'Countdown with Keith Olbermann' for Thursday, January 7th, 2010
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Video via MSNBC: Oddball, Quick Comment (Gingrich), Quick Comment (Abdulmutallab), Worst Persons
Video via YouTube: Quick Comment (Gingrich), Quick Comment (Abdulmutallab)
The toss: Snare drum

Guests: Howard Fineman, Lawrence O'Donnell, Jack Rice, Arianna Huffington, Richard Wolffe

(BEGIN VIDEOTAPE)

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

On the radar since October, but reportedly no one decided to question him until the radar showed the plane he helped to destroy was in the air. The president releases the declassified, six-page summary of the failure, implements wider and broader distribution of the intel, changes the watch lists, but ultimately says the buck stops with him.

And he connects the other dots, blasting - not by name - the Republicans who have tried to exploit the near disaster.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Instead of giving in to cynicism and division, let's move forward with the confidence and optimism and unity that define us as people. For now is not a time for partisanship, it's a time for citizenship.

(END VIDEO CLIP)

OLBERMANN: The Republicans respond by immediately upping the partisanship.

Newt Gingrich says the terror attempt has given a boost to Pete Hoekstra. Terrorism is a boost?

And whatever happened to the promise that enhanced interrogation would produce actionable intelligence to stop terror attacks? Tonight's comments.

The big banks are still not listening even after the bailout. Too-big-to-fail? Make 'em smaller. Arianna Huffington on her push to get customers to pull their money out of BOA, Citi, JPMorgan Chase, Wells Fargo, and put it in smaller banks.

And the latest lunatic right-wing fringe, teabag, Pavlovian dog, knee-jerk over reaction, panic-inducing nightmare - this evil person is trying to crash our tea party.

(BEGIN VIDEO CLIP)

RACHEL MADDOW, MSNBC HOST: I'm Rachel Maddow.

(END VIDEO CLIP)

OLBERMANN: Rachel banned seven minutes after she signed up for a tea party nation convention, except - she never signed up for it. It was somebody else.

All the news and commentary - now on Countdown.

(BEGIN AUDIO CLIP)

MADDOW: I'm not kidding. It's an incredible story.

(END AUDIO CLIP)

(END VIDEOTAPE)

OLBERMANN: Good evening from New York.

It was expected to be a moment of pragmatism, a dry list of intelligence failures, national security lapses and their fixes, but today's remarks by the president about the failed Christmas Day bombing ended with a call to arms against the goals of al Qaeda, including the goals of making us afraid of letting fear dictate the American character.

Mr. Obama began with a preliminary report he has now received on how a 23-year-old Nigerian Muslim alleged to have ties to militants and a bomb on his person could board a plane bound for the U.S. Although the report discussed human error and found that both the CIA and the National Counterterrorism Center failed to access available information about the suspect, Mr. Obama called the problem a systemic one and he took the responsibility for it.

The man who compiled that report, John Brennan, took responsibility as well.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, ASSISTANT TO THE PRESIDENT: I told the president today I let him down. I am the president's assistant for homeland security and counterterrorism. And I told him that I will do better and we will do better as a team. Thank you.

(END VIDEO CLIP)

OLBERMANN: And they will have to start by spelling better. NBC News has learned tonight that the name of Umar Farouk Abdulmutallab was, in fact, checked for a possible visa on November 20th, two days after his father reported suspicions about him. The senior State Department official telling NBC this check would have turned up Abdulmutallab's name as having a visa which might then have been revoked if only the employee entering the name had spelled it correctly instead of having dropped one letter.

"The Los Angeles Times" reported last night and was also confirmed today Abdulmutallab did come to the attention of U.S. border officials but only after his flight was in the air. A secondary post-takeoff check of the passenger manifest sweeps a larger data base than just the no-fly list. So, U.S. officials were planning to question Abdulmutallab when he landed, apparently assuming that he had planned to land.

The president ordered numerous changes to address systemic failures, revealing that in the sprawling intelligence infrastructure created by President Bush after 9/11, no single agency took responsibility for addressing the imminent possible attack from al Qaeda in the Arabian Peninsula.

The CIA tonight said it will now disseminate information on suspects within 48 hours, expand its name traces, and beef up analysis of Yemen and Africa.

The White House stood behind National Counterterrorism Chief Michael Leiter who is now under criticism for his agency's performance, but Mr. Obama tapped Director of National Intelligence Dennis Blair to take the lead in changing the system.

The president today no fewer than three times addressed the American people as actual grownups, refusing to promise total safety, and warning us that the possible - best possible defense may not suffice.

(BEGIN VIDEO CLIP)

OBAMA: Even the best intelligence can't identify in advance every individual who would do us harm. Now, there is no silver bullet to securing the thousands of flights into America each day, domestic and international. There is, of course, no fool-proof solution. As we develop new screening technologies and procedures, our adversaries will seek new ways to abate them.

(END VIDEO CLIP)

OLBERMANN: We will, later in this news hour, do a partial inventory of the Republican response to Mr. Obama's remarks. But Mr. Obama anticipated them as well. With the right-wing demanding what even President Bush opposed, that Guantanamo prison remain open, demanding an end to things like due process and the presumption of innocence, the very bed rocks upon which America was founded, Mr. Obama pushed back firmly and declaratively, refusing to let terrorists or those aiding their cause by stoking fear define the nation.

(BEGIN VIDEO CLIP)

OBAMA: Here at home we will strengthen our defenses, but we will not succumb to a siege mentality that sacrifices the open society and liberties and values that we cherish as Americans. Because great and proud nations don't hunker down and hide behind walls of suspicion and mistrust. That is exactly what our adversaries want and so long as I am president, we will never hand them that victory.

We will define the character of our country. Not some band of small men intent on killing innocent men, women, and children.

And in this cause every one of us, every American, every elected official, can do our part. Instead of giving in to cynicism and division, let's move forward with the confidence and optimism and unity that define us as a people. For now is not a time for partisanship, it's a time for citizenship - a time to come together and work together, with the seriousness of purpose that our national security demands. That's what it means to be strong in the face of violent extremism. That's how we will prevail in this fight.

(END VIDEO CLIP)

OLBERMANN: The intel and the changes with Jack Rice in a moment. First, let's turn to MSNBC political analyst Howard Fineman, also senior Washington correspondent and columnist for "Newsweek."

Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: That closing minute or so seemed perhaps shocking in its rejection of the "do anything, sacrifice any principle" fear that has prevailed for so long, correct?

FINEMAN: Oh, it was a departure. And it's interesting for a few reasons.

One is that it's - that's Obama. Obama prides himself on his cool, on his calm, his collectedness. That's a virtue.

Two, he wanted to remind people of one of the reasons why he was elected. This is a guy with a broad gauge and deep sense of the country, broader perhaps than merely the way George W. Bush handled things. That's one of the reasons why he was elected.

And there's a political dimension to this, too, Keith. It's clear that the Republicans are going to go after him. It's going to clear - be clear that they're about division and they're about fear. They think for patriotic reasons but for whatever, and President Obama wants to get to higher ground before they come back in town.

OLBERMANN: Well, clearly, they've already started that. And this was somewhat veiled. He never used any reference to political parties, let alone naming one of them. But it was quite a pointed shot at people who have and who still want America to change in the face of terror, which, of course, happens to be exactly the same goal the terrorists have.

Why do it now? Is it - is it just preemptively or is there anything else in the equation?

FINEMAN: Well, I think it's a matter of deep belief in talking to some of his friends and advisers. This has been one of Barack Obama's goals from the beginning. This is one of the things he understands the greatness of America to be, which is our value system.

Don't forget he's a constitutional lawyer by background. This is something he cares about deeply.

But I've got to say also that we are going to change incrementally. He is hoping and promising that we won't. But the fact, is even if we don't change our fundamental character, some things about our daily lives are going to continue to change as this war - and he called it that - continues to evolve.

OLBERMANN: Why those reminders in there that even a perfect system may not yield perfect results, that there's no such thing as absolute safety? That seems like a - like a policy departure and an overall approach departure. I referred to it earlier as talking to Americans as "grownups."

FINEMAN: Yes. Well that's a big departure from the previous occupant. You know, George W. Bush, in my view, had his virtues. This kind of approach was not one of them. And George Bush - even George Bush said that, you know, we could be attacked tomorrow. He didn't like to talk about it. He - I knew him well and knew that he was counting the minutes and the days until he got out of there and could claim he kept us safe.

Barack Obama - as he said in the speech in Oslo - we have to look at the world the way it is. He said, "I confront the world the way it is." And that's something the American people are going to have to do, too. And I thought it was not only brave but very characteristic of him to say what he said.

OLBERMANN: Congress is going to begin hearings on this attack soon. The spirit of unity that extended to Mr. Bush when we were attacked, is that going to prevail now, any shred of it going to prevail now?

FINEMAN: No. It's not going to prevail at all. By my count, there are at least four committees, maybe five, that are going to have hearings.

The one that I'm told that Democrats on the Hill are concerned about, and, I think, the White House is concerned about, are the hearings that Senator Joe Lieberman is going to chair. He's head the Homeland Security Committee. He hasn't had a whole lot of oversight hearings, some people say. Now, he's really going to turn up the juice.

There are going to be lots of hearings and lots of questions asked, because I think one of the things that President Obama left on the table here, he said there was human error but nobody was really at fault individually. Congress is not going to think that way. They're going to want some people fired and that's the kind of simple notion that Congress likes to get its head around. And you're going to see a lot of talk of that when Congress comes back - first, the House next week, and the Senate the week after.

OLBERMANN: And if you use the term "Senate" and "simple" in the same sentence, that leads us inevitably to Mr. Lieberman.

Howard Fineman of "Newsweek" and our own political analyst - great thanks for your time tonight. And I said that not you. Thanks, Howard.

FINEMAN: OK. Thank you, Keith.

OLBERMANN: We are joined once again by former CIA field operations officer, Jack Rice, currently the host of "Live in Washington with Jack Rice" on Air America Radio.

Jack, good evening.

JACK RICE, FORMER CIA FIELD OPS OFFICER: Great to be with you.

OLBERMANN: Let's start with the NBC report tonight that a single letter dropped from the man's name prevented the U.S. from revoking his visa presumably.

How crazy is this that, you know, "A," we don't have people in these roles who can spell, or, you know, try alternate spellings, et cetera, be a little creative, and, "B," that the government does not have this function that Google has, the capacity to ask did you mean Abdulmutallab?

RICE: Yes, it makes me wonder how we're spelling Osama bin Laden.

OLBERMANN: Yes, seriously.

RICE: I wonder if we have his address someplace in Karachi, we just never spelled it right. Is it with a "O" or with a "U"? Have they transposed letters?

This is perfect example, by the way, of some of the systemic problems that we have. The fact that we have spent $1 trillion in this transformation of the government and the world, frankly, and we still can't get something so simple done - I feel like I need to get my 12-year-old sent down to Langley, sent over to the National Counterterrorist center and say, "This is what you should do." And that's a frightening prospect.

OLBERMANN: Yes. It's also literally one of the plot fulcrums from Terry Gilliam's movie from 20-odd years ago, "Brazil" a miss, a one-letter difference and they go out and get the wrong guy and accuse him of being a terrorist. So, again.

RICE: Perfect.

OLBERMANN: . life imitating art in a horrible way.

This other part of the story, "The Washington Post" report today, that Mr. Bush's reforms of the intelligence system might not have changed things for the better ultimately. There was a 2005 essay from the man who now leads and is in charge of this massive terrorist data base and he wrote, "Are we on the road to fixing intelligence or are we at risk of making it worse?" In truth, either outcome is entirely possible."

Has this vast amount of raw data the U.S. has swept up, some of it legally and a lot more illegally, made it more difficult to make use of it and can today's changes change this?

RICE: Well, the Bush team has made it much worse. I mean, they've actually had a lot of problems here and they've caused a lot of these. A perfect example of this is they weren't as concerned about quality. Hence that's the reason they were willing to torture somebody by waterboarding them 183 times in a month. It's a perfect example.

If you don't get good in, garbage-in, garbage-out, you still have that problem. But then we couple that with the inability to analyze it and synthesize it, so you don't have garbage in, and then you confuse it and you still can't put it together. And so, you get nothing.

OLBERMANN: And that essay that I just quoted also says that reform severed the collection of the data from the analysis of the data. Go a little more depth about what that's a problem and again, is there a way to address that quickly?

RICE: Absolutely. This was the organizational structure. Again, the CIA used to do a lot of its own analysis. So they would take the information from the field. As a field operative, I would bring that in. Somebody would take that and analyze it.

Then what they did after 9/11 is they started the director of national intelligence and the National Counterterrorism Center. They would take that information from them and then move it to another place. The problem with that, sometimes, is you may not get all of the context of that initial information so they only get pieces of it.

When you break this up into so many different moving parts, and there are already incredible numbers of moving parts already, you sort of misunderstand how the entire process works. And so, now, they're having to cobble it all back together and try to come up with an answer. And they're still failing at that.

OLBERMANN: All right. Put on your field operations officer hat one last time and tell me what you would have thought from that perspective of Mr. Obama's point that a perfect intelligence might not still discover every would-be bomber.

RICE: Well, I love the fact that this man is a realist, because you can't necessarily grab everything. There are human beings involved. You may simply not have the intelligence. It may not be available.

And by the way, this highlights the broadest question of all. The person who gets recruited who wasn't tied to terrorism in the past, you get a 23-year-old Nigerian, and if you didn't have anything else that touched this, imagine how you deal with that. And that's the biggest problem we face in the future is this radicalization issue. We have to deal with that.

OLBERMANN: Jack Rice, formerly of the CIA now of Air America. Thanks again, Jack.

RICE: Thank you very much.

OLBERMANN: Two more questions tonight. What happened to all that actionable intelligence we were assured by Republicans would come from the enhanced interrogations at Gitmo, which has held for at least 2 ½ years, at least 90 men from Yemen? And if the terrorists get a boost from the fear that Detroit spread, and Newt Gingrich now says Pete Hoekstra got a boost from the fear that Detroit spread, aren't Hoekstra and the terrorists sharing the same boost?

Two "Quick Comments" and Lawrence O'Donnell - next.

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OLBERMANN: Now, continuing our first week of our new nightly pair of "Quick Comments."

The president of the United States will have a far easier time correcting the flaws in our counterterrorism efforts than he will have correcting the flaws in the souls of the American politicians who continue to exploit those flaws for their own insidious reasons.

Now, Newt Gingrich has not only applauded Michigan Congressman Pete Hoekstra's hysterical, holier-than-thou partisan reaction to the failed plot at Detroit but he's complimented Hoekstra's nascent campaign for governor there and actually said that the congressman, quote, "has gotten such a boost out of having been intelligence committee chairman now with the attempted attack on Detroit."

Across agency intel system for which then-Chairman Hoekstra had congressional oversight failed, so he gets a boost out of it - the way John McCain's top adviser said another terrorist attack here would be a big advantage to him? And for whom is a terrorist attempt a boost exactly or an advantage?

When will this become evident to all of you seedy politicians yearning for office even if it means you get it over the frightened bodies of American citizens or the dead bodies? You cannot claim that a terrorist attack or an attempted terrorist attack is a boost or an advantage for anybody or anything in this country without emboldening the terrorists.

Newt Gingrich, like Cheney, like Hoekstra, like Giuliani, you are personally showing a terrorist somewhere the kind of havoc he can sow in this country whether or not his bomb goes off. You are personally instructing a terrorist somewhere on how to divide us and how to pick our leaders for us. You are personally encouraging a terrorist somewhere to go ahead with his plans.

And any boost that any American politician gets from terrorism, he shares with that terrorist.

(COMMERCIAL BREAK)

OLBERMANN: Listen to the right-wing echo chamber. President Obama is to blame for a Nigerian's failed attempt to blow up an airliner on Christmas Day. But when hijackers successfully took control of four U.S. airliners on September 11th, 2001, at which point President George W. Bush had been in office nearly eight months, that attack was not his fault - to say nothing of the follow-up attempt, the "shoe bomber" of December of 2001. Only under Karl Rove's math, the same math that predicted Republicans sweeping in the 2008 presidential and congressional elections could both sums add up.

More Republicans, like Newt Gingrich and Dick Cheney and Congressman Hoekstra and Mayor Giuliani before them issuing new attacks in the wake of the president's remarks this afternoon.

The low lights, GOP Chair Michael Steele going for the lay-up by claiming that President Obama's policies, quote, "have not helped keep America safe," citing in particular his decision to close the detainee facility at Guantanamo Bay. Never mind that it was the Bush administration which wanted it closed and which released detainees to Yemen first.

Chairman Steele as well as Republican Congressman Mike Rogers of Michigan both believing that the current president has not recognized we are at war with al Qaeda. Congressman Rogers asking that Mr. Obama, quote, "use this terrorist act to recommit our nation to winning the war on terrorism."

Congresswoman Michele Bachmann, not so much focused on wiping out al Qaeda as wiping out American civil liberties.

Quoting her and we are sorry, we really must at length, "How can we honestly believe the president, when he says he will not rest until he finds out all who were involved in the attempted Christmas Day bombing when we've already given Umar Farouk Abdulmutallab the right to remain silent? We should be using all legal means necessary to push this terrorist to release all his information, not allow him to lawyer up. Therefore, I'm calling on President Obama to immediately change his approach to this ongoing struggle against terror, and never again allow terrorists Miranda rights."

Lastly but certainly not least, Senator Cornyn of Texas, keeping his eyes on the prize of defeating health care reform by claiming that the failed attack over Detroit happened because President Obama's alleged preoccupation with health care.

I wish I were kidding but as you see, I am not.

Let's turn to "Huffington Post" contributor and MSNBC political analyst Lawrence O'Donnell.

Good evening.

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Good to be here, Keith.

OLBERMANN: We'll skip the fact that we heard Bachmann use "all legal means" and "not allow him to lawyer up" in the same sentence. But, broadly, the Republicans see no risk in this strategy - the idea that it's a boost coincidentally for them and terrorists holds no fear for them?

O'DONNELL: I think Republicans do see a risk. Most Republicans aren't saying anything. What we get is this.

OLBERMANN: Yes.

O'DONNELL: . giant, you know, this reliable group of half a dozen, sometimes a dozen who will come out with stuff instantaneously and they are very reckless about it. It is a - it is a desperate attempt for them to reach back to a play that they think worked.

Cheney was the one who really specified this in 2004. There came a point in that campaign where he said very explicitly, "If you elect John Kerry, this country will be less safe." No one had ever done that at the presidential, vice presidential level in presidential campaigning before. Those words had not been spoken about the other side.

They won after saying that. They think it's a play that works.

They're trying to make it work again.

OLBERMANN: The details when you look beneath the surface of the fear, which does resonate with people, people have the right to be afraid. It's a human emotion.

But when you go into some of the details, the specifications that would be in this indictment say, oh, he never uses the terms "terror" or "war on terror." He used the term or variations of it 11 times today in his sixth statement on this, and yet, Republicans continue to use this even though it is easily factually disproved.

Is the assumption that nobody will ever - nobody they're talking to will ever listen to what Obama actually says?

O'DONNELL: Well, in fact, more people hear President Obama use those words than hear the accusation that he doesn't. He's got a much bigger microphone than they do and, of course, this attempt to tell people you haven't heard what you just heard - that's a play we haven't seen anybody win with before in American politics.

I don't know the case where you get - where you can point to where you say the president has never said this. And the president has, in fact, said that and somehow you win that argument. I've never seen that happen.

OLBERMANN: And this notion that Mr. Cornyn has just put out, that this all happened because of a distraction over health care or domestic policies - it seems somewhat lame on the face of it, but given the speed of this review that was pushed out this afternoon, it does not - it also seem to be factually easily disprovable?

O'DONNELL: Oh, I think everyone knows they elect the president to multitask, that he's got a lot of work to do and they know - in this case, they elected a president into two wars and into a large body of domestic governance that involved instantaneous crisis first day on the job, an economic crisis likes of which you haven't seen in a generation, more than a generation.

So, everyone knows that the president's job is multitasking. Republicans pretend that it can't be done when it's convenient to them. I mean, you know, this is - this is the same party that was insisting to us that every single day of President Bush's vacation, every single day of his vacation, he was handling several different aspects of the governance from the dust of Texas. So, you know, consistency is something we aren't going to get.

OLBERMANN: Plus, cleaning out all that brush.

O'DONNELL: Exactly.

OLBERMANN: Let me read you, finally, one blogger's thought on this and get your reaction. I don't know if you've heard this.

"Sniping at the president by Republicans, including former Vice President Cheney and by conservative radio and TV commentators borders on, if not passing into asinine. Partisanship truly has pervasively infected our political system when a reasonable, measured, factual, timely and substantive response by a president to a single security incident, the roots of which clearly indicate long simmering problems that pre-dated his tenure in office is publicly blasted as irresponsible. In point of fact, those leveling such counterproductive attacks are the ones engaging in irresponsible behavior."

That was Bob Barr, the former Republican congressman of Georgia.

O'DONNELL: A moment of integrity for Bob Barr, who's traveled a long road since the impeachment hearings in the House of Representatives.

Look, the public knows that. Bob Barr is stating the obvious, and we all go through metal detectors. I'm one of many Americans who've gone through metal detector at the airports since this incident. They're there for a reason. We know al Qaeda is still trying to do this.

And the best they could do was get a guy to set his underpants on fire. That's the best they could do.

OLBERMANN: Lawrence O'Donnell of MSNBC and the "Huffington Post" - always a pleasure, sir. Thank you.

O'DONNELL: Thanks, Keith.

OLBERMANN: It is too bad we didn't have anybody from al Qaeda in Yemen to torture. They would have given up this plot, right? Oh, yes, we did. Mr. Bush had at least 111 of them in Gitmo for at least 16 months. Good thing enhanced interrogation works.

The second "Quick Comment" - ahead.

(COMMERCIAL BREAK)

OLBERMANN: Banks too big to fail are too big to need your business.

Move your money. Arianna Huffington on her big idea.

First, on this date in 1598, Boris Godunov became czar of all the Russias. Presumably, this was a big deal for his career. But, more importantly, later it would permit Jay Ward and Bill Scott to unveil their character for Bullwinkle, Boris Badinoff. Shut up your mouth.

Let's play Oddball.

I send lady spy into room, where are moose and squirrel.

We begin outside a police precinct in Staten Island, New York, where yesterday a chain gang of prisoners, led in shackles to a van which was to take them to court. Seven men left the precinct. Six of them made it to the van. I'm sure he's just going for a bagel. He'll be right back.

Unfortunately for him, 22-year-old Neqwon Thompson (ph), he decided to escape while he might have noticed the ABC affiliate was taping him. Police quickly recaptured the ultimate scofflaw, who now faces inescapably long odds of going to the big house.

Over to Lawndale, California. Residents don't like how it smells. A few years ago the town Lawndale planted flowering garlic plants in the medians of its streets. The people of Lawndale finally had enough of the odor which the plants gave off which they want them removed. The cost would only be 35,000 dollars in taxpayer money. Lawndale councilman Jim Ramsey doesn't mind the stink, though. He highlighted the benefits of garlic lined streets to a reporter from my old station, KTLA.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The only reason why we ever had garlic put in was so we could keep the vampires out of town. And since we have had garlic, I haven't seen one single solitary vampire in town.

UNIDENTIFIED MALE: These plants protect you?

UNIDENTIFIED MALE: These plants are protecting the city. If we take them out, we may have vampires in here again.

(END VIDEO CLIP)

OLBERMANN: Arnold Schwarzenegger, I'm going to go with he's kidding. Though, if you look at him, he does look something like Barnard Hughes, who played the grandfather in "The Lost Boys."

Lastly, to a train station in Western Japan, where at a recent ceremony, Tamah (ph) the cat was promoted from station master to operating officer. Well, that makes sense. Tamah was named station master at Keshi (ph) station several years ago, and became a tourist attraction, boosting profits for the railway. Kishikawa (ph) Train Company says this is the first time in the world a cat has became an executive of a railroad corporation. Nice cat. Still not clear if Tamah as operating officer will actually conduct the train. Tounces the driving cat was unavailable for comment.

Arianna Huffington's advice on how you can reward the banks that aren't too big to fail. The major American newspaper that actually printed this line: "in the two cases of domestic terrorism since 9/11, both on Obama's watch" - well, it was written by the paper's publisher. Why would he know anything about the history of the United States between 2001 and 2009? An idiot wins worst persons tonight.

(COMMERCIAL BREAK)

OLBERMANN: Remember the banks too big to fail? The ones that took billions in taxpayer money and used that not to help you with a loan, but to sweeten their balance sheets and pay lobbyists to fight financial reform and award their top guns with big, fat bonuses? The very same banks that played a huge part in putting the entire global economy in the crapper in the first place?

It turns out you are not powerless in their grasp. Time to make those too big to fail banks just a little bit smaller by moving your money to a local community bank that only has a grisp, instead of a grasp. This is the brain child of senior staff at "Huffington Post," including Arianna Huffington, who will join me in a minute.

It is almost needless to say at this point, but the facts are obvious. The four biggest banks, for example, JP Morgan Chase, Citibank, Bank Of America, Wells Fargo, have cut lending to businesses by 100 billion dollars over just a six-month period after taking billions in taxpayer money in part to increase lending. Those big banks, which were crowding out community banks even before the economic crisis, have an even greater advantage now. The system is rigged.

There is something you can do. And the idea of moving your money is already gaining momentum. It has been endorsed by financial writers from "Time Magazine," "Newsweek," and "The Nation," among others.

Now, as promised, co-founder and editor-in-chief of the "Huffington Post," Arianna Huffington. Good evening.

ARIANNA HUFFINGTON, "THE HUFFINGTON POST": Good evening, Keith.

OLBERMANN: The idea is obviously brilliant in its simplicity, but potentially broadly in its impact. Describe it for us. What does it mean practically?

HUFFINGTON: Well, very simply, what it means is to have something that we can do, beyond being angry, frustrated, or resigned, to deal with this huge chasm you described between how the big banks are doing and how Main Street is doing. And what we can do is take our money out of the big banks, put it in community banks. There are over 8,000 credit unions and about 8,000 community banks, with tens of thousands of branches around the country.

We have teamed up with a bank rating agency, so if you put your zip code into the website MoveYourMoney.info, it will give you all the credit worthy, safe and solvent banks in your area. You can choose among them, move your money there.

The additional advantage, beyond you not having to deal with all the hidden fees and all of the other charges that make the big banks additional billions every year - the additional advantage is that these community banks can then turn around and invest in the communities, invest in small businesses, and create jobs, which are so desperately needed. So it creates a kind of virtuous cycle.

OLBERMANN: Any risk in this for a depositor, any danger whatsoever?

HUFFINGTON: No, not at all, because, whether you're with a big bank, a credit union, or a community bank, any deposit under 250,000 dollars is guaranteed, either by the FDIC or by the Credit Union Insurance Fund. So no risk whatsoever.

And the stories that are coming, Keith, people are sending to us, the thousands of comments, are so moving. To describe how people are treated in the local banks compared to the big banks, where they are treated like cattle. And the additional sense of empowerment that as citizens there is something we can do, instead of giving our money, as you said at the beginning, to these big banks, who are then hiring lobbyists to undermine fundamental financial reforms, and also to engage again in the same derivative trading that was so risky when they did it back in 2008, and is just as risky right now.

So the taxpayer is likely, once again, to have to bail out these too big to fail banks. Let's make them smaller.

OLBERMANN: I am all in favor of moving my money to the Bedford Falls Building & Loan from "It's a Wonderful Life," and it's good that we can do that. But to return to that underlying problem, what are those too big to fail banks up to lately? Have they, to any degree, indicated that they're loosening lending or are they still fighting reform with everything they've got, including what we gave them?

HUFFINGTON: Absolutely. They are fighting reform with everything they've got, with everything we've given them, with all the guarantees and the special privileges the government continues to give them. And right now, additionally, we have the cram down legislation, for example, Keith, just to give you one example, which the big banks defeated in the Senate, and then they also defeated in the House. That would have prevented millions of homeowners, potentially, from losing their homes.

So they're completely back to that same game of undermining the public interest. But there is something we can do about it.

OLBERMANN: So MoveYourMoney.info. We got that correct? That's the website?

HUFFINGTON: Exactly, yes.

OLBERMANN: Arianna Huffington of the "Huffington Post" and MoveYourMoney.info. Thanks, as always.

HUFFINGTON: Thank you, Keith.

Rare is the night you see me thanking Rudolph Giuliani. But he was good enough to remind me about just how thoroughly the theories were disproved about enhanced interrogation and actionable intelligence and Gitmo good. Tonight's second quick comment.

The Tea Baggers are having a party and they're keeping that damned Rachel Maddow out. After they falsely claimed she was trying to get in when she wasn't. When she joins you at the top of the hour, she will look at how when the president calls for citizenship and not partisanship, confused Republicans revealed today they thought citizenship was partisanship.

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OLBERMANN: Worsts next. First, the second of our nightly quick comments. And thanks to Rudy Giuliani, seriously. A pivotal point would not have occurred to me had Giuliani not said this about the criminal trial of Umar Farouk Abdulmutallab: "the president made a very big mistake in not making him an enemy combatant, because the minute you make him a criminal justice defendant, you cut of the ability to really question him. You want to keep an enemy combatant for about a month or two to get all the intelligence he is willing to give you, because that could be about other possible attacks on the United States."

It was Mr. Bush who beat it into our heads that al Qaeda and other terrorist groups plan their attacks years in advance. We know Abdulmutallab was trained in Yemen. We know that the last detainee arrived at Gitmo in September 2007, and at that time, President Bush had at least 111 Yemenis there. We know enhanced interrogation has taken place at Guantanamo Bay.

This question courtesy of Mr. Giuliani: the Yemenis at Gitmo, detainees, enemy combatants, no lawyers to interfere, subjected to enhanced interrogation; why didn't they produce actionable intelligence about other possible attacks on the United States? Attacks that were presumably years in the planning by the al Qaeda group in their own country?

Maybe enhanced interrogation is utterly unreliable and useless?

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OLBERMANN: Another knee slapper from the tea party crowd. They get a phony Rachel Maddow to try to crash their convention, then dramatically announce they've banned her. That's next, but first time for Countdown's number two story, tonight's worst persons in the world.

The bronze to RNC Chairman Michael Steele. As some unhappy Republicans grumble about the job he is doing, Steele goes on ABC radio today and says, quote, "I'm looking them in the eye and say, I've had enough of it. You don't want me in the job, fire me. Until then, shut up. Get with the program or get out of the way."

Steele made these remarks while continuing his book tour, the book from which he is keeping the profits, understandably. It's his book. Problem is the "Washington Times" claims, quote, "RNC ethics rules appear to forbid anyone working for the national committee from taking outside income or using the committee position for personal gain."

This is called pulling an Oscar Wilde. Never sue for libel when you're guilty of what they've said about you.

Our runner-up, Lonesome Roads Beck, still living the martyr fantasy of the far right, asks about President Obama: "the question is, when a press conference becomes hostile, or when a press conference becomes like a should be, like it even was under George W. Bush, they actually start to ask this president and back him up to the wall and not allow him to get away with blatant lies, how does this president react?"

Yeah, wow. Remember those Bush press conferences when Fox News didn't allow him to get away with that blatant lie about how he hadn't decided to invade Iraq months, years before he did? When the "New York Times" didn't allow Bush to get away with that blatant lie about the weapons of mass destruction? When Les Kinsolving didn't let him to get away with that blatant lie about how no one could have predicted 9/11? Those were the days.

Plus, all those times Jeff Gannon backed him up to the wall.

But our winner, Sherman Frederick, publisher of the newspaper "The Las Vegas Review Journal," writing a column about it that no self-respecting newspaper would have printed, not one that employed a fact checker anyway. But then again, he's the publisher. Who is going to stop him. "For three days, our president failed to address his people directly on Abdulmutallab's failed effort to blow up a commercial flight over Detroit on Christmas day. All of this on top of President Obama's noticeable refusal to characterize our struggle as a war on terror. In the wake of fierce criticism, Obama now talks tough about keeping America safe/ But in the two cases of domestic terrorism since 9/11, both on Obama's watch, red flags flew aplenty."

All right. It was three days after an attempt on an airliner until Obama formally spoke. It was six days after an attempt on an airliner until Bush formally spoke. And Obama has now made 37 uses of the root word "terror" in his six statements about Detroit.

Oh, and the two cases of domestic terrorism since 9/11 both on Obama's watch? Publisher Sherm apparently missed those pesky anthrax terror attacks in the winter of 2001, 2002, and the shoe bomber terror attack. And if you're counting Detroit, you have to count the shoe bomber. And the 2002 terror attack on the El Al ticket counter at LAX. The DC sniper terror attacks in 2002. And the guy who drove his SUV into a group of pedestrians at Chapel Hill to honor his role model, Mohammed Atta, in 2006.

It's one thing if some greasy politician gets the memo and parrots this crap in public. But this guy owns a newspaper, which would obviously be better off if he delivered it rather than tried to write for it. Sherman "facts optional" Frederick, the publisher of "The Las Vegas Review Journal," today's worst person in the world.

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OLBERMANN: It will happen in Opry Land, as opposed to say Oprah land. Sister Sarah will give the keynote. Michele Bachmann will entertain you over lunch. A Tea Party convention, a gathering of independents with a thirst for freedom to take the cause to the next level. But organizers warn not all will be allowed to drink from the well. Specifically, no liberal trolls. Liberal trolls like Rachel Maddow?

The group Tea Party Nation cautioning loyalists via e-mail that as the convention nears, we will, in all likelihood, be invaded by liberal trolls. The e-mail was obtained by noted Tea Party sympathizers Talking Points Memo DC. TPM DC obtained the alert because it had signed up for the organization's list serve. It's a fool proof system, apparently. The e-mail continues, "Rachel Maddow joined this morning and we banned her seven minutes after she joined. I have little doubt she will mention this on her show."

It turns out my colleague did not try to join. In fact, the Tea Party nation made the whole thing up as a publicity stunt. The good natured Ms. Maddow responded, "I'm flattered that the Tea Party folks think I'm well known enough to help their cause."

Still, Tea Party paranoia goes further. "Note to prospective liberal trolls, TPN does not tolerate liberal trolls. If your sole purpose is to join this site in order to disrupt the flow of constructive dialogue against liberalism, you will find your time here very short. If you wish to debate the virtues of liberalism, as though there were such a thing, there are many other sites on the web who will tolerate you."

Time now to call in MSNBC political analyst Richard Wolffe, also the author of "Renegade, The Making of a President." Richard, good evening.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: I'm seeing a little disconnect here. The Tea Party nation, the principal element of this, we're explained time and time again, is not tea bagging, but the party of every man, but not everyone. How does that work?

WOLFFE: I am beginning to fear these people are giving tea parties a bad name. You know, we thought they were channeling the Boston tax revolt, but it turns out it's the Mad Hatter after all. You should check out their website. There are some blogs and discussion boards that you'll find very interesting. They reek of tolerance. There is the one about "have communists infiltrated our government." That's next to what looks like a picture of Joe McCarthy.

Another one is "FEMA death camps and martial law."

If they have any ideological basis to this movement, it's ripped from the libertarian party. But there's not much libertarianism going on here.

OLBERMANN: And it sounds like it is also ripped from the headlines of 1954 as well. That's the other - good news travels fast. They are organized enough to hold a convention. Why add to this by - I mean, it is, whatever else you think of it, whether it was grown naturally or, you know, bought and sold by lobbyists - they built this thing up fairly quickly. And yet, you know, are going out to send out paranoid e-mails and lie about Rachel Maddow trying to join, which are so easily disproved. Why bother with the little stuff?

WOLFFE: Well, it's agitprops. It's stunts. This isn't actually - for all the language about building a movement, if they really wanted to replicate what, say, the Obama campaign did, they'd say, we are actually open to independents and people on the other side. Remember, that was part of the pitch of the Obama movement. These people may have forgotten, thinking that he's a socialist, communist, fascist. But the idea of reaching out to the other side is how you build a movement.

This isn't about that. It's about revving up a disillusioned base. And the shocking thing is that in this disillusioned, angry time, when people are upset with established parties, these people are active. They're going to show up and vote. You know, if the other side doesn't get its act together, they are going to be out numbered, because people are going to stay at home. These people aren't going to stay home.

OLBERMANN: Sarah Palin is scheduled to give the keynote address. If she shows up, "The Washington Independent" is pegging her speaking fee at a minimum of 75,000 dollars. If she were to go instead to the CPAC convention at roughly the same time, she wouldn't get a dime. Is this why she chose this one or am I just being too cynical?

OLBERMANN: I don't know, Keith. I mean, if she had stayed in Alaska and served the public interests in her term out as governor, she'd would have gotten no money at all either. So she is clearly part of that entrepreneurial spirit that this party movement is seeking here. She has proven pretty well adept at raising money for herself, if not for anyone else.

OLBERMANN: But, again, her presence and the price that going to see her talk, which is I think what you do - you don't go to listen, you go to see her talk.

WOLFFE: Right.

OLBERMANN: Is 349 dollars, plus 200 dollars to attend the rest of the convention. If you didn't go to the convention and you saved your 549 dollars, wouldn't you have just addressed most of the problems that the Tea Party people are complaining about in the first place?

WOLFFE: Yeah. That is more than the price of a cup of tea, isn't it? It's a strange way to build a movement, to put money in the pockets of Sarah Palin. She does have a big family.

OLBERMANN: Back to Rachel for a second. This is kind of a badge of honor here, isn't it? I mean, is she the next Hillary Clinton or what? And she is listening, by the way, to whatever your response is.

WOLFFE: You know, Rachel's numbers and her show speaks for itself.

But in case she doesn't want to speak for herself, let's do it for her. It's a badge of honor to be something of a stimulant to a group of over stimulated people. Maybe they should have decaffeinated tea.

OLBERMANN: They asked Ed Schultz to run for Senate. Rachel is a stocking horse for the Tea Party people. Matthews in Pennsylvania. And, for crying out loud, Harold Ford was asked - might run for something. You know, what do I get in the deal?

WOLFFE: There is a sports commissioner's post waiting for you.

OLBERMANN: Like I said, what do I get in the deal? Richard Wolffe of MSNBC, author of "Renegade," as always great thanks.

WOLFFE: Thank you, Keith.

OLBERMANN: That's Countdown for this the 2,443rd day since the previous president declared mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.

Now, with more on that god bless America, country first, let's roll, flag pin wearing response to Detroit by the GOP, ladies and gentlemen, here is the most dangerous woman in America, David Letterman's special guest, Rachel Maddow. Good evening, Rachel

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