'Countdown with Keith Olbermann' for Thursday, April 2, 2009
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Guest: Mary Mitchell, Chris Hayes, Howard Fineman

DAVID SHUSTER, GUEST HOST (voice over): Which of these stories will you be talking about tomorrow?

The "Yes, we can" attitude of President Barack Obama takes the G20 Summit by storm.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES: We owe it to all of our citizens to act and to act with a sense of urgency.

(END VIDEO CLIP)

SHUSTER: And act Obama did. Reports tonight that a fight between the French and Chinese threatened to derail talks until President Obama stepped into negotiate an agreement - a challenging environment with so many leaders in the room.

(BEGIN VIDEO CLIP)

OBAMA: If it's just Roosevelt and Churchill sitting in a room with a brandy, you know, that's an easier negotiation.

(END VIDEO CLIP)

SHUSTER: Meanwhile, back at the ranch, the GOP is still trying to take down President Obama. Eric Cantor accuses the Democrats of overreacting to the economic crisis. And Karl Rove - Karl Rove of all people, accuses the president of playing politics.

First comes impeachment then comes indictment. Rod Blagojevich gets the bad news today. But where is he? He went to Disney World. He didn't get the memo: "You go to Disney World when you win."

The disturbing scene from Washington State: An out-of-work dad holds up a convenience store while his daughter looks on.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You call the cops, I'll come back and I'll kill you. I'm out of work. My daughter's got to survive.

(END VIDEO CLIP)

SHUSTER: And what history will remember from the Obamas trip to London? Palace insiders were shocked not by Michelle Obama's behavior but by the queen's. Royal aides say the real headline is the queen touched the first lady in public.

All that and more - now on Countdown.

SHUSTER (on camera): Good evening from Washington. I'm David Shuster. Keith Olbermann has the night off.

As if being the American president were not tough enough these days, but with trying to fix the economy, fighting wars on two fronts and restoring America's image abroad, as if President Obama did not have enough to juggle at the G20 Summit London, it turns out in our fifth story in the Countdown: In his spare time today, the American president kept other world leaders from fighting with each other.

Just reading Mr. Obama's schedule today in London enough to make mere mortals exhausted: 3:00 a.m. Eastern, a sit down with South Korea's president; 3:30, a breakfast meeting with the entire gang; after breakfast, the group got down to business at its first planning session of the day. It was then reportedly that President Obama's skills as a peacemaker were put to the test.

ABC News reporting the French President Sarkozy and President Hu Jintao of China got in a spat over tax havens. Their fight is threatening to tear the summit apart. Obama first pulled Sarkozy aside, urging him to reach a consensus, stressing the importance of working together.

Then, with the help of a translator, Obama and President Hu talked in the corner. After a few minutes, Obama asked Sarkozy to join them. The end result: A compromise in which France and China described as, quote, "meeting in the middle."

Speaking of meetings, Obama's day is nowhere near over yet - 8:25 a.m. Eastern, lunch with the gang. What's that Army tagline, "We do more by 9:00 a.m. than most people do all day"? Nine-thirty a.m., the second group planning session, followed by a meeting with the leader of Saudi Arabia and another with the prime minister of India. More on that in a bit.

President Obama capped his day with a news conference before the world's press. He modestly graded his own performance as - at the summit as OK.

(BEGIN VIDEO CLIP)

OBAMA: I think we did OK. I think that the document that has been produced as well as the concrete actions that will follow reflect a range of our priorities.

(END VIDEO CLIP)

SHUSTER: All appearances and performances to the contrary, President Obama refusing to say whether his trip to London represents a break from the foreign policy of his predecessor.

(BEGIN VIDEO CLIP)

OBAMA: I didn't accompany President Bush on his various summits. So, I don't know how he was operating. And I won't, you know, I won't warrant a guess on that.

(END VIDEO CLIP)

SHUSTER: But Obama's description of how he views leadership hard to view as anything but a comparison to Mr. Bush.

(BEGIN VIDEO CLIP)

OBAMA: We exercise our leadership best when we are listening; when we recognize that the world is a complicated place and that we are going to have to act in partnership with other countries; when we lead by example; when we show some element of humility and recognize that we may not always have the best answer, but we can always encourage the best answer.

(END VIDEO CLIP)

SHUSTER: Not just telling other nations what to do?

(BEGIN VIDEO CLIP)

OBAMA: I do not buy into the notion that - that America can't lead in the world. I wouldn't be here if I didn't think that we had important things to contribute. I just think in a world that is as complex as it is, that it is very important for us to be able to forge partnerships as opposed to simply dictating solutions.

(END VIDEO CLIP)

SHUSTER: Of course, actually listening meant listening to criticism about Wall Street.

(BEGIN VIDEO CLIP)

OBAMA: There were occasional comments, usually wedged into some other topic that indicated from their perspective that this started in America or this started on Wall Street or this started with particular banks or companies. Perhaps what helped was my willingness to acknowledge that - and it's hard to deny it - that some of this contagion did start on Wall Street.

(END VIDEO CLIP)

SHUSTER: The cornerstone of the agreement reached today, a commitment to invest $1 trillion into the International Monetary Fund, money that will prop up the world's poorest economies. President Obama said the long-term success of the rest of the economic agreement is a "We'll see."

(BEGIN VIDEO CLIP)

OBAMA: In life, there are no guarantees, and in economics, there are no guarantees. The people who thought they could provide guarantees - many of them worked at AIG and it didn't work out so well. So there are always risks involved.

I have no doubt, though, that the steps that have been taken are critical to preventing us sliding into a depression. They are bolder than more rapid than any international response that we've seen to a financial crisis. I think the steps in the communique were necessary. Whether they're sufficient, we've got to - we've got to wait and see.

(END VIDEO CLIP)

SHUSTER: At times, President Obama charmed the members of the world's media, including a young reporter from "The Times of India" who was giddy with excitement.

(BEGIN VIDEO CLIP)

OBAMA: I'm going to call one foreigner.

(LAUGHTER)

OBAMA: Actually, I'm the foreigner. That is why I smiled. One correspondent not from America, and then I will - oh, you know, we are not doing bidding here.

(LAUGHTER)

OBAMA: Come on. But I also want to make sure that I'm not showing gender bias. So, this young lady, right here. Not you, sir, I'm sorry.

UNIDENTIFIED FEMALE REPORTER: Hi, Mr. President.

OBAMA: How are you?

UNIDENTIFIED FEMALE REPORTER: Thank you for choosing me. I'm very well. I'm Sumeet (ph) from the "Times of India."

OBAMA: Wonderful.

UNIDENTIFIED FEMALE REPORTER: You met with our Prime Minister Manmohan Singh. What did you - what is America doing to help India tackle terrorism emanating from Pakistan?

OBAMA: Well, first of all, your prime minister is a wonderful man.

UNIDENTIFIED FEMALE REPORTER: Thank you. I agree.

(LAUGHTER)

UNIDENTIFIED FEMALE REPORTER: I agree.

OBAMA: Did you have something to do with that or .

(LAUGHTER)

OBAMA: You seem to kind of take - and take credit for it a little bit there.

(LAUGHTER)

UNIDENTIFIED FEMALE REPORTER: Really proud of him.

OBAMA: Of course. You should be proud of him. I'm teasing. I think he's a very wise and decent man.

(END VIDEO CLIP)

SHUSTER: Time to call in our own political analyst, Howard Fineman, senior Washington correspondent for "Newsweek" magazine.

And, Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Good evening, David.

SHUSTER: Howard, an American president who served to bring world leaders together, instead of driving nations apart, might it be fair to grade his performance at his first summit, the first post-Bush summit as more than OK?

FINEMAN: Well, as your question indicates, David, we are grading on a

curve here to some extent. His first achievement is that he's not George

Bush, but whatever his strengths in other realms, putting people at ease

and getting deals done at summit meetings was not one of them. George Bush

didn't feel at home in them and he didn't know really how to operate in

them particularly. And Barack Obama is utterly at ease in this situation -

that's number one.

Number two, as he said, he was humble. And he used what they call in the law a term called "confession and avoidance." You avoid the lawsuit by confessing your sins. And he said, "It was unavoidable, I had to confess that, you know, we were part of the problem." And I think that was disarming.

I think, also, Barack Obama as a symbol himself is a sign of the future and a hopeful one. Meaning - that he got elected. His wife is first lady. That in and of itself says something about America and our confidence and faith in the future.

As long as I mentioned Michelle, I'll mention her again. Based on all of the evidence and what I've heard as well as what I've seen, she took London by storm and she herself is a very, very uplifting symbol of the country.

SHUSTER: President Sarkozy of France told reporters after the meeting that President Obama really found the consensus and "I wish to thank him for that." Chancellor Merkel of Germany said, "The American president put his hand into this." And she was not talking about shoulder rubs.

Considering that the buzz before the summit was all about France and Germany threatening to walk out - are these no small compliments?

FINEMAN: Well, it's not just that they are saying it, but they're, I guess, confirming the story that came out of the - out of the summit that the president, in fact, did play a role in brokering a deal between two countries, one with, you know, famous for its diplomatic finesse, namely France, and another one, China, with 5,000 years of history. And here the young American president from the relatively young country steps in at a massive summit of 20 countries and gets them literally to talk to each other.

I think the fact that they're putting out that story, not just the United States, but the other countries are supporting it, shows that they want Obama to succeed and shows that whatever they say about the end of the Washington consensus and the end of the American era and all that other stuff that you are hearing, we are in the indispensable nation and our president remains indispensable to any meeting of global scale work, and whether it's the G6 or the G20.

SHUSTER: Besides the $1 trillion to the IMF, is there much else to this agreement and is that why President Obama warned there were no guarantees?

FINEMAN: Well, even the trillion dollars, David, depends on the individual countries following through. They made this pledge here. It's not a treaty. They didn't sign a contract. There's a lot of mutual faith going on here and we'll see what happens.

I think one thing the president is doing is lowering expectations. You know, you remember that "Hope" poster from the campaign, if that poster were being produced again, it would still have Barack Obama's picture, but it would say, "Don't expect a miracle." I think he is lowering expectations both here in the United States, saying it's going to be a long siege and the same around the world. He also wants to set the stage for future meetings.

I think, he's also, though, telling the world and the bears in the markets around the world, that we are going to put a floor under this. The G20 - all the G20 nations are determined to put a floor under this thing. And if they have to get back together not only in September but the following April and the September after that, they're going to do it to prevent a global depression.

SHUSTER: I joked earlier about Obama's schedule vis-a-vis the Army tagline, "We do more by 9:00 a.m. than most people do all day." The scope of what the president set out to do today, this week, is that a break with the foreign policies goals of the Bush years?

FINEMAN: Well, sure. First of all, I can say, having covered him a fair amount during the campaign and here in Washington, he was pretty tired by the time he had that press conference, and by the end of it, he was running on fumes. But he's a young man with a new mandate and an effort to show a new generation taking hold in America by way of restoring our credibility. So, he needs to use the energy and his personality and his confidence.

George Bush, as I said earlier, was never comfortable in these situations. Sometimes behind closed doors, he could try to be when he thought of it as, you know, the old fraternity gang back at Yale.

But Obama is utterly at ease on the stage and utterly at ease behind closed doors. He has a gift for assuming a level of equality, not superiority, but equality with anybody he meets, whether it's somebody on the campaign trail or a head of state from another nation. That's a gift and he's using it. And so far, it looks like he's used it to good effect.

SHUSTER: Howard Fineman of "Newsweek" and MSNBC - and, Howard, thanks as always for your time. I appreciate it.

FINEMAN: Thank you, David.

SHUSTER: Coming up: Michelle Obama's awe-inspiring impact in London from an extremely rare public touch from Queen Elizabeth to today's unbelievable outpouring of emotion from London schoolgirls.

But, first, the breaking news from Illinois: Former Governor Rod Blagojevich got a strong message from a grand jury, he was slapped with a multi-count indictment for trying to sell President Obama's Senate seat and for lying to investigators.

And in true Blago fashion, where is he on indictment day? Disney World. He took time out from the rides to issue a statement. Details ahead on Countdown.

(COMMERCIAL BREAK)

SHUSTER: Breaking news for Rod Blagojevich, although he says he's done nothing wrong, a grand jury disagrees. The former Illinois governor can now add "indicted" to his political resume. We'll bring you the B-Rod's reaction to the charges.

And a horrible sign of the economic times: An out-of-work dad brings his daughter along to a store robbery. What was the clerk thinking as he was held up at gun point? That clerk will join us.

And Michelle Obama's headline-grabbing appearances in London, first the queen returns a friendly gesture; and now today, the first lady nearly brought to tears in an emotional response from local schoolgirls.

That's next - this is Countdown.

(COMMERCIAL BREAK)

SHUSTER: Sad news today for former Illinois Governor Rod Blagojevich and his fans - things just got a lot less funny. Our fourth story tonight: Breaking news out of Chicago this evening, a devastating indictment. Blagojevich indicted on 16 felony counts, along with indictments for his brother, former chief of staff, and businessman.

Just tonight, Blagojevich released a statement asking the people of Illinois to afford him the presumption of innocence, saying, quote, "I'm saddened and hurt but I am not surprised by the indictment. I am innocent."

His indictment lists a lot of wrongdoing anyway, specifically 11 counts of wire fraud, two counts of attempted extortion, one count of racketeering, conspiracy, one count of extortion conspiracy, one count of making false statements.

Among the detailed allegations that last year, Blagojevich decided to provide additional state money to a Chicago hospital if the hospital officers raised $50,000 for him in campaign contributions. The hospital was Children's Memorial. And the money Blagojevich allegedly tried to trade for donations have been budgeted for Medicaid reimbursement of specialty care pediatric physicians.

In broad terms, Blagojevich and his associates explicitly planned to use his public office and others for their financial benefit. Prosecutors are claiming he sold state positions, sold state contracts, all in return for campaign donations, jobs or good old-fashioned checks. Although prosecutors alleged - Blagojevich tried to leverage his authority to appoint Barack Obama's successor in the Senate, there was no suggestion of wrongdoing by the man Blagojevich picked, Illinois Senator Roland Burris.

And Blagojevich himself is not even in Illinois today. According to reports, he is - and we kid you not - checked in at the Saratoga Springs Resort and Spa at Disney World.

Actually, in Chicago tonight is Mary Mitchell, "Chicago Sun-Times" columnist and member of the editorial board.

And, Mary, thanks for joining us tonight.

MARY MITCHELL, THE CHICAGO SUN-TIMES: Thank you.

SHUSTER: The indictment suggests that these were not isolated cases of wrongdoing but a concerted strategic knowing-decision to turn the statehouse into a cash register. Can you amplify or correct me on that assessment?

MITCHELL: I think that's absolutely right. And here's what's interesting. I covered the federal courts in the early 1990s. And this indictment has come down against Blagojevich reads a lot like the kinds of indictments that they had against drug cartels and against drug - and gangbangers. This is a criminal enterprise indictment.

This is an indictment that says not only former Governor Blagojevich was up to no good but he had recruited a whole group of people who are helping him basically defraud the taxpayers. This is an amazing document, 75 pages, fascinating reading. You can't make this stuff up.

SHUSTER: What were the Blagojevich's lawyers be most worried about in this indictment? Is it the detail that you're talking about or the number of people cooperating with prosecutors?

MITCHELL: It's got to be the number of people cooperating, because you have to think that when you see all these names, you talk about John Harris, you talk about Lon Monk, you talk about William Cellini, you talk about all these names that's been mentioned, you can imagine that one by one, they must have been hauled in and were given an opportunity to, you know, do themselves some good by spilling the beans on the former governor.

So, the lawyers for Blagojevich have to be worried exactly what did these guys say and really how much have they given to the feds.

SHUSTER: Mary, what's the Blagojevich defense for all of this?

MITCHELL: Well, his defense is the thing that he continues to say even as he celebrates with his family in Disney World. He will continue to say that I have done nothing wrong. And he's a very, very persuasive person.

You have to remember that these - the jurists are going to be from Illinois. This is, as strange as it sounds, this is not new in Illinois. They've heard of politicians before trying to shake down people for contributions.

And so, Blagojevich is going to basically say that he hasn't done anything more than any other politician has done.

SHUSTER: Finally on that whole Blago outsized personality thing. It was funny for a while, but in light of these charges and the familiarity that Chicago residents have with this kind of stuff, does his personality help him with the jury or maybe hurt him? I mean, I'm sort of wondering if people will resent him for using that stick to cover up some truly slimy deeds if true.

MITCHELL: Well, if true, if the feds are able to prove their case against the governor, I think that what the jurors and the people who are going to be watching this case are going to be totally disgusted. But again, I just have to remind you that this is Illinois. This is nothing new. We have a governor, former governor right now sitting in jail. And Blagojevich in Disney World seemingly having a good time and not worried about what's going to happen to him in the future.

SHUSTER: Mary, any big surprises in Chicago in terms of how everybody there is reacting to this, how the local media and the mood of the city in all of this?

MITCHELL: This was expected. I think the surprising thing for me -

I'm going back to the criminal enterprise that they've gotten down to the point of saying they will take the governor's house. Now, that's amazing. You think about that in terms of, you know, drug deals where they come out and take the Cadillac and the Escalade.

They are talking about taking that same house over on the North Side that the governor was seen going in and out during this whole period of time. So, this is a criminal enterprise indictment. And I think that's what people are going to find most surprising.

SHUSTER: Mary Mitchell of the "Chicago Sun-Times" - and, Mary, thanks as always for coming on.

MITCHELL: Thank you.

SHUSTER: You're welcome.

Coming up: Caught on tape - an unemployed father robs a convenience store while his daughter looks on. We'll talk to the clerk who survived the holdup.

And from serious times to seriously funny - the Oddball "caper of the day" - next on Countdown.

(COMMERCIAL BREAK)

SHUSTER: A big day for Oddball's favorite state today. It was on this date in the year 1513 that Juan Ponce de Leon set foot in Florida, in search of gold and land for the Spanish empire. We also know that the explorer was searching for magical waters that would reverse the aging process.

Ponce de Leon never found the "fountain of youth," but for discovering the state that has provided this segment an endless fountain of wacky fodder, we salute you by saying - let's play Oddball!

We begin, where else, in Florida, in Kissimmee, where a caller to 9/11 is stuck in a car that has lost all power. Of course, with no power for her power locks, she has no possible way to unlock her doors. She would have been trapped forever in her vehicle if not for the quick thinking of this 911 operator. Let's listen.

(BEGIN AUDIO CLIP)

911 OPERATOR: What's the emergency?

UNIDENTIFIED FEMALE CALLER: Hi. I'm in a Walgreen's parking lot and my car will not start. I'm locked inside my car. I cannot open my car. I can't get the windows down. Nothing electrical works and it's getting very hot in here and I'm not feeling well. I need some help.

911 OPERATOR: Are you able to pull the lock up on the door and open the door. You should be able to pull the lock up even if it's electrical.

UNIDENTIFIED FEMALE CALLER: I'm trying. OK. OK, all right, I got that going. OK.

911 OPERATOR: Are you able to get out of the car now?

UNIDENTIFIED FEMALE CALLER: Yes. I got the door open.

(END AUDIO CLIP)

SHUSTER: Staying in the Sunshine State in St. Petersburg, with a home invasion already in progress. The only thing between these two thugs and an easy payday is one locked sliding glass door. And one of the crooks will use his head to solve the problem, literally. Lunges the guy in black, backs up, gets in a three-point stance, and attempts to bash his head through the door. Rejected!

The criminals move to Plan B, chucking a brick through the glass. I myself would have juggled the two plans. Thankfully, an alarm went off when they broke the glass and the thieves made off with nothing.

Finally, to spring training in Arizona, where yesterday the Brewers beat the Diamondbacks. And a fan saved a damsel in distress. Watch as Brewer outfielder Corey Hart tattoos a home run over the wall in left center field, where there is a lawn and a sun-tanning lady on the lawn, and a guy who saved the lady a trip to the ER. You can see the fan snatch the home run out of midair just before it hit the woman. What a catch.

He then hit the deck. She began to figure out what the heck just happened. Our hero went home with a souvenir and a nice grass stain, while the lady got her tan and a new lease on life.

Karl Rove, the architect, the brain of the Bush administration, is now accusing President Obama of using Chicago style bullying political tactics. Is Rove impressed or upset someone is stealing his playbook.

An emotional day for Michelle Obama. The first lady's powerful speech to a group of London students and their overwhelming reaction of support. That and more ahead on Countdown.

(COMMERCIAL BREAK)

SHUSTER: From a president who promised a new kind of politics, it was a damning quotation and a menacing threat, "don't think we're not keeping score, brother." Tonight, in our number three story, Karl Rove has jumped on that line, making it his smoking gun, in an op-ed titled "The President Is Keeping Score; Chicago Politics Has Moved Into the White House."

It all started Monday, when Mr. Obama went to Capitol Hill, asking some 200 House Democrats to support the budget. During the meeting, Mr. Obama spoke with Oregon Congressman Peter Defazio, who had voted against Mr. Obama's stimulus package. "Don't think we are not keeping score, brother," the president said. It was to rove, quote, "a presidential rebuke of Defazio and part of a new hard nosed push by the White House to pressure Congress to adopt the president's budget."

Rove today warned Mr. Obama that such tactics of Chicago politics will alienate Democrats who oppose his massive spending. Is Obama bullying Defazio and other Democrats to spend more money? It turns out Defazio was asking Mr. Obama to spend more, specifically on transportation infrastructure. The president said, "I know you think we need more for that, because he voted against it," meaning the stimulus. "Don't think we are not keeping score, brother," the president added to laughter from Defazio's colleagues.

Later, Mr. Obama told Defazio he was messing with him. The very first sentence in the article Rove himself wrote says Defazio calls it a badge of honor. "He got the message that I wanted him to get. I can vote for the House version of the budget because it increased the funding for transportation."

With us now is Chris Hayes, Washington editor of "The Nation Magazine." Chris, thanks for coming in tonight.

CHRIS HAYES, "THE NATION": Thank you, David.

SHUSTER: This Moakley that Mr. Obama is targeting Democrats who are balking at the budget; "Congressional Quarterly" story about the meeting was, quote, House Democrats perceptive to budget Obama's pitch. What is the fact checking on Mr. Rove's thesis here?

HAYES: It is a strange example for him to pick, because it is the one place in which Obama was sort of reacting to someone who voted against the stimulus from the left. The big problems that Obama have aren't with people generally on the progressive side of the coalition, like Pete Defazio. The big problem he has with his budget particularly are people like Ben Nelson in the Senate from Nebraska, and Kent Conrad, and Evan Bayh, and the sort of self-described, quote, unquote, moderates, who are - have been giving him a hard time about the size of the budget and some of the items in it.

So the example Rove chose doesn't really even make any sense.

SHUSTER: Can you explain the story line, the overall narrative that Mr. Rove was hoping would stick?

HAYES: Yes, there's two narratives. One of them is that Obama is a, quote, Chicago style politician. This really escapes me why they think it's going to be effective. It is not just Rove. Judd Gregg said the same thing the other day about pouring someone in concrete and dumping them in the Chicago River. The idea, I guess, is that people have some sort of very broad stereotype of corrupt old type Chicago pols.

The fact of the matter is, in order for these smears to work, they have to have a semblance of relatability, some connection to reality. When you look at and listen to Barack Obama, he does not come off that way. You didn't see Democrats try to paint George Bush as some sort of evil genius, some brilliant maniacal presence in the White House. That wouldn't have worked. If you are going to try to paint someone into a corner, if you're going to try to attach a label to them, it has to emanate out of something, at least there is a kernel of truth to. I don't see this going anywhere.

SHUSTER: I know the "Wall Street Journal" editorial page is extremely conservative. But who exactly was the audience Mr. Rove was speaking to beyond them. And again, to what end?

HAYES: He is trying to whip up the base. Karl Rove is not a particularly serious political commentator. He is a pretty discredited figure. He presided over one of the worst disasters in American political history. So I think he is mostly whipping up the base. At this point, that is mostly what the Republicans do. I think they no longer have any vocabulary that speaks to people outside of their strange ideological cocoon.

SHUSTER: So Rove accuses Obama of Chicago politics because that's the name of Obama's city. Is there any term for the type of politics Mr. Rove practices? And is there any link between that term and Mr. Rove?

HAYES: Shameful maybe. There was an amazing profile of Rove by Josh Green in "The Atlantic" years ago, about the races he ran down in Alabama, when he got his start running these judicial races. The dirty stuff they did, calling up - going to homeless people and giving them flyers to show up at an opponent's campaign office, saying there is free food. Running these smears about someone being a child molester.

This was the kind of stuff that Rove was associated with and involved with down in Alabama. He is really, really not anyone to be throwing any stones.

SHUSTER: Also today, according to Politico, rising GOP star Eric Cantor accused Mr. Obama of over-reacting to the economic crisis. Is this simply a Republican attempt to show voters how in touch they are with economic anxiety?

HAYES: Honestly, the political tenure from particular the House Republicans, the Republican party in general, is unbelievable. If you look at this budget they proposed, it is a crazy document. It is going to cut spending across the board and give more tax cuts to the wealthy. It would be like if the Democrats, after 9/11, had said we call for abolishing the CIA and cutting the military budget in half. It would have been total political suicide. I think it is only because the reporting around fiscal policy is so opaque and confusing that it isn't complete political suicide for the Republicans.

SHUSTER: Christopher Hayes of "The Nation," great to talk to you as always. Thanks for coming on, Chris.

HAYES: Thank you, David.

SHUSTER: You're welcome. Up next, a shocking holdup caught on tape. A gunman brings his daughter along while he robs a convenience store, despite measures because he is out of work. We will talk to the clerk involved in the robbery.

At the top of the hour on "THE RACHEL MADDOW SHOW," more of her exclusive interview with former Secretary of State Colin Powell and surprising revelations about some of the Gitmo detainees.

The great good touch, bad touch debate. Wait until you hear what some inside Buckingham Palace are saying about the Michelle Obama/Queen hug.

But today, surprise, the First Lady's trip to a London school; an overwhelming response for Michelle Obama and her heartfelt advice for the students ahead on Countdown.

(COMMERCIAL BREAK)

SHUSTER: With the economy weighing heavily on people's mind and jobless claims reaching a 26-year high, how far would you go to help your family? Our number two story, one man's act of desperation. After being unemployed for months, a man held up a convenience store with his nine-year-old daughter by his side. Forty two year old Robert Daniel Webb robbed 200 dollars from the AM/PM Minimart in Elinsburg, Washington early Tuesday morning.

Webb then stopped at the home of an acquaintance in northern California last night. He asked his friend to watch his daughter while he ran some errands. That acquaintance, the father of a local sheriff's deputy, contacted police when he learned Webb was wanted for drunk driving and robbery. The girl is waiting to be reunited with her mother.

After leading police on a high speed chase, Webb remains at large.

Our correspondent is Michael Oku.

(BEGIN VIDEOTAPE)

MICHAEL OKU, NBC NEWS CORRESPONDENT (voice-over): The suspect and daughter looked harmless, if not typical enough, entering the gas station convenience store 3:00 am Tuesday. But watch seconds later as the man pulls a gun on clerk Eric Owens and demands cash.

UNIDENTIFIED MALE: You are going to give me this and what she's got.

OKU: His nine-year-old daughter, dressed in pink, just inches away.

ERIC OWENS, STORE CLERK: How many criminals take a child to a crime scene? It is bizarre. I was stunned. You have a kid standing next to you. What are you doing this for?

UNIDENTIFIED MALE: Open the till and got me what you have.

OKU: Owens emptied the register, less than a couple hundred dollars, before the suspect explained himself.

UNIDENTIFIED MALE: You call the cops, I'll come back and kill you.

I'm out of work. My daughter's got to survive.

OKU: Authorities identified the suspect as 42-year-old Robert David Webb, unemployed for months.

CLAY MYERS, UNDER-SHERIFF: There are too many unpredictable things. He is making poor choices now that are not just endangering himself, but endangering her.

OWENS: I have been homeless. My son and I lived on the streets in Seattle. I know what hard is. Resorting to crime is not the solution.

OKU: Michael Oku, NBC news, Los Angeles.

(END VIDEOTAPE)

SHUSTER: Joining us on the phone is Eric Owens, the store clerk that was held up Tuesday morning by Robert Daniel Webb. Mr. Owens, thanks for joining us. First of all, how are you doing?

OWENS: I'm pretty tired. It is kind of hard to sleep. I have been inundated with interviews.

SHUSTER: Did you get a sense that anything was wrong when Mr. Webb and his daughter walked into the store?

OWENS: No. They seemed very normal like most customers. I see parents with their kids all the time. They came in the store. They walk around. They grab a little bit of this, little of that. It was all very normal to me, up until the point he walked up to counter and set the coffee down. And I noticed that he had a cup inside of a cup, and I have to charge for it, because of the bar coding and all of that. Up to that point, it seemed normal.

SHUSTER: What was going through your mind during the holdup portion?

OWENS: It was getting pretty serious pretty rapidly. My initial shock was, hey, this us is just a cup of coffee and you are getting this angry over coffee. What is this all about?

SHUSTER: Did you feel empathy towards Mr. Webb at any point?

OWENS: I didn't feel empathy for him until after I had given him the money and I walked around the other side of the counter and he and I started having a conversation. Because when he asked me to walk around the other side of the counter, that was after I gave him the money. I thought this was an opportunity for me to defuse the situation here, so that things don't get worse.

I have already given him the money. So he's got what he wants. He is a little happier, a little calmer. I will talk with him. If I talk with him and I don't raise my voice and I'm not aggressive, maybe he'll calm down and maybe everything will be fine. When I talk with him, I looked at him in his eyes. His eyes were watering up. I could tell this guy was hurting inside.

He is hurting inside. He feels defeated and he has probably given up hope. He is desperate. He is acting out of desperation. It is quite possible he is a victim of the economy. Unfortunately, that's a bad choice to make, to commit a crime because of a lot of other things you could do instead.

SHUSTER: I gather you can relate to being a victim of the economy.

OWENS: Absolutely, I can relate. I lost my wife in a car accident at a very young age. I became a single parent at the age of 27. I raised three kids of my own from the time one of them was in diapers. I raised them until they were fully grown. I struggled for the entire time. I sold my blood to feed my kids. My youngest son and I were homeless, living on the streets in Seattle at one point in time.

I know what hard is. But you know what? I never resorted to crime. There's always a way out. All you got to do is get on the phone and call a family member, a brother, sister, parent and say, look, can I live with you for a couple of months until I get back on my feet. Go to a firehouse, go to a church, go to a homeless shelter, get some social help, get some food stamps. There's always a way. You don't have to involve your children in a crime.

SHUSTER: Did you sense Mr. Webb's daughter knew what was going on?

OWENS: Actually, I'm glad you asked that, because there were a few times I glanced at her, and she had the most puzzled - look of puzzlement and look of fear on her face, which is understandable, because she is the victim here, not me. And I could tell she was really confused and just didn't understand what was going on.

SHUSTER: Well Eric Owens, we are grateful you survived that holdup last night. We thank you for your time tonight. And good luck as you try to continue processing this unbelievable incident.

OWENS: Thank you. I appreciate it. I'm glad the girl is OK.

SHUSTER: We are, too. Thank you.

It was the touch seen around the world. The original question, did Michelle Obama do something wrong? Apparently, she did everything right. Word from inside the palace that this was a very rare, genuine display of affection. As the queen goes, so goes her subjects. An emotional day in London for everyone when the First Lady visited a group of students, next on Countdown.

(COMMERCIAL BREAK)

SHUSTER: To the top of the Countdown. In our number one story, we have seen the intersection of overblown, misguided media analysis and the body language of Michelle Obama time and time again. As evidence, that fist bump shared between husband and wife after Barack Obama locked up the Democratic nomination, which prompted this cherry from Fox News.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: A fist pump, a pound, a terrorist fist jab? The gesture everyone seems to interpret differently.

(END VIDEO CLIP)

SHUSTER: This time, it is not Fox News' terrorist fist jab, but a royal back hug that has the media in a tizzy. Yesterday, during a reception at Buckingham Palace, the queen of England and America's First Lady shocked the royal watching world, when they were spotted with their arm's around each other's back, apparently a gross breach of royal protocol.

The headline from the "Daily Mail," "Did Michelle Obama Break Royal Protocol by Giving The Queen a Hug?" The "Times of London," "Protocol is Abandoned as Michelle Obama Cozies up to Queen."

Unfortunately, in the video, even with this Countdown forensic enhancement, you can't tell who caressed who first. Luckily, an eyewitness clarifies the situation to the "Daily Mail." "The queen appeared to look up at her and make a comment about how tall the first lady was. As she did, she put her arm around Mrs. Obama and rested her gloved hand on the small of her back. Almost simultaneously, Mrs. Obama put her arm around the queen's shoulders, rather more firmly."

That revelation seemed to let a little air out of any Michelle Obama screwed up balloon. Earlier this afternoon, our own royal commentator Dickie Arbiter contextualized the caress.

(BEGIN VIDEO CLIP)

DICKIE ARBITER, FMR. BUCKINGHAM PALACE SPOKESMAN: Who cares? If she didn't want to do it, she wouldn't have done it. Who cares?

(END VIDEO CLIP)

SHUSTER: Buckingham Palace agrees with Mr. Arbiter. A spokesman today saying the embrace was a, quote, mutual and spontaneous display of affection. And we don't issue instructions on not touching the queen.

Today, the displays of affection, spontaneous and otherwise, continued for Mrs. Obama during a visit to a multi-ethnic girls school. From London, here is Dawna Friesen.

(BEGIN VIDEOTAPE)

DAWNA FRIESEN, NBC NEWS CORRESPONDENT (voice-over): She has dazzled Britain with her style and substance. From the palace to the streets, she has taken London town.

(on camera): This is just a small example of the first lady's ability to draw a crowd. Word spread that she was coming to a school near here and these people have been waiting for hours.

UNIDENTIFIED MALE: The first lady of the United States of America, Michelle Obama.

FRIESEN (voice-over): Erupting with shrieks of joy, the teenagers at this London girls' school were completely surprised by the visit. The students, 90 percent whom are from ethnic minorities, sang their hearts out for her.

(SINGING)

FRIESEN: It clearly struck a chord.

MICHELLE OBAMA, FIRST LADY: All of you are jewels. You are precious and you touch my heart. And it is important for the world to know that there are wonderful girls like you all over the world.

FRIESEN: It was a speech from the heart; Mrs. Obama telling them they could all be just like her.

M. OBAMA: We need strong, smart, confident young women to stand up and take the reins. I want you to know we have very much in common, for nothing in my life's path would have predicted that I'd be standing here as the first African-American first lady of the United States of America. I wasn't raised with wealth or resources or any social standing to speak of.

FRIESEN: To such a diversity of girls, from such an inspirational woman, the message couldn't have been more powerful.

M. OBAMA: You, too, can control your own destiny. Please remember that. If you want to know the reason why I'm standing here, it's because of education.

FRIESEN: She also talked about men.

M. OBAMA: The men in my life taught me some important things as well. They taught me about what a respectful relationship should look like between men and women. They taught me about what a strong marriage feels like.

FRIESEN: When it was over, the hugs began and it seemed they'd never stop. Mrs. Obama even moving to the audience, ignoring Secret Service agents who tried to steer her away. As they left -

UNIDENTIFIED FEMALE: Michelle Obama hugged me.

FRIESEN: - the girls could hardly contain themselves.

(on camera): Is it important to have women like her as role models?

CROWD: Yes.

FRIESEN: Why?

UNIDENTIFIED MALE: Because then it encourages people to be like her and not to just lay around and give up.

FRIESEN: Some thrilled to tears, all a result of what seems to be Mrs. Obama's powerful personal magic.

Dawna Friesen, NBC News, London.

(END VIDEOTAPE)

SHUSTER: That will do it for this Thursday edition of Countdown. Up next on MSNBC, "THE RACHEL MADDOW SHOW" with more of her exclusive interview with Colin Powell. I'm David Shuster, in for Keith Olbermann. Thanks for watching, everybody.

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