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The Rachel Maddow Show, Transcript 12/28/11

Guests: Nate Silver, Brian Hicks, Ed Fallon

RACHEL MADDOW, HOST: Good evening, Ed. Please tell Senator Santorum I said hello when you see him. SCHULTZ: I will do that. I watched you last night. You`re waiting for the Santorum wave. It might be coming on to shore. (LAUGHTER) MADDOW: It`s so disturbing. Thank you, Ed. I really appreciate it. And thanks to you at home for staying with us the next hour. We actually do have some legitimate breaking news to report right now out of Iowa. With six days to go until the Iowa caucuses there has been a rather dramatic development just moments ago tonight in the Republican race for president. What you`re looking at right there is a campaign event that is under way right now in Des Moines. It`s a campaign event for Republican Congressman Ron Paul of Texas who you see speaking there. The two latest polls out of Iowa show Congressman Paul in first place in the PPP poll and in the second place in the CNN poll. More on that in a moment. But the breaking news tonight is that Ron Paul appears to have scored a bit of a coup in his effort to win Iowa. Shortly before Dr. Paul took the stage there, in Des Moines tonight, an Iowa Republican state senator who`s named Kent Sorenson was introduced to the Ron Paul supporting crowd. Now, up until tonight, Mr. Sorenson had been serving as an Iowa state co-chair for the Michele Bachmann campaign. The reason he was being introduced at a Ron Paul rally was to announce he`s switching sides. (BEGIN VIDEO CLIP) ST. SEN. KENT SORENSON (R), IOWA: Tonight`s been tough for me. I`ve been serving as Michele Bachmann`s state chair over the last two years. And while Michele has fought tremendously for my conservative values, I believe we`re at a turning point in this campaign. I believe that we have an opportunity to elect a conservative, somebody that holds our values dear. I just want to tell you guys that I`m going to do everything the next few days to help in Iowa and beyond, and we`re going to take Ron Paul all the way to the White House in 2012. (CHEERS) (END VIDEO CLIP) MADDOW: The co-chair of Michele Bachmann`s Iowa campaign tonight jumping ship and saying he is supporting Ron Paul. Shortly after making that announcement, the Ron Paul campaign did put out a press release saying that man you just saw speaking there, State Senator Kent Sorenson, has resigned from the Bachmann campaign effective immediately. It should be noted that Mr. Sorenson was in attendance at a Michele Bachmann campaign event earlier today in Iowa. So, he apparently woke up today as a Michele Bachmann Iowa campaign co-chair but is going to bed tonight as a supporter of the campaign of Ron Paul. So, big news tonight out of Iowa and big news certainly for the Ron Paul campaign. This is one of MSNBC contributor Ezra Klein`s graphs of the year of 2011. He did graphs of the year to give you a snap shot of where things are in American politics and the American economy. This is one of them. He said it helps explain what the year has been like. This is a graph of the standings for the Republican nominating process among Iowa residents polled over the course of this year. This is the Iowa Republican polling this year. When you look at that graph, what does that graph say to you? Any one thing? Yes, that graph says one thing. It says chaos. And if not chaos, at least constant motion. Even before this dramatic news about the Michele Bachmann campaign co- chair jumping ship to Ron Paul tonight, this was already proving to be the really, really fun part of the political year. Stuff is just a mess in Republican politics right now. There are a million things going on. Behold, first we now have the first post- Christmas Iowa polling. So if you want a snap shot of what the race is like in Iowa since the holiday this weekend, these are the first numbers that we`ve got on that. As you can see here, the Ron Paul surge in Iowa appears to be holding steady or even getting better. This is the poll out from Public Policy Polling. They`re putting Ron Paul as the front-runner in Iowa, holding a four-point lead over Mitt Romney. This is the second straight PPP poll in Iowa that`s put Ron Paul in the lead. Also of note from this poll, look at Newt Gingrich. Newt Gingrich has fallen to 13 percent in this poll, which puts him in third place. Over the last 3 1/2 weeks in this poll, Newt Gingrich has gone 27 percent in Iowa on December 5th, from 27 percent to 13 percent now. That is a 14-point drop in three weeks. Here`s another headline out of this poll, though. Look who comes in last place in the PPP poll. Former Louisiana Governor Buddy Roemer, there in last place. That is actually a good thing for Buddy Roemer relatively speaking because PPP never even asked about Buddy Roemer before this poll. Last week, PPP sent out this tweet. It said, quote, "Buddy Roemer just called and personally asked to be included in our polls and was very nice about it. So, we`ll do that for the duration." Buddy Roemer asked nicely and voila, now PPP is polling on Buddy Roemer, along with the other candidates. So, officially now, he`s in last place, 2 percent. Moving on up. You contrast that with another bottom of the barrel candidate making news today. The former Republican governor of New Mexico, Gary Johnson. Gary Johnson actually gave up on the Republican nominating process altogether today. Mr. Johnson in Santa Fe this afternoon announcing that he is leaving the Republican race. And he`s had it better than Buddy Roemer. Gary Johnson at least got into a couple Republican debates so far this year. He said today his deep disappointment with the process thus far is leading him to dump the Republican Party and instead run for the libertarian party`s presidential nomination instead. In terms of dissatisfaction, though, with the available options in the Republican primary so far, there was also this news today about Sarah Palin, Governor Palin once said on an Alaska radio show that it would take a lot -- it would take a huge, natural disaster, in fact, to get her to jump into the race for president. Remember this? (BEGIN AUDIO CLIP) RADIO HOST: Are you sure that we`re not going to hear tomorrow that Sarah Palin has decided, you know what, I`m going to run for president of the United States? SARAH PALIN (R), FORMER ALASKA GOVERNOR: You know, that would take an earthquake the size of the `64 Great Quake in, you know, the personal life and local political life to change that up. So I don`t anticipate it. RADIO HOST: All right. If, in fact, there`s a 10.3 earthquake somewhere on the globe today, you have to promise me you`ll call this show first and tell us you`ve decided to run for president. PALIN: I will. It`s kind of morbid thinking, but yeah, 10.3. That`s the marker. RADIO HOST: All right. Very good. (END AUDIO CLIP) MADDOW: Ten-point-three, for the record, is significantly bigger than the Great Quake in Alaska in 1964. Those comments were enough to inspire a group of Iowa Sarah Palin lovers to form themselves into a group called Sarah Palin`s Iowa Earthquake. In other words, they would like to be the earthquake that causes her to get into the race. And today, we learned that they have started running this radio ad in Iowa. (BEGIN AUDIO CLIP) ANNOUNCER: Are you unhappy with the current GOP field? Let me tell you something. You are not alone. Join thousands of Iowans as we vote rogue. It`s the caucus for Sarah Palin on January 3rd. Let Iowa and the entire country know we want real leadership and real reform in D.C. So come on, Iowa, vote rogue on January 3rd. Paid for and authorized by Sarah Palin`s Iowa Earthquake who is responsible for the content of this ad. Not authorized by Sarah Palin, Sarah PAC, any candidate or candidate`s committee. (END AUDIO CLIP) MADDOW: Vote rogue on J 3rd, disclaimer, disclaimer, disclaimer, disclaimer. We called Governor Palin`s office today to ask whether she thinks it is a good idea for Iowans to vote rogue, for Iowans to caucus for her on Tuesday. So far, we`ve had no response from her office. But hope does spring eternal. We`ve also got a second round of polling out of Iowa today from CNN and from "Time" magazine. Now, like the PPP poll that I just described, this data did come out today. But in some cases, these were Iowa voters being polled before the Christmas holiday. So, it`s being released on the same day. In some cases, these questions were asked earlier than the PPP poll. But while that PPP poll had Ron Paul first and Mitt Romney second, this one has the top two reversed. Mitt Romney in first and Ron Paul in second with 25 percent and 22 percent of the vote respectively. That interestingly reflects a five-point gain for each of them since the last time this CNN/"Time" poll was done. Where are they getting the five points each from? Well, again, look at Newt Gingrich. Mr. Gingrich`s support falling from 33 percent to 14 percent in this poll in less than a month. Hey, I guess negative advertising works. When you lose 19 points in less than a month, there`s plenty of your former supporters to spread around. So not only do Ron Paul and Mitt Romney get a five-point bump each in this latest poll, courtesy of Newt Gingrich`s failure. But also the littlest bubble gets some help, that would be Rick Santorum rocketing up to third place in Iowa. Mr. Santorum going from 5 percent to 16 percent in less than a month. Again, some caution is warranted here. First of all, this is Rick Santorum. Most famous for being un- Googleable for something he once said about having sex with dogs and for losing his own Senate seat in a landslide. So, caution is warranted here. Caution also warranted because as I mentioned the other poll out today, taken more recently, the PPP poll. If you look at Rick Santorum`s numbers in the other poll, they show no movement whatsoever in Rick Santorum`s numbers. So, caution. But if you are Rick Santorum, this kind of surge even in one poll at this late stage in the political calendar, has got to be very excited. What better timing for the emergence of the Rick Santorum super PAC? Yes, Rick Santorum has one, too. It`s called the Red, White and Blue Fund. And today, they launched this pro-Rick Santorum ad in Iowa. Apparently, they`re spending a quarter of a million dollars on it, which for the other top tier candidates in Iowa is a drop in the bucket. But for Rick Santorum, that`s a huge deal. I would say next things to watch on Rick Santorum are probably whether or not any other candidates take him seriously enough to go negative on him, and also, whether or not FOX News gets onboard with Mr. Santorum. They have mostly ignored him thus far. But I think those two factors we`ve seen make a big difference in the durability of other candidates` non-Mitt Romney bubbles, thus far. So, I think if you`re trying to figure out if Rick Santorum might be a factor next week, those two factors will be worth watching. But what do I know? I`ve been dismissing Rick Santorum all along. All right. One candidate who is not getting any headlines out of the polling from Iowa today, not only not getting any headlines but not getting any sub-headlines out of the new polling from Iowa today is Rick Perry who comes in fifth in both the PPP and the CNN polls that are out today. Of note in the Rick Perry campaign right now is a new Rick Perry stump speech. "The Des Moines Register" reporting today the Perry campaign revamped his stump speech in what they`re billing as his closing argument to Iowa voters. The revamped speech "The Register" observed, quote, "ends with a religious flourish borrowed from chapter six of the biblical book of Isaiah." This would be said religious pick Perry flourish. (BEGIN VIDEO CLIP) GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: When the Lord asked the Prophet Isaiah, he said, whom should I send and who will go for us? Isaiah said, fear not, send me. This is your country. Taking her back is your call. Join me in this mission. Echo the words of Isaiah. Here am I. Send me. (END VIDEO CLIP) MADDOW: Rick Perry now very focused obviously on closing the deal with religious conservatives in Iowa. Another sign I think of Rick Perry banking hard for the evangelical social conservative vote, his announcement at a campaign event in Iowa last night sort of striking announcement that he`s changed his mind on abortion. He said, seeing Mike Huckabee`s DVD about abortion has caused him to change his stance on the issue. Even though Rick Perry is very, very antiabortion, he is for criminalizing it. Mr. Perry used to believe the government shouldn`t force rape victims or victims of incest to bear the child of their rapist or of their incestuous attacker. Now, though, after seeing Mike Huckabee`s movie, Mr. Perry has decided that the government should in fact forced victims of rape and incest to bear the child of the rape or incest. He even teared up a little bit when he was explaining it. So, the new Rick Perry, after seeing Mike Huckabee`s movie, is for no exceptions for rape or incest in his desire to criminalize abortion. One note, though, on the Rick Perry abortion thing, the question to him was also whether he believed it should be legal to have an abortion not just in cases of rape or incest but also if that would be the only way to save the life of the woman who is pregnant. He did not answer about that. He only answered about rape and incest. So given that he`s gone through a transformation on this, thanks to watching Mike Huckabee`s DVD, we called the Perry campaign today to ask whether Mike Huckabee`s DVD also made Rick Perry change his mind about whether a woman should be forced to give birth, even if doing so will kill her. So far, we had no response from the Perry campaign. Also, no word on whether or not Rick Perry plans to keep watching movies about abortion and if that means we should keep expecting new positions from him on the issue. I`m thinking of sending him over the handmade sale, for example. But in an interesting and risky gambit from the Perry campaign today, one of the Perry headline, Governor Perry decided to weigh in on one issue that up until now had not been fodder in this presidential race. (BEGIN VIDEO CLIP) PERRY: It really disturbs me that nearly after nine years of war in Iraq, that this president wouldn`t welcome home our many heroes with a simple parade in their honor. (END VIDEO CLIP) MADDOW: We`ve been talking about this issue for the last few days on this show. I guess I should not be surprised to see this turning up as a partisan issue in a presidential campaign. But I am surprised. And Rick Perry does seem really desperate right now. I am a person who leans toward the idea that there ought to be a parade to mark the end of the Iraq war. But I recognize that it`s complicated. And everybody should note that this is by no means an uncontroversial position among Iraq and Afghanistan veterans, and current service members. A lot of whom feel that it would be inappropriate to have an end of the Iraq war parade while the Afghanistan war is still raging. This is a sensitive and complicated issue. But Rick Perry has put himself out on a limb on this. He`s decided to make it a partisan issue. To make it something over which he will attack President Obama as if not holding a parade means Barack Obama doesn`t support the troops. And Rick Perry will get to bring that home to Texas with him to keep him warm at night as soon as this is all over for him, which should be in about six days. Do you want to talk about the truly growing caution to the wind in the race right now. How about this today from Ron Paul? "Talking Points Memo" today, look at this, interviewing a pastor that the Ron Paul Iowa campaign recently touted as a Paul supporter. The supporter`s name is Reverend Philip Kayser of the Dominion Covenant Church. It turns out Reverend Kayser is a "kill the gays" guy. Reverend Kayser with Ron Paul Iowa campaign has been putting out press releases about, praising his enlightening statements and his support for Ron Paul. This guy also believes homosexuality in the United States should not just be outlawed but the punishment for being gay should be execution in the United States of America. How is that for small government? The Ron Paul campaign so far refusing to comment on "TPM`s" reporting on this. And so far, at least as far as we can tell, the Ron Paul campaign making no efforts to distance themselves from their "kill the gays" supporter who they`ve been touting. If there`s a big picture story to tell about Iowa less than a week out, it`s a story of constant motion, desperation and chaos. Yay. The bottom line today is probably ultimately the same bottom line you would have had a year ago today, which is that for all of the ups and downs and headlines and gaffes and scandals, if you had to pick which candidate you wanted to be today in this race, you would probably want to be Mitt Romney. Mitt Romney, in fact, telling a Republican audience last night, I think I`m going to get the nomination if we do our job right. Again, the breaking news in Iowa this hour, the state co-chair of the Michele Bachmann campaign just up and jumped ship and endorsed Ron Paul. Live and in the flesh at an event tonight in Des Moines. We`ll be back with Nate Silver in just a moment to find out what that might mean. We`ll be right back. (COMMERCIAL BREAK) MADDOW: Again, tonight`s breaking news out of Iowa, the state co- chair of the Michele Bachmann for president campaign has tonight turned up at a Ron Paul event in Iowa and announced that he is jumping ship. He is leaving the Michele Bachmann campaign of which he is state co-chair and throwing in with Ron Paul instead. Joining us now is "New York Times" spreadsheet psychic and founder of the political calculus blog, Nate Silver. Nate, thanks for being here. NATE SILVER, NEW YORK TIMES: Yes, thanks, Rachel. MADDOW: I realize this is breaking news and it is spectacularly non- quantitative. But if there was going to be a benefit to Ron Paul from he who formally supported Michele Bachmann, what would we look at to discern that? SILVER: I mean, the polls are going to change on a daily basis from here on out. One thing we learned, the newest poll really is usually the best. People are still making up their minds, about 6 percent of voters will decide in the last week essentially, and if they are leaning right now, just looking for any movement at all. I mean, I think this is more bad news for Michele Bachmann than it is good news for Paul necessarily where Bachmann, and Perry and Santorum are all competing for the same group of voters. They all were at about 10 percent. Each time the candidate is not viable, that the ship is not sailing the right direction, could lead voters to abandon that ship and jump on to Santorum`s campaign or Perry`s campaign instead. MADDOW: Is there any evidence of any consolidation of we`ve been calling non-Romney voters, toward any of the other campaigns? SILVER: Well, you know, you can make the argument for Santorum based on one of the polls today, based on the fact that he got this sort of tentative endorsement from the Family Leader, the evangelical group last week. That he has a lot of staff in Iowa. The press seems to have decided it`s his turn to have a surge. MADDOW: Right. SILVER: I mean, the media is really important in dictating momentum in the primaries. It seems like right now, that, hey, you know, it`s the story -- it`s a slow news week so people are boarding up to cover Rick Santorum`s campaign. But he does have some support in the numbers. He`s run a traditional campaign. In the CNN poll, he`s up to 16 percent, which is not that far out of first place. MADDOW: In terms of the significance of the polling at this point and trying to understand not just what`s going to happen in Iowa, but the importance of Iowa, though. You`re saying it`s more important to watch movement in the polls than in is to watch any one poll? SILVER: Yes. Well, what`s weird is that, yes, you want to look at momentum, right? But you also want to look at who`s going to perform well relative to expectations. In 1984, Gary Hart finished second place with 17 percent. Walter Mondale had 50 percent. But Hart got the momentum somehow because he was only supposed to get 9 percent instead. It seems a big failure for Mondale. So, candidates really have to watch how they manage expectations. You also have voters behaving tactically, where if Rick Santorum looks like he can win, a lot of people think of him favorably in Iowa. His approval rating -- excuse me, favorability numbers are pretty good. But if he`s not viable, they might vote for a Gingrich, Perry or Bachmann instead. So, that`s why voters really are smarter than they`d be in a lot of campaigns give them credit for, where they want to make sure their vote counts. And that calculation can change day-to-day and actually be effected by the polls. MADDOW: And I think that point you just made there is so key to understanding the viability of Ron Paul, because if the Republican establishment, including all of the other candidates never see Ron Paul as viable, they will never go negative on Ron Paul. And if they never go negative on Ron Paul, voters who are not part of the establishment, because they`re just voters, may never see the downside of Ron Paul that the establishment assumes everybody knows. And he may be able to hang in there longer than people expect. SILVER: Well, Ron Paul could hang in there until the convention. I do think he most likely has a cap on his support, though, because if you want to get past the 20 percent of true libertarians or true believers in Ron Paul, whatever you want to call it, then he has a lot of positions that aren`t within the Republican mainstream. He`s basically not really a Republican. He`s probably more a Republican than a Democrat. But h positions are different and unorthodox in Republican primary. MADDOW: But voters have to know that. And if none of the other candidates put out nasty attack ads against Ron Paul pointing that stuff up, I guess it`s up to FOX News. SILVER: Well, you know, the Romney people can throw -- a few of the Romney PACs I guess can throw a few elbows. If Rick Perry recovers, he loves to throw punches. You know, if Ron Paul wins Iowa, you`ll see more negativity. If he wins New Hampshire, you`ll see -- MADDOW: Complete chaos. SILVER: Complete chaos and complete panic. I think Romney is smart enough to know maybe Ron Paul winning Iowa prevents a candidate like Gingrich who might be more viable, that might be good for Mitt Romney. But it`s not good for Mitt Romney if he were to lose New Hampshire under any circumstance at all. You could have a Huntsman rebound or have someone come back in South Carolina and make the race more complicated. So, Mitt will go negative on Paul I think as soon as he needs to. MADDOW: And as soon as he figures out how to. Yes, Nate Silver, I will say what you were saying about South Carolina there is what we`re going to talk about next. I almost feel like horizons are already turning to South Carolina because of the chaos here. This is a great deal of fun to cover. Thanks for helping us. SILVER: Thank you, Rachel. MADDOW: Nate Silver does the FiveThirtyEight blog at All right. When you call up cabinet agencies in the great state of South Carolina, the person picking up the phone tells you it`s a great day in South Carolina. They do that because the small government, Tea Party- backed governor of South Carolina mandates that they say that. No matter what kind of day it is in South Carolina. In just a moment, why that is proving to be a really annoying decision not just for anybody calling the state of South Carolina, but also for the governor whose bright idea that was. That`s coming up next. (COMMERCIAL BREAK) MADDOW: Occupy the Iowa caucuses. You knew it was coming. Nobody had any idea how much it would freak out the Iowa Republican Party. That`s coming up. (COMMERCIAL BREAK) MADDOW: On Tuesday, someone will win in Iowa. If it`s Mitt Romney, who everybody said could never do that because he`s not conservative enough, that will be a big deal. If it`s not Mitt Romney, it`s kind of hard to imagine that the caucus will have much of an effect at all -- unless of course you`re one of the people for whom the earth shook in 2008 when Mike Huckabee won in Iowa. New polling today from CNN and "Time" magazine shows Mr. Romney, though, way ahead in the race that will follow Iowa, Mr. Romney way ahead in the New Hampshire primary which takes place a week after Iowa on January 10th. Quote, "Romney who owns a house in New Hampshire earned 44 percent, followed by Mr. Paul with 17 percent." So, if it`s one of this year`s Huckabees who wins, a Ron Paul, a Rick Perry, a Michele Bachmann, a Rick Santorum -- if one of this year`s Huckabees wins Iowa and Mitt Romney wins New Hampshire, everything will have gone pretty much according to plan. We will be no closer to knowing who the Republican nominee for president is going to be. In fact, the first race will be an open question politically will be on the Saturday, January 21st contest in South Carolina. (BEGIN VIDEO CLIP) NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: You have to win South Carolina. Everyone who`s won South Carolina has been the nominee, every single one. (END VIDEO CLIP) MADDOW: Iowa and New Hampshire are fascinating to watch, but South Carolina might really be the race to watch in terms of how things are going to go in this nominating process. Mr. Gingrich there describing South Carolina as a must win. He`s previously described it as his firewall. South Carolina is the kind of place where Mitt Romney is not expected to be able to win, just as he`s not necessarily expected to be able to win in Iowa. But it should be noted that Mitt Romney`s locked up an endorsement from South Carolina`s Republican governor, Nikki Haley. (BEGIN VDIEO CLIP) WOLF BLITZER, CNN: Governor, thanks very much for coming in. GOV. NIKKI HALEY (R), SOUTH CAROLINA: Thank you, Wolf. It`s a pleasure to be with you. It`s a great day in South Carolina. STEVE DOOCY, FOX NEWS: Joining us now is the governor of the great state of South Carolina, Nikki Haley. Good morning, Governor. HALEY: Good morning, it`s a great day in South Carolina. NEIL CAVUTO, FOX NEWS: The Republican governor of the fine state with us right now, Governor Nikki Haley. Governor, good to see you. Do you have any horses in this race? HALEY: Hi, Neil. Well, first of all, it`s a great day in South Carolina. (END VIDEO CLIP) MADDOW: Noticing a pattern? It is not just a personal crusade that the Governor Haley is on there. She actually makes people in South Carolina say that, by her order. Seriously. (BEGIN VIDEO CLIP) HALEY: Whenever someone calls your department, we need to say, "It`s a great day in South Carolina. How can I help you?" Every person, not just the main line. Every single person that is called, "It`s a great day in South Carolina. How can I help you?" (END VIDEO CLIP) MADDOW: By order of the governor. Well, today, two South Carolina legislators filed legislation saying, oh, please stop it, saying that nobody should be forced to answer the phone with Governor Haley`s mandated cheery greeting, quote, "unless is really is a great day in South Carolina." This thing has a trigger. The legislation says no state agency can force its employees to answer its phone with "it`s a great day in South Carolina" as long as state unemployment is 5 percent or higher. It would also outlaw the greeting as long as all South Carolinians do not have health insurance. And it`s not just the great day thing that is sticking in the craw of some South Carolinians. A recent Winthrop poll shows Governor Haley`s approval rating dropping by double digits in the state even among Republicans this year. Governor Haley also now facing a scandal over e-mails that show her apparently, improperly influencing a supposedly independent, a panel that was supposed to be studying how best to implement the federal health care law in South Carolina. But e-mails unearthed by "The Charleston Post and Courier" newspaper showed the governor actually dictating what the supposedly independent health panel would find. When "The Post and Courier" tried to get access to the governor`s e- mails to report their story, emails that were public records, the governor`s office refused to turn them over. Governor Haley`s problems are not necessarily the biggest problems for Republicans in South Carolina. Last Friday, the federal Department of Justice shot down, well, much of what South Carolinian Republicans have been working on this year. They shot down South Carolina`s new Republican- backed voter ID law -- an ID law that would require voters to show documentation in order to vote that they`ve never before had to show and that thousands of South Carolina residents do not have. The Justice Department saying the law would target minority and lower income voters. And the day before the Justice Department struck that South Carolina law down, a federal judge also rejected key provisions of something else South Carolina Republicans have been working on all year. The state`s new Republican-backed immigration law, blocking the most contentious part of the law which requires law enforcement officials to check the immigration status of any suspect they believe may be in the country illegally. The judge also banning provisions that make it a crime to harbor or transport an illegal immigrant. So, the fate of the Republican nominating process at least in its early stages may really hang on Republicans in South Carolina. It`s really not looking like a great day in South Carolina now for that state`s Republicans. It`s not looking good when it comes to running the actual South Carolina primary, itself. Earlier this month, Stephen Colbert -- yes, Stephen Colbert offered to pay for a chunk of the South Carolina Republican primary because, quote, "The South Carolina Republicans and local officials were at odds over who would pay for the election." Colbert says he reached out to the party to offer to subsidize the cost through his Colbert super PAC. Mr. Colbert says he was told it would cost $400,000. Ultimately, though, the state Republicans rejected Stephen Colbert`s offer. Now, the taxpayers will have to pay the bill instead. Ultimately, the South Carolina Supreme Court decided the state`s counties will have to foot the bill for the cost of the election. So, South Carolina can`t even figure out how to pay for its Republican primary. It`s thinking about sticking the bill with the taxpayers and it`s having to turn down a comedian born in the state who says he`d like to help out. So I say, again -- is it really, really a great day in South Carolina for all of the nation`s attention to be about to turn there on the state`s Republicans? Joining us now is somebody who`s been writing extensively about this. It`s Brian Hicks, a columnist for the Charleston, South Carolina "Post and Courier." Mr. Hicks, thank you very much for joining us tonight. BRIAN HICKS, CHARLESTON POST AND COURIER COLUMNIST: It`s good to see you, Rachel. MADDOW: Let me ask you first if I got anything wrong in the description of what`s going on in South Carolina politics right now. You watch it from a much closer vantage point. HICKS: Well, it`s a great day in South Carolina if you`re a political columnist. But I don`t -- MADDOW: Let me just ask you, if as a political columnist, if you could tell me if this is sort of unique in South Carolina politics right now or if it is always this great. HICKS: Well, every year it`s abundantly clearer that these are the descendants of the people who started the Civil War, but they`re really raising the bar this year. It`s -- lunacy is off the charts. MADDOW: When Mitt Romney announced his endorsement by South Carolina`s governor, Nikki Haley, the first thing that made me think was, oh, I bet Newt Gingrich is annoyed by that, because Newt Gingrich has described South Carolina as his must-win state. But the second thing I wondered is whether or not an endorsement by Governor Haley goes very far with the Republican electorate in South Carolina. What do you think the effect of that endorsement will be? HICKS: I don`t think it has a very big effect at all, Rachel. In fact, the only thing I really think it`s going to do it alienate her from the Tea Party a little more than she already is. MADDOW: Why is she alienated from the Tea Party now? HICKS: They`ve -- well, she ran on transparency. That was her only issue. And she`s not been very transparent and the Tea Party has been calling her out on that. And so, cozying up to Mitt Romney who`s no friend of the Tea Party is not going to help her very much. MADDOW: In terms of the overall sort of state of the party, South Carolina knows that it`s going to be important in the national race by virtue of the earliness of its primary contest this year on January 21st. But in the sort of immediate aftermath of the Mark Sanford scandal, with Governor Haley proving to have problems as you`re describing even with the people who you think would be most closely allied with her, with the logistical problems they`re having over who`s going to pay for the primary, the thing they`re having with Stephen Colbert, the other scandals going on with their main legislation all being overturned by the federal government and federal judges -- should the rest of the country understand South Carolina Republicans as sort of having, I guess, organizational difficulties that will effect this nominating contest? HICKS: That`s a very nice way to put it. Yes. It`s a little bit of chaos down here right now. The party`s really split into two pieces. There is the mainstream Republican Party and then there is the Tea Party that`s sort of the tail-wagging the dog here. And the Republican Party is just livid. They can`t stand the Tea Party people, but they`re scared to death of them. And so, they`re going out and doing all this crazy stuff that they`re asked to do and gritting their teeth. And it`s really -- it`s really a train wreck. MADDOW: Brian Hicks, columnist for the Charleston, South Carolina "Post and Courier." I`ve been enjoying reading you on South Carolina politics for a long time. I`m happy to talk to you tonight, sir. Thanks a lot. HICKS: Well, thank you very much. MADDOW: Appreciate it. All right. Just ahead, Newt Gingrich`s fix for the economy -- a glorious policy he likes to talk about as if it`s theoretical but we have actually tried for a very long time and it worked very, very poorly. Stay with us. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) GINGRICH: I`m in a way their mortal threat. I just don`t threaten Obama electorally. I threaten him intellectually and I threaten their model of how the world works with the Reagan/Kemp supply side model. They`re very fundamental fights. (END VIDEO CLIP) MADDOW: That`s Newt Gingrich on the bus today in Iowa speaking with NBC`s Chuck Todd. Mr. Gingrich describing himself there as an electoral, intellectual, mortal threat to President Obama. As for the part about being a mortal threat, the new CNN/"Time" magazine poll number out of Iowa today shows the formally front running Mr. Gingrich dragging around in Rick Santorum land in Iowa, which Santorum surely is delighted with but I`m sure Newt Gingrich isn`t. If you take the other part of what Mr. Gingrich was saying on the bus today, not just the typically grandiose thing about the mortal threat, but the part about the Reagan supply side model and how that`s a fundamental political fight to have in the country, there he may be on to something. A few months after taking office in 1981 in the middle of a tremendous recession, President Reagan announced his plan for saving the economy. His plan was tax cuts. Big tax cuts. Even for the highest income brackets. Be brave, he told America. Drop the reins and let wealthy people getting even wealthier pull the country back to prosperity. The year Ronald Reagan was elected, the wealthiest 1 percent of Americans earned $110,000 a year. By 1990, after a decade of Reaganomics, good times -- look at that -- for the top 1 percent. Good times for the rich -- wages for the top 1 percent rising by 80 percent. But let`s check on the others, shall we? These are the average wages at the bottom of the economic ladder, at the time that Ronald Reagan was elected, after a decade. That same decade of trickle down, supply side Reaganomics, yes, not so much, flat as an Iowa corn field. A whopping 3 percent rise in wages which might as well be nothing. So, the already wealthy get an 80 percent rise in wages. Everything else gets squat. Here`s another way to look at it, family income growth under supply side, trickle down Reaganomics. For the top 1 percent, family incomes up 74 percent. Woo, deck the halls with lots of money. Everybody else, hope grandma sends something nice because your family income is going nowhere. And the poorest Americans actually slid back by more than 4 percent under Reagan-style economics. Supply side, trickle down Reaganomics is not a theory. We tried it. This is what it did. This is also what Newt Gingrich would like more credit for. (BEGIN VIDEO CLIP) GINGRICH: In `78, I run as a supply side candidate. Reagan at that point is not a supply side candidate. (END VIDEO CLIP) MADDOW: Newt Gingrich saying in essence, I got there first. This chart should have my name on it. I`ll be the mortal threat on here. Today in Iowa, 100 or so people from occupy the caucuses turned up to occupy Mitt Romney`s campaign headquarters in Des Moines. They said Mr. Romney should release his tax returns, which he`s thus far refused to do. These images come from "The Des Moines Register" which has done a great job covering this story like it matters and it does. Today, the occupiers of Mr. Romney`s office also said he should give back campaign contributions he has received from corporations, including from executives at banks like Wells Fargo. Seven occupiers were arrested at Romney H.Q. today. Another three protesters were arrested at the bank, at Wells Fargo. The protest was held from all over -- a lot of them from Iowa, but a lot of them from elsewhere. One of them was from a town called Ten Sleep, Wyoming, which is the middle of the middle of nowhere. Occupy the caucuses has been in the works for months now. Last night, they held their own caucus, deciding where to protest first today, voting with their feet as regular caucus goers do in Iowa. Newt Gingrich says he wants political credit for inventing what amounts to the modern economics of the 1 percent, he says that`s the fight of the election. Maybe that is the fight of the election, but if it is, not just the 1 percent but the 99 percent are determined to have their say in that fight, too. Joining us now is Ed Fallon. He`s a former Iowa state legislator, a Democratic candidate for governor and Congress, and a very small scale chicken farmer. Also, one of the occupiers who on the streets in Des Moines today. Mr. Fallon, thank you very much for joining us tonight. ED FALLON, OCCUPY DES MOINES: Good to be here, Rachel. MADDOW: I don`t mean to be casting aspersion on the size of your chickens or your chicken farming. But I think a lot of people are looking at the occupy caucuses and wondering now, is that just people just going from Zuccotti Park to Iowa or are there Iowans doing this too? How would you describe who has been protesting? FALLON: Well, 95 percent of us are Iowans. And most of us have jobs. And contrary to what Newt Gingrich says, we also bathe regularly. (LAUGHTER) FALLON: It`s really rank and file people who have jobs or who have lost jobs and looking for them who are making time in their busy lives, in their busy days to camp out, to organize, to protest, to try to move this country back in the right direction. MADDOW: Iowa`s Republican Party sounded today a little freaked out by the 99 percent movement, by the occupation. They said they will tabulate the results of the caucuses in a secret location this year because of their concerns about security. Should the Iowa Republican Party be afraid enough to be doing that? What`s your reaction to their decision? FALLON: The Iowa Republican Party tends to like secrecy, period. We`ve seen that in the Governor Branstad administration this time around. But, no, we`ve made it clear time after time that we are not disrupting the Iowa caucuses. I`ve been going to Iowa caucuses since 1988. I love the Iowa caucuses. I`m going to keep doing it. I`m going to go to it this year. Most of us involved in the occupy movement will probably be going. But, again, no matter how many times we say we`re not disrupting the actual caucus. We don`t want to get in the way of people`s right to vote. You know, the head of the Republican Party and the voices on the right are going to continue to try to malign us in order to make us look like we`re some kind of a threat to people`s democratic right to vote. Simply not true. MADDOW: How do you think Iowans should expect to see the occupy movement, to see the 99 percent movement unfold over the course of this week? What should they expect to see you doing in the upcoming days and on caucus day? FALLON: Well, the people`s caucus last night was a great kickoff. It was our way of saying, hey, you know, we`re tired of seeing the average person go last. We`re going to jump ahead of the Iowa caucus. Iowans jumping ahead of Iowans -- you know, Florida usually does that to us. But we jumped ahead. We had the people`s caucus. We had our resolutions introduced. We broke into preference groups. About 30 percent wanted to occupy Obama`s headquarters. So, this is certainly not just an anti-Republican movement. About 60 percent wanted to occupy a Republican candidate`s headquarters and 10 percent were undecided. Today was really the first day where that occupation began, focusing on Mitt Romney. Tomorrow, I think Obama, since he was fairly popular at our people`s caucus will probably be a target of the movement. It`s hard to say where it will go from there. MADDOW: Obviously, you have run for office. You`ve served in the state legislature as a Democrat. With no Democratic caucuses, no Democratic contests this year and the focus really on the different Republican candidates, in the discussions that you`re having with people, the demonstrations that you`re doing, and in the I guess the interactions that your direct action is sparking -- do you feel like there is overlap, at least room for discussion between the occupy movement and the Republican Party, its ideals and its policies? FALLON: Well, I think there`s plenty of room for discussion on both sides of the aisle. People are pretty dissatisfied with Obama, even people like me who worked hard for him are very dissatisfied. And I think a lot of Iowans will be going to the Democratic caucus and voting uncommitted. You can do that. Uncommitted has actually won the Iowa caucus three times in the past. So, that won`t be unprecedented. I think on the Republican side, there are people who are going to go uncommitted there as well, but there are certainly people interested in Ron Paul because of his stand on the wars, Afghanistan and wars that might be breaking out elsewhere. And also his opposition to the Patriot Act and to the recently passed detention provisions in the National Defense Authorization Act. There are people who find Fred Cargill`s message of quality for gay and lesbian Americans empowering. He`s a Republican activist running as well on that side. I think what some people liked what Gary Johnson had to say about immigration reform. Some people were pleased with what Huntsman said about climate change. But overall, there is grave dissatisfaction with the field of candidates across the spectrum. And I think that`s why this movement is so important that it`s not -- I mean, to me, voting is very important. We also have to have a protest movement in order to let it be known that people are really, really fed up, are sick and tired. Again, one thing we`re trying to do in Iowa is connect the dots between the corrupt political culture and corporate culture, and that line of money that flows between the two. We saw that today with the action moving from Romney`s headquarters just down the street to Wells Fargo. MADDOW: Ed Fallon, former Iowa state legislature, current occupy the caucuses activist. I keep thinking I`m saying occupy the caucuses, as if Caucasia. FALLON: That would be a little far for us. We`d miss our -- MADDOW: At this point it doesn`t seem that unprecedented the way these things are spreading. Go ahead. FALLON: I would miss my chickens. MADDOW: Fair enough, with the delay and everything. FALLON: Don`t send me there. MADDOW: Ed Fallon, thank you very much for helping us explain this to our viewers tonight and good luck over the next few days. We really appreciate it. FALLON: All right. Thank you. MADDOW: Right after the show on "THE LAST WORD," Lawrence O`Donnell introduces you to the comedy stylings of former Pennsylvania Senator Arlen Specter. It turns out he`s a raunchy late night comic. That`s coming up. (COMMERCIAL BREAK) MADDOW: A couple of updates on the breaking news out of Iowa tonight. First, the story of the co-chair for Michele Bachmann switching sides tonight and endorsing Ron Paul. Here he is tonight explaining his decision. (BEGIN VIDEO CLIP) SORENSON: We watched the last few weeks as the Republican establishment has come against Ron Paul. And I believe that he came to my side in my Senate race. I had a tough Senate. I had a tough House race before that. Both himself and his team has come to my aid. I believe it`s my duty to come to his aid as well and help put him over the top. Am I going to be the deciding factor? You know, I don`t know. We`ll know more on January 4th. But the fact of the matter is I want to do everything I can the next few days to help him get elected the president of the United States. (END VIDEO CLIP) MADDOW: That is the state senator who was campaign co-chair for the Bachmann campaign in Iowa for the past year. Tonight, a dramatic development him showing up in person at a Ron Paul event to announce that he is now endorsing Ron Paul. The latest PPP poll showing Paul in first place in Iowa with Mitt Romney close on his heels. "THE LAST WORD" with Lawrence O`Donnell starts now. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END