Monday, September 22, 2008

'Countdown with Keith Olbermann' for Monday September 22, 2008
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Video via MSNBC: Oddball, Worst Persons

Guest: Paul Krugman

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

Deregulation and the deconstruction of John McCain.


SCOTT PELLEY, CBS NEWS CORRESPONDENT: In 1999, you were one of the senators that helped pass deregulation of Wall Street. Do you regret that now?

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: No. I think the deregulation was probably helpful to the growth of our economy.

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: In fact, he recently stated that he thought that we should use the healthcare system - we should adopt the same principles of deregulations to the healthcare system as we have to the banking system.


OLBERMANN: McCain's exact quote in current issue of "Contingencies Magazine": "Opening up a health insurance market to more vigorous nationwide competition. As we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation."

Sure. And how much would we spend pulling back deregulated industry's butt out of the fire?

The economic crisis continues and blame is laid at the feet of John McCain and his cronies. Campaign manager Rick Davis took more $30, 000 a month for five years to defend Fannie Mae and Freddie Mac from government regulation.

The anti-earmarks king. "I have never asked for nor received a single earmark or pork barrel project for my state."

Except, Progressive Accountability says, "That's a lie." $56 million for flood control in Arizona in 2000. $4.6 for a road in Arizona in 1991. Millions more for a conflict resolution center in Tucson.

Worsts: Neil Cavuto says Congress should have issued a warning, quote, "Loaning to minorities and risky folks is a disaster," unquote.

The last game at Yankee Stadium: Was it really the last game at Yankee Stadium?

And the Fred Merkle centennial. The most controversial play in sports history on its 100th birthday.


UNIDENTIFIED MALE: They never believed Fred Merkle. The umpires certainly didn't after they escape from the mob scene at the crowd down there had become.


OLBERMANN: Who on earth is that guy?

All that and more: Now on Countdown.

(on camera): Good evening. This is Monday, September 22nd, 43 days until the 2008 presidential election.

There's a man running for president tonight who actually believes right now that deregulation has been a great thing for the U.S. economy. He has surrounded himself with lobbyists who made millions pushing for the regulatory changes that facilitated the current crisis. And he thinks that deregulation of the banking industry has been so great, we should do exactly the same thing with - make that to - healthcare.

Naturally, his campaign today conducted a conference call to announce that the "New York Times" can longer be considered a news organization. And when chronicled the factual errors the campaign made during that conference, the campaign then declared the Politico writer is, quote, "in the tank."

Our fifth story on the Countdown: The political implosion of John McCain. Whatever the senator is saying, and he has taken, at least, two sides on this issue today alone, the Republican nominee having showed his hand in the current issue of "Contingencies," the magazine of the actuarial profession.

In an article that has his name on the byline quoting from it, "Opening up the health insurance market to vigorous nationwide competition as we have done over the last decade in banking, would provide more choices of innovative products less burdened by worst excesses of state-based regulation."

The McCain campaign claiming that the senator was referring only to the regulatory change that allowed banks to operate across state lines, not banking deregulation at large. But since what he meant to say, a candidate, doesn't specify what he really meant in the article, we rely instead on McCain's anti-regulatory voting record, about which, the Republican nominee telling Scott Pelley of "60 Minutes," he has no regrets.


PELLEY: In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

MCCAIN: No. I think the deregulation was probably helpful to the growth of our economy.


OLBERMANN: And guess who else made light reading of the McCain healthcare deregulation article over the weekend? Well, the Obama campaign, up with a new ad today to prove it.


NARRATOR: We've see what Bush-McCain policies have done to our economy. Now, John McCain wants to do the same to our healthcare. McCain just published an article praising Wall Street deregulation, said he'd reduce oversight of the health insurance industry, too. Just "as we have done over the last decade in banking," increasing costs and threatening coverage, a prescription for disaster.

John McCain: A risk we cannot afford to take.


OLBERMANN: Time now to call in our own Jonathan Alter, also, of course, senior editor of "Newsweek."

Good evening, Jon.


OLBERMANN: If the McCain campaign thought it might be able to run away from or, at least, distance itself slightly from his record on deregulation, the timing and publication of this particular actuarial bible magazine, did that blow that for them completely?

ALTER: This is what's so great about politics is, you know, this election may be determined by a magazine that is perfect for insomnia, actually, and nobody actually reads. But what it does it confirms where he has been all of these years. You know, he said that the 1999 bill that was written by his close friend and would be treasury secretary, Phil Gramm, the man who he thought should be president of the United States in 1996, that that help the economy.

It didn't help the economy. The economy started to decline in 2000, the following year. It was after the big years on Wall Street. All that it did was turned the big casino into a bigger casino in a very, very unhealthy way. There is no record of him voting for a regulation, increased regulation going all the way back to the early '80s when he came to Congress.

He redeemed himself slightly in 2005 by wanting more oversight of Fannie Mae and Freddie Mac, but, only slightly. And as far as the basic risks that were assumed by Wall Street, he was always moving in the other direction.

So, for him to now claim that he's really been a regulator and in favor of regulation, he's trying to confuse us, Keith, on two words, reformer and regulator. He thinks that if he says reformer enough, people will believe that he's also had faith in regulation.

OLBERMANN: Well, they reform the rules as they were and made them much more easy for people to play wild west out there. That is reform, like Napoleon had reform.

ALTER: Yes. It's even worse than that because if you remember the Keating Five scandal that he was a part of it, which, by the way - it's crazy, but there's been very little about it in the press in the last few weeks. McCain thinks he's getting a hard time, he's really getting a free ride on the fact that he was in the middle of the last great financial scandal in our country.

But his reaction to that, you would have thought would have been more regulation of the financial services industry. Instead, he moved forward on campaign finance reform after being caught on that scandal, but did nothing, nothing to try to prevent another savings and loan crisis from happening down the road. He was missing in action when it came to even learning the basic lessons of the scandal that he said taught him all kinds of things that he would never forget.

OLBERMANN: Let me ask you something that is tangential to this in the time we have left. The conference call, with the "New York Times," which they said, or the conference call about "New York Times" which they said the "Times" is no longer a journalistic organization by any journalistic standard, they are now, now the "New York Times" is on the "S" list, with us and everybody else, came back and listed the factual errors that they made in this conference call. So now, the claim was, well, now Politico is also on the list, they're in the tank.

Is this still an idea of rallying the base against the media or is this just panic?

ALTER: Well, I think there's a little bit of panic. But it's mostly in the form of just an emotional reaction that they can't control. What is happening in these campaigns is that the character and personality and temperament of the leader leaks down to all the people below him. So, if you have a candidate who is erratic, has a temper, likes to lash out, you are going to see that on the part of the people as well. It's just a natural thing.

And it's also just really trying not to just work the refs the way they do in basketball.


ALTER: But actually get on the court and push the refs, hoping that their bosses will go - oh, you know, we don't want to get in trouble with the guy who might be president. So, we'll move in the other direction and go easier on him.

I don't think it's going to work in this case.

OLBERMANN: Yes, because there's always more refs.

ALTER: Yes, right.

OLBERMANN: Jon Alter of MSNBC and "Newsweek," as always, thanks for coming in.

ALTER: Thanks, Keith.

OLBERMANN: In addition to Senator McCain's own record of being anti-regulation, there are also the lobbyists who work for him, who have themselves lobbied for the deregulation of this banking industry and gotten rich off it.

The "New York Times" aforementioned, reporting this morning that the McCain campaign manager, Rick Davis was paid more to that $30,000 a month, or a $1.8 million over five years to be president of an advocacy group with the deceptive name of the Homeownership Alliance which defended the mortgage giants, Fannie Mae and Freddie Mac against stricter government regulations according to current and former officials.

What did the mortgage giants buy with that nearly $2 million they paid Davis? In a word, access - access to Senator McCain.

Former spokesman for Fannie Mae telling the "Times," quote, "The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again."

And the latest twist in the crisis, the prospect the our bailout of American firms might extend to foreign banks like, the Swiss outfit, UBS, whose vice chairman, former Senator Phil Gramm, nearly wrote the McCain economic plan.

Over the weekend, UBS and other foreign banks successfully lobbying to sell their toxic mortgage debt to the U.S. Treasury as well, getting the same treatment as American Banks.

Yesterday, McCain spokesman, Tucker Bounds, refusing to rule out that Senator Gramm might still become Treasury Secretary Gramm in a McCain administration.

On the stump today, Senator "McPopulist" decrying the excesses of CEO pay.


MCCAIN: My friends, top executives are asking for $2.5 billion in bonuses after they ran the company into the ground.


MCCAIN: The senior executives of any firm that's bailed out by the treasury should not be making more money than the highest paid government official. We should have that criteria.


OLBERMANN: And what about McCain financial advisor Carly Fiorina, you asked, or, at least, that's what Meredith Vieira asked.


MEREDITH VIEIRA, NBC NEWS HOST: About Wall Street. You said you promised to crack down on CEOs who walked away with huge severance packages. And yet the person that up until recently was your public face, really, on your economic policies was Carly Fiorina, she was the former CEO of Hewlett Packard. She was fired in 2005. But she left with a, I think, is a $45 million golden parachute while 20,000 of her employees were laid off. She is an example of exactly the kind of person you say is at the root of the problem.

MCCAIN: I don't think so.

VIEIRA: The CEO - how can you say that?

MCCAIN: Because I think she did a good job as CEO in many respects. I don't know the details of her compensation package, but she's one of many advisors that I have.


OLBERMANN: Like Rick Davis of Freddie Mac and Fannie, and Phil Gramm of UBS.

On the campaign trail in Wisconsin, Senator Obama redefining maverick.


OBAMA: After 26 years of being part of this Washington culture, all that he has changed is his slogan for the fall campaign. And the people in charge of that campaign prove that if we elect John McCain, it's not a team of mavericks we'll be sending to the White House, it's a team of lobbyists. We can't afford four more years of that kind of politics.


OLBERMANN: Let's turn now to CNBC's chief Washington correspondent, John Harwood. Also, of course, political writer with the "New York Times."

Good evening, John.


OLBERMANN: You interviewed Senator McCain over the weekend when you asked him about the lobbying that Rick Davis had done for Fannie Mae and Freddie Mac, he said, the quote was, "My campaign manager has stopped that, has had nothing to do with it since. And I'll be glad to have his record examined by anybody who wants to look at it."

Obviously, somebody did, your colleagues at the "Times," and the McCain campaign's response today that the "Times" is not a journalistic organization by any standard, this goes kind of beyond working the refs as John Alter just pointed out. This is accusing the refs of fixing the game.

HARWOOD: You know, it was pretty over the top - the statements that Steve Schmidt was making. And it's an acceleration of a pattern that we've seen. We saw it in the 2004 campaign, some of the Bush people were pretty aggressive about blaming the press. It is, as you mentioned to Jonathan, a way to rally the base and also express some frustration.

They know they're behind the eight ball on this economic crisis. They had momentum coming out of their convention. There's some frustration there and they are trying to get the attention away from some of the things the press wants to talk about and on to different ground and try to redefine a little bit this economic crisis. It's not something about broad economic policies, but about individual greed and corruption.

The problem, of course, is that you've got some of McCain's advisors who are involved in the same activities that he's condemning.

OLBERMANN: And to that point, Rick Davis claims now that he didn't lobby for per se for Fannie Mae or Freddie Mac, for his nearly $2 million that he got, he merely ran the lobbying organization. Could there be a lot of different kinds of analogies made here as to why that's not really a substantive difference?

HARWOOD: I don't there's a substantive difference. I think you're right about that. And in fairness, McCain said to me, these are conglomerates that really touched - reached out and touched everyone in Washington. There's a lot of truth to that. There's an awful lot of Democrats and Republicans, very prominent people, including, Bob Zoellick, who is an alternative treasury secretary for John McCain.

Some very prominent advisors, Jim Johnson, who was heading the vice presidential search process for Obama before he was asked to step down.

There's so many people who have been on the dole from Fannie Mae, that it really has infected a lot of Washington. And that's something that's obviously going to change in this rescue package.

OLBERMANN: Is this economic crisis, meltdown, whichever terminology you prefer, creating a real problem for Senator McCain and that the day jobs and the former jobs of his campaign associates, Mr. Davis, Senator Gramm, Ms. Fiorina, are being scrutinized as perhaps they should be?

HARWOOD: Yes, and, Keith, it's really bigger than that, though. It's0 that Barack Obama knows that this crisis underscores and helps him make the case that the economic policies of this unpopular incumbent Republican have not worked. So, he can afford to be calmer, be more presidential, try to be reassuring.

John McCain knows that the wind is right in his face. He's trying to fight through it, shift away from broad economic policies toward individuals, and to try to raise doubts about Barack Obama personally. That's an important part of it.

OLBERMANN: And what saves that negative momentum for the senator at this point, Senator McCain that is if Friday's debate being about foreign policy and not the economy. Is that the luck of the draw here for him?

HARWOOD: Yes, that is John McCain's turf, although we know that the economy is going to come up in that debate. But, I think, at the end of the day, John McCain is counting on the fact that swing voters are going to look at John McCain, look at Barack Obama, and decide that it's too risky to go with the new guy who's inexperienced. And Barack Obama is trying to reassure people that it's not too risky.

OLBERMANN: Or that the other cases, even risk the earth.

HARWOOD: Exactly.

OLBERMANN: John Harwood of the "New York Times" and CNBC, thanks, John.

"Decisions by the secretary pursuant to the authority of this act are non-reviewable and committed to agency discretion and may not be reviewed by any court of law or any administrative agency" - the language of the big bank bailout. The powers that kind of prod like that ones that gave Napoleon. Senator McCain managed today to both support them and oppose them.

Paul Krugman is next with us.


OLBERMANN: Senator McCain and Senator Obama agree, making whatever the secretary of the treasury does in the banking bailout not reviewable by any court or government agency might be going tragically too far. But Senator McCain also thinks the bailout needs to be passed immediately. Didn't he just disagree with himself?

Later: Blaming the economic disaster on loans to minority home buyers. The subtle racism of fixed news, not so subtle when it comes to Neil Cavuto. Worst Persons is ahead.

You're watching Countdown on MSNBC.


OLBERMANN: Nothing like an intensely complicated economic problem multiplied by urgency phrased in the most cataclysmic of terms to bring out contradictory answers from the presidential candidates. The switch here is senators, McCain and Obama, do not seem to disagree with each other. The conflict seems to be between Senator McCain and Senator McCain.

Our fourth story on the Countdown: The treasury secretary pressing Congress to approve without changes or significant debate an unprecedented financial bailout funded by taxpayers that could reach a $1 trillion. And, oh, by the way, give him all the power and none of the accountability.


HENRY PAULSON, U.S TREASURY SECRETARY: I think what we need to do is have the authority to move very quickly to purchase these assets, these illiquid assets from banks, and the plan we have, I think, is one that will work and will help us stabilize the market to get through this period. And then, future administrations, there's flexibility to run this, any way they would like to run it. But what we need to do is have something that will work and work quickly.


OLBERMANN: Secretary Paulson's plan dubbed "cash for trash" by its critics, taking hits in Congress. But on the campaign trail, the "do it now" mentality were supported by Senator McCain, but opposed by Senator McCain.


MCCAIN: We don't have time to wait for Senator Obama's input for our nation to act. I think it's clear that Congress must act and act quickly.


OLBERMANN: So, for Senator McCain, it's act now, except for when that means he thinks Paulson's idea isn't so good.


MCCAIN: I'm greatly concerned about the plan that gives a single individual the unprecedented power to spend $1 trillion - $1 trillion without any meaningful accountability.


OLBERMANN: Which is pretty much what Senator Obama said today, too.


OBAMA: We cannot give a blank check to Washington with no oversight and accountability when no oversight and accountability is exactly what got us into this mess in the first place.


OLBERMANN: And check this out tonight from the top Republican of the banking committee, Senator Shelby of Alabama. "I am concerned that treasury's proposal is neither workable nor comprehensive despite its enormous price tag. In my judgment, it would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted and may actually cause the government to revert to an inadequate strategy of ad hoc bailouts.

Given that markets have recently taken confidence in the prospect of government involvement, I believe Congress must immediately undertake a comprehensive public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion we owe the American taxpayer no less."

Paul Krugman is, of course, professor of economics at Princeton University, an op-ed columnist with the "New York Times," brings piece on the so-called "cash for trash" rescue appeared this morning.



OLBERMANN: I want to get your analysis of the latest stage of the bailout. But first, I'm very confused by Senator McCain's response here. He does not like the unchecked authority that so many are complaining about, so he wants to give Secretary Paulson the unchecked authority, immediately.

KRUGMAN: Well, he wants to do something immediately. And, you know, he is trying to have it both ways.


KRUGMAN: I'm not sure he has quite said - and there's a lot of debate - a lot of people think that McCain is going to try to, in the end, vote against this thing and oppose the opponent of big government. But, it's, you know - I mean, let's put it this way. Obama is a little slow on the uptick.


KRUGMAN: We'd like to hear more from him. But McCain is really trying to play this on both sides.

OLBERMANN: The Bush administration's "hair on fire" approach to this, you have analogized this to the authorization for use of military force, Section Eight of the bailout, whatever the secretary of the treasury does, it's not reviewable by the courts. Clearly, that briefing of lawmakers last Thursday must have been like one of Dick Cheney's warnings about Saddam Hussein. It's much worse that we're telling the public - is this another scam or is this JPMorgan in 1907 locking the bankers in the room, not letting them out until they did something?

KRUGMAN: Well, you know, my hair is kind of on fire.


KRUGMAN: This is a very scary financial crisis. It's not clear to me that extending the debate a couple more days is going to, you know, be make or break. And you really want to do it right.

The amazing thing to me was the arrogance of Paulson. Because he comes along, he says, OK, we're in this terrible crisis, and without consultation, without any discussion, he comes up with this plan that basically is - all your decisions, they belong to me, right, and no future review, no courts, no agency can establish accountability - without explaining. There's nothing from treasury explaining why this thing should work.

And I've been in conversation with lots of people, Wall Street people. There's been this very active discussion among economists who know something about it over the weekend and nobody that I know is convinced that it will work. So, this whole thing of we have to do it now, now, now otherwise trouble - and there's particular reason to believe - and by the way, Hank Paulson's record on this financial crisis, while he's certainly better than some other Bush administration officials, he has, in fact, been wrong again and again. And there's no reason to think that he has the magic answer.

OLBERMANN: And is there a reason even given for why there is to be no accountability, why that section was written in such a bare boned, in your face, kind of 32 words, sign here or else?

KRUGMAN: Yes, that's very odd. I mean, the guess is that there is actually going to be, if they get their ways, there are going to be some real giveaways. They're going to go to some firms and they're going to buy this stuff for a lot more than its worth in order to rescue the firms. And then they don't want somebody to be accountable.

But you know, if you're going to do this, let's be up front. Let's have a mechanism where the public gets some ownership, if we do that.

OLBERMANN: The Chris Dodd parts, his alternative of this, which, I guess, you're hinting at there, protection oversight, something for whatever amount of money we're giving away. Is that essential to anything because the more I see this as an outsider in this field, the more it reminds of the movie, "Blazing Saddles" and Cleavon Little holding the gun to his own head and saying, "You know, nobody moves or the sheriff gets it"?

KRUGMAN: Yes. What I've been hearing is the Bush administration can stay irrational longer than you can stay solvent.


KRUGMAN: Now - and the world can stay solvent. No, the real problem, I think, if there's no equity at stake then it's the deal-breaker and what's really amazing, by the ways, as treasury produces bare bones, talking with no explanation. U.S. Treasury Department, Senator Chris Dodd, who is after all just a senator, has produced a much more detailed, much more carefully-thought out document. The Dodd plan is much more convincing than the stuff from Paulson.

OLBERMANN: Is it that they don't know what to do or is it that they want the proverbial blank check?

KRUGMAN: Well, they want both. They want the proverbial blank check, and look, this was just a week ago. Just eight days ago, Paulson thought, well, we're finally just going to stop, you know, stop the bailouts, we're going to say no. Lehman, we're going to let it fall and no problems. And then the world started falling on them. And all of the sudden, they completely reverses and says - I want total power to dispose of $700 billion of taxpayers money with no constraints. It's very - yes.

OLBERMANN: Do you think that this inclusion of Section Eight, this really kind of just naked power grab contain in this, is going to ironically work towards the forces who want oversight, it's going to essentially necessitate this (INAUDIBLE)?

KRUGMAN: I'm thankful for Section Eight, because there's an intellectual argument which I and those who we've been trying to have, saying, you know, this plan does not make sense, we need to restructure it. But we might have been just overcome by the rush. It could have been the Iraq war resolution all over again, except that people took a look at that and said, what?

And that was kind of a signal that these people are not serious, that they are not really trying to reach out. This is, you know, this is a power grab. Let's stop and talk about this for awhile. So, I think this may have been a great gift, maybe there was a mole in the treasury legal department who realized that this was a bad plan they've given out.

OLBERMANN: Put in a poison pill if they'll have a chance.


OLBERMANN: Paul Krugman of the "New York Times" and Princeton, as always, great thanks for your time, and especially in person.

KRUGMAN: Thanks so much.

OLBERMANN: Thank you.

Talk about radio news hot off the wire. What it's supposed to be video of a station catching fire and not just in the ratings.

And nothing like blaming the financial meltdown on loans to minority home buyers. Nice racism, Neil Cavuto. Worst Persons is ahead.


OLBERMANN: Bests in a moment. Of course she hit her husband with a hammer. He was an alien yen from outer space who was trying to kill her.

In the same vein today, September 22nd, 2008, means we can now say, America, now 316 years without the official execution of a witch. The last hanging from the Salem Witch Trials on this date in 1691. Of course, with Governor Palin's connection to a former Kenyan witch hunter, Pastor Thomas Moothey (ph), this streak is in jeopardy. So enjoy it while you can. Let's play Oddball.


OLBERMANN: She turned me into a newt. We begin in New York City's Central Park, where illusionist David Blaine has officially run out of ideas. This morning, he was hoisted 44 feet above the ground by his legs. He'll attempt to remain upside down for 60 hours. Didn't Rosie O'Donnell do that on "The View?"

This is not the first mid-air stunt for Mr. Blaine. You may recall his extended stay in a he glass box high above London. You may also recall Londoners heckling him and pelting his box with eggs, fire crackers and the odd cheese burger. Luckily, New Yorkers are so much classier that that. So the stunt will end during a prime time special on another network when Mr. Blaine will be released from his harness. He will drop to the ground. And his fall will be broken by the cast of "Dancing With the Stars."

To the Internets and video from inside of what appears to be radio station 99.5 in Athens, Greece. Should we say Hot 99.5? Watch as the man reading the copy turns around, sees the studio on fire and continues to read. He kicks at the flames, continues with his script. Might be a practical joke. We tried this once in college.

The fire spreads behind him, sparks flying, smoke filling the room. The announcer keeps on going like this happens every damn day. Finally, help would arrive. The fire would be extinguished. Being from the Interwebs, we can't guarantee all this was real, but I can tell you it did happen at New York station WNEW in 1970 or so, and Sandy Becker stayed on the air until the fire department got there.


OLBERMANN: John McCain says he never asked for an earmark, which is a problem considering he got Arizona at least 59,600,000 dollars in earmarks.

And the centennial of the Fred Merkle play. This extraordinary story.

And we'll bring you my report on it from 25 years ago. All this ahead.

But first time for Countdown's top three best persons in the world.

Number three, best excuse, Gabrielle Graffia of Round Lake Beach, Illinois, under arrest for aggravated battery on her husband after she hit him with a hammer. He was not seriously injured. Her explanation? She was over medicated and she had decided her husband was an alien being from outer space and trying to kill her. Write it down, may come in handy.

Number two, best idea gone bad, officials in Lancaster, California. A quarter mile strip of a local roadway had been grooved in such a way that motorists driving Honda Civics over it at 55 miles per hour played the tune from the theme of the Lone Ranger. The problem was, if you were at any other speed or in any other car, the noise sounded not like the William Tell Overture but just a high-pitched droning sound. Tomorrow, they'll pave the grooves over.

Number one, best bet. If you took Jolee Bacon to win the competition at the Nez Perce County Fair at Louiston, Idaho Saturday, you knew what you were doing. Jolee Bacon entered and won the hog calling contest.


OLBERMANN: To hear John McCain tell it, when it comes to earmarks, those pet projects funded by federal legislation, he's a modern-day Vincent Van Gogh. In our third story tonight, his opposition to earmarks, the foundation, one might even say a fundamental of his campaign - it turns out those fundamentals are not too sound either, nor too true.

McCain's image as an earmark virgin forms the basis for two pillars of his campaign. One that he can restore America's economy by eliminating earmark spending. And two, that his ability to reform Washington's ways has been proven by his refusal to peruse or accept funding for Arizona projects through earmarks.

We already know that he chose a running mate who not only increased her town's pursuit of earmarks, she was the first mayor there to hire a lobbyist for the job and continued in that vein as governor, seeking two million for research on the productivity of crabs and, of course, saying, thanks, hell yes, to that Bridge to Nowhere earmarked money.

The primary tool Senator McCain has had to fight earmarks in Congress has been to vote against the budgets in which those earmarks reside, a point Senator Obama seized upon today.


OBAMA: When it comes to reforming government waste and spending, Senator McCain talks a lot about earmarks. Here's an area he does deserve credit. He hasn't requested many of those earmarks during his time in Congress. What he doesn't mention is he has voted for 144 billion dollars worth in just six years, or that he's voted for four out of the five Bush budgets that have been filled with special interest giveaways and left us with the largest deficit in history.

The truth is our earmark system, what's called pork barrel spending in Washington, is fraught with abuse. It badly needs reform, which is why I didn't request a single earmark last year, why I have released all my previous requests for the public to see, why I pledged to slash earmarks by more than half when I'm president.


OLBERMANN: Why not pledge to slash all earmarks? Well, some earmarks are good. And in any case, it depends how you define earmarks. To Senator McCain, an earmark is anything he does not do. Namely, he maintains that an earmark is not just pork barrel spending on hometown projects, but it has to be done secretly, and it doesn't count if the funding appears in its own bill. which would explain the 2005 Senate bill 2136, co-sponsored by McCain, quote, to provide funds, two millions dollars actually, to help establish the William H. Rehnquist Center on Constitutional Structures and Judicial Independence at the University of, golly, Arizona.

Taxpayers for Common Sense called that, quote, an earmark in training. McCain also claims it does not count if it's not legislation, which would explain why even after Congress rejected five million for an Arizona waste water facility, McCain went around Congress, asking the EPA to, quote, either reprogram five million out of existing fund or earmark the amount from an appropriate account. Earmark, a verb?

None of those qualifiers making room for McCain outing by fellow senators in February of 2000, listing McCain's earmarks, including 4.6 million for the Turquoise Trial in Arizona and 56 million for flood control and habitat restoration on the Salt River in Arizona. Just some of the earmarks McCain did not cut off, we know, to spite either of his faces. The flashback of a different kind, my mustache from 25 years ago and Fred Merkle's nightmare from 100 years ago.

Usually, the racism on Fox is a little more subtle, but you may blanch visibly when you hear what Neal Cavuto said about, quote, minorities, ahead in worst persons. But first, our newest feature, the most outrageous or untrue thing said by or on behalf of Republican presidential nominee John McCain, McCain in the membrane. Asked at a town hall to rebut the claim that she has no foreign policy credentials, Governor Palin completely side stepped the question, inviting the questioner to play stump the candidate. Not noticed as much, Senator McCain's follow-up.


MCCAIN: You may know that on September 11th, a large contingent of the Alaska guard deployed to Iraq, and her son happened to be one of them. So I think she understands our national security challenges.


OLBERMANN: Well, that would make one of you. The governor's son is not in the Alaska National Guard. He's in the Army. Whole different groups of soldier men, senator.


OLBERMANN: A hundred years since a ball game so controversial, so confusing that no two versions agree as to actually what happened. The Fred Merkle centennial. And Yankee Stadium is closed forever. Or is it?

That's ahead, but first time for Countdown's number two story, tonight's worst persons in the world.

The bronze to Steve Doocy of Fixed News, going on half cocked about an Internet rumor that Minnesota Senatorial candidate Al Franken wrote a sketch critical of John McCain for his old employers at "Saturday Night Live." Franken, in fact, only suggested to executive producer Lauren Michaels that the tag line, I'm John McCain and I approve this message, might be the basis of a good bit. Doocy's response was wonderful, "how could this possibly be legal?" You bozos have Karl Rove working for you and the McCain campaign simultaneously. And you had your boss, Roger Ailes, writing to-do list for President Bush and you're throwing stones on this? "How could this possibly be legal?" Like Bill-O the Clown, Steve Ducey thinks he has his own Fox police force. The runner-up, troubled city councilman Paul Lindaman (ph) of Columbia, South Carolina. Police video of his latest DUI arrest is now public. He is shown unable to recite the alphabet or count backwards successfully from 32. He repeatedly gets stuck on 33. Councilman Lindaman got his license suspended which put him in a pickle when he was seen a month later driving to a city council meeting. He is also running for re-election, which may explain his rather bizarre rationalization of all this, that the nomination of Sarah Palin may help him, because, quote, people have started to recognize that everybody who is running for political office is as human as those sitting back home.

Listen to this carefully because you haven't heard it before and may never hear it again from somebody like me. Councilman, that's totally unfair to Governor Palin. Leave her out of this.

But our winner, Neal Cavuto of Fixed News, showing his true self while trying to rationalize that some of the economic meltdown is the fault of Congress, telling a US representative that he should have warned bankers, specifically the mortgage giants Fannie Mae and Freddie Mac. Quoting Cavuto, I'm just saying, I don't remember a clarion call that said Fannie and Freddie are a disaster, loaning to minorities and risky folks is a disaster.

Wow, usually they hide their racism a little bit better at Fox or at least slightly. Not so with Neal. Neal Cavuto, today's worst person in the world.


OLBERMANN: That the history of Yankee Stadium in New York stretches back to 1923 you probably already know. That win one for the Gipper was coined there you might have heard. That Aryan Supremacy was first vanquished there, probably not. That there may be a sliver of doubt that last night's game there really was the last to be played in that facility is probably a complete surprise to you. An explanation of that small possibility in a moment.

But in our number one story in the Countdown, Yankee Stadium not only hosted Babe Ruth, but it also was played in by men who started playing baseball in the 19th century, and by Fred Merkle, whose involvement in the most controversial moment in the sport's history will be remembered on its centennial tomorrow.

First, the end of Yankee stadium probably. After pregame ceremonies that lasted fully an hour and 37 minutes, complete with actors portraying the team's heroes who had long since preceded it to it's great reward, the Yankees beat the Baltimore Orioles seven to three. Last Yankee batter Derek Jeter, last Yankee pitcher Mariano Rivera, last home run Jose Molina. Last out on last foul ball, Brian Roberts of the Orioles.

Was this actually farewell or are the Yankees hedging their bets? Reporting over the weekend that a contractor to dismantle the old stadium will not even be selected until January. The team's offices will not even be moved to the new stadium across the street until February. Memorabilia to be sold won't be removed from the ball park before March. And the knocking down of old Yankee Stadium will not be completed until the spring of 2010.

Sources in all the phases of the building of the new Yankee Stadium insist there have been no construction delays. Topping off of the new building is still scheduled for February 17th of next year. Begging the question, why are the Yankees and the city of New York planning to leave an empty and hard to protect from souvenir hunters ballpark to stand for 20 months, considering that across town the New York Mets and the city of New York anticipates starting to knock down Shea Stadium within 15 days of the last game there. And the Mets offices have already been moved in part to the new City Field.

The assumption has to be that an extraordinary fierce winter might delay finishing off both or one ballpark, so they better leave one of them intact, just in case the new ones are not ready for opening day next April. Of course, assumptions bring us back to Fred Merkle. Tomorrow is the 100th anniversary of the most controversial and, in some respects, most heart breaking moment in American sports history. It is a story of blame and scapegoating and, as the old cliche goes, the rules being changed in the middle of the game.

I've done some kind of story about Fred Merkle and Fred Merkle day every September since 1976. To give you a sense of that and Merkle's story, and with my thanks to my friend Jim Walton and my other friends there, I want to show you a piece that I filed on Merkle for CNN on the 75th anniversary in 1983. I apologize for some technical problems caused by aging videotape and by the mustache I had then.


OLBERMANN: They never believed Fred Merkle. He claimed he had touched second base 75 years ago today, touched it even as a riotous, happy crowd nearly swallowed him in its frenzy, but as it proved, premature celebrations. He claimed he wasn't out. He claimed the run counted. He claimed the Giants had won.

They never believed Fred Merkle. Seventy five years ago today here, the words Polo Grounds meant not an apartment complex but rather a baseball stadium. And 75 years ago today here, two great teams were fighting for the National League pennant. They were tied 1-1 in the bottom of the ninth inning. They were the Chicago Cubs and the New York Giants.

The Cubs of Tinker, Evers and Chance (ph). The giants of John McGraw and Christy Mathewson and Roger Breznehan (ph). They came through when it counted did those 1908 Giants. The scorecard from the September 23rd game might have said that there were two men out in the bottom of the ninth. But there was Moose McCormick (ph) leading off third base and the rookie first baseman Fred Merkle standing at first.

Merkle had just defied the skeptics who said the 19-year-old substitute couldn't hit. He laced a single here to the corner here in right field, what was right field. That sent the potential game-winning run, in the person of McCormick, over to third base. It was not the brightest thing Fred Merkle could have done. He would save himself endless aggravation if he had just struck out. Because that's when it happened.

Al Birdwell (ph) singled into right center, scoring McCormick. The Giants won and the stands of the Polo Ground spewed forth the crowd onto the field. Merkle went about halfway to second base, saw the fans coming and ran for the safety of the Giants' club house in center field. It's vital to remember that in those days when baseball card still came with cigarette boxes, that it was not baseball etiquette that every I had to be dotted and T crossed.

Once the winning run was across the plate, the game was considered over. While the rule book might have said that Fred Merkle had to go to second for the run to count, he was not doing anything unusual in not going to second base, because nobody paid attention to the rule book, nobody but the Cub's second baseman Johnny Evers.

Merkle said later that over the din of the fans he heard a commotion near second base. It was Evers screaming for a baseball, rushing to tag the base, to end the inning, to nullify the run. Merkle said he turned and fought his way through the throng and touched second base.

They never believed Fred Merkle. The umpires certainly didn't, after they escaped from the mob scene that the crowd down there had become. They ruled several hours later that Merkle was indeed out, that the run did not count, that the inning was over and that the game was a 1-1 tie. The Giants slumped through the rest of the regulars season, wound up tied for first with the Cubs, and so they had to replay that game that everyone now called the Merkle game for the national league pennant.

The Cubs won it. The Giants did not. Guess who got blamed. Fred Merkle. He had to be hidden in Brooklyn to protect him from the angry Giants fans. Somehow he managed to spend the next 17 seasons playing baseball, ironically enough even performing for the Cubs; 1,587 times he would again appear in a big league game. And if he ever survived just one of them without hearing someone yell, hey, Fred, don't forget to touch second, or hearing someone call him the bone head who cost the Giants the pennant, there is no record of it.

Fred Merkle told anyone who would listen that he went back and touched second base. He told them from that infamous afternoon here 75 years ago today until he died in 1956. But alas, they never believed Fred Merkle.


OLBERMANN: Fred Merkle's undeserved infamy followed him the whole of his life. Not until 42 years after that game was there any absolution. The New York Giants held an old-timers game in 1950 and Merkle attended, just to see the comrades of his youth, even if it meant getting booed again. Except the Giants fans rose and gave him a standing ovation. He died less than six years later.

As for the Chicago Cubs, weeks after the Merkle game, they won the 1908 World Series. They've not won a World Series since. A lot of us think those two facts are on some cosmic level intertwined. For the centennial, fate has placed the Cubs in New York, where tomorrow night, on September 23rd, they play the New York Mets and one can only wonder what kind of curse completing payback history has planned for them, with me in the ballpark.

That's Countdown for this 1,972nd day since the declaration of mission accomplished in Iraq. I'm Keith Olbermann, good night and good luck.