'Countdown with Keith Olbermann' for Monday, August 2nd, 2010
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Video via MSNBC: Twitter Report, Oddball, Tea Time, Worst Persons
The toss: Hat prop

Guests: Ezra Klein, Robert Reich, George Barisich, Christina Bellantoni, Rep. Raul Grijalva

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

The new, new, new math. What's the Republicans' latest plan today to avoid the stark reality that keeping the Bush tax cuts means a larger deficit? Ignore the stark reality.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), VIRGINIA: If you have less revenues coming in to the federal government and more expenditures, what does that add up to? Certainly, you're going to dig the hole deeper.

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OLBERMANN: Others? Count on their fingers - or try to.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER GOVERNOR OF ALASKA: My palm isn't large enough to write - to have written all my notes down on what this tax increase, what it will result in.

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OLBERMANN: Day 105: "static kill" and lawsuit kill as BP scrambles to buy off local businesses to keep them out of court.

Target Target. The department store gives 150,000 bucks to a PAC for the anti-gay candidate for the governor of Minnesota. LGBT groups try to cut in to Target's profits.

The minority-based Tea Party event - almost no minorities show up.

"Worsts": Rupert Murdoch decides it's time for your local news to have just as much propaganda as FOX News does.

And Arizona - a senator lies to make his own state look more dangerous than it is.

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SEN. JON KYL (R), ARIZONA: There's a great deal of violence and crimes associated with the presence of illegal immigrants.

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OLBERMANN: And the emerging protest leader against the "papers, please" law?

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LADY GAGA, SINGER: You really think that us dumb (EXPLETIVE DELETED) pop stars are going to collapse the economy of Arizona?

(CHEERS)

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OLBERMANN: Yes, Lady Gaga.

(BEGIN VIDEO CLIP)

LADY GAGA: I'll tell you what we have to do about S.B. 1070. We have to be active. We have to actively protest.

(CHEERS)

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OLBERMANN: Just protest, spin that record, babe.

All of the news and commentary - now on Countdown.

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LADY GAGA: We will peacefully protest this state.

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OLBERMANN: Good evening from New York.

With the lynch pen of supply side economics, the Bush tax cuts for the rich about to expire, Ronald Reagan's own point man on supply-side economics has now come out in favor of letting them expire.

Our fifth story tonight: one of our guests recently wrote that the expiration would be a litmus test for the GOP - a test of which of them are serious about reducing the debt of our children and which are serious about increasing the wealth of our wealthy.

The lab for that test was the Sunday talk shows and one Republican was so unprepared for her version of the test that she was cribbing her answers again, writing down, literally, talking points her palm and on paper to argue for extending tax cuts that President Bush signed into law for a 10-year period. Except now, the half-governor thinks that having the taxes return to their Clinton-era levels was President Obama's idea.

And keep in mind: President Obama supports renewing the tax cuts for everyone except the richest 2 percent.

So that is who she's arguing for.

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PALIN: To reduce deficit spending and our enormous debt, you rein in spending. You cut the budget. You don't take more from the private sector and grow government with it. And that's exactly what Obama has in mind with this expiration of Bush tax cuts, proposal of his.

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OLBERMANN: This expiration of Bush tax cuts proposal of his.

That woman is an idiot.

Of course, it was, in fact, President Bush who proposed having his tax cuts expire because he lacked enough votes to beat a filibuster and the Senate rule letting a pass them on simple majority also prevented him from increasing the deficit beyond the 10-year period.

Despite the fact the tax cuts are literally expiring because and only because they will increase the deficit, today's Republican Party leaders also failed the litmus test, arguing yesterday - arguing, mind you - against FOX News that extending the Bush tax cuts would create a massive hole in the already expanding deficit.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS: Congressman, what are you going to do about that $3 trillion hole that you're blowing in the deficit by extending all of these -

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: There is no $3 trillion hole.

WALLACE: Let me just finish - sir, let me just finish the question. Three trillion dollar deficit that you're blowing in the deficit - $3 trillion that you're blowing in the deficit by extending the tax cuts?

BOEHNER: Why can't we keep tax rates where they are today? This is the whole Washington mindset.

(END VIDEO CLIP)

OLBERMANN: The Palin-Boehner argument is that cutting taxes will let small business owners create jobs and the taxes on those salaries will make up for the tax cuts.

Mr. Boehner is right about opposition to this theory being a Washington mindset. The Reagan-appointed former chairman of the Federal Reserve said flat out yesterday that tax cuts do not pay for themselves - when he was asked whether he would let them all expire.

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DAVID GREGORY, MEET THE PRESS: You're saying let them all go. Let them all lapse.

ALAN GREENSPAN, FORMER CHAIRMAN, FEDERAL RESERVE: Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten in to in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous. And my view is: I don't think we can play subtle policy here.

GREGORY: You don't agree with Republican leaders who say tax cuts pay for themselves?

GREENSPAN: They do not.

(END VIDEO CLIP)

OLBERMANN: What other Washington mindset guy disagrees with the number one House Republican and thinks that the tax cuts will increase the deficit? Would you believe the number two House Republican guy, Eric Cantor?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I just want - I was just wondering if you had any - if you had any dispute with the notion that it does exacerbate the deficit picture.

CANTOR: What I - what I said in the beginning is, if you had less revenues coming into the federal government and more expenditures, what does that add up to? Certainly, you're going to dig the hole deeper.

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OLBERMANN: But it's not just the House Republican Whip Cantor and former Fed Chair Alan Greenspan, who will at least admit that tax cuts will worsen the deficit. Those are the guys who said so on camera. Other Republicans have been more devastating in print.

Meet David Stockman, President Reagan's Office of Management and Budget director. This weekend, the original supply-siders comparing Republican support for extending these tax cuts to a bankruptcy filing and, quote, "This approach has not simply made a mockery of traditional party ideals, it has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy."

More, quote, "It's a pity that the modern Republican Party offers the American people an irrelevant platform."

That's Ronald Reagan's OMB director speaking, you know, one of the disciples of "conserva-Jesus."

Then there's the country itself, only 30 percent support renewing all the tax cuts, a plurality, 31 percent want them all gone.

Let's turn now to Robert Reich, labor secretary under President Clinton, now a professor at U.C.-Berkeley's Goldman School of Public Policy.

Once again, much thanks for your time tonight, sir.

ROBERT REICH, FMR. LABOR SECRETARY: Hi, Keith.

OLBERMANN: There's lots to talk about here, but I want to - I got to start with David Stockman. When David Stockman to - explain David Stockman and the whole idea of this and where he stands now to the younger viewer who does not remember where he was in all of this when we went through it in 1981-1982.

REICH: Well, it's actually very interesting because David Stockman was the architect of these "starve the beast" idea, and that is if you spend so much, when you are a Republican president and you reduce taxes, you might be able to have kind of a little bit of a spurt of growth, but most importantly, you make it impossible for any subsequent Democrat to spend anything - because bond markets will penalize. Bond markets will say, you've got to reduce the deficit. And that, in effect - that theory did prove absolutely correct.

But now, David Stockman, years later, has, it seems, seen the truth, or he's at least willing to be a bit little more candid about what he believes. And that is that deficits over the long term are going to be a problem and you don't want to expand and extend tax cuts for the rich simply because of that. I mean, that would be - that's the height of hypocrisy.

OLBERMANN: So, his relative epiphany. Plus, what Mr. Greenspan said. Let me see if I can summarize this. It's not OK, according to the Republicans, to stimulate the economy with borrowed money to go to unemployment benefits, which Republicans blocked, or the small businesses' tax breaks, which Republicans blocked. But it is OK to stimulate the economy with borrowed money that goes to the 2 percent richest people in the country?

REICH: Exactly, Keith. What we've seen again and again is Republicans who say and block unemployment insurance and they block everything that the middle class needs and they block sending money to the states so that the teachers can stay employed. No, they say none of that is - none of that is possible because we need to deal with the long-term deficit.

But when it comes to extending the Bush tax cut for the top 2 percent

now, we're talking about not the middle class, we're talking about the top 2 percent of Americans, Republicans, the same Republicans say - oh, well, the long-term deficit is not all that much of a problem. We really do need to extend the tax cut to the top. Well, if that's not hypocrisy, I don't know what is.

OLBERMANN: The other kind of tax cuts. You support extending tax cuts for the middle class. What happens if Democrats put that on the table?

REICH: What's likely to happen, Keith, is a stalemate - that is the Democrats are going to say, look, we want the tax cuts to be extended for the middle class. They are beleaguered. They're getting out from under a huge pile of debt. They can't use their homes as ATMS any longer. And unless they can spend, this economy is not going to create new jobs.

But, on the other hand, Republicans are going to say the price for you to do that is going to be to extend the Bush tax cuts for the people at the top, the upper 2 percent.

So, there's going to be a little bit of a game of chicken going on.

OLBERMANN: Our next guest wrote and suggested that this was a litmus test for Republicans on whether they're going for increasing the debt or increasing the wealth of the wealthy. But I'd like your perspective on what this test is revealing about the Republican Party of today.

REICH: Well, first of all, it's revealing who their real patrons really are. It's not the middle class. It's certainly not the poor. It is the top 2 percent.

It also, though, may reveal something about the American electorate - that is the American electorate, remember, did fall for the Republican death tax notion. That, you know, getting rid - getting rid of the estate tax is necessary because, said the Republicans, everybody is going to be affected. When, in fact, the so-called death tax, estate tax, only really affected the top 1.7 percent.

Now, here again, maybe Republican demagoguery can win out, but I think not if Democrats are making a clear case, and also making it in ways that the public understands.

OLBERMANN: Robert Reich, former secretary of labor in the Clinton administration, now at U.C. Berkeley - great thanks for helping us to understand tonight.

REICH: Thanks, Keith.

OLBERMANN: Let's turn now to the administrator of the litmus test, MSNBC contributor Ezra Klein of "The Washington Post" and "Newsweek."

Good evening, Ezra.

EZRA KLEIN, MSNBC CONTRIBUTOR: Welcome back, Keith.

OLBERMANN: Thank you kindly, sir.

The results of your litmus test appear to be back from the lab.

What's the diagnosis here, doctor?

KLEIN: It's not looking good. I fear we're going to lose a patient.

Look, I don't want to say Republicans don't care about the deficit. I don't think. I know that, I don't know if anybody can say it.

What we can say is they care about tax cuts and military spending more. Under David Stockman, you had deficits go up because there were too many tax cuts. Too much military spending under Bush, the same thing happened. And, you know, Democrats get into power, Republicans care about the deficit a lot, or at least they prefer reducing it to letting Democrats do things that aren't tax cuts and/or military spending.

But when they get back into power, we're back to sort of tax cuts that expand the deficit. So, the thing I think you have to include isn't anything about the deficit per se but the core principle of the modern Republican Party is tax cuts. And if that comes to $3 trillion, $4 trillion on the deficit, so be it.

OLBERMANN: All right. But let me - let me make sure I understand what you're saying. That Republicans are saying the cure for the economy and its woes of the moment is to continue the exact same policies that were in place beforehand and are still in place now, why would they - the tax cuts - why would they suddenly start helping the economy after the 1st of January when they didn't do anything to prevent the recession and apparently are doing nothing to end it?

KLEIN: Well, there's something, too, I should say, that - in a recession, I mean, if we do end the tax cuts particularly for the middle class, that is a tax increase on the middle class. It isn't one Democrat created, it's what the policy said was going to happen. But it is non-stimulative.

So, if you - if you believe in particularly middle class stimulus, saying we should raise taxes on the middle class or allow taxes to go up on the middle class, it's not a great idea. And it shows the trap Republicans put Democrats into 10 years ago. They couldn't extend the tax cuts for longer than that because they were using the reconciliation process to decrease the deficit which you can't use more than 10 years. But they knew that when it ended, it would be very, very difficult for Democrats to allow tax increase to take place.

And, now, we're in the middle of a horrible recession that they did not manage to prevent. And so, it's even more difficult. So, there's a bit of a "damned if you do, damned if you don't." And meanwhile, Republicans stand on the sidelines yelling about the deficit.

OLBERMANN: But -

KLEIN: It's an incredible play they've pulled off here.

OLBERMANN: If you put - if you cut out the preamble to what they're yelling about, if we agree with Palin and Boehner and McConnell that it's OK to borrow to stimulate the economy with which what they're saying after that whole preface stuff, what's the most effective way to borrow to stimulate the economy?

KLEIN: Well, the most effective thing we can for stimulus is food stamps, you got a buck 71 stimulus for every dollar you spend on them versus the Bush tax cuts which are 32 cents for every dollar you spend on them. But we are, in fact, cutting stimulus right now, or we're cutting food stamp right now to pay for state and local aid, which is also better than tax cuts.

So, this is one problem here. The argument that the Republicans are at least giving to Democrats is: you don't want to allow a good stimulus like a tax cut to expire during a recession. And they're right about that. People who care about this are worried about that.

But at the same time, they're forcing Democrats to cut very effective forms of stimulus and under-sale others, like state and local aid.

So, we are in this bit of a pickle here where Republicans are essentially giving up the thing they like because it's a tax cuts and Democrats can't let it go because it's stimulus. Or Republicans block the stimulus that actually would work better and the Democrats would like to see happen.

OLBERMANN: MSNBC contribute Ezra Klein of "The Washington Post" and "Newsweek," of course - as always, great thanks, sir.

KLEIN: Thank you.

OLBERMANN: The relief wells may be abandoned. The static cap that has not yet been tried has already been declared a victory. And BP's commitment to the long term health of the Gulf requires you to waive your long-term right to sue.

Just when you thought the oil disaster in the Gulf was beginning to make sense - it isn't. Next.

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OLBERMANN: BP - breaking news perhaps out of the Gulf, just a small hydraulic leak delaying a test. Nothing more serious - uh-uh.

The anti-gay candidate for governor who just got $150,000 from Target via a PAC, thanks to the Citizens United decision.

Manipulating a nation is not enough. Now, he's going to go door-to-door, the plan to turn your local FOX News into local fixed news.

One of these people is lying about S.B. 1070 from Arizona. It's the compulsive person pretending they're something they're not - meaning, it is not Lady Gaga who is lying.

Ahead on Countdown.

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OLBERMANN: With BP supposedly making its final preparations at this hour to permanently seal its leaking oil well in the Gulf of Mexico, that, apparently, is not the only thing the company is trying to seal out off.

Our fourth story: BP now seeking to cap its liability by preparing to offer Gulf Coast residents lump sum payments in return for waiving the right to sue.

A new estimate revealing that nearly 5 billion barrels of oil have gushed into the water so far at rates of up to 62,000 barrels a day before BP was able to put the capping stack on.

This afternoon, BP to have begun the test, it was a precursor to the

so-called "static kill" procedure. But BP releasing tonight saying that as

engineers prepared to start the injectivity test, they discovered a small

hydraulic leak in the capping stack's hydraulic control system. BP says

the test and the static kill will wait until the leak is fixed - possibly

by tomorrow.

But even before BP's engineers have tried merely tried to pump mud and cement down the throat of the busted well, something it has tried and failed to do in similar fashion before, something it cannot now even start, the company is acting as if it has already succeeded. BP officials today saying they are not sure they will even use the relief wells that they have been digging for months now to permanently plug the ruptured oil well in the Gulf of Mexico - what is long thought to be the best most sure-fire method of stopping the leak for good.

A BP spokesman is saying, quote, "Precisely what the relief wells will do remains to be seen."

The long-term effects of dangerous chemical dispersants are also remaining to be seen. Congressional investigators revealing that the Coast Guard routinely approved BP's use of thousands upon thousands of gallons of the dispersant Corexit despite a federal directive that it'd be used sparingly.

With the Obama administration under fire for allowing the use of the dispersant, the EPA today said that a new study shows dispersants are no more toxic than is oil, which would seem merely to confirm that dispersant is indeed highly toxic. Best time for BP to shield itself from liability before the full effects of the dispersant, the oil, the economic fallout is truly known.

Something else it is doing with the approval of the Obama administration, "The Guardian" newspaper reporting that when Kenneth Feinberg takes over this month as administrator of the escrow fund set up by the White House, for the first time, claimants will be offered a one-time sum based on their future lost earnings in return for an agreement not to sue BP. Claimants will also be able to receive an emergency payout to cover lost income for up to six months without waving that right to sue.

For more on that, let's call in George Barisich, president of the United Commercial Fishermen's Association, himself a third generation shrimp fisherman from St. Bernard Parish, Louisiana.

Thanks for your time, sir.

GEORGE BARISICH, UNITED COMMERCIAL FISHERMEN'S ASSN.: Thank you for having me, sir.

OLBERMANN: This leak is already in its fourth month. The emergency payment would only cover six months worth of expenses. A lawsuit against BP could take years. Is it going to be hard, might it be hard for your fishermen to resist the lump sum payment if it's high enough?

BARISICH: If it's high enough, that's a very good point.

OLBERMANN: Yes.

BARISICH: If they dangle the carrot, if it's big enough, a lot of people are going to have to take it. If it's minimal, some people are going to be forced to take it because a lot of us still have a lot of loans from Katrina and then Gustav. You know, the timing of this is what's terrible. You know, had it come when the industry was doing well, it would have - we would be able to wait longer and take a better deal, per se.

OLBERMANN: Can you estimate how many of your members couldn't wait?

How many of them have already gone out of business?

BARISICH: There's a bunch of them (INAUDIBLE) if it wasn't for this work that, you know, a lot of people are doing for BP. In St. Bernard, we did it a little different. We had a rotation system where most of the fishermen were able to work if they wanted to work. Unfortunately, I wanted to shrimp. And I was one of the last ones, three days ago was the first time in 32 years that I actually worked for everybody else.

And it was like, I think, when I buried my mom and daddy, it was the only other sad times, this and that. It was like somebody died if you can understand what I'm saying, like I lost something, you know?

OLBERMANN: Yes. No, I - I know what you mean. But a question about BP - do you - have they been straight with you and your members? Do you feel like you can trust them to any degree?

BARISICH: Yes, some issues, once we forced them, you know, once our attorneys forced them to do certain things, you know? And I met with Feinberg himself and he promised this and that. But what I don't like is we had numerous town hall meetings and there was an agreement, there was a statement saying any work you do to help BP clean up their mess, it wasn't ours, you know, would not come out of any settlement.

The day after they capped it, partially capped it, they hit the TV saying, well, any work you do is coming out of the settlement. That's not boding too well right now. It's really not.

OLBERMANN: So - in other words, I hasn't heard this before. In other words, if you've done work for BP, that would be subtracted from the amount that BP is liable to pay you?

BARISICH: That's what you understand now. And when we started working for 'em, you know, and it's on record, we've got them taped saying that - that, no, it would not come out because you're helping us clean our mess.

OLBERMANN: Right. And it's like - well, the mess is gone now. What mess are we talking about?

BARISICH: Well, that's a misconception, too.

OLBERMANN: Yes.

BARISICH: The mess is not going to just stop, you know?

OLBERMANN: Are you surprised that the offers that are going to come here with the stamp of government approval that they'll be offered as part of the escrow fund administers by Kenneth Feinberg, the man you just mentioned. Does it surprise you that this - that this has got an official stamp to it?

BARISICH: Well, according to what Mr. Feinberg said, the only reason I gave the OK ballot, you know, when I went there, because I was ready to take and pack the stuff and go home, is that he wasn't government and he wasn't BP. He was business-to-business. OK?

So, if you're going to give me a fair deal, but understand you've got to take a lot of variables in effect. Mr. Feinberg was supposed to meet with (INAUDIBLE) and if he listens to us and understands the variables, understands the various conditions of our industry, the state that it's in, and incorporates that into his estimates and makes a person a fair offer, you know, a lot of people may take it. But I don't - we're not to that point yet.

OLBERMANN: As you said, this isn't finished. It's just capped. The dispersants are masking how much oil there really still is in the Gulf. How is the fishing industry looking - what is the outlook for you and your members, short term, long term?

BARISICH: As far the oysters are concerned - I'm scared to death because that's what I do. I've got a lot of oyster farms. But also shrimp.

Right now, the shrimp season is open. They're reopened. (INAUDIBLE) why can't we go catch shrimp right now? But I don't even have a market for it. I can't go out and catch it because my dealer don't want it.

OLBERMANN: Yes.

BARISICH: And his processor doesn't want it. Not for any price right now. So, when they do - you know, when the season does open across the state, as more areas open, I'm going to have to go to make some money, but that's going to be a depressed price again. So, unless, they give me free fuel or give me a subsidy on my price, we don't know what's going to happen.

You know, you can't blame their processor - he can't put millions up and then maybe can't sell it.

OLBERMANN: Right.

BARISICH: It's a convoluted situation. A lot of people don't understand.

OLBERMANN: Mr. Barisich, one last question - tell me about your t-shirt.

BARISICH: Oh, that's what I'm doing to make a living. After Katrina, I designed one. This one, no, actually, it's a fundraiser for United Commercial Fishermen's Association. If you want some, give me a call, we need to sell them bad.

OLBERMANN: "Bringing oil to American shores like never before."

Brilliant.

George Barisich -

BARISICH: I'd show you the back but I can't turn around. You could see the back, too.

OLBERMANN: The president of the United Commercial Fishermen's Association, George Barisich - thank you again, sir.

BARISICH: Take care.

OLBERMANN: Health in the Gulf reminds us to remind you that the two free health clinics made possible with your generous donations. The one in Washington is Wednesday of this week. You can still register to be seen or to donate your services and time, medical or otherwise, by going to freeclinics.us.

And we're still raising funds for the two-day clinic in New Orleans, coinciding with the fifth anniversary of Katrina, August 31st and the 1st of September.

Again, the address is freeclinics.us. And, again, we thank you kindly.

Oh, and by the way, whatever damage BP has actually sustained, they'll be able to fix it by purchasing parts of Congress in the years to come. The first stride towards the corporatist state enabled by Citizens United is under way. A state of Minnesota, a division of Target.

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OLBERMANN: Lady Gaga, tolerance and anti-S.B. 1070 activist.

First, the sanity break beginning with the Tweet of the Day which helps us clear-up a popular misconception, it's from Dceltic123. "How in the hell id FOX News get the seat held by Helen Thomas? Did the White House just overlook NPR? Bad move."

Actually, the White House doesn't have a say in that decision. The White House Correspondents Association made the bad move and took away valuable time from the association's real purpose: holding an annual banquet. Let's play Oddball.

We begin in the Czech Republic with the second annual Putamov (ph) Footbridge Championships, because simply walking across a bridge would be too easy. There are a variety of divisions. There's the bike divisions, release, rotation, splash, the push a poorly constructed wheelbarrow, release, rotation, splash division, and, of course, the always possible rolling keg with wife on back, release, rotation, splash division. The rotation splash division. There are, of course, no losers in this grand event, except for maybe the release, rotation, splash guys that we've just seen.

Seaside Park, New Jersey, hello. Have to do that in a British accent from now on? Christ. Governor Chris Christie now has another problem at the Jersey Shore. A shark, in search of food or possibly a tanning bed, has washed up on shore. Somewhere it's always Shark Week. While everybody was distracted by the thrashing around, his friend Snooki escaped from the penitentiary.

Finally Mexico City, where we find a baguette, a big baguette. Dozens of sandwich makers from 45 local establishments combined to create a 157-foot long hero. The super sandwich is the longest ever constructed in Latin America, besting - that's not Latin America. Who wrote that? Bests the former record by more than five feet. More than 60 ingredients needed to create this record breaker, including mayonnaise, mustard, and spicy - oh, 157 feet of mayonnaise, oh! Luckily, the same fare also featured the largest antacid tablet in the Western Hemisphere.

And the Citizens United nightmare has begun. A major department store chain can donate 150,000 to a PAC which supports an anti-gay candidate for governor of Minnesota, next.

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OLBERMANN: The 1975 James Caan film "Rollerball" has proved less than exactly prophetic about a world owned and operated by corporations. For instance, the world of "Rollerball" had only six multinationals: communications, energy, food, housing, leisure, and transport. We all know there are actually seven. They forgot the shopping for crap corporation.

Our third story in the Countdown, one of the subsidiaries of shopping for crap, Target, is the first to have dived into the cesspool created by the Supreme Court ruling - that's right, eight corporations:

Communication, energy, food, housing, leisure, transport, shopping for crap, and the judges for sale corporation. Created in the wake of wake of Citizens United, the group MN Forward has raised over a million dollars from 13 separate corporations; 150,000 came from Target.

One of MN Forward's goals, on behalf of its corporate donors, electing Republican Tom Emmer Minnesota's next governor. What its ad does not mention is Emmer's anti-homosexual agenda. In 2007, he sponsored an amendment to Minnesota's constitution that would have outlawed gay marriage and civil unions. The "Minnesota Independent" reports that on several occasions Emmer has tried to amend bills so they would discriminate against same sex partners.

Since the disclosure of Target's donation, some Democrats and gay rights activists have called for boycotts. Target's CEO bristles. "Target has a history of supporting organizations and candidates," he says, "on both sides of the aisle who seek to advance policies aligned with our business objectives, such as job creation and economic growth."

He also pointed to Target's 100 percent record from the Human Rights Campaign Corporate Equality Index. But yesterday, it bought a full-page ad in the newspaper of the "Minneapolis Star Tribune" calling on Best Buy and Target to donate money to groups that support gay friendly candidates.

And then there's gay rights activists Rodney Retan (ph) of Eden Prairie, Minnesota, who videotaped her last Target visit during which she returned some merchandise and cut up her credit card for Target. According to Retan, "my youngest son is gay, and I love him more than anything I could ever buy at Target."

Joined now by Christina Bellantoni, senior reporter for TalkingPointsMemo.com. They had been all over this story. Good evening, Christina.

CHRISTINA BELLANTONI, TALKINGPOINSTMEMO.COM: Good evening. Welcome back, Keith.

OLBERMANN: Thank you kindly. The Disclose Act, which would force corporations to be named in political ads that they front, that they pay for, that their money gets laundered into. It failed last week. How do we find out, if it failed, that Target and to a lesser degree Best Buy are giving to this MN Forward group?

BELLANTONI: In part, because Minnesota has pretty strict disclosure laws. They're the sort of transparency that Democrats are seeking to put in place with the Disclose Act that the Republicans filibustered last week.

OLBERMANN: The Target CEO came back and called his support of the LGBT community unwavering. What are we going to believe? His - our lying eyes or his company's 150,000 dollar contribution?

BELLANTONI: Well, the Target line on this is that they support pro-business candidates. This organization, Minnesota Forward, it got 100,000 dollars in cash from Target, 50,000 in kind services, other things besides cash. It's not even the biggest contribution to this organization, which is going to promote candidates that will give businesses tax cuts that will be pro business. That's sort of the line they're saying, is that they're getting dragged down into a social issue because the candidate that they're backing with this very friendly ad that, as you mentioned, doesn't mention any social issues, is anti-gay marriage.

OLBERMANN: Is the backlash here that we're seeing, is this meaningful? Is it having an impact at all on Target? Or is it just, you know, democracy's last dying gasp?

BELLANTONI: This is a real interesting story. I spent the day with a lot of sources on the ground in Minnesota. They told me, both sides, Republicans and Democrats, that you've seen a lot of businesses pretty spooked because the progressives and the Democrats in Minnesota are using this as an example of sort of Citizens United gone wrong. They're trying to paint it as a corporation trying to buy the election.

So this is Target, an organization that has very strong national brand name. It's one of the best-known companies in the country, but especially in Minnesota, where it's based - it's spooking organizations to maybe back off and not necessarily donate to Minnesota Forward. But I will point out that I learned today that this organization is going to be backing six state lawmakers in the coming week. Three of them will be Democrats.

OLBERMANN: I mentioned that obviously the Disclose Act failed. Is there anything other than state-by-state acts like what they have in Minnesota? Anything coming down the pike that's going to temper corporate spending on elections and avoid the "Rollerball" scenario?

BELLANTONI: Well, This bill is alive in congress. Essentially Republicans prevented it from moving forward in the Senate. It already passed the House. So there are actually watchdog organizations that are pressuring Senate Majority Leader Harry Reid to bring this up for a vote again and again and again until it happens. But it is an election year. As we all know, these things don't necessarily pass in an election year.

OLBERMANN: Christina Bellantoni of "Talking Points Memo," great thanks for your insight on this one.

BELLANTONI: Thanks, Keith.

OLBERMANN: By the way, if you saw earlier those t-shirts that George

Barisich showed on the program and you would like to get one, please send

us an e-mail. He doesn't have a website. Send the e-mail to

Countdown.MSNBC.com with BP T-shirt in the subject line. We will forward

your e-mail to his organization. That's the story in short. If you like

those t-shirts that Mr. Barisich was showing us before, "bringing oil to

American shores like never before" - the not really a BP t-shirt - send

us the e-mail there, Countdown.MSNBC.com with BP t-shirt or not BP t-shirt

as the legal purposes, as the subject. Change that to not BP t-shirt. >

Who will lead the anti-papers please push in Arizona? You will, says Lady Gaga, though she's willing to front it.

Worsts, Rupert's manipulation of the national news no longer enough for him. Now he's going to go after what you see on your local news.

And when Rachel joins you at the top of the hour, she will explain how to vacation like the Tea Party; go to Colonial Williamsburg and yell at the actors playing the founding fathers. Wait, those are actors?

(COMMERCIAL BREAK)

OLBERMANN: Worsts, and Rupert Murdoch decides his local station should have just as much propaganda as his alleged news channel. First, no, this is not your water coming to a boil. It's our nightly check up on the something for nothing crowd. It's Tea Time.

As you know, if you point out that the Tea Party is virtually all white, you're the racist. Of course, that does raise the interesting question of why the Tea Party would feel compelled to have what one of its leaders called a "minority-based Tea Party event." The score card from the rally Saturday outside Independence Hall in Philadelphia, 18 speakers, ten of whom were non-white. For the "Philadelphia Inquirer," an estimated crowd of 300, about 15 of whom were non-white.

Not a problem said an African-American speaker named David Webb, "I didn't realize that any movement anywhere had a minimum daily requirement of black people to be legitimate."

Except given the group's history, the fact that the majority of speakers were not white might easily explain how the low turnout, lower even than most Tea Parties. Organizers had 1,500 bottles of water already on ice, all ready for the crowd, and most of them went untouched.

But it gets worse. According to a series of news reports, another public event in Philadelphia the day before may have drawn anywhere from twice to three times the crowd of the minority-based Tea Party event: the opening of that city's first Apple Computer Store.

(COMMERCIAL BREAK)

OLBERMANN: Senator Kyl of Arizona lies about Arizona to make crime in Arizona look worse than it is, so he can blame the Mexicans. That's next, but first, get out your pitchforks and torches, time for tonight's worst persons of the world.

The bronze to Tom Shales, the once prominent critic of "The Washington Post," who lost his mind over this narration in a new in memoriam segment from Christiane Amanpour during her debut yesterday on ABC's "This Week." First, he called her a, quote, "globe-trotting fancy pants." Then he added "the commendable in memoriam segment ended with a tribute not to American men and women who died in combat during the preceding week, but rather, said Amanpour in her narration, in remembrance of all those who died in war in that period. Did she seem to suggest that our mourning extend to members of the Taliban?"

What did she do with the segment? What about the Taliban? Let's look at the segment Mr. Shales complains of.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, ABC NEWS ANCHOR: We remember all of those who died in war this week. And the Pentagon released the names of 11 U.S. service members killed in Afghanistan.

(END VIDEO CLIP)

OLBERMANN: We remember all of those who died in war this week, while the names of the American dead are shown on the screen. Yeah, that's a suggestion that our mourning extend to members of the Taliban. You know what Ms. Amanpour can include in next week's in memoriam segment? Tom Shale's career.

The runner up, Fred Barnes of Fixed News, attacked the members of the ill-fated Journolist by claiming "the Wall Street Journal" - claiming in the "Wall Street Journal" that some of them seem to be on the Democratic team, but he's never been on the Republican team. "If there's a team, no one has asked me to join. But I've never been part of a discussion with conservative writers about how we could help - most help the Republicans or the conservative team."

As Joe Conason noted at "Salon," Barnes was paid more than 25,000 dollars, plus travel expenses to speak at county Republican meetings in Oregon, Texas and Florida between '06 and '08. You got paid, Fred. You have already joined the conservative team.

But our winner, Rupert Murdoch and his president for station operations for Fox, Dennis Swanson. For a long time, the one saving grace of the Fixed News propaganda machine was that it did not extend to the local stations Murdoch owns, like Channel 5 in New York, Channel 11 in Los Angeles. Well, you can forget the one saving grace.

Multiple industry sources say that within the last six weeks or so, local news directors at the local Fox O&Os have been receiving memoranda and e-mails from Swanson and other executives, and even from Murdoch himself. Content directives, they're called, to make the local news on Fox broadcast stations around the country look and sound just as shaded, just as biased as that on Fox News Channel.

An example, last month, all of the Fox O&Os were informed it would be a good idea to do a man on the street segment for which the question was provided by Fox News headquarters. "Half of Americans think President Obama is not doing a good job. What do you think?" So let the propagandizing begin.

Soon this will no longer be the unintentional slogan of the local newscast on the Fox station in your city.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A tough man to make a tender forecast, Nick.

UNIDENTIFIED MALE: I guess that's me.

UNIDENTIFIED MALE: Keep (EXPLETIVE DELETED) that chicken.

(END VIDEO CLIP)

OLBERMANN: That will now be replaced with, keep bleeping that Obama. Rupert Murdoch and his local stations chief, Dennis Swanson, today's Worst Persons in the World.

(COMMERCIAL BREAK)

OLBERMANN: Arizona's junior senator insisting his state's crime rate is worse than it actually is, and Arizona's senior senator insisting his state's border problems are all the president's fault. In number one story, it falls upon one Stephanie Germanotta, formerly of Manhattan's upper West Side, to emerge as a voice of reason in Arizona's immigration hysteria. That's Lady Gaga for those of you playing at home - or even if you're alone.

But, first, worried that the Constitution serves as a, quote, reward for undocumented workers, Senator Minority Whip Jon Kyl says he wants to hold hearings on whether to deny citizenship to the American-born children of illegal immigrants, despite what the Constitution says about that. Mr. Kyl still also pedaling the myth that crime is the, quote, greatest threat posed by illegal immigrants.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In some of these border towns that were thought to be susceptible to law-breaking of illegal immigrants, the crime is actually down. Crime in phoenix, for instance, is down significantly in the last couple of years.

SEN. JON KYL (R), ARIZONA: That's a - that's a gross generalization. Property crimes are up. Certain violent crimes on certain parts of the citizenry are up. Phoenix is the - is a very large source of kidnapping. It's called the kidnapping capital of the United States. So there's a great deal of violence and crime associated with the presence of illegal immigrants.

(END VIDEO CLIP)

OLBERMANN: Except there isn't. According to the FBI, crime committed by undocumented workers in Arizona has dropped. The state's overall crime rate also decreased by 12 percent last year. As for Kyl's claim that Arizona is second to Mexico City in kidnappings, "Politifact" lists that as false. The FBI and Interpol are unable to substantiate the claim.

As for Arizona's senior senator, the guy who was for amnesty before he had a tough primary on his hands, he has a new political ad out blaming the president for border problems. Meanwhile, speaking on behalf of the sane, Lady Gaga. The pop star refused to cancel her own concert in Phoenix over the weekend, even after receiving pressure from fellow musicians.

(BEGIN VIDEO CLIP)

LADY GAGA, SINGER: I got a phone call from a couple of really big rock 'n' rollers. We'd like you to boycott Arizona. And I said, (EXPLETIVE DELETED), do you think us dumb (EXPLETIVE DELETED) pop stars are going to collapse the economy or Arizona? I tell you what we have to do about SB-1070. We have to be active. We will peaceably protest this state. Because if it wasn't for all of you immigrants, this country wouldn't have (EXPLETIVE DELETED).

(END VIDEO CLIP)

OLBERMANN: She said something about the Bay City Rollers. Joining me now Congressman Raul Grijalva, a Democrat of Arizona. Congressman, thanks again for some of your time tonight.

REP. RAUL GRIJALVA (D), ARIZONA: Thank you, Keith. Appreciate it.

OLBERMANN: The message from Lady Gaga is a little blunt. But do you think she's pretty much nailed this?

GRIJALVA: Yeah. I think - I think part of the issue is that - and we asked for that, that musicians and concerts return to Arizona. We have to help galvanize opposition to this. If I thought Brewer, Kyl and McCain would respond to economic pressure, I would tell them not to. The reality is they don't care. Maybe the strategy is to utilize the constituencies that big musicians have to help us change the politics on the ground.

OLBERMANN: Practically speaking, Mr. Kyl and Senate Republicans can't hold Judiciary Committee meetings without the approval of the Democratic chair, Senator Leahy. Is this the next set of immigration talking points of the GOP, dangling repealing the 14th Amendment?

GRIJALVA: I find it so ironic. Arizona is a petri dish. They're going to try everything here. And if people don't understand that after 1070, they better. So we found that 1070 and the preliminary injunction violates the Constitution. Senator Kyl is saying, that's OK; let's violate the Constitution one more time by violating the 14th Amendment.

I find it so interesting that strict constitutionalists, whether it's Kyl, McCain, Brewer, the Tea Party, find that the Constitution can be malleable if it fits their ads. You're either for the Constitution that you swore to uphold or you're not. It's politics. It's useful, destructive politics that they're using. And they have to continue to use it until the midterms.

OLBERMANN: Crime has dropped in every category. To say that crime numbers have risen, as Mr. Kyl did in that sound clip that we played of him, isn't that a gross generalization, to say nothing of making Arizona look more dangerous than it is?

GRIJALVA: It's a - it's a lie. And any things I ask for in terms

of economic sanctions or anything else pales compared to them talking about

beheadings, kidnappings, death. Any time you walk on a street in Arizona -

they caused more to depress the economy in our state than anybody else.

And it's a lie. It's a lie.

OLBERMANN: Where's the Democratic pushback in this? Why aren't more people calling out Mr. Kyl and Governor Brewer, who was the first one who brought up this beheading thing, and then they walked it back; well, we didn't mean people in the Arizona desert are being beheaded; we don't really know where they are, but we've heard these stories. Other than letting these people stew in their own falsehood, as Mr. Kyl should be today, where is everybody pushing back on this?

GRIJALVA: You know, that's a problem. You kind of feel isolated. Here in Arizona, you question them. Nobody else jumps in, particularly the Democrats, and - because of the timidity and the fear that this could affect an election. I'm not telling people to agree with me in my position. I'm being - let's be consistent on the facts. The facts tell us that Kyl, McCain, Brewer, in terms of violence and crime in the border, are not telling the voters the truth.

OLBERMANN: It's good for campaign material. It's good for Senator McCain. How does it translate to actual policy for Arizonians?

GRIJALVA: I think it's to their advantage to keep the system broken so that nothing is done. They can continue to use immigration all the way through the midterms as a wedge issue that divides and makes this whole conversation about immigration ugly and us against them. It works to their favor. Those of us that would like a dialogue, a conversation, a compromise are kind of left out in the cold.

OLBERMANN: One, scare people; two, do nothing to fix it; three, tell people whose fault it is. Congressman Raul Grijalva of Arizona, as always, a pleasure, sir. Thank you.

GRIJALVA: Thank you.

OLBERMANN: That's Countdown for August 2nd. It's the 2,650th day since President Bush declared mission accomplished in Iraq, 2,239th day since he declared victory in Afghanistan, and the 105th day of the Deepwater Horizon disaster in the Gulf.

I'm Keith Olbermann, good night and good luck.

Now to discuss why Tea Partiers are choosing Colonial Williamsburg for their vacations, the answer is people are not wearing enough hats. Ladies and gentlemen, here is Rachel Maddow. Good evening, Rachel.

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