'Countdown with Keith Olbermann' for Friday, July 31
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Video via MSNBC: Oddball

Guests: David Axelrod, Markos Moulitsas, Chris Kofinis, Christian Finnegan

(BEGIN VIDEOTAPE)

RICHARD WOLFFE, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

Ugly tactics in the health care fight. As the Democrats take on big insurance.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE: The glory days are coming to an end for the health insurance industry in our country.

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WOLFFE: . the playbook from the other side? Pack town halls with angry people hell-bent on stifling intelligent debate.

Tonight: White House senior advisor David Axelrod on the high stakes of the health care message wars.

The arrested development of the birthers: As Eric Cantor tries to deflect blame for the birther conspiracy from his party.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I have no idea where he was born.

(END VIDEO CLIP)

WOLFFE: Tonight-we see how the fringe is taking over the GOP. The right-wing rumor mill is working so well that 28 percent of Republicans actually believe the nonsense that the president was not born in the United States.

The surprise success of "cash for clunkers."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm happy to report that it has succeeded well beyond our expectations and all expectations.

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WOLFFE: A billion dollars spent in one week and more cash is on the way. Will it finally silence the stimulus critics who said the money wasn't working?

And political plays of the week: From the breathless hypes surrounding the beer summit.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, TV HOST: Top 10 things overheard at the White House beer summit.

(END VIDEO CLIP)

WOLFFE: . to Sarah Palin quitting again-this time the Tweeter of the North is a no-show at a fundraiser for the Reagan Library. How very mavericky.

All that and more-now on Countdown.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), ALASKA'S FORMER GOVERNOR: I'm where I need to be today.

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WOLFFE: Good evening from New York. I'm Richard Wolffe. Keith Olbermann got one more night off.

To all Democrats in Congress who are planning to spend their part of the August recess talking about health care reform at town hall-style meetings back home, we offer this friendly Countdown public service announcement in our fifth story: Those angry protestors who will disrupt your attempts to talk with your voters-and trust us they will-are being coordinated and coached by industry funded, right-wing operatives. Their stated goal will be to rattle you, not to have an intelligent debate.

And there's a good chance they don't even live in your district.

One conservative front group is now busing people from all over the country to protest against Democratic members-a strategy endorsed by Republican Congressman Pete Sessions of Texas, who told Politico.com that the days of civil town halls are now over.

A leaked memo from the folks who brought you the tea bag protest gives step-by-step instructions for disrupting town halls, including advice to prevent members of Congress from informing their constituents. Quote, "The goal is to rattle him. Stand up and shout out and sit right down. Look for these opportunities before he even takes questions."

The memo also talks about how to artificially inflate their numbers. Quote, "Spread out in the hall. The rep should be made to feel that a majority, and if not, a significant portion of at least the audience opposes the socialist agenda of Washington."

Do these people have any idea what socialism is or do they secretly support their own idea of socialism?

Last night, Democrat Anthony Weiner of New York introduced an amendment that would have abolished Medicare-you know, evil, socialized medicine.

(BEGIN VIDEO CLIP)

REP. ANTHONY WEINER (D), NEW YORK: This amendment is simple. It gives my Republican friends the chance they've been waiting for, to vote against government-sponsored, government-run, government administered health care. It's your dream amendment. This is put up or shut up time. If you don't like national health care, if you don't like government-run health care, this is your amendment.

(END VIDEO CLIP)

WOLFFE: But when it came time to put up or shut up, not a single Republican voted to abolish Medicare. In fact, one GOP congressman called Weiner's amendment a farce.

In the Senate, one of the Democrats playing a lead role in the health care fight, Senator Chris Dodd of Connecticut, announced that he has early stage prostate cancer and that was detected during his annual physical. Senator Dodd said the diagnosis has made him even more committed to health care for all.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD (D), CONNECTICUT: As a member of Congress, I have a very good health care plan. My health care plan allows me to get paid an annual physical. And because I have an annual physical, I was able to detect this prostate cancer very early.

But the benefit of being in Congress and having a good health care plan is not available to everyone. Today, 100 people in this state of Connecticut will lose their health care coverage; 14,000 people across the country will today in the United States lose health care coverage.

For a person to lose his health care coverage, that physical may not be something you can afford.

(END VIDEO CLIP)

WOLFFE: White House senior advisor David Axelrod met with the House Democratic Caucus this morning to discuss the health care fight going forward. He joins us now from the North Lawn of the White House.

Good evening, David.

DAVID AXELROD, WHITE HOUSE SENIOR ADVISOR: Good evening, Keith. But why are you talking with that phony British accent? I don't know.

WOLFFE: You figured me out already. So-OK, jokes aside, what did you tell the Democratic lawmakers today and what concerns did they have for you especially as they head back to face voters and those rabble-rousers in their districts?

AXELROD: Well, what we spoke about was a very, very strong case we have to make to the American people. You know, while there is still work to be done to complete this health care reform plan, this health insurance reform plan, it is embedded in all the versions of it are really significant protections for consumers in the health care system.

And these are things that we want to call people's attention to, if they haven't been well-covered, but they'll make an enormous difference. The fact that under this bill, under this law, people would not be excluded from insurance because they had preexisting conditions. They can't be dropped if they have a serious illness. It would cap their out-of-pocket costs and do a series of other things that will give people more security and stability if they have insurance.

And we have a very, very strong bill, or very, very strong case to make to the American people about what we're trying to do to bring about that security.

WOLFFE: Let me try a blunt question for you. Have you lost control of the framing of this debate?

AXELROD: Let me try and give you a blunt answer-no. I don't think so. I feel that, by definition, when the focus is on-you know, five different committees of Congress and their differences over technical aspects of the legislation, that diverts attention to some degree.

But I'll tell you why I don't think we've lost control of the debate, because I think every month people are still paying their health care premiums and they know that they've been going up 10 percent a year. Every day, people are dealing with these growing out-of-pocket costs for their health care. Every day, small businesses are dropping people. Large businesses are cutting back what they're willing to cover for their employees.

This is a problem that people live with every single day, and as a result, they want us to do something about it.

WOLFFE: Maybe I'm reading too much into this, but the White House seemed to shift its language from health care reform to health insurance reform this week. Why the shift? Have you narrowed the focus for reform or have you just identified an enemy that's maybe easier to hate?

AXELROD: No, Richard. I think that the-that people interact with the health care system through their insurance. This is about making sure that those who don't have quality, affordable insurance can get it and those who do have it are treated fairly within the system. So, I think it's an apt description of what we're trying to achieve.

WOLFFE: Now, I'm sure you heard today-progressives in the House think way too much has been given away to a few blue dogs and Republicans who probably aren't going to vote for this in the end anyway. So, these progressives, I think, are the people who believed in change more than anybody else.

How do you keep their hope alive when they read about the kinds of compromises in the works that we see in the newspapers every day?

AXELROD: Well, first of all, I would say that 90 percent of what's in the different renditions of this-of this plan that are being passed by various committees of Congress are identical. So, let's start from the premise that we're going to achieve 90 percent of what everybody involved wants to achieve. There are differences and they're going to have to be harmonized as we move along in the process.

But our point is, let's just keep moving. Let's keep pushing this

process forward and we'll have those discussions in the coming weeks and

months, and we'll resolve those issues. But there is no doubt that if you

if you're a progressive, then you want a system where every American has access to quality, affordable health care and where health care consumers are protected in that system. And I think that we will have such legislation and we will have such a plan, and they'll vote for it.

WOLFFE: And we saw in "The Hill" newspaper, a report about a health care lobbyist who admitted a key strategy to defeat reform is to, quote, "delay it" and then, quote, "kill it." We've already seen the "delay" part in action.

How do you stay away from the "kill" when Congress comes back in September?

AXELROD: Well, first of all, it isn't just the insurance lobbyists-some of the insurance lobbyists who are saying that. But we've heard some opponents in the Congress say, "You know, let's delay it and if we kill it, we can pin a loss on Obama" and so on. That would be a shame if that philosophy prevailed because the losers would be the American people who are struggling in this health care system.

I think, members of Congress are going to go home and meet many of those Americans during this break and I think they're going to come back with resolve to get this done. I'm very optimistic that we're going to get something done.

WOLFFE: So, you don't think the delay has left you sort of in a wounded state, a vulnerable state coming back in the fall?

AXELROD: I think-I think we've made great progress, and I think that over this break, Americans are going to have a very frank discussion about their struggles within the system and the rising costs that are crushing families and businesses across this country, and they're going to ask their legislators, "What are you going to do about it?"

And-because we know one thing for sure, Richard, whatever you think of the various plans that have been offered, there is one that we know is guaranteed to cause your rates to skyrocket. There's one that's going to result in more people who are uninsured. There's one that's going to put more and more businesses in jeopardy and lead to greater deficits, and that's the system we have now-that's the status quo. And those who want to stop reform are essentially embracing what we have now.

I don't think the American people are going to stand for that.

WOLFFE: David Axelrod, senior advisor to the president, joining us from the White House tonight-thank you for your time.

AXELROD: Thanks, Richard. Good to be with you.

WOLFFE: For more now on the state of the health care fight, let's turn to our MSNBC political analyst Eugene Robinson. He's also a Pulitzer Prize-winning columnist and associate editor for "The Washington Post."

Good evening, Gene.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Good evening, Richard.

WOLFFE: So, who has the tougher job when Congress comes back in September: the White House and Democrats pushing through significant health care reform or the Republicans trying to defeat it?

ROBINSON: Define "significant," because I think that's the key there. Clearly, the Democrats with their majorities in the House and the Senate have the votes to get a bill through and get a bill through, they can get it to the president's desk, he can sign it, and they can all declare victory.

The question is: what is significant health care reform? And, you know, I'm not sure we have an agreed on definition of that.

Mine would be that you'd have to have the principle of universality, that finally this country has decided that the way we ration health care now is wrong and then, in fact, people should have essentially a right to health care through health insurance, and that would be historic, not just significant, if that were obtained.

And then also, the question of a public option-a public plan of some sort, and, again, you could call it whatever you want. But that also, I think, would certainly make this significant reform.

You know, if you take my definition of "significant," then the Democrats are going to have the tougher time because the Republicans have an easy one word answer to everything which is "no."

WOLFFE: Well, of course, a lack of definition-as you rightly point out-isn't going to stop the opponents of the White House and Democrats in general. So, you know, these step-by-step instructions to the right-wing rabble-rousers, those protestors who are going to be bussed around all over the country, does that kind of tactic show why bipartisanship was actually never going to happen?

ROBINSON: It was not going to happen. If the Republican idea of health care reform is no health care reform, and if their main goal is to damage the Obama administration and weaken it for the, you know, so that it's weakened for the remaining three years of his mandate, then bipartisanship is a fool's errand.

So, you know, the question now for the Democrats, of course, is to get the blue dogs onboard. If they can get them, I think they'd be willing to forget about bipartisanship.

WOLFFE: And for these lawmakers going on their vacation in August, how much of it's going to be spent reassuring constituents about health care while shooting down the scare tactics and the fake protests? I mean, how much-how much relaxation are they going to get here?

ROBINSON: I don't think they're going to get much relaxation. And, you know, you mentioned, the problem is for the Democrats at least, is, what's the story they tell? There is-there is not a bill, now, that they can go out and defend. And so, they kind of have to say, "Well, we're going to do this. We're not going to do that but we don't exactly know the shape of it is going to be, but don't worry, we're not going to-we're not going to hurt you."

They have to find some way to be on offense here, and to remind people why this whole health care effort is being undertaken in the first place-what Americans have to lose if we do nothing and what they have to gain if there is significant reform.

WOLFFE: And just briefly, if more Americans understood that Medicare was government-run, government-sponsored, socialized, quote-unquote, "health care," could the whole debate look pretty different about now?

ROBINSON: I think it could. I mean, maybe we could call it, you know, "Medicare light" or something like that, the public option-because everyone loves Medicare. That'd be-that was a brilliant move to put up that amendment to try to get the Republicans to vote yes or no on Medicare, which is much closer to socialized medicine than anything the administration now is talking about.

It is amazing that people don't draw that connection and maybe proponents of reform should do more to draw it for them.

WOLFFE: Medicare light. I guess that goes with a can of Bud Light.

Eugene Robinson, Pulitzer Prize-winning columnist of "The Washington Post"- thanks for your time, Gene.

ROBINSON: Good to be here, Richard.

WOLFFE: The GOP's birther problem comes full circle. After starting the whisper campaign about Obama's birth records over a year ago, now, Republicans are doing everything they can to not take responsibility for the mess they created.

And fixing the mess in the U.S. auto industry-the White House and Capitol Hill are forced to go into overdrive today to extend the wildly successful "cash for clunkers" program. Will that finally force critics of the stimulus to admit that it's working?

Ahead on Countdown.

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WOLFFE: Live by the birthers die by the birthers-shocking new poll numbers show just how much the lies about President Obama's birth certificate are taking hold.

And Sarah Palin's RSVP problem: This time, she disses the library of Ronald Reagan. Perhaps William Shatner can replace her-coming up on Countdown.

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WOLFFE: In 2002, Journalist Ron Suskind met with a senior advisor to President Bush. Quote, "We are an empire now," the unnamed advisor said, "and when we act, we create our own reality, and while you're studying that reality we'll act again, creating other new realities which you can study, too. And that's how things will sort out."

Now, in our fourth story tonight: A stunning new poll shows just how high a ransom the Republican Party is paying for taking reality hostage-the issue, of course, President Obama's citizenship.

A new Research 2000 poll for "Daily Kos" shows that only 42 percent of Republicans believe Mr. Obama was born in the U.S., 30 percent aren't sure, and 28 percent do not believe he was born in the U.S. In other words, most of the Republican Party membership in the United States is incapable of recognizing the reality of a state-verified birth certificate, two contemporary birth announcements in Hawaiian papers, and the fact the U.S. Congress itself certified President Obama's election.

Nor is it just voters. Several GOP members of Congress admitted to "Fire Dog Lake" their adherence to the new reality.

So, today the second most powerful Republican in the House, Eric Cantor, said he does not question Mr. Obama's citizenship-which, of course, stopped short of affirming his status as a natural-born American. The Cantor spokesman goes on to blame the phenomenon, the birther movement, on the media.

Is Cantor turning on FOX News? Nope. Here's the quote, "Cantor finds it ironic that those most eager to talk about the president's citizenship are in fact some of his biggest cheerleaders, whether it's Chris Matthews or others on MSNBC, 'The Huffington Post,' or camera toting liberal bloggers."

So, they're slamming the debunkers of a false rumor that started how exactly? Well, first with the Muslim theory spread by these men and picked up by the conservative "Free Republic," then in a book from a conservative editor Mary Matalin who's also first floated the claim that Obama's birth certificate was forged in August last year on FOX News when he was not refuted.

Let's bring in the "Daily Kos" founder and editor, Markos Moulitsas, also the author of "Taking on the System: Rules to Radical Change in the Digital Era." thanks for your time tonight.

MARKOS MOULITSAS, DAILYKOS.COM: Thanks, Richard.

WOLFFE: We're going to get to your poll in a minute, but I wanted to ask what you think in the political calculation is for Cantor as he distances himself from the birthers and then bashes those who challenge the birthers?

MOULITSAS: Well, I think most people would recognize, even Republicans, that there's a certain percentage of the Republican base that's a little off. That's a little crazy. I just think they didn't want anybody to know-half of them. I mean, that's crazy.

So, it's a problem for them because what they're realizing is that they're a southern regional rump party that their leadership is heavily based in the south and the rest of the country is sort of looking at them and wondering what the heck is going on down there?

WOLFFE: So, do you think now, we're in a point where Cantor and maybe a certain segment of the GOP want the whole birther thing to go away now? Is that what's happening?

MOULITSAS: Oh, absolutely. I mean, for a while, you know, as long as nobody knows about it, then they could sort of feed it. They could introduce legislation in Congress quietly to sort of appease this rabid radical right.

But suddenly now, this is a national story because it's getting credence. I mean, you have Lou Dobbs on CNN making it his personal crusade. You have FOX News, obviously, pushing this very heavily. Talk radio.

And you suddenly realize that you have Republicans who are going on campaign swings, they're going on television, they're doing interviews, and they're being asked about Obama's birth certificate. And really, not the kind of thing they want to be asked about. It's not the kind of thing they want to encourage.

WOLFFE: Yes. I guess Lou Dobbs needs a new crusade now. But, you know, one thing I found fascinating in your poll is this detail about older southern Republicans being the most likely to believe this stuff. Glen Thrush of "Politico" wrote today, quote, "when do we start a serious dialogue about the birther movement being a proxy for racism?"

So, how about now? Is the birther movement a proxy for racism?

MOULITSAS: I think there has to be a correlation. I mean, a lot of the birther movement is fixated on what his name is in that so-called original birth certificate.

Is it Barry? That the radical black nationalist Barack Obama changed his name from good old American Barry to Barack. What was his middle name? Was it maybe Muhammad instead of Hussein? I mean, this is nonsensical stuff.

And-but, really, for a party and a movement that is really convinced that Obama is not American like them, this is really natural stuff. And what's amazing about that poll, if you look at the southern numbers, is that over 70 percent of southern whites believe that Obama is not-was not born in the United States. And what does that come from? I mean, clearly, race has to be an issue here.

WOLFFE: So, just briefly, I'd like to go back to how we started this story. Suskind's reporting about the Bush Republicans creating their own reality, shouldn't Republicans now be worried about this legacy, about membership, a party incapable of fact-based analysis? Because that membership might quite like the idea of one President Sarah Palin.

MOULITSAS: One of the last few moderate Republicans in the Senate, George Voinovich of Ohio, was recently quoted as saying, "We have a real problem in the Republican Party with the southerners," because people in Ohio look at this party and they see these southerners talking for the party and they don't know what that has to do with Ohio.

And I think we're seeing that nationwide, because in this poll, if you look at the regional numbers, the South really is apart from the Northeast, the Midwest, and the West-the rest of the country is pretty sane and pretty normal. The South is a little crazy.

And when the Republican Party is focused in catering to that crazy southern base, the rest of the party is just going to continue to flock and run away from the Republicans as quickly as it can.

WOLFFE: Yes. That didn't end too well last time. But Markos Moulitsas of the "Daily Kos"- have a great weekend.

MOULITSAS: Thank you very much.

WOLFFE: Does the fact that the president drank a Bud Light at last night's beer summit give him any street creed with the birthers? Coming up: Behind the scenes at the meeting with Gates and Crowley. What may or may not have been said around that picnic table.

And in "Oddball," the police chase that gives the phrase "holy roller" a whole new meaning-next on Countdown.

(COMMERCIAL BREAK)

WOLFFE: On this day in 1975, a bizarre vanishing act. Teamsters' president, Jimmy Hoffa, disappears in Detroit, Michigan. Once rumored to be buried somewhere in the Meadowlands, the fact that Mr. Hoffa's life ended in mystery is somewhat fitting, considering it began with a riddle. Literally, it began with a riddle.

Riddle was Hoffa's middle name-which can only mean it's time to play "Oddball."

We begin in the main streets of Plain city, Utah, with the "Oddball" car chase of the week. The Plain City P.D. got an early morning call about some crazy driver blowing through stop signs. Cops caught up to the reckless racer, chasing the low life behind the wheel who was clocking speeds of 40 miles per hour right into his lair.

The pursuit ends as our perp ditches his wheels and hooves it. But he does seem kind of small. Yes, the life of kiddie crime is short lived as 7-year-old Preston Scarbrough runs into his house and calls for his mommy. Preston says he stole his parents' car because he didn't want to go to church. No charges will be filed, but rumor has it that Preston was taken to confession, where the priest promptly gave him ten Hail Maries and one speeding ticket.

To the Internets, where this young lady is overcoming a life long phobia, a fear of horses. She had been terrified of Mr. Ed and his posse since she was small. So standing next to this horse is a very big deal. Fortunately, the horse is very gentle, making things much easier.

Yes, that is until it sneezes on her. The girl recovers her composure when she realizes there's no risk of her getting Swine Flu. But the horse's owner was very embarrassed, saying he thought he taught the animal better. He said that's, nay way to treat a lady.

And finally, to Washington, D.C., with more ground breaking work in the annals of human civilization. Meet Brian Ptereken Vertinesium (ph) and his eyebrows. If you haven't guessed it by now, this plucky individual is trying to groom his way into the Guinness Book. The category, longest individual strand of hair, eyebrow division. Measuring at 6.5 inches, his lucky strand has even got a name, Wally. But Wally's got company. and needs to grow another half inch to beat the reigning champ, name unknown.

Mr. Vertinesium will continue to grow his lucky brows, to which we say, heck of a job, Eye Brownie.

Speaking of eyebrows, a lot of them raised by the latest high profile no show from Sarah Palin. She is turning her back on a Reagan Library fund raiser after toying with attending. Does Miss Wasilla need to read up on her Miss Manners?

Bipartisanship hits D.C. Capitol Hill sets a new speed record to allow Americans to turn in their gas guzzlers in record numbers. A big stimulus win for Obama and the auto industry, if the Senate doesn't get in the way, ahead on Countdown.

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WOLFFE: After all the Republican sniping about how President Obama's recovery package was not working, for our third story on the Countdown, there is encouraging economic news and a wildly successful car incentive program. The president today citing better than expected GDP numbers, told reporters that the U.S. economy is finally headed in the right direction. But added his main concern is still jobs, jobs, and more jobs.

(BEGIN VIDEO CLIP)

OBAMA: As far as I'm concerned, we won't have a recovery as long as we keep losing jobs. And I will not rest until every American who wants a job can find one.

(END VIDEO CLIP)

WOLFFE: Also today, the House voted to inject another two billion dollars into the government backed Cash for Clunkers Program. The Senate is expected to follow next week. NBC's Kelly O'Donnell takes a look at the stimulus program so successful it nearly went broke.

(BEGIN VIDEOTAPE)

KELLY O'DONNELL, NBC CORRESPONDENT (voice-over): Today, with unusual speed, Congress found another two billion dollars to keep new car sales coming.

A rushed vote after the unexpected announcement last night that the popular new car incentive program, Cash for Clunkers, was out of cash. Today, the president said it had exceeded all expectations.

OBAMA: It's working so well that there are legitimate concerns that the funds in this program might soon be exhausted.

O'DONNELL: Concern that had top White House officials scrambling.

CHRISTINA ROMER, WHITE HOUSE ECON. COUNCIL: I can tell you there's a flurry of activity this morning, working with the agencies, working with Congress to make sure there are the funds for it.

O'DONNELL: The plan? Move money already set aside for a different project, renewable energy research, and use it now to extend Cash for Clunkers.

UNIDENTIFIED MALE: We're working that through.

O'DONNELL: The program gives consumers up to 4,500 dollars to buy a new, more fuel-efficient car, when they trade in an old gas guzzler. Officials expected 250,000 new cars would be sold, but were stunned the demand drained the program in less than a week.

So today, the House tripled the size of Cash for Clunkers, and notably both Democrats and Republicans voted for it.

REP. DANIEL MAFFEI (D), NEW YORK: Finally, we have a bailout not for the big businesses, not for Wall Street, but a bailout for Main Street.

REP. JOHN CAMPBELL (R), CALIFORNIA: It is the one thing we have done here in this Congress that is absolutely working.

REP. JOE DONNELLY (D), INDIANA: This is a win-win-win for our country. It's one of the great programs to create jobs.

REP. CANDICE MILLER (R), MICHIGAN: Most of the nay sayers are even admitting that it's the best one billion dollars in economic stimulus funds that the federal government has ever spent.

O'DONNELL: But there are critics, who argue taxpayers have already done too much, especially for the auto industry.

REP. JEB HENSARLING (R), TEXAS: Maybe we should have a cash for cluckers program and pay people to eat chicken. Then after that we can have a program to pay people to buy TVs, and then a program to pay people to buy lumber.

(END VIDEOTAPE)

WOLFFE: Well, if we can't pay people to buy TVs, let's bring in Democratic strategist Chris Kofinis. Chris, thanks for taking the time to be with us.

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Thank you, Richard.

WOLFFE: The Cash for Clunkers program was so successful that it ran out of money in a week. How badly did the administration need to show this country this tangible example of a stimulus success?

KOFINIS: Well, you know, I think we've had tangible examples of the stimulus success, in terms of saving jobs, whether teachers, police officers, you know, firemen. I think you've had other examples where jobs were created, construction or green jobs.

I think what was so great about this program was how dramatic it was.

The program was supposed to last months ran out of money in literally days. I think it just shows what a great program, not only in terms of creating an incentive to trade in old cars for more fuel efficient cars, but to spur that demand.

I'll tell you the other I think key point a lot of people are talking about is just psychologically this is what this country needed. Seventy percent of our GDP is consumer spending. It is motivated by people waking up one day and saying, I want to buy a car. What they saw by this great program is other people wanting to buy a car. I think that just creates more demand. It's just a really powerful sign for the Obama administration.

WOLFFE: As you know, the bill has just passed the House, the new bill. But there are big road blocks ahead in the Senate. John McCain says he'll filibuster. Do you think Majority Leader Harry Reid can actually push this through?

KOFINIS: I think he can push it through. I'll tell you, I'll never completely understand some Republicans, like John McCain, who are opposed to this program. Just a few months ago, they were critical of an auto bailout because they said people didn't want to buy American cars. And now you have an incentive program that shows people are buying American cars and other cars, and that is I think just a strong example of a government program that works.

So why Republicans are opposed to it I don't completely understand, other than I think some ideological battle they seem to be having. Or, even worse, if you want to take it into a more cynical direction, there are Republicans who seemingly want to hope the economy worsens to gain some kind of political value out of it.

But I think what you saw from the GDP numbers and from this program is that not only is I think this recession bottoming out, but I think you're starting to see real signs that we're starting to turn the corner. That's a great thing for the Obama administration and for President Obama.

WOLFFE: You know, Chris, it's not just Republicans that are against this. Some Democrats are, too. What would it mean about Reid's leadership if he couldn't get funding for this kind of program? And could he then expect to push through health care reform?

KOFINIS: Well, some of the Democrats-you know, I wouldn't necessarily call it opposition as much as they have a different idea for the program. Senator Feinstein, you know, has an idea where you should have more fuel efficiency requirements in the program. I don't think that's a bad idea.

The question is when you have clearly growing and overwhelming demand out there to buy cars, that has an enormous ripple effect through this economy-you're talking about hundreds of thousands of jobs in the auto industry, as well as millions of jobs in the related industry. That is a program we need to fund. I don't think you'll find a lot of opposition at the end of the day.

If they want to make the program better in phase two or three, I say go for it. But let's keep this program a model of success going forward.

WOLFFE: Just briefly, Chris, when they ran out of cash again in a couple weeks time, car buyers might stay home again. Does Congress just keep coming back for more? Do they have to keep funding this program?

KOFINIS: I don't know if they can keep funding this program forever. But it's amazing to me that we seem to have found trillions of dollars for bank bail outs or hundreds of billions of dollars-or actually billions of dollars, to be more accurate, for defense projects that we don't need. But here we have an example of a program that's successful. Let's keep funding it, at least in the short term.

WOLFFE: Chris Kofinis, Democratic strategist, many thanks.

KOFINIS: Thanks, Richard.

WOLFFE: Coming up, cameras were kept at a distance during last night's beer summit at the White House. But David Letterman has the inside scoop of what was said during the meeting.

And another reason why Florida has a problem. Pet pythons are taking over the Everglades, and if left unchecked could begin an invasion of the north.

(COMMERCIAL BREAK)

WOLFFE: The beauty of the Florida Everglades, ravaged by a slithery menace. Yes, I know it may sound like science fiction, or perhaps a sequel to a Samuel L. Jackson movie. But in our number two story, it's actually a pet population run amok. As residents and lawmakers attempt to get their arms around the problem, our correspondent, Kerry Sanders, fins out what happens when animal lovers realize their cuddly little pet python is actually a python.

(BEGIN VIDEOTAPE)

KERRY SANDERS, NBC NEWS CORRESPONDENT (voice-over): It may have been a bit of luck. But on the first day hunters hit the Everglades, they wrestled an immense snake lurking under a board walk.

UNIDENTIFIED MALE: He was on the move. He had seen us out here.

SANDERS: It's not just that the snakes are big and powerful.

UNIDENTIFIED MALE: When I grabbed him and he came around, he just nicked me with a tooth.

SANDERS: Biologists say they're rapidly upsetting the balance of nature. Alligators were once the top of the food chain here. In this series of photos, the battle is revealed. The most vivid example? The python that tried to swallow a gator. The snake exploded and then died.

Just this month, a pet albino python slithered into a child's bedroom and killed the two-year-old.

SEN. BILL NELSON (D), FLORIDA: This is what we have been saying was going to happen.

SANDERS: Florida Senator Bill Nelson says it's only a matter of time before there's another attack.

NELSON: Sooner or later, for an unsuspecting tourist in the Everglades National Park, there will be an encounter with a human.

SANDERS: Attempts to rid Florida of these exotics have included beacons implanted in captured snakes to track them back to their nests.

Dogs like Python Pete, trained to sniff out the serpents.

UNIDENTIFIED FEMALE: There it is. Good boy.

SANDERS: And classes.

UNIDENTIFIED MALE: That's the way to do it. Get yourself where you can lunge at the head. Don't miss.

SANDERS: Where increasingly pythons are showing up. The battle is so serious there are federal plans to take it high tech.

UNIDENTIFIED MALE: There's a possibility of using remote controlled airplanes with thermal sensors to detect pythons.

SANDERS: Experts warn, unchecked, the pythons will spread beyond Florida. But they say even killing every snake they can find may be a case of too little to late.

UNIDENTIFIED MALE: This is just one tool that's in the tool box. I mean, this is not going to be the silver bullet.

(END VIDEOTAPE)

WOLFFE: From the Florida Everglades to the Alaskan Tundra; if Sarah Palin really does harbor national ambitions inside the GOP, perhaps her first unofficial act as a private citizen should be something other than backing out of a fund raiser for the Reagan Library. That and more ahead on Countdown.

(COMMERCIAL BREAK)

WOLFFE: Brouhaha; ale to the chief; the audacity of hops; touch of glass. In our number one story on the Countdown, the so-called beer summit has come and gone, though the puns linger on like a bad hangover. The world may breathe a sigh of relief now that the summit communique-I'm sorry-now that the meaningless photo op, turned national obsession, has gone away.

There they are relaxed and sanguine under the full flower of the late July sunshine, Professor Henry Louis Gates, Sergeant James Crowley, President Barack Obama, and Vice President Joe Biden. Though apparently the vice president was late or something, since he's not present in the official White House photo of the event.

No worries. Let the healing begin and cue the late night jokes.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, "THE LATE SHOW": Top ten things overheard at the beer summit.

Here we go. Number ten, don't worry, Biden will clean up the empties.

Number nine, guys, stop me if I try to drunk dial Nancy Pelosi.

Number eight, smoking, drinking, suddenly our president is Artie Lang.

Number seven, let's call Limbaugh and take this party to the next level.

Number six, I feel dizzy and confused, just like Bush.

I don't want to freak anyone out, but I just saw Nixon walking down the hall.

Number four, tell Geithner to put his shirt on.

Number three, Senator Larry Craig asked if he could have his beer brought to the men's room. Still a reference, people.

Number two, you guys want to see where Clinton used to get freaky?

And the number one thing overheard at the White House beer summit, excuse me while I take a presidential leak.

(END VIDEO CLIP)

WOLFFE: Meantime, back at the ranch, or rather, the vast Alaskan ice sheet, former Governor Sarah Palin has gone AWOL. Not literally, but her fans are upset that she has not Tweeted on Twitter for five whole days. That's right, not a peep from the new national poet since she resigned her post on Sunday.

Which means that Palin has broken a promise of sorts, because on July 17 she Tweeted this: "ten days until less politically correct Twitters fly from my finger tips outside state site." Since then, there was a posting on Palin's Facebook page, but that was from her spokeswoman. It announced that the former governor would not be attending an event at the Reagan Library next month, despite prior indications that she would attend.

"As repeatedly stated to several in the media over the last week, former Governor Sarah Palin is not committed to attend the Simi Valley Republican Women's event at the Reagan Library and, in fact, is not attending the event. Neither the governor's state staff nor Sarah Pac has ever committed to attending this event or speaking at this event and even requested that the governor's name be removed from the invitation several weeks ago."

Me thinks she doth protest too much.

Let's bring in comedian Christian Finnegan. Good evening, Christian.

CHRISTIAN FINNEGAN, COMEDIAN: Hello.

WOLFFE: So this beer summit, first. It all went down rather smoothly and refreshingly, don't you think?

FINNEGAN: I guess, since there were no fisticuffs. But it was a little awkward. It looked like they were all like animatronic robots, like you'd see at the "Pirates of the Caribbean" ride. Like it is so wonderful to be sitting around this picnic table, drinking Earth beer. My Earth beer is delicious. We are four humans drinking beer. Now let us discuss this sporting event. It'll do I guess.

WOLFFE: I missed the giant octopus, too. But I guess the photographer missed Vice President Joe Biden, because he wasn't there at the start. What do you think he added to the festivities once he got there?

FINNEGAN: You get the feeling about a quarter of 5:00, Obama got a knock in the Oval Office door, and Biden being like, hey, did I hear something about a beer summit? Obama's like oh, you didn't get the e-vite? Gee. Yes, sure. Of course, he was drinking a non-alcoholic beer, which I can't help but imagine was not Biden's choice. I'm sure like all right, guys, I got two words for you: Yager and bomb.

And at a certain point, he'd lean forward and some awkward story about keeping the night going, where he'd say, seriously, dudes, I know a guy.

WOLFFE: Do you think they kept the pretzels from him as well?

FINNEGAN: Perhaps.

WOLFFE: So Sergeant Crowley and Professor Gates are talking about additional private meetings. But they say this time they're going to drink Kool-Aid or iced tea. Is that what passes for progress now?

FINNEGAN: We almost got through this event without some sort of awkward racial moments, where the white police officer offers to get Kool-Aid for the black professor. I really think Gates is more a pinot grigio guy. But I do hope that they sort of hang out more. Professor Gates could bring Officer Crowley to a Maya Angelou reading. The officer could bring the professor to a Bruins game. They could both see a Tyler Perry movie, and both feel insulted and ashamed.

WOLFFE: That one's going to stick with me. Turning to former Governor Sarah Palin, not a Tweet, not a peep, not a chirp. What will her fans, her Tweets, as they like to call themselves, do now?

FINNEGAN: I feel terrible for these people. For Sarah Palin's most hard core fans, that Twitter feed may be the only reading they do, other than, of course, like Toby Keith CD inserts and the instruction manual that came with their brand new crossbow.

WOLFFE: Ouch. And this idea of having a radio show; you know, they floated this this week. I guess they were trying to see if any offers came in. Is she any closer now to being the shock jock hockey mom?

FINNEGAN: All right. Obama needs to get his grass roots mobilized. This must happen. You have to remember, these mangled Tweets that she sends out, these are things that she types herself and then says yes, that looks good, and hits send. Can you imagine what three hours of extemporaneous speaking would bring?

MSNBC would have to spin-off into an entirely new network. I'll tell you who should give her a radio show, Air America. Awesome.

WOLFFE: It would also, I guess, give William Shatner work for several more months to come. You know, this Reagan event that she's blown off, how can-I'll put this delicately. Is she thinking straight?

FINNEGAN: Well, I mean, you know it's not a smart choice. It's sort of like Miley Cyrus blowing off the Teen Choice Awards, although with the excitement they have about Reagan-Reagan and Palin together, their heads would explode nearly. You know, who knows? Maybe she is hoping to replace him one day.

WOLFFE: Comedian Christian Finnegan, many thanks for your time tonight.

FINNEGAN: Good night, Mr. Wolffe.

WOLFFE: That will do it for this Friday edition of Countdown. I'm Richard Wolffe, in for Keith Olbermann. You'll be glad to know Keith is back on Monday. Thanks for watching. Have a great weekend everyone.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END

'Countdown with Keith Olbermann' for Thursday, July 30
video podcast
screencaps

Video via MSNBC: Oddball

Guests: Howard Fineman, Clarence Page, Joan Walsh, David Waldman, Margaret Carlson

(BEGIN VIDEOTAPE)

RICHARD WOLFFE, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

The White House beer summit: Two weeks after the racially charged arrest of a Harvard professor, the president holds peace talks between the two men in the middle of a culture war.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is three folks having a drink at the end of the day, and hopefully giving people an opportunity to listen to each other.

(END VIDEO CLIP)

WOLFFE: Can he bury this distraction once and for all?

Not if the race-obsessed right-wingers get their way.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: They're finally hearing me. Why, he's an angry black guy. I do believe that about the president. I do believe he's angry.

(END VIDEO CLIP)

WOLFFE: Why the vitriol from the right says more about them than it does about the president.

Turning health care into health scare.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It won't pay for my surgery but we're forced to pay for abortions.

(END VIDEO CLIP)

WOLFEE: Have the blue dogs Democrats fallen for a Republican ruse with their August time-out?

The birther battle inside the GOP.

(BEGIN VIDEO CLIP)

REP. ROY BLUNT (R), MISSOURI: What I don't know is why the president can't produce a birth certificate. I don't know anybody else that can't produce one.

(END VIDEO CLIP)

WOLFFE: When Ann Coulter and Rudy Giuliani are the voice of reason, you know the Republican Party just got hijacked.

More than a month after the death of Michael Jackson, a custody agreement is reached for his kids-just as Joe Jackson drops a bombshell:

Michael Jackson has another child-an older biological one.

(BEGIN VIDEO CLIP)

JOE JACKSON, MICHAEL JACKSON'S FATHER: He looks like a Jackson, he acts like a Jackson, he can dance like Jackson.

(END VIDEO CLIP)

WOLFFE: But who's getting custody of Sarah Palin? A new poll says most Americans don't want her in the White House ever; almost half of Republicans agree. Maybe she has a future in poetry? Cue the tweets.

(BEGIN VIDEO CLIP)

WILLIAM SHATNER, ACTOR: No drought threat down here ever, but consistent rain reminds us: no rain, no rainbow.

(LAUGHTER)

(END VIDEO CLIP)

WOLFFE: All that and more-now on Countdown.

(END VIDEOTAPE)

WOLFFE: Good evening from New York. I'm Richard Wolffe. Keith Olbermann got the night off.

On hot, humid summer evening, the kind of night that Washington, D.C. is famous for this time of year, who doesn't enjoy winding down with a beer or two?

In our first story on THE Countdown: Cooling off with a few cold ones took on multiple meanings tonight in the White House Rose Garden, where President Obama held his so-called "beer summit" with Harvard Professor Henry Louis Gates and the police officer who arrested him, Sgt. James Crowley.

Beer delivered on a tray, one of many good things about life in the White House. Vice President Biden, a surprise guest at tonight's proceedings. The White House described the interaction between Gates and Crowley as friendly and warm, unlike the beer.

More interest, if not importance, it also detailed the beer preference of each man at the table. The president, Bud Light. Sergeant Crowley, Blue Moon. Professor Gates, Sam Adams Light, and for the vice president, Buckler, that's a non-alcoholic beer beloved of one George W. Bush. Peanuts and pretzels were also served, note the pretzels. Didn't they read the note from the last guy?

Late this afternoon, during a meeting with the president of the Philippines, the president tried to get away from the term "beer summit," telling reporters, quote, "It's a clever term but this is not a summit." He also said he's, quote, "fascinated" with the fascination about tonight, adding that he hoped the media would make his meeting with President Arroyo the lead story instead of the non-summit where there's free beer.

Bad news, Mr. President. We just heard the latest cover of "Foreign Policy" magazine-it's Obama's beer diplomacy.

There was one surprise after tonight's less than happy hour, a press conference driven under the influence of a few beers.

(BEGIN VIDEO CLIP)

SGT. JAMES CROWLEY, CAMBRIDGE POLICE DEPT.: I think what you had today was two gentlemen agree to disagree on the same issue. I don't think that we spent too much time dwelling on the past. We spent a lot of time discussing the future.

That wasn't the first we encountered-the professor and I encountered each other while we're both on individual tours of the White House, and the professor approached me and introduced his family. I introduced my family. And then we continued on with the tour, but as a group. Two families moving together, and that was the start.

So, it was very cordial. I'm still not - haven't caught up with this. I'm going to need a few days maybe just to reflect on the events of the past couple of weeks.

(END VIDEO CLIP)

WOLFFE: Lots to talk about with Clarence Page, Pulitzer Prize-winning columnist and member of "The Chicago Tribune's" editorial board.

Good evening, Clarence.

CLARENCE PAGE, CHICAGO TRIBUNE: Good evening, Richard.

WOLFFE: So, the White House tried to play down expectation. But how did a few beers in the Rose Garden come to be as big a deal, at least in the media as Begin and Sadat or even Reagan and Gorbachev?

PAGE: Well, it's such a great, easy story for us to grab onto, because all of the drama and the symbolic value. It just presses all the hot buttons of the culture wars, as you mentioned. And, by the way, I was just over there at the White House awaiting in vain for the news makers to come out and talk to us. And there was no beer served to the press group.

WOLFFE: There are, I guess, downside to covering the White House.

Before I ask about whether anything was actually accomplished, though, was there supposed to be some kind of a communique out of all of this or was the whole point really just to get a photo of these two men, Gates and Crowley, sitting down together?

PAGE: Yes. That's-it was really a photo-op situation and I think the images of last week were so negative, and played badly for the president, you know, after he referred to Crowley's actions, you know, said the police behaved stupidly and then he withdrew the stupidly, while still making the same point, that it wasn't necessary to arrest Professor Gates in his own house.

Nevertheless, though, we've seen in NBC polling and elsewhere, it's played badly because it was the kind of Obama that he tried to avoid showing during his campaign-that of taking sides, that of being perceive as taking sides, especially with black Americans as opposed to being the honest broker in this cultural war, these racial disputes, these disputes over police power, et cetera.

So, it was important to show, "Hey, let us all come together," this kumbaya moment over a few cold ones.

WOLFFE: Well, that begs the question, Clarence: was it about tone or do you think the president should never have got engaged in this in the first place?

PAGE: Well, I don't know what his thoughts are, but I think everybody around him says that he can benefit on a night when he was trying to focus and sell his health care plan and proposal, to suddenly, you know, the very last question of the night, the one that he visibly was more animated about, was this issue of racial profiling. That this suddenly-you know, grabs all the attention, because-let's face. It's more exciting to talk about race and class and professors versus cops than it is to talk about the nuts and bolts of, what, 16 percent, 17 percent of the American GDP, which is what health care amounts to.

So, you know, getting the debate back on track wasn't easy.

WOLFFE: OK. So, let's turn this on ourselves, in the media. Beyond all the questions of what kind of beer they would drink, what should our teachable moment be? Can the media actually debate race in any meaningful way at all?

PAGE: No, Richard. I've given up.

(LAUGHTER)

PAGE: I've been in the media for 40 years now and I was a little baby when I got started back in the '60s, and I've been covering, you know, social issues, police issues, courts, et cetera, and certainly racial uprisings from Jesse Jackson's early days through O.J. Simpson, to the present day, and I think what we're seeing is that one of our pathologies in the press is that we are geared towards the visual, not towards the conceptual. We're geared toward conflict, not kumbaya moments. And unfortunately, this is the kind of thing that really, I think society has to work upstream to try to come together.

And I think that was why, you know, Barack Obama's election night was so exciting, even for people who didn't vote for him. Just the fact that we saw some kind of a comity, a coming together of Americans and we saw celebrating of people around the world of America and our democracy, our way of life, that we hadn't seen. It was kind of like America is back.

And now, all of a sudden, we're seeing the bad old days are back.

WOLFFE: Right.

PAGE: . where we're having these culture wars.

WOLFFE: Well, it's great to know the media is really uplifting in this discussion.

Clarence Page of "The Chicago Tribune"- thank you for your time tonight.

PAGE: Oh, my pleasure, Richard. Thank you.

WOLFFE: One man's attempt to start a dialogue between two parties is another man's, quote, "angry black guy" trying to destroy a white policeman. Guess who that man is? Yes-our old friend Rush Limbaugh.

The conservative talk show host is the leader of a mob of right-wingers who are openly attacking President Obama, not because of his politics, but because of his skin color, kind of the same way they tried to attack his Supreme Court nominee for being Latina and a woman during her recent confirmation hearings.

The most telling comments about Judge Sotomayor's heritage came from the white Republican men on the Senate Judiciary Committee. For the right-wing these days, the rise of minorities are so unsettling that they seem to be suffering their own identity crisis, as if their biggest question is: I know who you are, but what am I?

(BEGIN VIDEO CLIP)

LIMBAUGH: They're finally hearing me. Why, he's an angry black guy.

I do believe that about the president. I do believe he's angry.

GLENN BECK, FOX NEWS: This president, I think, has exposed himself as a guy, over and over and over again, who has a deep-seated hatred for white people or the white culture. I don't know what it is. This guy is, I believe, a racist.

LIMBAUGH: This guy that they elected, who they thought was all of these wonderful, perfect things, is now behaving as a community organizer and is fanning the flames of race.

Here you have a black president trying to destroy a white policeman.

(END VIDEO CLIP)

WOLFFE: Time to bring in Salon.com editor-in-chief and columnist Joan Walsh, who's written be about this race subject for her Web site. This afternoon, in response to that column, Rush Limbaugh called her a racist and a, quote, "magic honky." Sorry to bring that up.

Good evening, Joan.

JOAN WALSH, SALON.COM: Good evening, Richard. Thank you.

WOLFFE: It's quite a badge of honor you got there. He actually called recently me a dunce or an idiot or something sophisticated.

So, I just want to ask: Does him calling you a racist pretty much confirm the exact point you were making in the column, that Limbaugh and others are merely projecting their own racism on to the president?

WALSH: Absolutely. It is all about projection. He is clearly showing his fear at seeing a black man as an equal, as a leader.

And, you know, to Rush, this goes back quite a ways. Remember, he was fired by ESPN because he disparaged Donovan McNabb and insisted that he was only a black quarterback because of affirmative action.

WOLFFE: Right.

WALSH: when he was one of the stars at the time.

He also has a really kind of alarming habit of making sexual references and sexual paranoia, talking about having to bend over and grab his ankles for this black president, and he wouldn't do it. I mean, the man is frightened of black people and projects it on to Obama, who-whether you like him, whether you're a Democrat or Republican-the notion that he hates white people is ludicrous.

And they are just trying to throw everything at him that they can, and race has been divisive in our society. We know this and they think it's going to work.

WOLFFE: You know, one of the most interesting things to me is that, it sounds like the usual coded messages and the veiled comments have thrown aside in favor of really blatant racial attacks.

WALSH: Yes.

WOLFFE: Do you think this kind of talk is accessible to Middle America, to the suburban independent voters, who have really decided in recent elections?

WALSH: No, and I thought that the Crowley, the beer summit-I know we're not supposed to call it that-and also his press conference, was really kind of a wonderful moment. I know it was all staged, Richard, and I don't mean to be naive, but you know there was a moment last week when both Rush and other right-wing blowhards were trying to kind of recruit and use Jim Crowley.

And you could really have imagined perhaps a different sort of man, maybe falling for it, feeling aggrieved and saying the problem is this black president. But instead, you have this guy come out and really say very gracious thing about both Professor Gates as well as the president and vice president.

And so, I think it is failing. I think Middle Americans, like Jim Crowley, don't want to hear this racist talk. They're not falling for it.

And, you know, some day we may find that Rush and Glenn Beck were paid by the Democratic Party. That's only way I can think in terms of why they'd be out here doing such damage to the Republican Party.

WOLFFE: We'll have to add that conspiracy to all the others floating around right now and there is more on the right-wing blogosphere. Some are suggesting that the president's health care plan is a back door for slavery reparations.

How fringy is this going to get and when and how does it go mainstream?

WALSH: Well, you know, it is fringy, but I will tell you, that thing

that is the thing I worry about. I mean, you and I both know that race and ethnicity has been used to divide us, and specifically, to create fear around people getting jobs that someone else deserves or people getting support. NPR featured an interview with a man who said that Obama wants to take health care away from whites and give it to minority-which, of course, isn't true.

So, in a time of economic crisis and chaos, there is a little bit of -

a little bit more potential for these scare tactics to make people think, "They're going to take it away from me and give it to them." I worry about that. Not the overt racism so much being widespread, but a kind of economic insecurity and tribalism that is-that can be fanned in times of trouble.

WOLFFE: Well, that's supposed to be another reason why we all hope this economy gets better sometime soon.

WALSH: We do.

WOLFFE: So, Joan Walsh, editor-in-chief of Salon.com-thanks for your time tonight.

WALSH: Thank you, Richard.

WOLFFE: And speaking of time, Republicans and blue dogs just bought more of it. With no one predicting a health care bill out of the Senate Finance Committee before the August recess, both sides of the debate will have another whole month to waste their money or the airwaves. Case in point: A new ad from the Family Research Council adding to the list of people who will die under Obamacare.

And-will the GOP obsession where Obama was born end up hurting the party that's formed the conspiracy theory? More video of Republicans caught in the headlights-next on Countdown.

(COMMERCIAL BREAK)

WOLFFE: Coming up on Countdown: The Christian right has a new ad using abortion to oppose health care reform. And naturally, it will kill old people, too. Let's see if they can work on gay marriage next time.

And Sarah Palin's new ambition. It seems she's not only thinking about the troops. We've also got numbers on how Americans especially Republicans feel about her, as well as more of Palin's Twitter thoughts delivered in dramatic style by the great thespian William Shatner-up next.

(COMMERCIAL BREAK)

WOLFFE: Republicans already won the most important health care battle. Unlike much of the rest of the developed world, Americans will not get free health care on demand, nor will all Americans even get insurance. Now, what Democrats-at least some Democrat are fighting for now is to create a new insurance program run by the government, like Medicare, for the rest of us. But in our fourth story tonight: Just the prospect of a new competitor is touching off a firefight that will last through next month.

Senate Democratic Leader Harry Reid claimed today that Republican leaders are undermining efforts to come up with bipartisan health care reform, saying the GOP's point man on health in the finance committee, Chuck Grassley and Mike Enzi, are, quote, "under great pressure." Committee Chairman Max Baucus, according to "Roll Call" today, has been warned by Reid, "Wrap this up by next week" or Reid takes over the talks.

Enzi admitted yesterday he was fielding calls from Republicans concern about reports that he had actually struck a deal on health care. Now, just as the blue dogs and Republicans wanted, the bill is not expected to emerge before the August recess, giving time for the GOP and insurance companies to stoke public fears about any government intervention.

House Speaker Nancy Pelosi called the insurers the villains of this drama. And House Democratic Leader Steny Hoyer said the Democrats will go on offense next month.

But Republicans will, too. The man formerly known as Bush's brain, Karl Rove, accused President Obama of, quote, "trying to sell his health care proposals on fear."

Now, who was it again who perfected the politics of fear? Oh, yes.

Karl Rove.

So, instead of fake scares about WMDs, the president is talking about the real scares of losing coverage or going bankrupt to pay medical bills.

Rove's allies on the other hand, Tony Perkins of the Family Research

Council is rolling out an ad explicitly written to create new bogus fears -

and while we're at it-tying health care to another ongoing battle.

(BEGIN VIDEO CLIP, POLITICAL AD)

UNIDENTIFIED MALE: They won't pay nor my surgery. What are we going to do?

UNIDENTIFIED FEMALE: But, honey, you can't live this way.

UNIDENTIFIED MALE: And to think that Planned Parenthood is included in the government-run health care plan, and spending tax dollars on abortions. They won't pay for my surgery but we're forced to pay for abortions.

NARRATOR: Our greatest generation denied care. Our future generation denied life.

Call your senator. Stop the government takeover of health care.

Family Research Council Action is responsible for the content of this advertisement.

(END VIDEO CLIP)

WOLFFE: Let's bring in MNSBC political analyst Howard Fineman, my good friend and former colleague at "Newsweek," where he's political columnist and senior Washington correspondent.

Good evening, Howard.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Richard.

WOLFFE: Help me out here, please. The ad says the problem with the new health care plan is that it would kill old people and young people. I guess that's one way to control costs. Is that about right?

FINEMAN: Well, first, let me say since we're friends, I know that you grew up in the bosom of national administrative health care in the U.K., I'm amazed.

WOLFFE: Socialist health care.

FINEMAN: I'm amazed that you escaped alive, you know?

Yes. No. The ad is really something. Well, first of all, there's nothing in any of the bills about abortion. That's a highly theoretical fear, which, of course, the research council is stoking. And as far as medical care for seniors, insurance companies are the ones who have gotten very tough about denying procedures and all kinds of other things late in life.

So, it's a fear machine and they're good at it.

WOLFFE: Well, the ad sounded to me like, actually, an argument for universal health care-because the only way to make sure everyone gets all the surgery they could ever want is Medicare for everyone. But the Family Research Council sent us this statement saying, no, quote, "We'll only obtain universal coverage through the private sector where competition for service will contain costs."

Now, Howard, don't we already have competition for service in the private sector? Why are they talking in the future tense about what we have today?

FINEMAN: Well, we do have some and, in fact, what most of the bills do-what all of the bills that are out there now do is try to increase competition. They talk about creating market places either regional or even national to do that. That's the whole point of what-what the president and the Democrats are trying to do in many ways.

But what the insurance companies' fear and what they're going to focus on is the idea of a public competitor in that marketplace. In many sense, there already is one. It's called Medicare.

WOLFFE: So, let's talk about politics on this one. How does this fight play out over the next month? Why was it so important for the opponent to win this delay?

FINEMAN: Well, they're going to try to drag the carcass into the alley, if I can get a little too vivid and pick it apart.

Here's the thing, Richard: The president successfully explained to everybody that we can't afford the system that we have. But that is a national concern, and it's in some ways not theoretical but in the numbers as much as in the individual people.

In the alternative, the Republicans are going to be able to pick at individual proposals in the myriad of bills that have been out there-three of which have been under consideration, two of them-three of them passed. They're going to try to pick each individual piece apart.

So, it's the president going at a national solution and his opponents picking individual pieces to attack, just the way the Family Research Council did.

WOLFFE: So, let's get just a bit more (INAUDIBLE), but it's also kind of strategic. Do you think the White House could go for the so-called reconciliation option, that would need 51 votes, not the full 60 to break the filibuster?

FINEMAN: I think that could be where this is heading. So, what will happen in the end: the Republicans will pull the plug on their own participation, not every Democrat will take part. In the Senate, they will probably use reconciliation. The only problem there is, certain parts of the law that would be signed into law under reconciliation would expire years later.

I think you'll se people, like Rahm Emanuel and the president himself trying to tinker with that to expand the permanent reach of whatever they pass in that way.

WOLFFE: Which means, I guess, that we'll be arguing about this all over again in a few years, right?

FINEMAN: Of course. Absolutely.

WOLFFE: Howard Fineman of "Newsweek" and MSNBC-thank you very much.

FINEMAN: Thank you, Richard. Talk to you soon.

WOLFFE: When Republicans aren't trying to scare you about health care reform, some are trying to scare each other about President Obama's nationality. Why the fringe birthers are growing into a bigger problem for the GOP.

And take a look at this. You know it isn't going to end well. The jaw-dropping finale-ahead in Oddball.

(COMMERCIAL BREAK)

WOLFFE: On this day in 1936, make way for dresses made of drapes and romantic jaunts of the staircase. Margaret Mitchell sells the film rights for "Gone with the Wind" to MGM. But the deal between Mitchell and studio head David O. Selznick wasn't always a sure bet. Selznick originally blanched that Mitchell's $50,000 asking price. To which Mitchell responded, "Frankly, my dear, I don't give a damn." You could see that coming, eh?

On that note, let's play "Oddball."

We begin on the Internets. And if you've ever been curious as to what happens when mom gets her own dirt bike, behold the evidence.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Too fast, too fast, too fast. Too fast.

(INAUDIBLE)

UNIDENTIFIED FEMALE: Oh.

(BLEEP)

UNIDENTIFIED FEMALE: Damn it. I'm sorry.

UNIDENTIFIED MALE: Are you OK?

UNIDENTIFIED FEMALE: I'm OK. Don't worry.

(CROSSTALK)

UNIDENTIFIED FEMALE: Are you OK?

UNIDENTIFIED FEMALE: I'm OK. I'm OK. I'm OK. I am OK. I am OK.

I'm OK, I'm fine.

UNIDENTIFIED FEMALE: All right.

(CROSSTALK)

UNIDENTIFIED MALE: Everybody's OK. You're OK.

(INAUDIBLE)

UNIDENTIFIED FEMALE: I'm sorry.

UNIDENTIFIED MALE: Is your ass broken?

(END VIDEO CLIP)

WOLFFE: Yes, it was all going so well until grandma and her pesky wheelchair came out of nowhere. For those concerned about the condition of grandma's ass, I'm happy to report that it's not broken, it's just fine, thanks. As for Shirley, next time she hops on a dirt bike, she'll aim for the kids, who can run away.

To Tewkesbury, England, where the good folks at the local mattress warehouse have an interesting way of showing off the merchandise. It's an afternoon game of dominoes. And if you think your boss is getting heavy, you don't know pressure from above until you've had a co-worker strapped to a 40 pound mattress fell on top of you.

But this mattress flipping isn't just for fun. Oh, no. The warehouse folks are hoping to make it into the Guinness Book of Records. Forty-one colleagues were part of the event. I hear there would have been even more had the box spring department not shown up three sheets to the wind.

Coming up: The return of William Shatner.

And some breaking news from tonight's White House beer summit. We'll have reactions from Professor Gates after the break.

Also ahead: William Shatner-first, it was Sarah Palin's farewell address as governor, now, he's turned her tweets into iambic pentameter-kind of.

Also, the latest from the GOP birther conspiracy. Some in the party desperately want it all to stop, while others are still signing on to legislation for future presidents to prove their citizenship. Details on the big birthing divide in the GOP-next on Countdown.

(COMMERCIAL BREAK)

WOLFFE: Some breaking news; Professor Henry Louis Gates has just released a statement tonight, after his meeting over beers at the White House. It's long, but it reads in part, quote, "I would like to applaud President Obama for bringing Sergeant Crowley, me and our families together. Sergeant Crowley and I, through an accident of time and place, have been cast together inextricably as characters, as metaphors really, in a thousand narratives about race, over which he and I have absolutely no control. Narratives about race are as old as the founding of this great republic itself.

"But these new ones unfolded precisely when America signaled to the world our country's great progress by overcoming centuries of habit and fear and electing an African-American as president. It's incumbent upon Sergeant Crowley and me to utilize the great opportunity that fate has given us to foster greater sympathy among the American public for daily perils of policing, on the one hand, and for the genuine fears of racial profiling, on the other hand.

"Let me say that I thank god that I live in a country in which police officers put their lives at risk to protect us every day. And, more than ever, I've come to understand and appreciate their daily sacrifices on our behalf. I'm also grateful we live in a country where freedom of speech is a sacrosanct value. And I hope that one day we can get to know each other better, as we began to do at the White House this afternoon over beers with President Obama."

In other news, the Obama birther movement has managed to produce another two-headed monster within the Republican party, the enablers, versus those who are realizing that the party needs to move away from this nonsense as fast as possible.

But in our third story on the Countdown, the enablers are still dominating the conversation. Indeed, Congressmen Louie Gohmert of Texas is the latest Republican to sign on to the so-called Birther Bill. The proposed law would require future presidential candidates to provide copy of their birth certificate to the Federal Election Commission. When Congressman Gohmert was asked if he believed that Mr. Obama was born in Kenya, not Hawaii, he said, quote, "I don't know if it's true or not, but I read that Lou Dobbs said Obama's original birth certificate was destroyed."

That's Lou Dobbs as his source. Meantime, Mike Stark of Fire Dog Lake, has once again tried to get rank and file Republicans to answer some straightforward questions. Here are some of the results.

(BEGIN VIDEO CLIP)

REP. JEAN SCHMIDT (R), OHIO Talk to you-

MIKE STARK, FIRE DOG LAKE: I'll run with you.

SCHMIDT: No, no, no.

STARK: Quick question.

SCHMIDT: Nope.

STARK: Do you believe Barack Obama was born in the United States?

SCHMIDT: You know, I've got to go right now. I wish I could talk to you right now, but-

STARK: People are going to think I'm tugging you.

SCHMIDT: Well, I know.

STARK: That doesn't require that much thought. Does it? Was Barack Obama born in the United States? That's a yes or a no. He's president of the United States, right? He swore a Constitutional oath to uphold the Constitution. If he is not a natural born citizen, he can't be president. You must care about your oath? Where do you stand?

SCHMIDT: Sir, I'm on the way to a very important meeting. And you can make an appointment with my office and we'll discuss it. OK? Thank you very much.

STARK: Congresswoman, take care.

STARK: There's been a lot of news about Barack Obama's birth certificate. Do you believe he was born in America? Anyone that believes otherwise is a little bit cuckoo?

REP. NATHAN DEAL (R), GEORGIA: I wouldn't say that. I have no idea where he was born.

STARK: I didn't know it when we talked to you the first time. But you are number four in the leadership of the Republican party. Do you want to offer a clearer answer on whether or not you believe Barack Obama was born in the United States? Are you still looking forward to seeing documents?

REP. CATHY MCMORRIS RODGERS (R), WASHINGTON: I'll tell you what, why don't-she has to get to a vote. Do you have a card?

STARK: Basis in fact or reality for this kind of stuff?

DEAL: The best way to do it, I think, is to produce the birth certificate and let that be the end of it. I don't think that's been done yet.

REP. ROY BLUNT (R), MISSOURI: What I don't know is why the president can't produce a birth certificate. I don't know anybody else that can't produce one. I think that's a legitimate question.

STARK: Can you give me clear answer? Was Barack Obama born in the United States?

REP. MIKE PENCE (R), INDIANA: Yes, I believe he was.

STARK: Unequivocally, right? People that believe otherwise are absolutely crazy.

PENCE: Right, yes. I'm willing to stipulate he's from Hawaii. I just don't know where he is coming from on health care.

(END VIDEOTAPE)

WOLFFE: Along with Congressman Pence, Congressman Tom McClintock of California agreed that there was no question about Obama's birthplace. But Congressman Blunt's office complained that Fire Dog Lake took him out of context. So the website released the unedited video. And in it Mr. Blunt says he does not have, quote, any reason not to believe that Obama was born in the U.S. Then he proceeds to raise questions, as seen in that video.

What does it say when this lot is actually taking the same side of the issue, trying to dismiss the birther theories as nonsense; Bill O'Reilly, Ann Coulter, RNC Chairman Michael Steele, former Mayor Rudy Giuliani, and House Minority Leader John Boehner.

Let's bring in a contributing editor Daily Kos, and editor of Congress Matters, David Waldman. Good evening.

DAVID WALDMAN, DAILY KOS CONTRIBUTING EDITOR: Good evening, Richard.

Thanks for having me.

WOLFFE: Is Congressman Gohmert typical of the Republicans supporting this birther bill, in that his legislation sounds reasonable, but then he goes off the rails when he tries to explain his reasoning. After all, Lou Dobbs is his source here. Why are they even bothering to try to sound reasonable?

WALDMAN: Well, that's the dodge they all play. I mean, yes, absolutely, Congressman Gohmert is typical of the people who are co-sponsoring this legislation. There's this kernel of interesting truth in the heart of the thing. Yes, there is this Constitutional requirement. But there are a million ways to deal with it. And we've dealt with it up to now without ever asking any kinds of questions formally like this.

It's interesting that they now design the answers to the questions in such a way that they can have it both ways. They won't say unequivocally either what they believe or what they believe actually means, so that they don't risk alienating the people who are driving this really crazy crusade.

WOLFFE: Well, that brings us to the conservative pundits and the politicians who are willing to dismiss the conspiracy theory. Do they see the danger in allowing the party to be linked to this kind of fringe?

WALDMAN: They very well may. I mean, the danger is pretty clear. I don't know-I'm surprised, I should say, at some of the people who are suddenly able to see danger for the Republican party so clearly. This is a new phenomenon for some of them.

What it shows, I guess, is that everyone, from top to bottom pretty much, who speaks on daily basis for the party and for conservatives in general has their own particular psychosis. But the problem is that, in many cases, it's kind of nuts from top to bottom. It doesn't matter who you ask, they'll give you one crazy theory or another. If it's not birtherism, it's racism.

WOLFFE: The conservative radio host Hugh Hewitt blames the whole thing on the media, which likes to make fun of what he says are, quote, people with a marginal grasp of logic. Which strikes me as a funny way to talk about actual Republican office holders, or even Roy Blunt. Not very polite, is it?

WALDMAN: No, not very polite, but also another day and another reason for Hugh Hewitt to blame to the media for something. I mean, that shows he's learned almost nothing from this episode and he blames everything on the media. There is a sense in which we may be spending a little bit too much time talking about this lunatic fringe. But the problem is that it goes from top to bottom, as I said. If you have half a dozen, now a dozen or more United States congressman jumping onto this bill that's really this thinly veiled of birtherism-the purer stuff you see on the streets.

But in the halls of Congress, you see this veiled thing. And it's not that they don't know how to dismiss people like this. They dismiss crazy nuts and people they just don't like, who really do have ideas that have some merit, but they just disagree with very strongly. They dismiss them at town hall meetings every day. Try talking to one of these guys about the fact that the previous administration tortured people for political gain. You won't get very far. They find a way to distance themselves from you when they want to.

WOLFFE: That's a good point, David Waldman, of the Daily Kos and blog Congress Matters. Thanks for joining us.

WALDMAN: Thank you very much.

WOLFFE: And a clarification to last night's Countdown. In a conversation about the financial industry and Tarp, our guest, Arianna Huffington, said Citigroup is basically insolvent. Citigroup contacted us today and said Huffington's comments were 100 percent wrong.

Sarah Palin is out of politics for now, but can she ever return? A new poll from NBC News is bad news for her if she's dreaming of the White House.

And Michael Jackson's children. A month after his death, a custody deal is reached. Joe Jackson confirms, meanwhile, that Michael actually had an older biological son. Next on Countdown.

(COMMERCIAL BREAK)

WOLFFE: As a custody agreement is reached, new revelations about an alleged secret son. Yes, you probably already guessed it. Our number two story is, indeed, about Michael Jackson. Family patriarch Joe Jackson, in his latest round of interviews, claims those rumors circulating about the late pop star's illegitimate son are true.

(BEGIN VIDEO CLIP)

JOE JACKSON, MICHAEL JACKSON'S FATHER: Yes. Michael has another son.

UNIDENTIFIED MALE: And he looks like a Jackson.

JACKSON: Oh, yes. He looks like a Jackson. He acts like a Jackson.

He can dance like a Jackson.

(END VIDEO CLIP)

WOLFFE: The Jackson doppelganger in question is 25-year-old Omer Bhatti. Bhatti had a front row seat next to Jackson's family at the singer's memorial. But Bhatti himself denies that Jackson is his biological father, which can only mean that Bhatti's mother is a woman named Billie Jean.

MSNBC's "The Scoop" reports that a Jackson family friend says the only person who knows her true identity is dame Elizabeth Taylor. You can't make this stuff up. Taylor's rep denies this. But adds, if the actress has something to say about the situation, she will Twitter about it. OK, you can make this stuff up.

Meanwhile, a custody deal involving the pop star's the three other kids was announced earlier today between Katherine Jackson and Debbie Rowe. Our correspondent is Jay Gray.

(BEGIN VIDEOTAPE)

JAY GRAY, NBC NEWS CORRESPONDENT (voice-over): According to his will, if anything happened to Michael Jackson, he wanted his mom to raise his three young children. It now appears that will happen. Lawyers for Katherine Jackson and the singer's ex-wife, Debbie Rowe, have released details of a custody agreement. Jackson's mother will be the permanent guardian of 12-year-old Prince Michael, 11-year-old Paris and seven-year-old Blanket.

Rowe, the biological mother of the two oldest children, has agreed not to seek custody, but will retain her parental rights and will get visitation. Attorneys also made it clear there was no financial component to the agreement.

NEAL HERSH, CHILD CUSTODY HEARING: I think this puts to rest a lengthy protracted piece of litigation. And I think the children are going to benefit from that.

GRAY: Quoting a release from lawyers now, "the timing, frequency and manner of Rowe's visits will be determined by a child psychologist." There are reports that only since their father's death have the two oldest children learned that she is their mother. And apparently, Rowe now believes she can develop a bond with the kids.

KAI CHASE, MICHAEL JACKSON'S CHEF: It's good to have a mother figure around.

GRAY: Jackson's personal chef, Kai Chase, talked about the children during an exclusive interview this morning on "The Today Show," and provided some insight into their perspective during the frantic last moments of their father's death.

CHASE: We're all panicking and wondering what's going on. Parents are screaming and crying, daddy, daddy, daddy.

GRAY: It is a horrible memory for Jackson's three young children that they will now apparently work through with the help of both their grandmother and their biological mom.

Jay Gray, NBC News, Los Angeles.

(END VIDEOTAPE)

WOLFFE: Sarah Palin is enjoying more time with her family, and a growing number of Americans think that's a good thing. New poll numbers show many don't want her in the White House. But thanks to the wonderful William Shatner, maybe she'll leave politics aside and turn to poetry, next on Countdown.

(COMMERCIAL BREAK)

WOLFFE: I know you may be feeling a little less safe now that former Alaska Governor Sarah Palin can't keep an eye on Russia. But Palin may need to turn her attention to threats other than Putin rearing his pretty little head. As her political capital fades away, our number one story on the Countdown is what's next for the polar-based pit bull?

A new NBC News/"Wall Street Journal" poll shows two-thirds of all Americans don't want Palin to ever become president; just 21 percent say they wouldn't mind a Palin White House. You might expect an overwhelming majority of Democrats to oppose the notion of President Palin, but 43 percent of Republicans and 65 percent of independents, even 46 percent of self-confessed conservatives, say the same thing.

What's a former governor to do? She's already got a big, fat book deal. But there's word Palin may be looking to join the media she despises so much. Insider Radio reporting she could be setting her sights on a syndicated radio show, where she will no doubt quit making stuff up.

Whatever Miss Wasilla 1984 decides to do, she says she'll still be Tweeting, the gift that keeps on giving to NBC's "Tonight Show," courtesy of last night's Poet Laureate, William Shatner, and host Conan O'Brien.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, "THE TONIGHT SHOW": In her fair-well speech, Palin promised to stay in touch with her followers using Twitter. She said, yes, I'm going to stay in touch using Twitter. Some people, though, have been reading these Twitters, and they found her Tweets to be a little rambling, confusing and off topic.

I spent the day today reading through all of Palin's Tweets several times, and it dawned on me, she's writing poetry. These are not Tweets. This is beautiful free verse. That is what she's writing. So, once again, here to read Sarah Palin's Tweets verbatim, as they were intended to be heard, is Emmy away winner and master thespian, Mr. William Shatner.

WILLIAM SHATNER, EMMY AWARD WINNER: From sea life near a lush, wet rain forest, to energy housed under frozen tundra, atop permafrost; god most creatively displays his diversity in Alaska.

Tourists from across America here loving their 49th state; I'm reminded one heart, one hope, one destiny, one flag from sea to sea.

Awesome Alaska night; sensing summer already winding down, with fire weed near full bloom, finally sitting down to pen, listening to Big and Rich.

Left you no lack heat warmth for rain in Juneau tonight. No drought threat down here ever. But consistent rain reminds us: no rain, no rainbow.

(END VIDEO CLIP)

WOLFFE: Who else could follow the surrealism of Captain Kirk but Margaret Carlson, "Bloomberg News" political columnist and Washington editor for "The Week Magazine." Good evening, Margaret.

MARGARET CARLSON, "THE WEEK MAGAZINE": Good evening, Richard.

WOLFFE: So the new NBC News/"Wall Street Journal" poll shows that Palin's political capital is in steep declined. Among the many lessons of Richard Nixon is that you're never really out of the arena. Is that true for Governor Palin as well?

CARLSON: Well, Richard, I don't know about you, but I would like to yield the remainder of my time to William Shatner. That was so good. And I missed it in the original.

Maybe we do not have, you know, Sarah Palin to kick around anymore as governor. However, in this guise, if she is going to go on the radio, where it's a shame she won't be able to wink-and apparently it is radio talk show akin to Rush Limbaugh, is what she would like to have. You know, she's going to be-she's going get the exposure that she was missing in Alaska.

She was-you know, hungered for it. How many times, Richard, did she do something and we would spend, you know, days talking about it from Alaska? Now it will be all Sarah all the time, just the way we talk about Rush Limbaugh many nights.

WOLFFE: So she said she was quitting because of a higher calling.

Does this possible radio gig qualify as one of those?

CARLSON: If she were coming to this show, Richard, we could call it a higher calling. But radio? I don't know. Rush Limbaugh-when we were looking for a leader of the Republican party and all of those polls were being taken and the Republicans couldn't find one; consistently Rush Limbaugh was at the top of the list. So there is one way to become a leader of the Republican party.

And it seems that actually the leaders of the Republican party are in the media: Rush Limbaugh, Sean Hannity, Michael Savage, Glenn Beck. These are the people we know best in the Republican party, given the vacuum at the top, and given that the people who are the natural leaders, say Mitch McConnell and some others, Eric Cantor, they're not necessarily TV or radio ready.

WOLFFE: So let's do this last one for the troops, as Palin likes to say. She does have charisma and a following. Could she actually bring disillusioned Republicans back into the fold in time for 2012?

CARLSON: Well, I don't know about yours, Richard, the people who love Sarah Palin and find her charismatic-and she does have that it thing-they are passionate about Sarah Palin. There may not be enough of them. We opened with that poll. There aren't enough of them, perhaps, to drag her across the finish line.

But she is going to be a formidable presence, because the people-there's nobody else in the Republican party that stirs passions right now. She's the only one. And she's likely now to do it, to stir those passions even more.

WOLFFE: And briefly, for those Palin backers out there, should they be worried by those poll numbers?

CARLSON: Well, you know, the ones I hear from, the more she has detractors and the less well she's doing among the mainstream Republicans, the better they like her. So, in a sense, she's down, she's up to them. And they're going to try to drive, you know-find solace and energy from her lack of favorability, and build her up, so that all of us see what they see in her.

WOLFFE: Margaret Carlson of "Bloomberg News" and "The Week Magazine," many thanks.

CARLSON: Thanks, Richard. Good night.

WOLFFE: That's it for this Thursday edition of Countdown. I'm Richard Wolffe, in for Keith Olbermann. Have a good night, everyone. Our coverage continues now with "THE RACHEL MADDOW SHOW."

Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END

'Countdown with Keith Olbermann' for Wednesday, July 29
video podcast
screencaps

Guest: Amy Robach, Andrea Mitchell, Chris Jansing, Sen. Sherrod Brown, Laura Flanders, Arianna Huffington, Eugene Robinson

(BEGIN VIDEOTAPE)

HOWARD DEAN, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

Let's make a deal meets the blue dog Democrats.

(BEGIN VIDEO CLIP)

REP. MIKE ROSS (D), ARKANSAS: We have reached an agreement that will allow health care reform to move forward.

(END VIDEO CLIP)

DEAN: Is the deal a breakdown or a breakthrough? And as we try to expand coverage for Americans, why is the Senate trying to take health care away from kids? Tonight: Inside the negotiations on Capitol Hill with Democratic Senator Sherrod Brown of Ohio.

The health care message war: Why is fear winning out over facts?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These folks need to stop scaring everybody. Nobody is talking about you forcing - to have to change your plans.

(END VIDEO CLIP)

DEAN: Tonight - why GOP scare tactics keep working?

Smearing the stimulus: The DNC has had enough of Republican hypocrisy and they're taking to the airwaves.

(BEGIN VIDEO CLIP)

NARRATOR: They supported the Bush policies that sank our economy into recession. They broke it. Now they refuse to fix it.

(END VIDEO CLIP)

DEAN: The bonus battle on Wall Street. The House makes sure financial execs don't cash in on risky money moves. Arianna Huffington joins me on the return of her book "Pigs at the Trough."

Hollywood and hard times: When this is happening on TV.

(BEGIN VIDEO CLIP)

CARTOON CHARACTER: An economic crisis has hit South Park and the nation like never before.

(END VIDEO CLIP)

DEAN: . you know the recession has taken a deep hold.

And - Obama's beer diplomacy. His meeting tomorrow with Professor Gates and Sergeant Crowley still sparking controversy.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: This president, I think, has exposed himself as a guy, over and over and over again, who has a deep-seated hatred for white people or the white culture.

(END VIDEO CLIP)

DEAN: The race debate, and expectations on tomorrow's meeting from Eugene Robinson.

All that and more - now on Countdown.

(INAUDIBLE)

(END VIDEOTAPE)

DEAN: Good evening from New York. I'm Howard Dean. Keith Olbermann has the night off.

If you don't like what we already know about the health care bill that's being worked out behind closed doors by the Senate Finance Committee, consider this: its final deal could be even worse.

Our fifth story on THE Countdown: Some Democrats say they fear the committee will take away health insurance from the 11 million children who already have it just to keep Republicans happy. First, the public option, and now, SCHIP. Dare we ask what's next?

At least things appear to be going much better in the House where most of the blue dog Democrats on the Energy and Commerce Committee say they've reached an agreement with the leadership and the White House. The deal leaves intact almost everything that both sides wanted.

But in the Senate, Democrats, like Jay Rockefeller, say they're unhappy about the concessions Democrats are making to keep a few Republicans onboard. Senator Rockefeller told "The New York Times" that SCHIP could be on the table.

The president's campaign to reform health care in this country is taking a hit on his poll numbers. More Americans now disapprove than approve of how the president's handling health care reform according to the latest NBC/"Wall Street Journal" poll.

But once people are given more details about the kinds of things that President Obama wants this plan to do, a clear majority are in favor of it. At a supermarket in Virginia, the president tried to clear up more of the confusion that's been created by Republican spin.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Rumor has it that if we get this new health care system in, that we won't get the health care, our doctors and all that we have now, that virtually people, older American citizens would just be put out to pasture. Please tell me that isn't so.

OBAMA: It isn't so. I mean, I don't know, look.

(APPLAUSE)

OBAMA: Nothing burns me up more than hearing some of these scare tactics directed at seniors.

UNIDENTIFIED FEMALE: Is this a plan that you would be willing to put your family on?

OBAMA: Yes. I mean, as I said, this is a plan that's similar to what I had when I was a member of Congress. You know, the federal employees benefit plan is - the way it basically works is, is that you have sort of a menu of options. You can choose the plan that you think is best and then, you know, you pay your premium.

I also think one of the choices that you should be able to choose from is what's called a public option. Now, this has gotten a lot of people riled up because, "A-ha, see, this government run." When you hear people talking about us wanting to create a government-run health system, all they're really talking about is what we were - what we proposed is to have an option that is not-for-profit, it's set up by the government, and can keep administrative costs low and can keep insurance companies honest, because if you - if the insurance companies started jacking up their rates real high, then you could go into the public option and, you know, those private insurers would start losing a lot of people so they'd have to compete for you.

(END VIDEO CLIP)

DEAN: Lots to talk about tonight with Senator Sherrod Brown, Democrat of Ohio.

Sherrod, welcome to the show.

SEN. SHERROD BROWN (D), OHIO: Thanks, Howard. Good to talk to you.

Thanks.

DEAN: Sherrod, the House has come up with a pretty decent compromise. Why is the Senate having so much trouble doing the same thing?

BROWN: Well, we have a good bill that came out of the Health, Education, Labor and Pension Committee - you know, strong public option, employer mandate, everybody needs to be in the plan, very strong consumer protections for all people who have insurance and for those newcomers that are just getting insurance. The Senate Finance Committee is not coming up as good of a plan, as Senator Rockefeller said.

But we're not - we're not going to do things like exclude the 11 million children who are now in SCHIP. We're not going to accept a weak public option or a non-existing public - existing public option. Those are the president's priorities. That's what every Democrat on the Health, Education, Labor and Pension Committee voted for.

We're not going to lay down and come up with some sort of phony co-op that some few number of number of Democrats seem to want.

DEAN: And in fairness to your committee's bill, it is a great bill. And one of the things that I want to spend a little time talking about is the option, is the part for small businesses. Can you talk to me a little bit about what you do for small businesses? Because this is the first big break the small businesses would ever have gotten from the federal government.

BROWN: Yes, everybody is going to get - if your workers are - if people are lower income, they're going to get some subsidies to be able to afford insurance. It goes up to literally 400 percent of poverty. So, if somebody - a family is making $80,000, they'll get some - they'll get less help than somebody making $20,000 or $30,000.

A lot of these insurance reforms will help small business. Those small businesses now that are not able to - where insurance has gotten so expensive in part because they're not just covering their own employees, they're covering people who aren't insured because of cost shifting, that burden will be taken off. So, that will stabilize insurance premiums for those companies because everybody will be in the insurance plan and the so-called gateway.

President Obama said, people are going to have a wide menu of choices. They can go into a public option. They can go with Aetna. They can go with Medical Mutual in Ohio, which is a - which is a mutual company. They can go into a for-profit or not-for-profit company like Kaiser. Or as I said, they can go into the public plan but that's the choice. That's the choice businesses will have, that's the choice individuals will have.

DEAN: Sherrod, you must get this question all the time from your voters in Ohio. Why is it that your colleagues appear willing to give away so much just to please a few Republicans who may not be interested in passing health care reform of any kind?

BROWN: I wish I could answer that question better, Howard. I - I go back to 40 years ago when the Medicare bill passed. People like Bob Dole, Strom Thurman, Donald Rumsfeld, Gerald Ford, as members of Congress, they all opposed it. The fact is, in those days, the Democrats moved forward. They didn't worry about we have to have X number of Republicans. Their mission was we're going to get a good Medicare bill.

That's what they did. That needs to be our - that needs to be our charge. Not we need a bipartisan bill - though I hope it is bipartisan, I hope Republicans vote for it - but our mission, our charge is we need a strong bill that works for the middle-class, that works for people in the country that don't have insurance, and it works for people that already have decent insurance.

And our bill that came out of the committee in the Senate is exactly that.

DEAN: What was going to be the reaction in the Democratic Caucus in the United States Senate if the public option is not in the deal that comes out of the finance committee?

BROWN: You know, people are going to be unhappy and there's going to be a lot of pressure on Leader Reid to adopt the bill, that's much more mainstream Democratic bill like the health committee but also mainstream American bill. I mean, the country overwhelmingly, as you know, wants a strong public option. When these numbers for President Obama have been declining, it's largely because the public is not seeing the strong public option, the strong pro-consumer bill that they saw out of the health committee.

When we passed our bill, the president's numbers about how he was handling health care were much stronger than they are now because the public is not reading about these compromises and these "bringing along conservative Republicans with their values," about weakening the public option, about kowtowing too much of the insurance industry and the drug companies.

So, if we write a strong, progressive bill, that's where the public is, that's when President Obama's numbers go up, particularly when he starts talking about it, like he did in the fruit and vegetable section in Virginia today, in that supermarket.

DEAN: Senator Enzi said that he wanted a guarantee that anything the committee agrees to ends up in the final legislation. That is not how the Senate works. Well, how can he possibly ask for something like that and still really have any intention - real intention of working for a bill?

BROWN: Well, he can ask for whatever he wants, but that's not going to happen. I mean, first of all, our bill, we had - we had 11 days of markup. That's longer than any bill I've ever worked on in 16 years, 17 years in the House and Senate. It was - we explored every option. We accepted 160 Republican amendments.

Senator Enzi is the ranking member on that committee. He lost some, he won some. He lost most of the big issues on the public option and some consumer protections, but the fact is that the Democrats are in the majority. The public voted for a strong health plan, not a bill written like the old Medicare bill.

You remember - Howard, you remember very - several years ago, you ran in part on this issue, how the drug companies and the insurance companies wrote the Medicare law that George Bush pushed through Congress. It was a betrayal of the middle class. It was a betrayal of consumers and patients because the drug companies and insurance companies had their way. Those days are gone.

I want to work with Republicans. I want a bipartisan bill. I got a lot of Republican votes when I was elected to the Senate in '06, but the votes I got were not people saying, "Hey, play along with the drug industry and the insurance industry and do what they want in health care." That's exactly the opposite message I took.

DEAN: Sherrod, do you think the president needs to do more with the Senate to get a good bill passed? Has he got to step in here more?

BROWN: Yes, the president needs to do a couple things. And I think he's begun to hit his stride listening to those clips that you just played in that supermarket in Virginia. The president needs to be out talking, you know, not through the screen of the drug industry or the pharma - or the insurance industry, but the president needs to go directly to the American people, talking about why this is good for them, if you already have insurance we're going to protect what you have. We're going to fix what's broken.

Second, the president needs to unleash all of those - all the people on - that are - that have been supporters of his, the way that you build up your list five years ago, the way he did in his '08 race - all the people out there that believe in a progressive government, that believe in this president, that believe a Democratic majority in both houses will move us forward on health care. Those people need to start calling and writing their congressmen and senators in both parties. I think that will make the other difference.

So it's the president hitting his stride and getting out there speaking directly to people, and it's about all the people that support the president starting to write and call their members of Congress.

DEAN: One last question. The inside-the-beltway media is writing about the idea that the Republicans have gained control of the message war and Democrats are losing just like what happened in 1993. I think, my own my own view of this is, that may be true and it's partly because the media only wants to seem to cover the Republican negative message and not the positive message. How do we change this around? It's not going to be easy.

BROWN: Yes, you're right. I don't - I don't see a lot of parallels between now and '93. My first year in the House was that year. I sat on the health committee and it turned out to be a disaster for a lot of reasons. And I think that the Republican message is easier because it says, stop, vote no, slow down - all the easy things to communicate to the public.

But I think, once the president's out there, once we have a bill he can talk about, similar to the bill that came out of the health, education, labor and pension committee, once he's got that, then we're going to see these numbers go back up and we're going to see - we're going to be on the offensive and we're going to let people know that this bill is good for the middle-class in this country.

DEAN: Senator Sherrod Brown of Ohio.

BROWN: Thank you, Howard.

DEAN: . thanks so much for being on the show.

BROWN: My pleasure.

DEAN: Health care, of course, is not the only battleground for the two parties today. Democrats are hitting back on the GOP stimulus attacks. We'll show you the video they put out.

And can a beer heal the nation's racial divide? Or will the nation once again split over an age-old conflict? Tastes great, less filling.

Next on Countdown.

(COMMERCIAL BREAK)

DEAN: Coming up on Countdown: Their leader is gone, but now, President Bush's allies in Congress are blaming Democrats for the economy. But today, Democrats are striking back. And a new law would stop companies from awarding executives for taking bad risks that jeopardize the companies and the economy. So now, the economy is fixed, right?

We'll get some answers from Arianna Huffington - up next.

(COMMERCIAL BREAK)

DEAN: First, Bush Republicans broke the economy. Then, Bush Republicans opposed fixing it. Then, Bush Republicans blamed Mr. Obama for not fixing it quickly enough.

Now - in tonight's fourth story - payback time.

The Bush generals who led the GOP Congress in blindly following Bush-onomics off the cliff are: Senate Republican Leader Mitch McConnell and House Republican Leader John Boehner, Senate Republican Whip Jon Kyl and House Republican Whip Eric Cantor.

In a new national ad airing today, Democrats not only refute their claims about the Obama recovery but reassert how these Bush Republicans made it necessary.

(BEGIN VIDEO CLIP, POLITICAL AD)

NARRATOR: He said we should cancel the Recovery Act.

He falsely claimed no projects had been awarded in Ohio.

He opposed the Recovery Act but then took credit for a project in his district.

And he led the fight against the Recovery Act that is boosting Kentucky's economy.

They supported the Bush policies that sank our economy into recession. They broke it. Now they refuse to fix it.

Tell Republican leaders to stop playing politics with our economy. The Democratic National Committee is responsible for the content of this advertising.

(END VIDEO CLIP)

DEAN: Congressman Boehner's office responded, saying, quote, "Democrats can't run away from the fact that the stimulus has failed to provide the immediate jolt to the economy and prevent unemployment from climbing above 8 percent as the administration promised."

This is the moral equivalent of an abusive guy who puts his wife in the hospital and then gets mad at the doctors who can't send her home as soon as they had hoped.

Joining me now is Laura Flanders, author of "Blue Grit" and host of "GRITtv" at GRITtv.org.

Thanks so much for your time tonight.

LAURA FLANDERS, AUTHOR, "BLUE GRIT": Oh, it's great to be with you, Governor.

DEAN: What is the point of targeting the leadership who are in safe seats rather than the followers who are vulnerable in the next election?

FLANDERS: Well, first off, it's a great ad, can we just say? You know, it's good to be reminded that some of these Republicans shouldn't be trusted any more when they talk about money than some of them should be trusted when they talk about their marriages, you know? So, I mean, I think there is something to be said for going on the offensive, going on the attack and a lot of the Democratic base is going to be happy to see the DNC showing some sign of life and really pushing back.

It's outrageous. I mean, it's an epidemic - the Republicans who are now claiming credit for some of the stimulus money that they, themselves, opposed.

I saw a picture the other day of Bobby Jindal in Louisiana. He went to the region to present them with this huge, jumbo check, you know, with his name at the bottom. The check was partly at least thanks to federal stimulus funds. It should have been the federal government's name at the bottom. He opposed that money and now wants credit for it.

So, you know, the question you're asking is an important one. Do the Democrats need to get - start getting really smart about the upcoming midterms? Absolutely. They have not won as you know in these national television contests, they won at the base, at the local level, how much work gets done.

But you know what? I think that the - going on the offensive is good, the attack is good. The accomplishments will be better. What will really win the midterms for Democrats is going to be actually coming through on what they've promised to their folks.

DEAN: Laura, the fed today reported that most of its 12 regions have either stabilized economically or that the pace of decline has started to level off.

FLANDERS: Well, that's.

DEAN: If the public starts sensing the worst is over, what do Republicans have left?

FLANDERS: Well, I have to say, you know, that's kind of like telling New Yorkers right now that it's not going to rain all of August. It's only going to rain some of August, you know? I'm not better yet by knowing that the pace of decline after a 30-year decline has slowed a bit.

And frankly, the only people I see up there experiencing any kind of recovery are the private health insurers. They're really just the profit insurers. They're going up to the ceiling with what they're getting out of this moment. But most of the people I know aren't yet feeling any real change.

You're right, though. The Republicans, you know, are making hay out of saying that the stimulus isn't working. It was never supposed to work in the first two seconds. We need to recall that. But they haven't got anything to solve the problem either. They're trying to go with, you know, "drill, baby, drill" and "we won't let you have an abortion." I don't think that's going to really play.

Again, though, the Democrats can't just sit back and say the GOP is in trouble. They've got to come through. And most importantly, they've got to come through with health care and with the public option that you were just talking about.

DEAN: The Republican National Committee is meeting today in San Diego, getting to know Minnesota Governor Tim Pawlenty who is a possible candidate for president in 2012. Can Pawlenty or anyone win both the nomination that requires base support and then a general election that requires mainstream support?

FLANDERS: Well, I wonder how well the RNC is going to get to know Pawlenty there. I mean, it seems to - seem to remember from the last sort of primaries, this is a guy who came out against Darwin. He's a creationist. There's going to be a pretty hard sell as a presidential candidate, somebody who believes so much bunk about science is really going to save our economy.

But, you know, yes, you're right. They're facing the problem, can they get a general audience, can we get a general audience and get the extremes as well? It's interesting, though, isn't it, Howard, and you know all about this, that on the Republican side they're busily trying to curry favor always with the people at their margins.

On the Democratic side, we tend to kind of run away from the - from the margins even when they represent majority views like the peace vote, you know? These are interesting times. It's OK for the Republicans to go for the people at their flanks. I just wish the Democrats wouldn't be going for the Republican votes, too.

DEAN: Laura Flanders, host of "GRITtv" - a pleasure to talk with you. Thanks for being on.

FLANDERS: You, too.

DEAN: Coming up: From the stimulus and the bailout, the House taking a new action to make sure your taxpayer dollars are not abused by padding executive bonuses.

And, you know times are tough when recession talk makes it into the cartoon world. Pop culture and the pain in the pocketbook collide - next on Countdown.

(COMMERCIAL BREAK)

DEAN: When asked how the entertainment industry deals with recession, pop culture expert Elayne Rapping said, "The recession is like the elephant in the room. You can't avoid it."

So, it's not surprising that with our economic tales well into its second year, the continued hard times are finally reflected in our popular culture. Here is NBC's Chris Jansing.

(BEGIN VIDEOTAPE)

CHRIS JANSING, NBC NEWS CORRESPONDENT (voice-over): Call it recession TV.

UNIDENTIFIED MALE: I had to kick the renters out and move into my parents' house where I grew up.

JANSING: On the new HBO series "Hung," the leading man is underpaid, uninsured, and newly divorced.

UNIDENTIFIED MALE: Now, all I ever seem to do is try not to drown.

JANSING: In the world of bank bailouts, automaker bankruptcies, foreclosures, and frauds, art is reflecting life.

MICHAEL LOMBARDO, HBO PRES. OF PROGRAMMING: Entertainment at its best, like a television show or movie, is grounded in reality. So - I mean, there is no way good writers aren't looking at what's going on today.

JANSING: So, "30 Rock" has repeatedly mined the financial crisis for laughs.

UNIDENTIFIED FEMALE: No, I never fired anybody in my life.

UNIDENTIFIED MALE: It's an acquired skill.

JANSING: So has "South Park."

CARTOON CHARACTER: An economic crisis has hit South Park and the nation like never before.

JANSING: . and "The Simpsons."

CARTOON CHARACTER: Here is your new monthly payment.

JANSING: In a thriller for his new movie, Michael Moore asks for money.

MICHAEL MOORE, FILMMAKER: Ushers will be coming down the aisles to collect your donations for Citibank, Bank of America, AIG.

JANSING: And Ben Affleck's upcoming film is about the aftermath of corporate downsizing.

(on camera): Hollywood and the entertainment industry have certainly produced memorable story lines from bad times before. The Great Depression produced everything from "To Kill a Mockingbird" to "The Waltons." And the economic downturn of the '70s gave voice to rap and hip hop.

(MUSIC)

JANSING (voice-over): But where there are reality checks, there is also escapism. The top grossing movies of the year are "Transformers," "Up," and "Star Trek" - all in a galaxy about as far away from downsizing as you can get.

CHRISTOPHER HOLMES SMITH, USC-ANNENBERG SCHOOL: It's also about finding stories that really stress universal themes, that really help people deal with tough times by telling them, what are universal values we can always adhere to?

JANSING: The universal theme of love is giving romance novels their best year ever.

LEIGH COURT, ROMANCE AUTHOR: If you're stressed or depressed, the bottom line is: romance novels are a lot cheaper than therapy.

JANSING: But don't expect "Dynasty 2" any time soon - because these days, even in the high flying Hollywood world of entourage.

UNIDENTIFIED MALE: What's wrong?

UNIDENTIFIED MALE: What's right? Have you seen my stock portfolio, Lloyd?

UNIDENTIFIED MALE: No (ph). What happened?

JANSING: The recession has gone primetime.

Chris Jansing, NBC News, Los Angeles.

(END VIDEOTAPE)

DEAN: Still ahead on Countdown: A House committee votes to keep Wall Street wages in check. What else needs to happen to keep the financial industry from spinning out of control again? Arianna Huffington joins me next.

And later: A single arrest sparking a national debate, from the president's assertion that the arrest was stupid to the far-right's cry that Obama is a racist. We'll take a look at the stakes of tomorrow's White House meeting.

(COMMERCIAL BREAK)

DEAN: One reason we've had a housing bubble is that industry - finance industry executives were making millions in bonuses and other compensation by creating a whole new business of marketing even the worst mortgages as bright and shiny securities, putting their companies at long-term risk of collapse so they could make out like bandits in the short run.

In our number three story tonight, a house committee has now voted - let's not do that anymore. Specifically, Barney Frank's Financial Services Committee sending to the full House a bill that would ban big companies from paying executives enormous amounts of money for deals that put the company at, quote, inappropriate risk.

Ranking Republican Spencer Bachus told the Associated Press, quote, "politically it was very difficult for my members to stand up and fight against this."

In part because executives now make up about 300 times what the average worker does, up from 35 times the average worker pay in 1978.

Let's bring in Arianna Huffington, co-founder and editor-in-chief of the HuffingtonPost.com and also author of "Pigs at The Trough." Arianna, thanks for coming on tonight.

ARIANNA HUFFINGTON, "THE HUFFINGTON POST": Great to be with you.

DEAN: Arianna, if we don't pay these guys millions of dollars, how will we continue to get the same caliber of leadership that has given us AIG and Citicorp and so forth and so on?

HUFFINGTON: Howard, that's exactly the question we should be asking ourselves, because the real issue here is how can we align the interests of executives with the interests of shareholders and the interests of the company, not to mention the interests of society at large? That's really what has gone awry.

I think it's important when we talk about this that it's not about limiting executive compensation in absolute terms. It's about correcting all these wrong incentives that have been there, that, as you pointed out, have basically made it so likely that executives put the short-term interests of their compensation ahead of the interests of the company and the interests of the country.

DEAN: Will this bill work, not just in reducing big compensation packages, but also in shielding the economy from them?

HUFFINGTON: Well, it's only one piece of the puzzle. I mean, we have a lot of work to do. We basically need to put an end to companies that are too big to fail, because if they are to big to fail, they are too big to exist. We cannot keep socializing losses and privatizing gains, which is what we have been doing, because the taxpayer is now on the hook for trillions of dollars.

But it is definitely a good first step to align these different incentives. Even if you go back to Ayn Rand, the high priestess of capitalism, the favorite of Alan Greenspan, she would have been completely opposed to what has been happening, which is basically decoupling performance and reward. You had CEOs - and I read about them from what happened in 2003, with Enron and Worldcom, and then what's happened in the last year or so - who basically drive their companies into the ground and, in the process, become phenomenally rich themselves. That was not what was intended by capitalism.

DEAN: OK, so we're now going to transform you into the secretary of the treasury. You are presiding over what Hank Paulson and George Bush saw a year ago. What do you do about it? You have a company like AIG, which is 185 billion - has 185 billion dollars of taxpayers' money. Do you let them fail? Because if you do, you know what the consequences are.

HUFFINGTON: No, I would not have let them fail, but I would have driven a very hard bargain. I would have attached many strings, which would have included breaking up the company, so it's no longer too big to fail, which it continues to be. And I would have definitely driven a very hard bargain when it came to paying back the counter-parties.

Remember, we gave 100 cents to the dollar. That's why Goldman Sachs, for example, ended up getting 12 billion dollars from the government. So when Goldman Sachs comes back now and says, look how much profit we are making, no they're not yet, because they're still living off taxpayer money and with taxpayer guarantees.

DEAN: Do you think Citicorp should be broken up?

HUFFINGTON: Absolutely. Citicorp should definitely be broken up. Citicorp is basically insolvent. So we continue to subsidize a zombie bank. And we are continuing to put the country at risk. That's really the key issue here.

DEAN: Let's look at a bank that's not insolvent, JP Morgan Chase, but clearly enormously big, perhaps well managed now, but maybe not in the future. Should that be broken up?

HUFFINGTON: I think the way we should handle that, Howard, is to bring back a form of Glass-Steagall. Remember, the repeal of Glass-Steagall, which happened during the end of the Clinton years, was at the heart of a lot of this crisis we've been facing. As you know, it had huge consequences around the country.

So the essence of Glass-Steagall is decouple all the different functions of banks. It served us very well since the Great Depression. We need to bring it back in some form that is compatible with our 21st century economy.

DEAN: What about regulating things like derivatives, these sort of mystical securities that nobody can really put their fingers on. Wall Street claims they help make things more liquid and help capital. But they're - without derivatives, I think AIG would still be solvent and a lot of the banks would not have - credit default swaps are another one. That certainly drove AIG into bankruptcy. What do we do about that stuff?

HUFFINGTON: I think there are two things we need to do. First of all, we really need to reform the credit ratings agencies. These agencies that kept giving perfect ratings to junk because they're basically paid by the people they are rating. That has to change.

The second thing we need to do is to bring back some real regulation, not the kind that the SEC was in favor of, which basically let Bernie Madoff get away with what he did, while the SEC was pursuing Martha Stewart.

DEAN: Arianna Huffington, perhaps the next secretary of the treasury.

The book is "Pigs at the Trough." Nice to talk with you.

HUFFINGTON: Thank you.

DEAN: Coming up, President Obama is attacked as a racist for his remarks surrounding the arrest of Harvard Professor Henry Gates. Why some are using this teachable moment to try to tear the country apart.

On the lighter side, presidential getaways. We'll show you where the Obamas might go for summer vacation ahead on Countdown.

(COMMERCIAL BREAK)

DEAN: If you're the leader of the free world, it's not easy to find the right place for your summer vacation. But President Obama and his family may finally have found theirs. They're reportedly going to be staying at the Blue Heron Farm, a 28 acre estate on Martha's Vineyard. As Amy Robach reports, it comes with an apple orchard, a private beach, and required for this president's hoop dreams, its own basketball court.

(BEGIN VIDEOTAPE)

AMY ROBACH, NBC NEWS CORRESPONDENT (voice-over): As president of the United States, you get to vacation pretty much wherever you want. But when you grew up in Hawaii, not exactly a shabby vacation destination, where do you go to get away from all this?

REP. JOHN BOEHNER (R), MINORITY LEADER: So, Mr. President, it's time to scrap this bill.

REP. ERIC CANTOR (R), MINORITY WHIP: This president has no one else to blame.

ROBACH: The White House says the Obamas will be spending the last week of August on Martha's Vineyard.

UNIDENTIFIED MALE: I think it's going to be one of the most exciting things to hit the island in a long time.

ROBACH: Carl McClauren (ph) and his family have been vacationing on Martha's Vineyard for generations.

UNIDENTIFIED MALE: I'm thrilled, as I think a lot of folks here on the island are, and excited.

ROBACH: Presidents have vacationed on the island off the coast of Massachusetts before. Bill and Hillary Clinton spent time there. So did, that's right, Ulysses S. Grant. Now it's the Obamas who will be tapping into an island which also has a rich history as a summer haven for African-Americans.

For centuries, the town of Oak Bluff has been considered a center of black culture. Martin Luther King wrote and swam there.

UNIDENTIFIED FEMALE: Would it suffice to say the Oprah Winfrey of the world, the Spike Lee, the Lavar Burton, Branford Marsalis' of the world have good sense? That's why they're coming to Martha's Vineyard.

ROBACH: But the Obamas may not be staying in Oak Bluff. Vineyard veterans are reporting that the Obamas will stay at the 28-acre Blue Heron Farm, ten miles from Oak Bluff. The White House won't confirm that, but similar places rent for between 35,000 and 50,000 dollars a week.

Reportedly, the Obamas are treating this as a standard vineyard summer rental, from payment terms, down to questions about bringing the family dog. Of course, that's assuming your standard summer rental includes dozens of staff and Secret Service going along with you.

But after six months of this -

UNIDENTIFIED FEMALE: He is not an American citizen.

ROBACH: - who could blame the president if he's looking forward to just a little bit of this?

(END VIDEOTAPE)

DEAN: Coming up, tomorrow's big meeting at the White House. Sergeant Crowley and Professor Gates meeting face to face for the first time since that fateful arrest. The expectations for Thursday's meeting and the heated racial conversations the arrest have sparked, next on Countdown.

(COMMERCIAL BREAK)

DEAN: It started with a routine call about an assumed break-in; a black suspect arrested; a white police officer presiding. But as the details came out and the president weighed in, the story became much more than that. Our number one story, the continuing debate on race.

Tomorrow, President Obama will meet with the Harvard professor arrested in his own home, Henry Louis Gates, and the man who arrested him, Sergeant James Crowley.

Meanwhile, the woman who called 911 to report the suspected burglary spoke with reporters today, breaking her silence on the matter. The incident has also prompted inflammatory comments from the far right, proving that two weeks after Professor Gates' arrest, there is still much to discuss. Our correspondent is Andrea Mitchell.

(BEGIN VIDEOTAPE)

ANDREA MITCHELL, MSNBC ANCHOR (voice-over): Her call to police unwittingly triggered an incident that has ripped the scab off racial politics in America.

LUCIA WHALEN, 911 CALLER: The criticism at first was so painful for me and difficult I was frankly afraid to say anything. People called me racist and said I caused all the turmoil that followed. And some even said threatening things that made me fear for my safety.

I knew the truth, but I didn't speak up right away, because I did not want to add to the controversy.

MITCHELL: Lucia Whalen, on a lunch break, called 911 to describe what she saw on that front porch in Cambridge, Massachusetts.

WHALEN: I'm not sure if these are two individuals who actually work there - I mean who live there.

UNIDENTIFIED MALE: Do you think they might have been breaking in?

WHALEN: I don't know because I have no idea.

MITCHELL: Just the facts and, contrary to the police report, no mention of race. She said today her parents taught her to be kind to strangers.

WHALEN: I do not judge people based on race, ethnicity, or any other feature, other than their character.

MITCHELL: But when the first African-American president criticized the police -

OBAMA: The Cambridge Police acted stupidly.

MITCHELL: - his political opponents, who have huge followings, were off to the races, and, for the commentators at least, it was all about race.

GLENN BECK, FOX NEWS ANCHOR: This president I think has exposed himself as a guy, over and over and over again, who has a deep seeded hatred for white people or the white culture.

UNIDENTIFIED MALE: Listen, you can't say he doesn't like white people. David Axelrod is white. Rahm Emanuel his chief of staff, right. I think 70 percent of the people that we say every day are white. Robert Gibbs is white.

BECK: I'm not saying that he doesn't like white people. I'm saying he has a problem. He has a - this guy is, I believe, a racist.

MITCHELL: Fox News said that was Beck's personal opinion. But then there's Rush Limbaugh.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Let's face it, President Obama is black, and I think he's got a chip on his shoulder.

MITCHELL (on camera): This is happening while right wing bloggers and talk radio hosts are also challenging whether Barack Obama is even a natural born American, ignoring all the evidence that he is. Their underlying reason, many say, the president's race.

(voice-over): So even though Barack Obama's election was a milestone for the country, we have a long way to go.

COLIN POWELL, FMR. SECRETARY OF STATE: It isn't quite post-racial. We still have conflicts between African-American citizens, especially males, and the police department. And we shouldn't wave that away or in any way minimize that kind of problem.

MITCHELL: Raising the question whether we live in a post-racial America in life or politics.

Andrea Mitchell, NBC News, Washington.

(END VIDEOTAPE)

DEAN: Joining me now is the Pulitzer Prize winning columnist for the "Washington Post," Eugene Robinson. Good evening, Gene.

EUGENE ROBINSON, "THE WASHINGTON POST": Good evening, governor.

DEAN: Gene, I had two African-American roommates when I was in college, my freshman year, the year Martin Luther King was assassinated and Bobby Kennedy was assassinated. It took us a year to listen to each other's narratives, understand each other's narratives, and begin to trust each other. Today, we're still friends.

How can we possibly hope that this problem is going to be solved over a beer in the White House?

ROBINSON: Well, it's not going to be, governor. You know, we've been working on race in this country since 1619. It is now 2009. So it's not going to happen over one beer. But this is how the discussion happens, I think. We say we would like to have a full and frank and comprehensive discussion about race in this country. I've written that. I've said that.

But I've come to realize that that's not going to happen. We're not all going to sit down in a classroom. We're not all going to be able to sit in the same dorm room and exchange narratives in that way. But what happens is an incident like this one happens, and it's an incident with a lot of layers, and a lot of levels, and a lot of angles, and compelling personalities. And in this case we're fortunate, an incident in which the only thing - only feelings and dignity got injured, but no one was hurt. There is no tragedy we have to talk about.

But it's a compelling story. We look at it in different ways. And at the heart of it are unprovable propositions. I believe that if a white professor had been involved, there would not have been an arrest. Others don't believe that. I cannot prove it, unless I can get somebody like Larry Summers to participate in an experiment for me, and we can see where we can run it.

But these propositions are unprovable. And so we talk about it and we are really talking about our own feelings and our own experience of race and our own prejudices. And it's a good conversation.

DEAN: In many ways, that's the whole point though. We've got to get people to listen to each other's feelings. Maybe there's racism here. Maybe there isn't. I think most of us are now inclined to believe that maybe there wasn't. But no matter what, it's not whether there was or wasn't racism in this particular incident. It's you have two reasonably well respected people, one very well known, one not so well known, who have different narratives behind their whole history that caused this kind of problem. How can we get at those narratives? And how can we listen to each other's narratives, so we can understand each other?

ROBINSON: Well, we can put them out there. And, you know, we can't make people listen who don't want to listen, who aren't of a mind to listen. But, you know, I'm writing about it. Others are writing about it from different points of view. I do not believe that the flame throwers like Glenn Beck and Rush Limbaugh are constructively contributing to the conversation. But I do think enough people are paying attention to the story that, you know - again, you don't get all the way there on one story in one week.

But I guess I'm optimistic, because I just think this is such a multi-layered story, in which you have not just race, but class and power and all sorts of things that have been happening in our society, that make it different from what it was 30 years ago.

DEAN: One of the most interesting things to me about this was watching President Obama, who has really been above the racial tension in this country for a long time. For the first time, he seemed to kind of go into the narrative of the black community, the black male, who was historically and has been historically the target of abuse by white police. We think - I think it's getting better. I'm an optimist. It was so interesting to see the president of the United States of America say that, realize he shouldn't have said it, and now react by trying to get the conversation started in a constructive way.

ROBINSON: Governor, I don't know. I don't believe I know a - personally know a black man in this country who does not believe that race was somehow involved in the fact of the arrest, who believes that, all other things being equal, had it been a white professor, an arrest would have taken place. I'm sure there may be people out there who do.

And again, this comes from history. It comes from experience. It is not provable. But it's strongly - it's a strongly held belief.

DEAN: Is there anything to be done about the kind of - you can laugh at Glenn Beck and Rush Limbaugh, but they are inflaming things and making them much, much worse. Other than being punished at the polls, which they clearly will be by the under 35 generation that elected Barack Obama in the first place, what do you do about that? It's not just harmless stupidness. It's really dangerous incitement.

ROBINSON: It is dangerous incitement. And I don't know what you do about it, because I'm not a believer in some sort of new fairness doctrine. You know, I believe in free speech. I believe that there is a marketplace of ideas and rotten, putrid ideas ought to, you know, be discarded.

But I take your point. It is a problem. Here's one thing I've been curious about: where are the principled conservatives who believe in individual rights, who oppose intrusive police power, for example, or the abuse of police power? Wouldn't it be smart politically for a few conservatives to come out on the side of Professor Gates and say, you know, he may not have acted well, but the man was in his own house and shouldn't have been arrested.

DEAN: If they're ever going to recover, they are going to have to learn that. Eugene Robinson, Pulitzer Prize winning columnist of the "Washington Post," thank you so much for your time. That does it for Wednesday edition of Countdown. Up next on MSNBC, "THE RACHEL MADDOW SHOW." I'm Governor Howard Dean, in for Keith Olbermann. Thanks for watching.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END