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The Rachel Maddow Show, Transcript 01/28/13

Guests: Bill Burton, Paul Krugman

ED SCHULTZ, "THE ED SHOW" HOST: That`s "THE ED SHOW." I`m Ed Schultz. And Rachel Maddow of THE RACHEL MADDOW SHOW starts right now. RACHEL MADDOW, HOST: Good evening, Ed. Thank you. SCHULTZ: You bet. MADDOW: And thanks to you at home for staying with us for this hour. The last state admitted to the Union, the 50th state in the United States is, of course, Hawaii. Forty-ninth state admitted the year before, Alaska. So those were 49 and 50. Those are the last two states admitted to the Union in 1958 and 1959. What was the last state admitted before then? Before Alaska and Hawaii, the last state admitted in the contiguous United States, the last state admitted on the big part of the map? That was Arizona. Arizona was the 48th state. It was not admitted to the union until 1912. It just has not been a state for very long, which is maybe why it sometimes feels like Arizona is still working out the kinks. But it also means that all of the oldest things about the state as a state just aren`t very old at all. The first governor of the state of Arizona was in office starting in 1912. Only 100 years ago, right? And if you are a schoolchild in Arizona, and you are treated to a school field trip to the Arizona capitol museum, one of the things you`ll be treated to on that field trip is the sight of the state`s first governor. George W.P. Hunt, as a life-sized wax figurine, right down to the life-sized white shoes. See? Under the desk right there. He is wax. He is seated at his desk. If you are freaked out by the life-sized wax figure of the first governor of Arizona and you leave the Arizona state capitol museum and you flee into the streets of Phoenix, you will find yourself still kind of face-to-face with that same dead governor, because looming over Phoenix at Papago Park high on the hill is this, the tomb of the first governor of the state of Arizona. He is in there and so is his whole family. He built the pyramid for himself while he still alive, and then once he died, they arranged to put him in it. It apparently has a lovely view. Agh! Arizona has not had governor versus long. They have only had governors for about 100 years. But even that short history is a history that is slightly fraught. The last governor of the state, of course, left office to go to Washington to become homeland security secretary. We now learned that Janet Napolitano is going to stay on for a second term. And so, there is nothing particularly fraught about that. But it is a somewhat unusual ending to a governorship. But even that unusual ending to a governorship is very, very normal compared to the way it usually ends in Arizona. Of the last nine governors of the state of Arizona, three of them have resigned, one of them was impeached and one of them died in office. The last Arizona governor to complete two terms that started as normal and ended as normal was this guy, One-eyed Jack. That`s what they called him. That`s not a blur in the photo. Jack Williams, his name was, he had only one eye, so he wore a blurry lens in his eyeglasses. He is the last guy who did two terms as normal, and that was 40 years ago. "Businessweek" wrote about the strangeness of the history of Arizona governorships recently when the current governor, Jan Brewer, started making noises that she should stay for a third term. Now, Arizona governors are term limited to two terms. But the person who is in the job now, Jan Brewer, decided that she should maybe get a third term any way. Her long-time attorney started making the case in an op-ed, that Jan Brewer essentially should refuse to leave office. He explained it`s his reasoning that, quote, "It comes down to what does a term mean?" He is right in a way, what is time? Look, George W.P. Hunt is still there at the capital museum. Governor Jan Brewer`s time in office has been marked by confrontation and controversy. She has aggressively marketed herself as a confrontational conservative. She has tried to develop a national profile that is all about toughness and confrontation. Her memoir is titled "Scorpions for Breakfast." And while she may be tough and she may be confrontational, what frankly is more central to her national profile is not necessarily toughness, or confrontation, but rather the sense that there is something unique, something special about her, at least something unpredictable. (BEGIN VIDEO CLIPS) UNIDENTIFIED MALE: And finally, we hear from Jan brewer. GOV. JAN BREWER (R), ARIZONA: Thank you, Ted. And it`s great to be here with Larry, Barry, and Terry. And thank you all for watching us tonight. I have -- done so much, and I just cannot believe that we have changed everything since I had become your governor in the last 600 days. Arizona has been brought back from its abyss. We have cut the budget. We have balanced the budget, and we are moving forward. We have done everything that we could possibly do. We have -- did what was right for Arizona. UNIDENTIFIED MALE: Which beheadings in Arizona were you referring to? BREWER: Oh, our law enforcement agencies have found bodies in the desert either buried or just lying out there that have been beheaded. UNIDENTIFIED MALE: Jan, I call upon you today to say that there are no beheadings. That was a false statement, and it needs to be cleared up right now. BREWER: And, you know, Terry, he will call you out. I think that you ought to renounce your support and endorsement of the unions. REPORTER: Governor, why wouldn`t you recant the comment you made earlier about the beheadings in the desert? REPORTER: Seriously, that`s a serious question, Governor. BREWER: This was an interesting evening tonight. REPORTER: Governor, please answer the question about the headless bodies. Why won`t you recant that? Do you still believe that? Come on, Governor. BREWER: OK, thank you, all. REPORTER: Governor, what do you make -- REPORTER: Come on. (END VIDEO CLIPS) MADDOW: Governor Jan Brewer, Republican of Arizona, always worth watching, wants a third term. Today in Washington, a bipartisan group of four Democratic senators and four Republican senators unveiled what they say is a viable bipartisan, widely accepted, specific policy prescription for the country finally being able to do something about immigration. This is not a narrow bore, tightly focused policy micro-solution to some part of the immigration program that`s the easiest thing to deal with. This is actually a comprehensive effort, which is what all the experts in the field say is necessary in order to get anything real done on this as a matter of policy. It`s also the only way to get eight senators as disparate as these guys to sign on to something together. I mean, generally speaking, when you`re trying to come to a deal with disparate elements like this, the legislation has to be complicated enough that the eight people trying to agree on it can horse trade a little bit, right? They can get individual things that they like, they can trade away individual things that they don`t want to be in the bill. That`s how you come to a deal. So, this was a big, comprehensive, complex proposal that these eight senators put forward today. The only major problem that was immediately apparent in what they put forward was this. (BEGIN VIDEO CLIP) BREWER: We have -- (END VIDEO CLIP) MADDOW: Yes. Republicans have long said they would not agree to do anything about immigration unless there were tough new seal the border enforcement actions, right? And those seal the border enforcement actions had to be taken as some sort of precursor to doing anything else about the 11 million people who are in this country without legal immigration status. The way that they handled that Republican requirement in this current complex bill that they put forward today is that they establish a commission of Southwesterners. Elected representatives, governors, and other people from Southwest border states, they would be put in a position of holding up all of the other advancements in the bill, keeping people from doing all of the other things that are in this policy, from getting in line for citizenship, stopping all the other reforms if this Southwestern commission did not certify that the border had been secured, that all efforts to secure the border were complete. The border security measures would have to be done first. This group would have to say they are completed, that everything secure on the border, and then and only then can the reforms that were unveiled today go forward. That is the implication of the language that was put out today by this group of eight bipartisan senators, which translated into political use means nothing happens until somebody like Jan Brewer says everything OK, everything is OK. Maybe Jan Brewer specifically, Jan Brewer is never going to say everything is OK. Things are not OK for Jan Brewer, whether it is making stuff up about headless bodies in the desert that don`t exist or trying to market to the nation how excited we should be that she wagged her finger in the president`s face when talking to him about border security. If it all rests in her hands, she gets veto power? Or any other local official`s hands to give thumbs-up or thumbs-down as to whether or not the country can go ahead with something we agree we need as a whole country? That seems like a weakness in the plan. When asked about this one laugh-out-loud provision in what seems like otherwise a very reasonable proposal, senators and staffers who are on the Democratic side of these negotiations for this bipartisan group said essentially, don`t worry about it. This Southwesterners commission will be able to make recommendations, but they won`t be given veto power over what happens for the whole country and millions of Americans counting on reform. Marco Rubio`s office on the Republican side has given a much more evasive answer, implying that maybe he thinks that Jan Brewer would have veto power. So clearly, that matter is going to have to be settled. As a matter of policy, though, in a collection of proposals and policies that is otherwise imminently centrist, that is otherwise just a list of reasonable incremental reforms that everyone is not an extremist on the issue has long agreed must be done, in the midst of all these other policies, this one clause frankly does seem to stand out as being too stupid to live. So it will either have to disappear, or it will have to be just a recommendation and nonbinding the way the Democrats are saying, or if they`re going to leave this thing in there and it is going to have veto power, it`s going to have binding authority, that will be the stupidest hill ever on which this totally needed policy change dice on. At a time when real substantial bipartisan legislation seems inconceivable, even the fact that this was introduced today and announced today seems like a great victory for the art of the possible in Washington, right? For the prospect that D.C. could actually make policy again, instead of just making sparks fly. But this is an area of policy where things have felt possible before. You might remember in 2007, it was John McCain with the support of the Florida Republican senator who went on to be chairman of the Florida Republican Party, Mel Martinez, all supporting a comprehensive immigration proposal, much like this one today, that never went anywhere that year. By the time John McCain was running for president the year after, he said actually he would vote down his own bill. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: At this point, if your original proposal came to a vote on the senate floor, would you vote for it? SEN. JOHN MCCAIN (R), ARIZONA: It won`t. It won`t. That`s why we went through the debate. No, I would not, because we know what the situation is today. That people want the border secured first. (END VIDEO CLIP) MADDOW: John McCain in 2008, running against his own immigration position from 2007, in order to try to get his party`s nomination for the presidency that year. In order to win his party`s presidential nomination this past year, Mitt Romney was the champion of self-deportation. Remember, he said he would veto the DREAM Act, and he brought on the guy who wrote the papers please law in Arizona as his immigration adviser. The Republican Party`s own platform that they just agreed to for the Romney campaign is vehemently opposed to the exact reforms that these eight senators brought forth today. But there were four Republican senators today making this proposal. The proposal has been made, and should it be noted that it matches almost word for word the exact immigration proposal that President Obama made in a big speech in El Paso back in the spring of 2011. President Obama is due to announce his own ideas on this subject tomorrow. We can guess if he meant what he said in El Paso, that what he says tomorrow will very closely mirror what the senators laid out today. Presumably with the exception of this one absolutely indefensible bizarre please the Republicans clause. This is -- this is an incremental centrist consensus lift of long accepted moderate reforms, which in any reasonable political science, reasonable understanding of how Washington works, this should be totally viable, should be. But, of course, this isn`t political science. This is our real Washington. And that means it has to go through the House too, where mark my words, watch. The Jan Brewer clause will be the only part of this thing that they like. Joining us now is E.J. Dionne, "Washington Post" columnist, senior fellow at Brookings. He`s author of "Our Divided Political Heart", which is now out in paperback. E.J., it`s great to see you. Thank you for being here. E.J. DIONNE, WASHINGTON POST: Good to be with you. MADDOW: Is it naive for me to think that this might be possible? DIONNE: I don`t think so at all. And thank God you didn`t ask me about the headlessness issue. I think we saw today, people talk all the time about the cost of politics and the price of politics. But they`re actually achievements in politics. And today was brought to you by the 2012 election. And there was something poignant about John McCain being there, supporting the bill that he originally supported before the 2008 election, because he suffered badly at the polls in 2008 among Latinos, even though he had championed immigration reform. Mitt Romney did worse among Latinos. And I think a lot of Republicans realize that they cannot hold to this restrictionist position forever without suffering real costs. In terms of that crazy commission provision, it was fascinating to see the Democrats say and the language on your screen said "make a recommendation," that is vague language. The Democrats were trying to say this is a very vague thing. The Republicans like Rubio are probably going to try to make a big deal of it. But you know what? There`s even action in the House. And the House is where progressive legislation goes to die these days. But even Paul Ryan has been saying good things about what Marco Rubio is up to. So I don`t rule out the possibility that this thing can actually pass. MADDOW: I`m glad you brought up the possibility of movement in the house. CBS first reported tonight that there has been bipartisan group in the House meeting on immigration in secret, just like these senators did on the other side of Congress. Is there something structurally different between the House and the Senate that would make a bipartisan agreement that`s possible in one of the two houses, not possible in the other one? Or would you expect a bipartisan group in the House to be able to come up with something much like this Senate plan? DIONNE: The House has a much more difficult problem. I mean, what you have here is a split between the national Republican Party and nationally-oriented Republicans who know the price of continuing to oppose immigration reform. But a lot of these individual Republican House members represent districts where not only are they very safe, but many of their voters would like them to continue to take a hard line on immigration. So there is a kind of conflict of interest between the views of those members and their view of what their constituents want and the national party. Nonetheless, there was a significant number of Republicans and significant enough number that if John Boehner can yet again figure out how to pass a bill with significant Democratic support, I think this can get through. The question is how often can Boehner do that? If he can do that a lot, we`re going to get a lot of legislation through the House. MADDOW: E.J. Dionne of "The Washington Post" and Brookings -- I feel we`re in a very interesting and unsettled time when stuff might be possible. I also feel naive for saying it, but you make me feel better. Thank you, E.J. DIONNE: Thank you. Good to be with you. MADDOW: It`s great to have you here. Thanks. All right. We have lots more ahead, including Nobel Prize winning economist Paul Krugman here tonight for the interview. And later, an "I call bullpucky story" has gotten even more bullish since I covered it. We will be right back. (COMMERCIAL BREAK) MADDOW: The president and vice president are doing work on the issue of gun safety reform. The president`s brand spanking new political operation tried to do work on gun safety reform, but it kind of did not work. Bill Burton, who knows about these things, joins us next. (COMMERCIAL BREAK) MADDOW: OK. Here is how you know it has been a busy day in politics. Here is how you know when there is a lot going on in Washington, D.C. At around 2:30 Eastern Time this afternoon, we had that big bipartisan group of eight senators come out to announce that they have reached a framework agreement on how to move forward on comprehensive immigration reform. This is a huge development. Immigration reform has been inexplicably elusive in Washington over the last decade. But with this announcement today, we do appear to have broken through some of the gridlock. Since the White House has been pushing immigration reform for years, and in particular in recent months, you would think they would greet today`s announcement from these bipartisan senators by dropping everything and making today immigration reform day in Washington. But that did not happen, because the White House in fact decided to preempt that big immigration reform photo op this afternoon with a photo op of their own a few hours earlier on a totally different subject. (BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Vice President Biden and I just want to thank the police chiefs and sheriffs who are here today representing law enforcement officials all across the country, who obviously share our deep concern about issues of gun safety and how we can protect our communities and keep our kids safe. (END VIDEO CLIP) MADDOW: There are few things historically speaking that are seen as bigger political lifts in Washington than immigration reform or than gun reform. But just eight days into this second term, the Obama administration is working actively to accomplish both of these things simultaneously. Today, President Obama and Vice President Biden met with police chiefs and local sheriffs from around the country, including police chiefs from Newtown, Connecticut, Aurora, Colorado, and Oak Creek, Wisconsin, all of which have endured major mass shootings just within the past six months. Vice President Biden also held a roundtable discussion on gun reform in Richmond, Virginia on Friday. He had the homeland secretary and health secretary with him there. President Obama himself made a high profile reference to gun reform in his inauguration speech last week. Other cabinet members, including the attorney general, have been making their own news on moving forward on gun reform, mental health reform, background checks. The administration, in other words, doing everything they can to not only move on this, but to keep gun reform at the top of the national agenda, to not let it slide out of the news with the passage of time after the Newtown shootings. The White House said they would work on it this way, because they know it`s going to be a heavy lift. Well, in addition to the White House meetings with law enforcement and the speeches and the roundtable discussions in places like Richmond, and in addition to all of that stuff, the way the White House has said that they were going to try to get around what has made this too heavy of a lift for previous presidents is that they said they were going to play the outside game. They were going to go outside Washington. They were going to get the grassroots involved. Specifically, they were going to bring the president`s 2012 campaign apparatus to bear on this really important and difficult policy issue. As NBC`s Michael Isikoff reported this morning, the Obama campaign has now given over its massive voter database to the new Democratic advocacy group Organizing for Action. Organizing for Action is being run by the heavyweights of President Obama`s 2012 reelection campaign. Their stated goal is to use the apparatus and the contact list and the volunteer energy that got President Obama reelected, use that to get his agenda passed in his second term. Nobody has ever done this before. But the Obama folks are doing it. They have now started that effort with gun safety and with immigration. And if you think about just gun safety in particular, I mean, it makes sense, right? If it is traditionally too hard to get the politics of this done, then you better bring nontraditional means to bear if you want to get it done this time. And using the president`s reelection campaign apparatus to get it done is definitely a nontraditional way of doing it. But when Organizing for Action puts out what appears to be the very first solicitation to that giant list on a policy issue, when they urge the millions of recipients on the mailing list to call their member of Congress immediately and to tell them to get behind the president`s proposals on gun reform, that call your congressman right now e-mail went out at 4:26 p.m. on a Friday afternoon. Specifically, on a Friday afternoon when neither the House nor the Senate were in session. Really? Call your senator right now? Late on a Friday afternoon on a day when he or she does not have to be at work, at a time when the staffers are likely to be on their way home, too? The whole idea of making their people call their member of Congress is to show those members of Congress that you can, right? Flex your muscles. Show that you have millions of people ready to be mobilized at any given issue at a drop of the hat and drive that home by making the phone ring in their office when they can do that. Doing that at 4:26 p.m. on a Friday when Congress isn`t in session? I mean, even if people would do it, you`re aiming to fill up the voice mail maybe and hoping when people check it Monday morning that that`s what it was about? This was the big launch? What`s going on here? Joining us now is a man who is the closest I can get to the White House or to the Obama campaign apparatus without actually being allowed to talk to somebody from the White House or the campaign apparatus. Bill Burton is the former White House deputy press secretary and co- founder of Priorities USA Political Action Committee. He is now an executive vice president and managing director at Global Strategy Group, which sounds both leviathan and terrifying -- Bill Burton. BILL BURTON, GLOBAL STRATEGY GROUP: That`s what I was going for. MADDOW: Executive vice president and managing director of Global Strategy Group, do you realize how evil that sounds? BURTON: You said bright but uncertain future when I was on not too long ago. And now it`s certain, Global Strategy Group. MADDOW: All right. Fair enough. I won`t ask. I assume I`ll know before it kills me, right? BURTON: I have to say, though, 4:30 on a Friday is actually a really good time to get a member of Congress. They`re probably not doing anything. MADDOW: They`re probably not at work. BURTON: You catch them right before happy hour. You get right through. You get right through. MADDOW: No. What -- is this just -- is the Obama for America organizing apparatus that existed in 2008 that got folded into the DNC, essentially went on autopilot and wasn`t effective during the president`s first term, is that is what is going to happen again in the second term? Are they going to run this thing on autopilot? BURTON: No, look, you`ve got some of the smartest minds in politics who are over there putting this together. They`ve got one of the best lists ever assembled. MADDOW: The best list ever assembled? BURTON: The best list ever assembled, and they`re going to put it to work. You know, the thing we have right now is the NRA has always been this powerhouse organization, which has been a lot more money than actual action. What you have now is a countervailing force where you can actually have a grassroots effort to get people to call their members of Congress, to put some pressure on them, and actually get something done from the outside. And I just came from "The New Republic" launch party. As the president told "The New Republic", you know, you`ve got to get the change from the outside in, or else it`s never going to happen. And if people don`t call their members of Congress and say to the ones who disagree with this policy, you`ve got to move or you`re going to pay a political price. And tell the ones who do agree with the policy -- great, thank you, keep pushing because we need this right now. MADDOW: So, but the first time they are employing it, they sent out a couple of e-mails essentially saying we`re doing this thing. This is the first time they have tried to employ it on a policy matter. You have to admit the timing was ridiculous. BURTON: Well -- MADDOW: That makes me feel like there might be big minds coming up with the big ideas. But people who are executing it are doing a bad job. And that`s the thing that seems surprising to me for a campaign that was so good at executing both times. BURTON: Well, one thing I don`t think you noticed because the Obama campaign was so big and it was so many things all at once, is that when you execute one of these online campaign, what you have to do sometimes is the soft launch, and that e-mail that got sent out is probably slightly different from other e-mails that went out. It`s a test. You see what people really react to, and you use that data in order to really engage voters who are on the list when you do your huge, big launch later on. So I think this is just part of a strategy leading up to what is going to be a sustained effort to really hold members` feet to the fire and get the kind of change we need. MADDOW: And you don`t have any doubts about it? BURTON: No. I don`t have any doubts. MADDOW: Here is the thing. I don`t care about how effective any political organization is, except just in terms of studying the tactics, I would expect the best list in politics to produce big results. BURTON: Yes. MADDOW: When it is employed. And if they don`t know how to drive that car, it`s doesn`t matter. BURTON: You can`t always do it right from the beginning. Sometimes you test different messages, you test subject line, you test different PS`s, all sorts of different things. You figure out what is the best way to do this and that is what gives you the big results. MADDOW: One last question on immigration specifically. Do you expect this outside game if they try to employee it on guns and immigration, it will be employed differently? Or is it the same set of tactics that you try to use that campaign apparatus to employ? Or is this a multifaceted thing, you can do a lot of things with it? BURTON: Well, I think it will be similar. The difference in the immigration fight is you`ve got much larger groups on the outside who have been doing a lot of this work. On the gunfight, you`ve got the Brady group, you`ve got the Bloomberg group, you`ve got all these people who are doing work. But on the immigration fight, you have the enormous apparatuses. And I think the grassroots behind that is going to be intense. Luckily, it`s already a bunch of momentum going today. And tomorrow with the president`s speech, I actually think we`re going to get something done. MADDOW: I think the thing that is going to be fascinating to watch is the president`s speech. I have no idea if he`s going to do it, but I think he should totally pro tend he didn`t propose all of these in May 2011, which he did. It`s like letter to his proposals exactly what he rolled out. I think if he disavows it, he might have a chance. You never know. Bill Burton, it`s great to have you here. I`m sorry that I always tease you, but it`s too fun to stop. BURTON: Thanks for having me. MADDOW: All right. We`ll be right back. (COMMERCIAL BREAK) MADDOW: The most over-covered story on the Beltway media are what Republicans say need to be do differently in wake of the election which was a Republican disaster. It`s an awful lot of talk with not a lot of news. They say it, the Beltway press writes it down. For some reason, we call that news. On the other hand, the most under-covered story in the beltway media is what Republicans like this, Republicans with actual governing power, are actually doing with that power in the places where they are in charge. What you do with power says a lot more than what you say about power, even if it isn`t always said quite as loudly. Paul Krugman is our guest tonight for the interview. That`s coming up. (COMMERCIAL BREAK) MADDOW: They have these where you live? These are called loosies. It means single items of something that are usually sold in packages, like these crackers. But because not everyone can afford to buy a whole box, store owners who have a customer base that doesn`t necessarily have a lot of money to spend, those store owners sometimes sell things loosely, as in loosies. Most of the time when people talk about loosies, it means cigarettes. It is an often illegal, but often available way to buy one cigarette at a time instead of buying a whole expensive pack. It`s not only cigarettes. You can also find loosie aspirin and loosie eggs and so on. Loosie can tell us a lot about the local customers, whether it`s poor students who are trying to bust up a six-pack of beer, or working families scrounging something for the kids to eat. We do not all approach the counter with the same amount of money at our disposal. But regardless of how much we can afford to buy at one time, we are all treated the same way by the sales tax. Sales tax doesn`t care if you`re a janitor with four kids in one precious dollar, or if you are a cardiologist with the second home and lots of dollars. And because of that, the less you make, the greater percentage of income you pay when you pay the sales tax. If you don`t make that much money, that sales tax on the egg might be 1 percent of a day`s pay for you. It could probably be more like a thousandth of a percent of the cardiologist`s paycheck for the day. A sales tax is therefore among the least populist ways of raising money for government, proportionally speaking. It takes the most from people with the least money, and the least from everybody who has more money. Because of that backwards impact, because it`s harder on the poor and easier on the rich, you might think a tax like that would be among the most unpopular tax ideas. But in bright red states, states where Republicans have complete control of the government, that tax all of the sudden is really popular. This month in Louisiana, Republican Governor Bobby Jindal rolled out his agenda for this year. Get rid of the income tax and corporate taxes where how much you pay depends on how much you make. But do not worry about the billions in lost tax revenue, because Louisiana, to compensate, will jack up the sales tax that everybody has to pay, and that takes such a bigger chunk out of poor people`s pocketbooks. When the nonpartisan tax wonks calculate the effect of Governor Jindal`s plan, they find that overall taxes will fall for the richest 20 percent of people in the state. Their taxes will go down. But for remaining 80 percent of the population, taxes will go up. And the people in all of Louisiana who can least afford a tax hike will get the biggest tax hike. That is what Bobby Jindal has in the works for Louisiana. Happy Mardi Gras. In Kansas, which doesn`t have Mardi Gras, except privately, Republican Governor Sam Brownback gets to do more or less what Sam Brownback wants, because Republicans also control the legislature there. The other day, Governor Brownback announced his agenda for this year. And oh, hey, look, an end to the income tax. Already Republican tax cuts approved last year have opened up a giant hole in the Kansas budget. Now, the governor wants to pay for that with a higher sales tax and by ending tax breaks that benefit ordinary working families. This is after Kansas Republicans already took away tax breaks for stuff like food, the kind of tax breaks that try to make up for the unfair nature of the sales tax. The nonpartisan tax wonks say they have a worried eye on the plans of the Republican governors this year. Not just in Kansas and Louisiana, but in Wisconsin and in Ohio and Nebraska. In North Carolina, where Republicans won complete control last year, they`re now talking about making the poor pay more. So that`s how the political season is opening up this year in the red states. In Washington, D.C., where Republicans are not in charge, where they like to remind everyone that they only control one-half of one-third of the federal government, Republicans have been sounding the sad trombone this past week -- woe is them, or woe are them, I guess. (BEGIN VIDEO CLIP) REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We`re expecting here over the next 22 months to be the focus of this administration as they attempt to annihilate the Republican Party. And let me just tell you, I do believe that is their goal, to just shove us into the dustbin of history. REP. PAUL RYAN (R), WISCONSIN: He needs to delegitimize the Republican Party and House Republicans in particular. The president will bait us. He will portray us as cruel and unyielding. We can`t get rattled. We won`t play the villain in his morality plays. (END VIDEO CLIP) MADDOW: Democrats are not organized enough to have their talking points be this evident. But when Republicans do it, it`s kind of obvious, right? This is the new Republican leadership talking point: President Obama is mean. And Republicans are helpless before his meanness in Washington. But you know what? Republicans have complete control of government in 24 states, which is a lot. And where they do have control, they`re not blaming Obama, right? Look what they`re doing in governance. They`re having the rich pay less, and they`re having the poor pay more. This is not what they`re marketing to the nation, but this is what they`re doing when they`re handed the reins of government. Economist Paul Krugman wrote about this deja news in his latest column. "What we`re seeing now," he says, "is open, explicit reverse Robin Hoodism: taking from ordinary families and giving to the rich. Even as Republicans look for a way to sound more sympathetic and less extreme, their actual policies are taking another sharp right turn. Why is this happening? In particular, why is this happening now, just after an election and which the Republican Party paid a price for its anti- populist stand?" Good question. And it`s the distance between what the Beltway writes down when the Republicans talk about themselves versus what Republicans actually do where they are in charge. It`s a very good question. Paul Krugman himself is here for the interview, straight ahead. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) GOV. BOBBY JINDAL (R), LOUISIANA: We must not be the party that simply protects the well off so they can keep their toys. We`ve got to be the party that shows all Americans how they can thrive. We`re the party whose ideas will help the middle class and help more folks join the middle class. We`re a populist party, and we need to make that clear to every voter and every American. (END VIDEO CLIP) MADDOW: Louisiana Governor Bobby Jindal making the case that the Republican Party is a populist party. Two weeks ago, Governor Jindal says he wants to eliminate all income taxes in his state in a revenue-neutral way, making up for it mostly with the sales tax. And whatever you think about tax policy, that is pretty much the exact opposite of populist, if the word populist has any meaning. Joining us now for the Interview tonight is Paul Krugman, Nobel Prize- winning economist and author of the bestselling book "End This Depression Now", which is out with a new preface right now. Paul, thank you for being here. PAUL KRUGMAN, NEW YORK TIMES COLUMNIST: Hi there. MADDOW: You have argued that the Republicans get credit for all sorts of things they are not actually for. They get credit for being tough on the deficit when they`re not -- conservatism in their approach to policy when they really want quite radical changes. Is there a coherence that matches the way they talk about themselves that is evident in the way they are governing in the states that might not be evident in Washington? KRUGMAN: Wow. I mean -- in state, in deep red states like Louisiana or Kansas, basically they are -- we`ve reached a point where they don`t worry about losing the election to Democrats. I mean, you know, if you talk about one-party rule, you know, and Southern whites are 90 percent Republican voters, it`s just not. So their only concern is about fending off challenges from their own right. And so, they are free to do what they really want to do, or what their base really wants them to do. And that turns out to be radically -- in a way, it`s fiscally more honest, right? At the national level, they`ve always had the pretense we can cut taxes and somehow that will pay for itself. We will eliminate waste and fraud we won`t tell you what, or the magic of the Laffer curve will deliver us the red meat. At the state level, you can`t get away with that, but on the other hand, they`re free to be honest and say, what we really want to do is take away from middle class and poor families and give to it the rich. And somebody like Jindal, who has national ambitions, but is simultaneously running policy in a deep red state, the difference between what he says Republicans stand for and what he shows Republicans stand for is really dramatic. It`s quite something to watch. What is interesting, both these things, both the rhetoric, what he said about we must not be the party that helps the rich keep their toys, that`s something you aren`t hearing. Republicans wouldn`t even acknowledge that there was even a possible perception of such things until after this last election. So, on one sense they said oh, maybe we have to worry about this class warfare thing. But on the other hand, this brutal upward redistribution of income, that`s also something new. It`s quite an amazing moment. MADDOW: In terms of understanding the magnitude of impact on typical family life in these states, if these changes are made, if Kansas and Louisiana and some of the other states are considering totally eliminating income taxes, they do actually make up for it by jacking up sales tax. What -- how will that change those states? KRUGMAN: Well, it`s a few percent. We`re talking something like a 3 percent hit to the poorest fifth of families, and something like a 3 percent benefit in terms of income to the richest 1 percent. So, you know, state budgets are not that big. So federal level changes could be a bigger hit. But if you`re living fairly close to the edge or at the edge which a lot of poor families are this is a significant thing. If you`re -- you know, if you`re in the top 1 percent in Louisiana, something like that $25,000 extra a year of extra spending money, not trivial. And this is -- you know, what is really amazing, by the way, one thing I couldn`t get into in the column, if you`re worried about the incentive effects, suppose you really worry about taxes diminishing the incentive to work, it turns out in our system, the highest marginal tax rates, the biggest disincentives to work in our system are not for the rich. They are for lower income workers who are in the range where if you start to work more, you start to lose benefits, you start to lose Medicaid, you lost housing subsidies. This is going to raise taxes precisely on people who have the biggest disincentives to work. MADDOW: Wow. KRUGMAN: So it is actually even from the old supply side incentive thing, this is going in the wrong direction. But, hey, that`s not what it`s about, right? MADDOW: Well, it`s about marketing in a way, and when they talk about how they want to be seen rather than how they want their policies to be parsed, they`re often increasing it. They`re putting it in terms of international terms as well, talking about the global financial crisis. One of the things you write about in a new preface in the book is how the United States has fared in the depression compared to other countries. We`ve sort of done comparatively better than Europe has. KRUGMAN: Yes, we lost the race to the bottom of stupidness. We didn`t do as many things wrong as the Europeans did. We didn`t do well, by any means, but we didn`t do gratuitous austerity the way that Britain did. We at least have a single currency across the continent, but also have a single government, which is kind of helpful. The Europeans screwed up in that dimension. But what`s interesting, of course, is that all the things that luckily we didn`t do are the things that the GOP wanted us to do. Wanted us to have British-style austerity, wanted us to have hard money the way that the Europeans have been forced to because this is bad thing. Yes, we`re actually -- things could be worse, in the environment in the United States. And that always ends with the punch line, and sure enough things got worse, right? But here we are. MADDOW: But this -- you know, for explanatory and political purposes, we did sort of run a controlled experiment, with some countries tried what they are proposing and we see how it worked. KRUGMAN: That`s right. In the middle of 2010, when the new British government came in, up to that point, the track of recovery had been about the same in the U.S. and Britain. Since then, we`ve started to recover, and they`ve gone into a triple dip recession. So there we are. MADDOW: Paul Krugman, Nobel Prize-winning economist, "New York Times" columnist, author of "End This Depression" now, thank you as always. KRUGMAN: Thanks a lot. MADDOW: Thanks a lot. All right. We`ll be right back with a RACHEL MADDOW SHOW patented bullpucky alert. This one appears not a test, not a drill, but a real life pile of bull. Hold on. (COMMERCIAL BREAK) MADDOW: On Friday, we ended the show with a code 3 bullpucky alert. You were all calm, just like we`ve all been practicing in our weekly bullpucky alert drills. Friday`s alert was triggered by a group called Use Your Mandate, which we`re told is supposedly made up of liberals and Democratic Party, gay rights advocates. The group is running this ad against former Senator Chuck Hagel, the president`s nominee for defense secretary. Here is the problem, though, the people running this ad have told the press that they are liberal Democrats with ties to the Obama White House. But they have refused to step out in the light. They`re doing this anonymously. They paid for a national ad going after this president and his nominee, but have done it secretly. They said they wanted to be anonymity because they feared retribution from the Obama White House, as if this White House is known for vindictively crushing liberals who disagree with them. The whole thing just seemed a little off. (BEGIN VIDEO CLIP) MADDOW: I`m not buying it. I call bullpucky. I say it is even money that this is the right running ads against Hagel while pretending to be the left. I might be wrong, but I call bullpucky. And if I am wrong, there`s an easy way to prove it. Come out, come out, whoever you are. If you are not Bill Kristol, or Liz Cheney or the Log Cabin Republicans or someone like that, I will be the first to admit that I`m wrong. But I do not think I`m wrong. This is not a liberal group. It`s a right wing group. You`re trying to look like liberals and we can tell. (END VIDEO CLIP) MADDOW: That was Friday, tonight, the follow-up. The day after the censors went off, the day after our siren sounded in our studio, the day after I said it was Bill Kristol or someone like him, I will say I am wrong -- the day after that, "The New York Times" reported about one very specific detail on those anti-Chuck Hagel anonymous ads. According to "The Times," this group Use Your Mandate, the supposedly pro-gay rights group that has no sense of irony at all about using the word "mandate", Use Your Mandate hired a firm to place these ads, a firm called Del Cielo Media, which is, quote, "an arm of one of the most prominent Republican ad-buying firms in the country." Between "The Times" reporting and a follow-up from Andrew Kaczynski at BuzzFeed, we learned that the firm`s client list doesn`t look at all that liberal or Democratic or nice to gay people. It includes the Republican National Committee and the National Republican Congressional Committee, and the Republican Governors Association, and the McCain-Palin campaign, and the Christine O`Donnell for Senate campaign, remember "I am not a witch"? Also a group called The Emergency Committee for Israel, which has on its board a rather famously anti-gay Gary Bauer. Remember Gary Bauer? He`s the guy whose Iowa campaign office Dan Savage went to in the year 2000 when Bauer was running for president, Dan licked the door knobs at the campaign of Gary Bauer to try to give him and his staff the flu. The Gary Bauer group also has a prominent a neo-conservative on its board, Bill Kristol. Bill Kristol seems to be coordinating most of the right wing opposition to Chuck Hagel`s nomination, including apparently sharing an ad-buying firm with somebody trying to appear like they are a left wing opponent of Chuck Hagel`s nomination, even though it really seems like that`s made up. We contacted Del Cielo Media for comment today. Their comment today was, no, as in they had no comment. Use Your Mandate also has a New York-based consulting firm called Tusks Strategies. They did confirm to us that Use Your Mandate was one of their clients, but declined to say who that client actually is. So, you know, maybe there is a left wing group that prioritizes gay rights that feels comfortable working alongside Bill Kristol and Gary Bauer and using all of these Republican resources to do their work. Maybe, or, bullpucky, that bullpucky alert is in effect. Chuck Hagel`s confirmation is on Thursday. Until this group says who they are, the important headline on Thursday about the opposition to the Chuck Hagel`s nomination is going to be that some of that opposition appears to be fake, comically, ridiculously fake. Do you want that to be the headline on Thursday? If not, come out, come out, whoever you are. That does it for us tonight. We`ll see you again tomorrow. Now it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL". Have a nice night. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END