'Countdown with Keith Olbermann' for Thursday, January 8
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Guests: Howard Fineman, Chris Cillizza, Chris Hayes, Margaret Carlson

KEITH OLBERMANN, HOST (voice over): Which of these stories will you be talking about tomorrow?

Lingering for years: The president-elect's prediction about the recession if Congress doesn't give him a stimulant to inject into the economy.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT: I'm asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed.

NANCY PELOSI, (D) HOUSE SPEAKER: We can't go home without an economic recovery package and we won't.

(END VIDEO CLIP)

OLBERMANN: Speaker Pelosi says it will be passed by the 16th of next month.

The would-be senator, Roland Burris, is now celebrating nine days Blagojevich-free. His testimony to the Illinois House committee, he said (ph) to impeach the governor his first step into the Senate.

(BEGIN VIDEO CLIP)

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL: In the conversation with the governor - he was praising my background and experience in Illinois because there's nothing written in any transaction.

(END VIDEO CLIP)

OLBERMANN: No way on Sanjay. Congressman John Conyers and economist Paul Krugman protesting the nominee for surgeon general, partially for his error-filled trashing of Michael Moore's movie, "SiCKO."

Worsts: Her candidate did not win so Michelle Malkin claims the Minnesota canvassing board was corrupted by Democrats, even though it consist of one Democrat, two independents, the former state Republican Party lawyer and the Republican governor's ex-law partner.

And, Palin comparisons - the governor at her craziest yet. Caroline Kennedy isn't getting treated the way she was because of the, quote, "class," unquote, to which Kennedy belongs and evidently, which Palin thinks she herself is not.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, (R) ALASKA: And I think as we watch that we will - perhaps we'll be able to prove that there is a class issue here also.

(END VIDEO CLIP)

OLBERMANN: But wait - there's more. Tina Fey and Katie Couric are, quote, "exploiting" her, and about Couric's surprise that nobody followed up on her question about which newspapers the governor read.

(BEGIN VIDEO CLIP)

PALIN: Because, Katie, you are not the center of everybody's universe.

(END VIDEO CLIP)

OLBERMANN: But wait - there is still more. Quote, "When she saw the

photo of Keith Olbermann, she literally let out a shriek and, pointing to

his photograph, declared, 'That guy is evil.'"

(LAUGHTER)

Sorry.

All that and more: Now on Countdown.

(on camera): Who me?

Good evening. This is Thursday, January 8th, 12 days until the inauguration of President-elect Barack Obama.

Throughout the transition - the American economy plunging ever deeper into crisis - the reality that the nation has only one president at a time and it is not yet Obama. Never seeming more prohibitive or surreal than this morning - when, in our fifth story on the Countdown: The president-elect taking the extraordinary step of giving an address to this nation before he takes office, warning that without swift and dramatic action, the American economy could be mired in recession - or worse - for years to come. It is still the economy, stupid.

On the day he was officially confirmed by Congress as the winner of the 2008 presidential election, with an electoral vote for every day on the calendar, incidentally, Mr. Obama saying that if nothing is done, the unemployment rate could reach double digits.

(BEGIN VIDEO CLIP)

OBAMA: The consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes and confidence in our economy.

(END VIDEO CLIP)

OLBERMANN: In pushing his stimulus package, the president-elect making clear that he believes government isn't the problem, it's the solution.

(BEGIN VIDEO CLIP)

OLBERMANN: Only government can provide the short-term boost necessary to lift us from a recession this deep and severe. That's why we need to act boldly and act now, to reverse these cycles.

(END VIDEO CLIP)

OLBERMANN: And the president-elect, of course, recognizing he cannot do it alone.

(BEGIN VIDEO CLIP)

OLBERMANN: For every day we wait or point fingers or drag our feet, more Americans will lose their jobs, more families will lose their savings, more dreams will be deferred and denied - and our nation will sink deeper into a crisis that at some point we may not be able to reverse. That's why I'm asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks.

(END VIDEO CLIP)

OLBERMANN: In Congress, Speaker Pelosi is saying that the conditions are finally right for a change.

(BEGIN VIDEO CLIP)

PELOSI: We have a big, strong, something like a 80-vote majority in the Congress, in the House. We have a Democratic president in the White House. His economic recovery package almost sight unseen is supported by 79 percent of the American people.

(END VIDEO CLIP)

OLBERMANN: So, that swift action the president-elect is looking for, the anticipated timeline he gave earlier this week of a bill by late January or the first week of February - that won't be a problem, right?

(BEGIN VIDEO CLIP)

PELOSI: We will have a bill before the president's recess. If we don't have a bill before the president's recess, there will be no president's recess.

(END VIDEO CLIP)

OLBERMANN: The president's recess as in Presidents Day, as in scheduled to start on the fierce urgency of February 14th, just 37 days from now, only 25 days after the inauguration. Part of the problem, the price tag of what President-elect Obama is asking for - at least $800 billion that would pay for the construction and repair of roads and schools, double alternative energy production in three years, and generating the most controversy it would offer - tax cuts to families and businesses, despite the tax cuts Republican lawmakers, like the minority leader, Mr. Boehner, suddenly finding religion on deficit spending after eight years of rubber-stamping this nation into the Bush poorhouse.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R-OH) HOUSE MINORITY LEADER: $800 billion to $1 trillion package on top of the deficit we have, you are adding an awful lot of weight to the debt. We can't buy prosperity with more and more government spending.

(END VIDEO CLIP)

OLBERMANN: Time now to call in our own Howard Fineman, senior Washington correspondent for "Newsweek" magazine.

Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: Democratic senators met today with Obama's economic advisor. Tom Harkin, who said after the meeting, "I'm a little concerned by the way Mr. Summers and others are going about this. It still looks a little more to me like trickle down." Senator Kerry, Senator Conrad, Senator Wyden, also expressed some skepticism about the tax credit proposal.

If the Democrats are equating the Obama plan to the supply side of economics of Reagan and early Bush years that principally got us into this mess, is this stimulus package already in some trouble?

FINEMAN: Well, I think that part of it may be, Keith. Talking to the people who were there, Larry Summers, who used to be treasury secretary in the Clinton years and who is, clearly, going to be a major voice in the Oval Office with President Obama on economic policy went up to the Hill and he got an earful from Democratic senators. They don't like the business tax credit for hiring new employees. A lot of senators think it is inefficient, they think it's wrong policy, and it does smack of trickle down and they let Larry Summers know it.

And Summers who is used to leading the class, had to be the pupil, and sit and listen. Now, that doesn't mean that it's dead by any means, even that tax provision. But it just shows you that Obama's going to have some sales work to do up there.

OLBERMANN: Is that why the president-elect did not outline a lot of specifics in that speech today, that this is more about politics than it was about policy, the intent here to get Congress in line, if not necessarily signing on a specific dotted line?

FINEMAN: Yes, I think so. I think what he was doing was giving an address to the nation that will deal with some of the specifics of the economy in a way that he may not when he gets into the poetry of Inauguration Day of January 20th. But I don't know that it lit any additional fires up on the Hill, because they're waiting for the specifics. As one Democrat told me on the Hill, "Look, we are talking about a huge amount of money here. We want to know what's going on."

And the irony is that the Democrats who, in many ways, you talked about Boehner of the Republican Party rubber-stamping Bush, the Democrats sometimes did the same thing. Now, the Democrats feel emboldened to run things from the Congress and they're going to take in a way they didn't during the Bush years, and they may try to take that newfound institutional spirit out on Barack Obama, their fellow Democrat.

OLBERMANN: All right. So, assess this. The speaker said February 14th, 15th, 16th - is she, even in that time frame is she realistic?

FINEMAN: Well, she may be. I mean, Harry Reid is saying the same thing. He is saying that same February weekend about a month after Inauguration Day. By the standards of the Congress, that's almost instantaneous.

But I have covered the Hill a long time, Keith, and I can tell you, whatever timetable they give you, double it. If they're saying 25 days, it means 50 days. And I'll say this on behalf of Harry Reid, the Democratic leader. He's telling his colleagues, "Look, we want 70 or 80 votes. We want a good hunk of Republican votes, not just the Democrats."

If they're aiming for that, that means it could take longer in the Senate.

OLBERMANN: Our own Howard Fineman, also, of course, of "Newsweek" magazine - thanks, as always, Howard.

FINEMAN: Thank you, Keith.

OLBERMANN: Speaking of the urgency of kind of now, the first vote towards the impeachment of Illinois Governor Rod Blagojevich and thus, the first unofficial vote endorsing the Senate prospects of Roland Burris, unanimous today, by an Illinois House committee. The vote next moves to the full Illinois legislature. The decision coming near hours after the Blagojevich's potential last ever appointee testified about how he happened to be handed the job of junior senator for Illinois.

Mr. Burris telling the impeachment panel at the State House that he never knew of any pay-to-play schemes involving Senator Obama's seat and that he did not speak to the governor about his desire for the seat until after charges had been filed against the governor. But he did mentioned his desire for the seat if it opened to one of Blagojevich's chief aides Lon Monk.

(BEGIN VIDEO CLIP)

BURRIS: I recall having a meeting with Lon Monk about my partner and I trying to get continued business and I did bring it up - it must have been in September or July, maybe it was in July of '08 - that, you know, if you are close to the governor, you know, let him know that I am certainly interested in the seat.

(END VIDEO CLIP)

OLBERMANN: The acknowledgement of that discussion and apparent contradiction to Mr. Burris' sworn affidavit sent to the committee three days ago, which read in part, "There was not any contact between myself or any of my representatives with Governor Blagojevich or any of his representatives regarding my appointment to the United States Senate."

A Democratic aide, tonight, is telling the "Huffington Post" that the discrepancy should make the Senate take a harder look at the Burris appointment. Senate Majority Leader Harry Reid's office is telling Countdown tonight that they will review the testimony and decide how to move forward.

Joining me now: "Washington Post's" White House reporter, Chris Cillizza.

Good evening, Chris.

CHRIS CILLIZZA, WASHINGTON POST: Good evening, Keith.

OLBERMANN: The majority leader said, Burris needed to remove any stain of impropriety from this appointment by this, at least, controversial governor. So, how big of a problem is this discrepancy about that, if it ever opens up an "I'm interested" line?

CILLIZZA: Well, we don't know yet. I think we're a little too close to what's happening. I did a little bit of reporting when I heard about this and I got the same response that you guys got from Harry Reid's office, which is "Well, we are going to wait and see."

It is not great. I think it slows the momentum. It clearly looked yesterday, two days ago, like this thing was moving in Roland Burris' direction. That he was going to eventually get this appointment. That's going to slow the momentum.

It also may give Harry Reid a few pats on the back because if it comes out that Roland Burris did, indeed, have more contact than we thought with Rod Blagojevich or Rod Blagojevich's representatives about the seat, then Harry Reid will look like a genius for barring him from the Senate. So, your political fortune can change very quickly in this town.

OLBERMANN: Yes. So, saying that he never heard of any pay-to-play, that he had never approached or been approached by the governor's office about the job before December 26th, that he hadn't spoken to anybody from the governor's office since they announced the appointment - is there more he can do than this now that he's testified to that committee in Illinois?

CILLIZZA: No. My guess is, Keith, is that we'll go through the process that Harry Reid and Dick Durbin outlined after they met with Roland Burris - which is that this matter will be referred to the Senate Rules Committee and then for a vote in front of the full Senate. Now, a vote in front of the full Senate is important because - remember, Republicans have been dining out on this whole thing for quite a while now, saying Roland Burris is nothing but, you know, Rod - he's got to taint of Rod Blagojevich on him. There is a little evidence there.

Now, do any Republicans, if it does come to a full vote, do any Republicans vote to seat Burris and how many Democrats vote not to seat him? It could be fascinating thing. And again, the biggest thing, it distracts from the pushing of Barack Obama's agenda that you and Howard were just talking about.

Barack Obama doesn't want to talk about whether Roland Burris should be a senator or not. He wants to talk about economic stimulus, health care, energy, anything probably but Roland Burris.

OLBERMANN: What was it? One of Nixon's attorneys, Leonard Garment, said when Spiro Agnew was fighting impeachment as vice president, that he didn't want - he wanted him to quit, go away because he just didn't want that word "impeachment" in the air.

CILLIZZA: That's right.

OLBERMANN: And here's vote about whether or not somebody should be admitted to the Senate when the Democrats are trying to get somebody who have had a 225-vote margin from Minnesota. Are the two things interrelated by any stretch of the imagination?

CILLIZZA: Well, you know, Harry Reid, I'm sure, would wish that the Roland Burris and Rod Blagojevich thing had not come along just as they were - as Al Franken, all of a sudden, went up 225 votes, because it t makes it hard to seat Al Franken. He is not certified. Governor Tim Pawlenty would have to sign that. He's not going to sign it because there's an election contest, likely 30, 60 or 90 days before we get a decision on that.

So, remember, this puts, if they don't seat Roland Burris, this put them down two seats at least. You've got things like the Employee Free Choice Act; Republicans call it "card check." You got a lot of votes. So, it's going to be very, very close. They are going to need all of those 59 or 60 votes.

OLBERMANN: Lastly, as if the governor is just trivia here. Is he done after this vote today?

CILLIZZA: I believe he is. You know, a lot of people say, "Well, where is the legal case against him?" And again, this is a different - this is not a legal proceeding in the state legislature. This is basically: should we impeach him? Has he done thing to disgrace the office of governor? My guess with that unanimous vote, is you're going to get a yes answer sooner rather than later.

OLBERMANN: Chris Cillizza of the "Washington Post" - as always, Chris, great thanks.

CILLIZZA: Thank you, Keith.

OLBERMANN: Meantime, the message from Congressman John Conyers and prominent advocates of universal healthcare to Surgeon General-nominee Sanjay Gupta, "Don't give up your day job."

And, Governor Sarah Palin has been off the wall so often that you get numb when you are told, "You won't believe what she said now." But honestly, you won't believe what she said now, trashing Caroline Kennedy, Tina Fey and Katie Couric, and in the words of the right-wing filmmaker who witnessed it, shrieking and yelling "That guy is evil" when shown a picture of - me. Ah, shucks, ma'am. It weren't nothing.

(COMMERCIAL BREAK)

OLBERMANN: Maybe they should have nominated Rick Sanchez. Sanjay Gupta's selection as surgeon general is protested by a Nobel laureate and a senior Washington Democrat.

And even for Governor Palin, it was unbelievable. First, she said that Katie Couric interviews were fine by her, then she reportedly claimed she'd been forced to do them by the McCain campaign, and then she denied that report and blasted the media for it. And tonight on camera, she's gone back to blaming her own campaign's media handlers.

You may want to record this - ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Some conservative bloggers are grumbling about CNN's Sanjay Gupta as surgeon general, annoyed with his reporting on John McCain's health records, fact checking his reporting on Reagan's AIDS record.

Our fourth story is not that, but now a leading Democrat, Congressman John Conyers, who's asking fellow Democrats to petition President-elect Obama against nominating Doctor Gupta. One reason, Conyers says, questions about Gupta's experience and even medical background - now, Gupta is a practicing neurosurgeon - for leading the 6,000 physicians of the U.S. public health service.

Conyers is saying, quote, "Clearly, it is not in the best interest of the nation to have someone like this who lacks the requisite experience." Conyers citing the complaints of economist and occasional Countdown guest, Paul Krugman, who wrote this week to appointing Gupta as, quote, "Just another example of a lack of accountability when someone," Gupta in this case, quote, "gets something wrong in a socially acceptable way."

What did Gupta get wrong? In 2007, he decided to fact check the Michael Moore documentary, "SiCKO" and reported that Moore fudged the facts; that parts of his advocacy for universal healthcare were, quote, "not true." Moore, another occasional guest here, pushed back hard - to nobody's surprise - getting Gupta to admit at least one mistake in his report and another in later discussion of it.

Moore also got a lengthy online response from CNN in which the network failed to prove even a single falsehood for Moore. Instead, it quibbled with him about how he selected the data he compared.

Joining us right now about this, Chris Hayes, Washington editor of "The Nation" magazine.

Chris, good evening.

CHRIS HAYES, THE NATION MAGAZINE: Good evening, Keith.

OLBERMANN: John Conyers, he's in the House as I recall. Gupta's confirmation would be in the Senate. What is Conyers doing and why?

HAYES: So, the context for this is single-payer and a bill that its proponents called "Medicare for all." And John Conyers, along with Congressman Pete Stark from California, they are the two most outspoken advocates for it. Every session they introduce, they co-sponsor a bill that would essentially institute something similar although different in certain crucial ways to a Canadian single-payer style public health system in the United States that would essentially use the current Medicare model and expand it and allow anyone to join Medicare.

Conyers - and for Conyers, this is one of the issues that he is most passionate about for which he advocates most strenuously. And so, the context for this is that Gupta going after Moore was on that specific issue. Moore, himself, in "SiCKO" advocates for exactly the kind of national healthcare program that Conyers feels so strongly about. And I think that's really the sort the subtext of this.

OLBERMANN: "Huffington Post" headline today, banner headline, "Dr. No." A contributor from your magazine, Trudy Lieberman, wrote for the "Columbia Journalism Review," that the Gupta coverage had glossed over significant problems with McCain's healthcare plan. When you add that to Conyers and Krugman and Moore, are Gupta's potential problems with the left significant, and given the nature of the process by which he will be confirmed, do they matter?

HAYES: Well, I guess I should take the second question first - which is, unfortunately, I don't think they will. I mean, partly because in the realm of the amount of fights there are going to over healthcare, I think this ranks fairly low down in everyone's priorities. The political capital people are going to want to extend on the actual legislation when healthcare reform rolls around.

So, I don't think there is going to be a massive rallying around using political capital to block this specific, somewhat symbolic nomination, although he does have a significant role in sort of overseeing these 6,000 physicians. I do think that there are problems that people on the left are starting to express. And if you monitor the blogs and you read commentators, like my colleague, Trudy Lieberman, obviously, Paul Krugman, that people are really - they haven't forgotten the Michael Moore moment.

OLBERMANN: Paul's big problem is also fascinating by itself, that there's .

HAYES: Yes.

OLBERMANN: . the Washington culture in here, that if you are on the inside, you're nice, you are presentable, it doesn't matter if you were wrong on healthcare, deregulation, Iraq war, you will get the big advisor job while those, you know, crazy left-wing nuts who are actually .

HAYES: That's right.

OLBERMANN: . right and right in facts and right in their predictions, are frozen out. Is that - is that a critique? Is Gupta the poster doctor for this?

HAYES: Yes, that's exactly right. And, in fact, that, I think, if there's a central frustration that people, I think, on the left feel about what - the sort of pieces falling into place around the transition, it is that. While a lot of the kind of old ways of thinking about governance and a lot of the old ways of thinking about the economy specifically, and the role of government, are crumbling around us. It's basically the same sort of establishment permanent governing class that's going to kind of lead us into this new era.

And so, there is a real frustration because the Washington establishment has this tendency to demarcate very strongly what's within the acceptable bound of discourse and what's outside of it. And that moment with Gupta and Moore, a lot of people felt like it was one of those moments in which the establishment was demarcating single-payer and Michael Moore as somehow outside the bounds of the discussion we are having, and that's what really frustrates people.

OLBERMANN: Chris Hayes of "The Nation" - as always, great thanks, Chris.

HAYES: Thank you, Keith.

OLBERMANN: From Gupta to GuGu, Beijing's most inhospitable panda attacks another human being.

And Billo declares a, quote, "security alert" because Leon Panetta is nominated to run the CIA. Security alert is usually reserved for when somebody has recorded Billo's phone calls with his producers. Worst Persons is ahead.

You are watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: Bests in a moment. Wait until the president-elect finds out who his latest appointment's grandfather was.

First, on this date in 1935 was born Elvis Presley, blah, blah, blah, sing, blah, blah, hips, blah, blah, blah toilet. Besides all that, Elvis' birthday means other deserving January 8th babies do not get their due. So, Happy Birthday to Steven Hawking and the great CBS newsman, Charles Osgood and the great former NBC newsman, Sander Vanocur, and the immortal comic, Soupy Sales. As white fang would say - (INAUDIBLE).

We begin in Beijing, where the last few years have been particularly bitey for GuGu the giant panda. 2007 it was when a drunken tourist got in to his pen and tried to hug the bear and was bitten. Last October, GuGu bit a teen intruder.

And this week, GuGu got-got another one-one. A fellow's kid dropped a toy into GuGu's pen. When daddy went in after it, GuGu gnashed on his leg.

The following is the lead paragraph from the "Associate Press" story about the attack: "Officials at the Beijing zoo are considering changes to keep visitors away from GuGu the Panda. It seems to me like an overreaction. But also, you might want to get GuGu a tube of preparation H. That could make him a less irritable.

In much cuter monochromatic animal news, this year, this is a litter of 18 Dalmatian puppies. In Leicestershire, England, and never mind what the Disney people say, this - this is the record crop of spotted dogs. Cruella Deville was reportedly headed to the scene in hopes of getting a new coat but in turns she had invested heavily with Bernie Madoff.

Now for some real laughs. Sarah Palin complains that the media is not treating her with kid gloves like they are Caroline Kennedy because of which social class each belongs to. When was the last time you heard somebody complained about social class? And she complains that Tina Fey and Katie Couric are exploiting her and she shrieked "That guy is evil" when she saw a picture of, well, guess who? This story is ahead.

But first, time for Countdown's Top Three Best Persons of the World.

Number three: Best smart cab driver. Harold Webb of Toledo, Ohio, he thought that it was a little odd that a guy hailing from an alley near a restaurant at 7:30 in the morning wanted to load up some luggage, several boxes of liquor, three flat screen TVs, which he claimed he was transporting on behalf of the restaurant's owner at 7:30 in the morning. When, a $20 ride later, they arrived at passenger Daniel Stanridge's destination and Stanridge declared he only had nine bucks, but would happily give Mr. Webb some of the TVs as payment for the fare, that is when the alert Mr. Webb realized his cab had became the getaway car and he called the cops.

Number two, President-Elect Obama, the Chicago White Sox fan. As you know, he yesterday appointed a new chief performance officer, as a kind of general auditor of the federal government, Nancy Killefer. It turns out Nancy Killefer has a close family tie that should make any real White Sox fan suspicious of her, perhaps even downright hostile. Her grandfather, reports the Society for American Baseball Research, Bill Killefer, also known as Paw Paw Killefer and Reindeer Bill Killefer, was a catcher for and then for five years manager of the hated Chicago Cubs.

And number one, best public service suggestion, Ricardo Jaral, the director for conservation of public spaces for Mexico city. Tired of gum stuck to the streets, he says, he has asked city residents that when they are done chewing, instead of throwing it on the side walk that they swallow their gum. This has outraged physicians around the world, who say, especially for kids, swallowing chewing gum can lead to intestinal blockage. Mr. Jaral responded he has always swallowed his gum and it's never done him any harm and then he keeled over in agony. I made the last part up.

(COMMERCIAL BREAK)

OLBERMANN: Since the mainstream media - hi - has recently blasted Caroline Kennedy for her frequent use of the verbal crutch "you know" in interviews, and since Governor David Paterson of New York now says that Kennedy's lack of elected experience does not help her, and since a new poll shows that Kennedy's support among New York Democrats is lagging, it is curious, in our third story in the Countdown, that Governor Sarah Palin of Alaska has now suggested that she and Ms. Kennedy have been treated differently by the media because of which class, her term, each belongs to.

The governor was given free rein to offer all manner of jaw dropping answers to soft ball questions posed by a right wing former radio talk show host, failed sports caster, one time would be O.J. Simpson assassin, and so-called documentarian John Ziegler. More on that interview and how Katie Couric, Tina Fey, and I wound up in it later in the news hour.

But on the question of "did media class bias cause a Sarah Palin/Caroline Kennedy double standard, the governor answered thus.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: I have been interested also to see how Caroline Kennedy will be handled, and if she will be handled with kid gloves, or if she will be under such a microscope also. It's going to be interesting to see how that plays out. I think as we watch that, we will perhaps be able to prove that there is a class issue here also that was such a factor in the scrutiny of my candidacy, versus, say, the scrutiny of what her candidacy may be.

(END VIDEO CLIP)

OLBERMANN: Even though she didn't have a candidacy, since she is not, in the traditional sense, a candidate running for office, nor was she seeking the number two job in the land. Nevertheless, the media scrutiny of Kennedy has clearly taken a toll. A recent survey from Public Policy Polling finds New York Democrats favor Andrew Cuomo over Kennedy for the job 58 to 27 percent, and the governor of New York, David Paterson, who obviously will make this appointment has now said, Kennedy's, quote, lack of elected experience does not help her. He describes it as a minus in his consideration of ten to 15 good candidate.

Let's bring in Bloomberg News political columnist and the Washington editor of "The Week Magazine," Margaret Carlson. Good evening, Margaret.

MARGARET CARLSON, BLOOMBERG NEWS: Good evening, Keith.

OLBERMANN: Just when we thought Governor Palin had run out, her new champion, John Ziegler, who says he is dedicated his life to her in some sort of non-creepy way, he raises the specter of class bias and the governor just takes off with it. This is certainly a strange thing. I meant this, when was the last time there was an issue of what class somebody belonged to in any race in this country, in any direction, up or down?

CARLSON: Well, the Republicans use the word elite as code for class warfare. Sarah Palin makes a couple of comparisons that are completely inept. First of all, Caroline Kennedy has gotten tremendous scrutiny, unlike others who are competing, or not competing, for the appointment to replace Hillary Clinton. She's the one that's gotten all the scrutiny.

Also, listen, there are a lot of inadequate people in the Senate and the world gets by. But if you are running to be a heartbeat away from a 72-year-old, four-time cancer survivor, I think you deserve a fairly high level scrutiny. She came into the game, I think, actually with a lot of praise right after that convention speech. She brought a lot of things with her, Trooper-gate, charging the government for nights staying at her own house, trying to get librarians fired.

She had a record which also raised a lot of questions. So on the merits, there is a difference between the two people.

OLBERMANN: And given what's happened in sort of the graph of the Caroline Kennedy appointment candidacy, if her name drew her enormous attention, did it not seem to turn into enormous critical scrutiny pretty quickly? Could you not actually sit there and say maybe class worked against her, not for her?

CARLSON: Well, it's definitely a two-edged sword. She might be on the short list because of being a Kennedy. She certainly got more criticism because of it. I know lots of people, including myself you know, who have the verbal tick, you know. If you have raised a teenager, as I have, you go through a period where it is a really, really a bad affliction.

Listen to Sarah Palin. Go back to listen to the second debate, when she's doing - or the first debate, when she is doing you betcha, which is not a verbal tick. It is a theatrical thing to try to be in a class that who knows if she is in it, with multiple winking. This is not the behavior of somebody who's got a verbal tick. This is somebody who is trying to play to a certain group in society, I think that -

By the way, at a time when the country was moving to the center and the left, I think Sarah Palin was playing, much more than John McCain, to a group way on the right that was anti-intellectual and anti-smart.

OLBERMANN: Speaking of playing to, there is something confusing about this, and we will hear a lot more of this interview later on, but she sold a kind of rugged frontier individualism, along with the usual Republican lines about individual responsibility, individual this, government out of that. Why is she willing to latch on to any excuse that she can - that is offered to her, sexism, the media's fault, class warfare, elitism, left-hander versus right hander? I mean, it is almost everything.

CARLSON: The media is an equal opportunity destroyer. I don't think you can accuse the media of class bias. I think there is a bias towards having smart people, especially after eight years of George Bush. But there is a grievance card that the Republican party pulls while they are saying that they don't believe in groups interests. Just as when something bad happens to me, I would prefer it to be not because it is me, but because of some bias against women. Then it is impersonal and you can deflect it.

That is what goes on with Sarah Palin. She needs somebody else to blame. Now it is classism in America.

OLBERMANN: Oh, and Tina Fey and Katie Couric and me.

CARLSON: And you, Keith. Congratulations.

OLBERMANN: Thank you. I have been validated. Margaret Carlson of Bloomberg News and "The Week Magazine," who is not as evil as I am, great thanks, as always.

CARLSON: Thanks, Keith.

OLBERMANN: Wait, it gets better and better. Katie Couric edited and spliced their interview to make her look bad. Of course, she has never seen the interview. And then there's yet another new story about whose fault the interview that she even did the interview.

Also, did you know everybody now agrees the New Deal failed, everybody. Apparently, Brit Hume held a vote. It was unanimous, FDR sucked, ahead in worst persons.

When Rachel Maddow joins you at the top of the hour, Rachel criticized Senator Feinstein for her response to the Leon Panetta nomination. Tonight, Senator Feinstein responds.

(COMMERCIAL BREAK)

OLBERMANN: You have metaphorically heard the chip on her shoulder, now listen to Governor Palin's paranoia. Tina Fey and Katie Couric are exploiting her. And shown a photograph of me, she shouted, that guy is evil. Final piece of my validation, next, but first time for Countdown's number two story, tonight's worst persons in the world.

The bronze to Brit Hume of Fox Noise, now in the rewriting history department over there. "Everybody agrees, I think, on both sides of the spectrum now that the New Deal failed. The debate is over why it failed."

Sure. Everybody, except the most recent Nobel Prize Laureate in economics, Paul Krugman, who just wrote that the New Deal's long term achievements remain the bedrock of our nation's economic stability, and except for probably a majority of economists, economic professors. But Brit Hume agrees with Brit Hume. That will show that damn Roosevelt.

Runner up, Michelle Malkin, claiming the people conducting the recount in Minnesota were providing, quote, moral support and help to Senator Elect Al Franken and that some of the recounters were involved with Acorn, that some might have had conflicts of interests, that there were shenanigans, because Republicans were completely left out in the cold when it came to the canvassing board.

According to the "St. Paul Pioneer Press," the Minnesota state canvassing board, which conducted that count, consisted of five people, the state's chief justice, a Republican, appointed by the Republican governor, who used to be his law partner, one of the state Supreme Court's associate justices, who used to be the state Republican party lawyer, and was appointed by the Republican governor, one of the state's assistant chief judges, who was appointed by the former governor Jesse Ventura, who was an independent, one of the state's chief judges, who was elected in a non-partisan race, no political parties listed, and to this day refuses to say if she is aligned with any party, and Minnesota Secretary of State Mark Ritchie, the Democrat.

The Republican governor of Minnesota called this canvassing board, quote, fair, and the chief attorney for loser Norm Coleman in November said "the people of this state should feel good about who is on this panel." But Michelle Malkin wants to create the impression that the board of two Republicans, a Democrat and two independents was politically crooked. Why? It didn't fix the outcome the way she likes it, and because she thinks her readers are even dumber than she is.

But, in the winner's circle for the first time this year, it is Bill-O the clown, who has apparently decided to devote the show this year to scaring children, the gullible and those blighted souls who watch his comedy program into believing that a terror attack is imminent. It began last night, with a banner reading Security Alert, while video rolled of the 9/11. This after O'Reilly had claimed, incorrectly again, that limiting interrogation of prisoners to what is in the Army Field Manual would mean no interrogation because, "the Army Field Manual says, quote, you are not to make any captured person uncomfortable in any way."

The field manual says no such thing, nor do the Geneva Conventions, which are quoted in the field manual. Billy also said, "I don't want the 'New York Times' or NBC News calling ideological shots when terror killers want to murder us."

Guess what? Neither does anybody else. Though clearly, neither NBC News or the "New York Times," either one of them could have done worse at protecting us than the Bush administration did in 2001. Bill-O, there's ratings in scaring people, the clown, today's worst person in the world!

(COMMERCIAL BREAK)

OLBERMANN: No one has ever accused Governor Sarah Palin of being deep, but her personality sure is wide and her ability to reveal huge and troubled, yet eternally entertaining parts of it seemingly limitless. In our number one story on the Countdown, you've already heard her complaint that she believes Caroline Kennedy is getting a free ride from the media because of the, quote, class to which she belongs. That was just the start of the governor's latest self-emulation, supporting the contention of right wing propaganda producer John Ziegler that elite media bias kept the governor and Senator McCain out of their rightful positions in the White House.

It began with the blogosphere and it ended with me. But there was one continuous thread, whatever happened, not in a million years was any of it her own fault.

(BEGIN VIDEO CLIP)

PALIN: When did we start accepting as hard news source bloggers, anonymous bloggers especially? It's a sad state of affairs in the world of the media today, mainstream media especially, if they are going to rely on anonymous bloggers for their hard news information. Very scary.

(END VIDEO CLIP)

OLBERMANN: Well, we apparently started accepting bloggers as hard news sources - I'm sorry, forgive me, governor, you apparently started accepting bloggers as hard news sources when you ran with their inflation of Barack Obama's passing acquaintance with William Ayers as, quote, palling around with terrorists. Palin on why the media caused her to lose the election.

(BEGIN VIDEO CLIP)

PALIN: I have the same question you do and others who would participate in this documentary, trying to figure out, is it political? Is it sexism? What is it that drives someone to believe the worst and perpetuate the worst in terms of gossip, lies?

(END VIDEO CLIP)

OLBERMANN: Governor, doing that is called being a conservative. The someone on your side claimed the opposing candidate was a terrorist, not born in this country, a Manchurian candidate, too black, too white, too inexperienced, too politically experienced, too popular, too unpopular, a Muslim, a black separatist theologian and a stoned gay man. Then again, consistency was never part of the plan.

Contemporaneous with her disastrous network news interviews, specifically the Katie Couric self-destructions, the governor said she had no problem with their scheduling. Then it leaked out that she blamed John McCain's people for forcing her to do those interviews. Then she denied she had anything of the kind and blamed the media for lying about her blaming the media. And now she's come back full circle to blaming the McCain campaign.

(BEGIN VIDEO CLIP)

JOHN ZIEGLER, DOCUMENTARIAN: Did you feel as if it had gone well?

PALIN: No. I knew it didn't go well the first day, and then we gave her a couple of other segments after that. My question to the campaign was, after it didn't go well the first day, why were we going to go back for more? Because of however it works in, you know, the upper echelon of power brokering in the media and with spokes persons, it was told me that, yes, we were going to go back for more. Going back for more was not a wise decision either.

(END VIDEO CLIP)

OLBERMANN: The governor coming across as somebody who couldn't pass sixth grade social studies, that was the campaign's fault and Katie Couric's. And how her answers were altered to make her look bad, even though she actually admits she never actually watched the final version CBS aired.

(BEGIN VIDEO CLIP)

PALIN: I never saw the interview after Katie edited it, spliced it together, did whatever they did and aired it. Never saw how it came across. But my understanding is so many other topics that were brought up certainly weren't portrayed as accurately, perhaps, as they could have, should have been.

(END VIDEO CLIP)

OLBERMANN: To paraphrase the governor, when did we start accepting as hard news sources your understanding. Oddly, like the day she claimed she had seen Tina Fey's impression of her, but had not listened to it, because the sound was down on the TV, she now insists she not see an interview she claims was maliciously edited, but she did see a comment Katie Couric made about that interview.

(BEGIN VIDEO CLIP)

KATIE COURIC, "CBS EVENING NEWS": Even in the post election interviews, Dave, that's she done, nobody has really asked her, why didn't you answer that question.

PALIN: Because, Katie, you are not the center of everybody's universe. Maybe that's why they didn't think to ask that question. So many other things to be asked.

(END VIDEO CLIP)

OLBERMANN: True, like why the governor couldn't think of the name of just one Supreme Court decision besides Roe v. Wade. The big news here, the governor finally answered the question about news sources, not about Supreme Court verdicts, trimmed it from all of them to somewhere between four and ten, and it only took her three months and nine days to do it.

(BEGIN VIDEO CLIP)

PALIN: To me, the question was more along the lines of do you read? What do you guys do up there? What is it that you read? And perhaps I was just too flippant in my answer back to her. Of course, I read newspapers. I read publications. I spend a lot of time reading our local papers and the highly circulated publications in Alaska, because that is my job, to know the business of Alaska and our communities. But also "USA Today," yes, and "New York Times."

(END VIDEO CLIP)

OLBERMANN: The marvelous, endless supply of self-pity and anybody but self-blame is not focused on Couric alone. Remembering that during her appearance on "Saturday Night Live," Governor Palin or somebody decided she should not say the self-deprecating line written for her, "I do like her impression of me." Listen to how the pity and the blame are mixed with a new chaser, jealousy.

(BEGIN VIDEO CLIP)

PALIN: Job security is important. My agenda here in the state, I'm just helping those outside of my state also keep their jobs secure. But I did see that Tina Fey was named entertainer of the year, and Katie Couric's ratings have risen. And I know that a lot of people are capitalizing on -

I don't know, perhaps exploiting that was done of me, my family, my administration. That's a little bit perplexing. It says a great deal about our society.

(END VIDEO CLIP)

OLBERMANN: A society which evidently appears to the governor through something akin to beer goggles. It hates her because she's a woman, she's an Alaskan, she's of a, by her own terms, lower class than Caroline Kennedy. But all would have been forgiven by the media, she says, if only one thing had changed, if she had run on the other ticket.

(BEGIN VIDEO CLIP)

PALIN: I think they would have loved me as a candidate. There's so much hypocrisy in it all. It is pretty baffling. But yes, had I been chosen to run perhaps as a reformer on the Democrat ticket, you would have seen an absolutely different and I think, if you will, a much prettier profile of Sarah Palin and the Palin family and my administration.

(END VIDEO CLIP)

OLBERMANN: The triage test of mental health is how correctly you can see others as others see you, how close you come to guessing what others perceive. This is how close Sarah Palin gets: in an era when the difference of what it means to be a Democrat or a Republican is probably greater than at any time since 1864, Sarah Palin can conceive, even hypothetically, about choosing to run for office as either one of them.

Lastly, though, there was one brief moment of clarity. To quote film maker Ziegler's blog, "when she looked at the back cover of my first film, and saw the photo of one of the film's targets, Keith Olbermann, she literally let out a shriek and, pointing to his photograph, declared, that guy is evil."

Joe the Plumber, Tito the Builder, Keith the Evil. Thus am I made whole. That's Countdown for this the 2,070th day since the declaration of mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

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