ad from the Karl Rove group saying she`s a friend of Wall Street, it struck me as a little bit like putting out an ad against Scott Brown saying he`s unattractive. It`s completely contrary to the one thing a low-information voter might know about this candidate even if they know nothing else, right? PHILLIPS: Yes, it is. It is. And as you said, it`s what they did to John Kerry. I think the difference is it was done in Ohio where John Kerry was not known and he was able to shape his image there, Kerry`s image. And I think Elizabeth, it`s going to be touch and go what he can do here. It will do damage. No doubt about it. But it is quite a pivot from what they were doing a month ago. Suddenly, the Occupy Wall Street gang looks pretty good to Karl Rove. Maybe he`ll be down there demonstrating with them before the end of this campaign. MADDOW: Is having a lot of big-mine ads from a Karl Rove-associated group itself a political liability at all? Is there any resistance to the idea that there ought to be big outside of Massachusetts money very early on weighing in on this race? PHILLIPS: Well, this is the first time we`ve seen Karl Rove in Massachusetts. And I don`t know how it will play. It`s just early on. This is extraordinary that 11 months out from the election we`ve already spent -- seen $5 million worth of ads, most of them negative ads, up on the air. She, Elizabeth Warren has gone up with a million dollars of her own ad. One on one, she`s looking into the camera, talking about her own history. But Brown himself has had $3 million worth of attack ads on him from environmentalist groups. So, Rove`s now coming in with the second wave of ads of about $600,000 each. The first one actually did do some damage. Her negative rating tripled from 9 percent to 27 percent. So, while she went ahead in the head on head race, she -- it did do some damage. And I don`t doubt that this will have some negative effect. People are still trying to figure out who Elizabeth Warren is. A lot of people do know her in Massachusetts. And that`s to her advantage. MADDOW: It is a great test of a campaign, especially with a first- time candidate, to define the candidate in the mind of the voters, to get out ahead of your opponent so you get your own story out there. There hasn`t even been a Democratic primary in this race, but it does seem likely that Elizabeth Warren`s going to be Senator Brown`s opponent. After covering Massachusetts politics for as long as you have, how do you assess her campaign, her level of support? How do you think she`s doing so far? PHILLIPS: Well, as you said, I`ve been doing this for almost 40 years. I have never seen a candidate come on so strong and excite the political base of a party so quickly and raise so much money. People are very excited about her candidacy in the Democratic Party. And she`s actually going to -- the Democrats are in despair. Scott Brown is an attractive candidate. He`s tried to show some independence as a Republican. And they really had no candidate to run against him. And she has emerged and really has shown that this will be a very tight race, a highly watched race nationally. It`s going to be a great debate. It would be nice if some of these outside groups could stay out of it and let them go at it. We don`t need all that sort of negative ads being flung around, particularly this one, which really has -- stretches the truth. It`s just not correct in a lot of what it`s saying. MADDOW: Frank Phillips, "The Boston Globe`s" statehouse bureau chief -- Mr. Phillips, thanks for joining us tonight. I feel lucky to have you on the show. It`s nice to have you here. PHILLIPS: Well, thank you for having me, Rachel. MADDOW: Thanks. All right. Right after the show, this is timely, on "THE LAST WORD," Lawrence O`Donnell`s guest will be Elizabeth Warren. We`ll be right back. (COMMERCIAL BREAK) MADDOW: We`ve been reporting this year on the story of little Benton Harbor, Michigan. Benton Harbor is very small, very poor, and rather broken as a city. Benton Harbor was the first town in Michigan to feel the tender caress of the state`s revamped emergency manager law. Michigan passed a more limited emergency manager law under a Democratic governor in the 1980s, but in March of this year, the new Republican majority there created sort of an enhanced version, like enhanced interrogation. Republican Governor Rick Snyder`s new version of the law gives an emergency overseer complete control of any town that`s been taken over. An emergency overseer like the one in Benton Harbor can strip all power from local elected officials. He can remove them from office. He can abolish their offices altogether. He can cancel contracts. He can even move to dissolve the whole town, just take it off the map, on one man`s decision. Benton Harbor was taken over by the state under the old law. In April, under the enhanced version, their emergency manager issued an order that said the outcome of Benton Harbor`s local elections was in effect being overthrown, overruled. What the people of that town voted for, null and void. The emergency manager decreed that the elected town commission no longer had any power. Based on his own ruling, he alone would be the government of Benton Harbor. (BEGIN AUDIO CLIP) JOSEPH HRRIS, BENTON HARBOR EMERGENCY MANAGER: The fact of the matter is, the city manager is now gone. I am the city manager. I replaced the finance director. So I`m the finance director and the city manager. I am the mayor and the commission, and I don`t need them. You`re running the city. You are the mayor. You are the commission. (END AUDIO CLIP) MADDOW: Now, Benton Harbor`s part of the story may almost be over. That emergency manager says his time there is nearly done. But Michigan`s Republican majority is just getting started. On Friday, the state began a review of the finances of the city of Detroit, as a possible precursor to installing an emergency manager there, too, to putting Detroit under what its critics call financial martial law. In Flint, Michigan, last week, the new emergency manager there canceled all city council meetings and decided to stop paying the elected mayor and city council. He made that decision unilaterally. He`s basically overthrown the government there and overruled the results of the last election. He has installed himself instead. The city of Pontiac, Michigan, got its emergency manager in September. He tells a local radio station that he is ready for that untrammeled authority. (BEGIN AUDIO CLIP) SCHIMMEL: I don`t know, Frank, what you would do in a place like Pontiac, Flint, Detroit, and so on, cities of that nature, if you didn`t have a Public Act 4. WJR-AM HOST: Well, it`s being portrayed as an act that takes the election, the right to a ballot away from the people, that it takes power it takes power away from elected officials and hands it over to a tyrant, if you will, a dictator. How is that wrong? Where do people get it wrong? SCHIMMEL: Well, I don`t know. I guess I`m the tyrant in Pontiac, then, if that`s the way it is. (END AUDIO CLIP) MADDOW: I guess I`m the tyrant. Pontiac`s emergency manager is at least from Pontiac. So at least he`s the tyrant of his own hometown. He will now have unilateral authority to destroy the town if he wants to, to dissolve it along with the results of the last elections, when Pontiac voted for its own local officials. You`ve got Flint and Pontiac newly under state control. You`ve got the big city of Detroit now under review, as well as the tiny town of Inkster, Michigan. Chris Savage, who`s a Michigan Democratic activist, has been following the emergency manager law on his site, Eclectablog. He posted a chart of the places that either have an emergency manager already or could get one soon. Chris looked at the census data and he look at the towns on that list. And you realized that when you put them together, you can tell that just over half -- just over half of the African-Americans in the state of Michigan are on the verge of having no meaningful local democracy. Chris writes, quote, "Solving the problems does not start from the baseline that the locally-elected, democratically-elected officials are not a useful part of the process, to be shoved aside. Everything that happens should begin at the baseline, that democracy is not just important, it`s essential." I still believe the story of Michigan`s emergency manager law, of what is being done to democracy in the name of fixing Detroit and Flint and Pontiac and Inkster and Benton Harbor, I still believe this could be the most important and most under-covered story of the year. I know my colleague, Ed Schultz, feels the same way. It`s because along with the national story of Republican legislators making it harder to vote in this country, Republican lawmakers in Michigan have declared that your local vote could become mute if your town falls on hard enough times. Congressman John Conyers of Michigan, a Democrat, wrote to the Justice Department last week and asked them to review and monitor the Republicans` emergency overthrow the towns march through Michigan. Mr. Conyers writing, quote, "While the law itself may be facially mutual, it`s being applied in a discriminatory fashion." Congressman Conyers says the Justice Department has told him it is reviewing the law. There`s also a recall drive to put the law up for citizens repeal in Michigan. It looks like they might get the signatures they need this month. Republican Governor Rick Snyder is considering a contingency plan, asking the legislator to pass the sort of emergency manager law 3.0, so he can keep taking over towns any way even if his last law was recalled. For now, the question in Michigan is: who gets to have a local democracy? Who is being allowed to be worthy of being allowed to elect their own officials? And why it`s taking democracy away considered a prerequisite for fixing a place? Should your vote matter even if the state doesn`t like the decisions of the people you elect? Should your vote count? This chart should rattle anyone who cares about that. The emergency manager law has been a signature policy of Governor Rick Snyder`s administration, the one that he was willing to risk giant Wisconsin-style protests over. A new poll out this weeks shows support for Governor Rick Snyder has fallen by more than half since he was elected last year. It`s down by half even within his own Republican Party. You can`t say that what is sinking Rick Snyder`s popularity is his emergency manager law, just as you can say Michigan Republicans passed this law so they can take democracy away for more than half the African-Americans in the state of Michigan. But you can`t say that Michigan Republicans are on their way to doing that whether they mean to or not. (COMMERCIAL BREAK) MADDOW: Meanwhile, in the rest of the world, something that happens in Russia keeps happening in Russia, protests. A fifth straight day of protests after an election this past weekend that does not seem to have passed the smell test for many Russian people. Authorities arresting the protesters seem to have inspired more people to protest, which is kind of the way these things work all around the world. Current prime minister/former president, Vladimir Putin, has been at the helm of the Russian government for more than a decade. This is the first time that they have turned out in big numbers in the streets to protest against him. While the toppling of dictators we have seen this year around the world, governments who have tightly held their grip on power for many years and are wary of mass demonstrations. Like this one planned in Moscow for this Saturday. According to the Facebook page, 32,000 people say that they are going to this thing. In the face of these very rare protests, Prime Minister Putin took to Russian TV today to tell the world that he knows why this is happening, he knows why Russians are turning out in the streets against him. He said essentially that it`s all her fault. "Her" being U.S. Secretary of State Hillary Clinton, who`s having quite a week, thank you very much. President Putin said Hillary Clinton`s expressed concerns on behalf of the U.S. government this wee about the integrity of the Russian election sent a, quote, "signal to some actors inside Russia." Among the incendiary things Secretary Clinton said about those Russian elections, quote, "The Russian people, like people everywhere, deserve the right to have their voices heard and their votes counted." Oh, snap. The risk the U.S. takes whenever any American government official says anything about almost anything going on in other parts of the world is that the U.S. will then be blamed by that country`s leaders for what happens in that country next. That is the risk. You see that happening in Russia now with Putin blaming the United States for the protests. That`s the risks. But here`s the reason the risk is sometimes worth it. The nation of Malawi in Southeastern African now says that it is reconsidering its national law that makes being gay a crime. Malawi`s minister of justice says they`re doing this because of, quote, "public opinion." This news comes just two days after Secretary of State Hillary Clinton`s historic speech, asserting that gay rights everywhere in the world are human rights, saying in that speech that the United States would work to end the repression of sexual minorities around the world and that leadership by foreign leaders around the globe should include leading their own people on the issue of gay rights. The speech supported a new policy memorandum from President Obama asserting that the U.S. would pay attention to country`s treatment of their gay citizens when we hand out foreign aid. Last fiscal year, the United States gave Malawi $140 million in development money and another $100 million on food and other humanitarian aid there. And last year, Malawi sentenced a gay couple to 14 years in prison for the crime of holding an engagement ceremony. After an international outcry against that sentence, Malawi`s president pardoned the couple. And now, Malawi says they are reconsidering their overall national criminalization of homosexuality. That`s a change. That does it for us tonight. We`ll see you again tomorrow night. Now, it`s time for "THE LAST WORD" with Lawrence O`Donnell including his exclusive interview with Elizabeth Warren. Please stay tuned. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END