Wednesday, December 1, 2010

'Countdown with Keith Olbermann' for Wednesday, December 1st, 2010
video podcast
The toss: Big-ass

Video via MSNBC: Oddball

Guests: Richard Wolffe, Rep. Donna Edwards, Rep. Jan Schakowsky, Greg Mitchell, Sam Seder



CHRIS HAYES, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

The Republicans and Mitch McConnell put it in writing: no debate, no governing, no DADT vote. We're taking our ball and going home, unless we get tax cuts for the wealthiest Americans.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We need to show the American people that we care more about them and their ability to pay their bills than we do about the special interest groups' legislative Christmas lists.


HAYES: Speaking of paying their bills, no unemployment extension either.

The Democrats state the obvious.


SEN. HARRY REID (D-NV), MAJORITY LEADER: Obstruct, delay; obstruct, delay action on critical matters and then blame the Democrats for not addressing the needs of the American people. It's very cynical, but very obvious, very transparent.


HAYES: And, apparently, very effective as the clock winds down.

Mr. McConnell, you were saying?


MCCONNELL: We'll see how much time is left before the expiration of the 111th Congress.


HAYES: The presidential debt commission issues its report. The title

"Moment of Truth," let us know when you find one. Social Security benefits to be slashed. Social Security wasn't part of the assignment.

Calls to prosecute Julian Assange, shut him down with the Espionage Act. Does this mean "The New York Times" should have been prosecuted for the Pentagon papers? Bob Woodward and Carl Bernstein for Watergate?

And Noah's Ark turns up in Kentucky. OK, it's a theme park version, complete with a 500-foot ark, live animals, and tax breaks. Here come the lawyers two by two.

All the news and commentary - now on Countdown.




HAYES: Good evening from New York. This is Wednesday, December 1st, 706 days until the 2012 presidential election. I'm Chris Hayes. Keith Olbermann has the night off.

Less than one day after meeting with the president with unemployment benefits for 2 million Americans already beginning to expire, Senate Republicans have delivered a brand new filibuster ultimatum to Democrats in our fifth story: forget the unemployed because nothing will get done until the Senate votes on tax cuts for the rich.

In a letter delivered to Senate Majority Leader Harry Reid this morning by Senate Minority Leader Mitch McConnell, the message was clear:

GOP obstructionism is alive and well.


MCCONNELL: The election was a month ago. It's time to get serious.

It's time to focus on priorities.

Now, a while ago, I delivered a letter to Senator Reid signed by all 42 Senate Republicans. It says that every Republican will vote against proceeding to any legislative matter until we've funded the government and protected every taxpayer from a tax hike.


HAYES: The clear practical implications of the strategy is that Republicans will run out the clock on other legislation, like the now lapsed unemployment benefits and repealing "don't ask, don't tell," which military leaders have said must happen, and the DREAM Act, which will provide a path to citizenship for the children of immigrants.

The Senate majority leader responded.


REID: The true effect of this letter is to prevent the Senate from acting on many important issues that have bipartisan support. With this letter, they have simply put in writing the political strategy that the Republicans have pursued this entire Congress: namely, obstruct, delay; obstruct, delay action on critical matters.


HAYES: Meantime, the first meeting of President Obama's working group on the tax extension issue has met for the first time today and made little progress according to "Roll Call."

And President Obama, who, full disclosure, is my wife's boss, today shrugged off the Republican filibuster strategy.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There's going to be some lingering politics that have to work themselves out in all the caucuses, Democrat and Republican. I think we got off to a good start yesterday. There are going to be ups and downs to this process, but I'm confident we're going to be able to get that done.


HAYES: At the rally with labor leaders, House Speaker Nancy Pelosi did what other Democratic leader have largely failed to do lately. Speaker Pelosi pointed out the heartlessness and absurdity of denying unemployment compensation to out-of-work Americans at a cost of $18 billion when the Bush tax cuts for the rich would cost $700 billion.


REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: Seven hundred billion dollars in tax cuts to the top 2 percent in our country. And our Republican colleagues say we should do that and we should not pay for it, we should add that $700 billion to the deficit.

But when it comes to unemployment insurance and just the renewal we want to have costs $18 billion - $700 billion, $18 billion - they're saying that has to be paid for. Have to pay for unemployment insurance, we don't have to pay for tax cuts for the rich. Tax cuts for the rich do not create jobs.


HAYES: House Majority Leader Steny Hoyer has reiterated the intention of House Democrats to vote on an extension of tax cuts for the middle class alone. That vote is expected tomorrow.

And that has prompted House Speaker-elect John Boehner to accuse Democrats, Democrats of stalling. Quote, "This vote is a Washington stalling tactic with job-killing implications for employers and entrepreneurs gripped by uncertainty over the looming tax hikes." Right. Because the uncertainty about rich people's tax cuts is paramount compared to the uncertainty of jobless Americans who are losing unemployment benefits.

Let's bring in Congresswoman Donna Edwards in Maryland's fourth district.

Congresswoman, thanks so much for your time tonight.

REP. DONNA EDWARDS (D), MARYLAND: Thank you, Chris. It's good to be with you.

HAYES: So, there's a lot happening in the other chamber, but let's begin with the House. Is your caucus prepared to vote for the middle class tax cut extension alone? And will passing that be a problem if it's done under suspension rules which is going to possibly, which would require 2/3 vote?

EDWARDS: Well, I think that's a good question. I mean, I think that we are committed as Democrats - we've stated this all along - along with the president to provide tax cuts for incomes up to $250,000. That means even the millionaires get up to their $250,000 with a tax cut. And so, I'm really - you know, I'm very clear that this is where we need to be as a Democratic Caucus, it's where we need to be for the American people.

And we don't need to have that linked to unemployment benefits. Those need to be extended, as well, for the people whose unemployment begins expiring today.

HAYES: There's been some talk about coming up with another linkage. House Majority Leader Steny Hoyer said today that the Democrats may tie tax cuts for those who make more than $250,000 to the unemployment extension benefits. It sounds like that is not something that you are interested in.

Do you - do you already see the House leadership starting to look for compromises? Or can they just bring this vote without throwing something else in there?

EDWARDS: I don't think these things are actually related.


EDWARDS: I mean, even if you look at the congressional district that's right over in Virginia, that has the highest median incomes in the country, they're at $100,000 median income. And so, that's nowhere near $250,000.

We've always extended unemployment benefits at a time when we have this kind of record unemployment. This should be no different. It's never been about politics.

Families who need unemployment benefits are Republicans and Democrats and independents. And we're going into a holiday season where we face the risk that 2 million people in this country are going to lose their unemployment benefits because the Republicans have turned this into politics.

HAYES: Can I ask you one question? I mean, when you look at - when you look at the fact that what was previously routine, which is essentially just re-upping these unemployment benefit extensions, we have 9.4 percent unemployment. When you look at something like that has now become this massive fight, it's already expired for a lot of people - does it feel to you like Congress is deeply broken? Because watching it, that's what it starts to feel like.

EDWARDS: Well, I think that for the millions of people who are unemployed and who have been unemployed for a long time, it feels awfully broken. But I want to get, you know, to the brass tax here. There are people who will not be able to put food on their table, pay their mortgages and pay their utilities because of the nickeling and diming that's going on to extend unemployment benefits when the other side is perfectly willing to provide tax cuts for people who are - have incomes over $250,000 to the tune of $700 billion a year without asking to pay for a dime of that, putting it on the backs of our children and grandchildren.

We have to actually expose the hypocrisy, and that's why I want a clean vote on the tax cuts for those - for the income up to $250,000, and a clean vote on extending unemployment benefits. It's actually the right thing to do.

HAYES: And, finally, I want to get your quick thoughts on two other pieces of legislation. Both of which, if I'm not mistaken, have passed the House and are in the proverbial Senate limbo, which is the repeal of "don't ask, don't tell," and the DREAM Act, which would allow children of immigrants essentially to apply for student aid and get a path for citizenship.

How - what are the prospects for those? And how important do you think those two bills are?

EDWARDS: Well, as you have mentioned - I mean, this is really up to the United States Senate and to the leadership in the Senate to say, you know, forget all of the - you know, the monkey business with the rules. The military's already come out and said "don't ask, don't tell" is a no-brainer for 70 percent of our servicemen and women who know that they will continue to do their jobs in the way that they do, in the best way that they do, by repealing "don't ask, don't tell."

It's time to do that. We've done it in the House. The Senate has to act.

And as for the DREAM Act, this is really a very simple question for a lot of young people who lived in this country and then educated in this country all their lives to be able to continue their education to contribute to our society and our communities. It's the right thing to do. It's the right time to do it.

And Congress doesn't just get to take a break like Republicans want just because we had a midterm election. We have, all of us in the 111th Congress have a job up until the end of the year. We have to continue to do our job.

HAYES: Yes, you don't get to leave work at 4:00.

EDWARDS: That's right.

HAYES: Congresswoman Donna Edwards - thanks for taking the time to talk with us tonight. I really appreciate it.

EDWARDS: Thank you, Chris.

HAYES: Let's call on MSNBC political analyst, Richard Wolffe, also author of "Revival: The Struggle for Survival Inside the Obama White House."

Good evening, Richard.


HAYES: OK, so - I was - I was - I guess I would say I was not surprised that Mitch McConnell was able to rally his caucus together, sign this letter and sort of throw down this ultimatum. What do you think the Democrats' next move is?

WOLFFE: Well, the problem here is that running out the clock actually works for Republicans.


WOLFFE: You know, the next game when it starts, they'll have more players on the field. So, just letting him get away with this isn't working.

Also, accusing the other side of being obstructionists is very satisfying. Everyone feels morally self-righteous, but actually that isn't a winning strategy. It's a tactic, not a strategy for Democrats. It happened last time around. And all you're going to get is two years of everyone saying the party of no.

What they have to do is call their bluff.

HAYES: Right.

WOLFFE: They have to say, let's get taxes off the table, do the deal, however you structure it, maybe take your votes, which aren't going to get through, take your votes, put it out there, get it done quickly, and move on as quickly as possible, because time is as much of the enemy here as the Republicans.

HAYES: OK. So, let's game this out because I want to make sure I understand this. Let's say they follow that advice and they say, OK, let's do the vote, let's take the vote. Could Reid essentially just bring a middle - just middle class tax cut bill to the floor tomorrow, this week? Is that in the realm of possibility?

WOLFFE: Sure, he could. Of course, he could. But the question is sequencing here. And let's face it, getting that on the record is not nearly as important as moving to unemployment benefits, because - here's the calling the bluff, it's not just about the time issue, it's saying to the other side and to the general public -


WOLFFE: - to the general public to independent voters, they say they care about jobs, they say they care about people without jobs, but they're not willing to take the step on unemployment benefits for people without jobs.

You know, Democrats have to say at this point when people are paying attention, not only are we reasonable, but we have our priorities straight. It's the unemployed. It's the people without jobs.

And you know, do they get stuck right there? And the clock goes out at that moment - well, at least Democrats stand for something.


WOLFFE: Introducing this other stuff, as important as it is, as important as all of those issues are, are frankly not as important as the unemployment situation right now.

HAYES: And yet, what we saw - I mean, I think you're exactly right. You have to sort of draw a line in the sand here and provoke a confrontation over this, even if the vote has failed. What we saw from the White House today in sort of response to this ultimatum is what we always see from the White House, which is kind of keeping their cards closer chest, and saying, well, maybe it will work out.

I know that you have good sources at the White House. You talk to folks over there. Can you shed some light on what this pattern of behavior from them, strategically, is intended to accomplish?

WOLFFE: Two words: independent voters.


WOLFFE: That is the big switch that we saw in the last election. Republicans may think this is all about the momentum on the right, Tea Party folks, Democrats may obviously want to say, look, we've got to hold true to our principles.

But if you're sitting in the White House looking at 2012, independent voters - they're the ones who drifted away. They want to see the parties working together. They want to se a reasonable tone.

And for the president to go out and do his signature move yesterday, saying these problems are bigger than politics. There are some things that are even more important than campaigning. That's what he does. That's who he is. That's what independent voters want to hear.

And, so, yes, he can afford to be reasonable. It is actually his only path to reelection. If you look at the numbers, there just aren't enough Democrats or Republicans. You need those folks who are the so-called independents.

HAYES: I know the independent voters also tend to be sort of low information. The question is whether all of this filters out to them. But that's another story.

MSNBC political analyst Richard Wolffe - thanks for your time.

Really appreciate it.

WOLFFE: Thank you, Chris.

HAYES: It was tasked with finding solutions to the tax cuts-fueled descent into debt. So, what did the presidential debt commission recommend? Wait for it, tax cuts - next.


HAYES: He calls anyone who is upset about proposed cuts in Social Security the greediest generation, and then proposes more tax cuts.

The problems with put-backs, not from Joakim Noah or any from the NBA, but from investors who may be looking at mortgage-backed securities and saying, refund, please. Why it could be the second tsunami in the mortgage crisis.

And Noah's Ark comes to Kentucky - thanks to the people behind the Creation Museum and $37 million of taxpayer money.


HAYES: Just days before today's release on the report on reducing the national debt, Co-Chairman Alan Simpson complained about his critics, referring to the, quote, "greediest generation," despite the fact that Simpson himself is a senator from the '70s through the late 1990s, helped fed that greed by relentlessly cutting taxes for the richest people in this country and carving out loopholes for them to make and keep even more money.

In our fourth story tonight: It turns out Simpson's solution to this problem is to cut taxes for the rich yet again. And to tell the children of this "greediest generation" they will have to work longer and harder than their parents did to pay for the unprecedented transfer of wealth Mr. Simpson helped to facilitate over the last generation.

Our guest tonight will be a member of the commission, a member who will go against Simpson and vote "no" on sending this report to Congress. The report does do a number of things the wealthy might not like, such as eliminating the tax deduction for the interest on mortgages above half million dollars, good idea, and on second homes, such as taxing dividends and capital gains at the same rate of income, also a good idea. And while the rich don't pay any Social Security tax on income over $106,000 right now, under Simpson's plan, by the year 2020, they would pay Social Security tax on income up to $190,000.

That's right, under this brutal austerity plan, but a working stiff making $60,000 a year would still pay Social Security tax on all of his income. But a hedge fund manager pulling down $2 million a year would now pay Social Security tax on almost 10 percent of his income. Brutal.

For the most part, the commission got right how we got here - though they were mostly polite enough not to mention the Republican president and Republican Congress responsible.


REP. XAVIER BECERRA (D), CALIFORNIA: The escalation was driven in large part by two wars, which by the way I always emphasize were never paid for. And so, we borrowed money to pay for those two wars and continue to borrow to pay for those two wars. The escalation was driven in large part by two wars and a slew of fiscally irresponsible policies, along with a deep economic downturn.


HAYES: Most notable among those fiscally irresponsible policies were, of course, the Bush tax cuts.

So, what is the commission's serious grown-up remedy? More tax cuts.

You know when something's gone wrong when a report on the government's lack of money declares on page 10, quote, "We need to lower tax rates."

The richest people in this country right now pay a top rate of 35 percent, that's when they pay it. If the Bush tax cuts go away, that rate will rise to 39.6 percent next year, far below its historic peak. The commission wants to cut it even further to 28 percent, the corporate rate, too.

"Without reform," the report informs us, "it is likely that U.S. competitiveness will continue to suffer." As if U.S. corporations did not just report third quarter profits this year that were some of the highest in history.

The way the report saves money is primarily by cutting government services, including eliminating 200,000 government jobs over the next two years, right when the economy desperately needs more jobs to grow, which of course would produce more revenue and reduce the debt.

As promised, we're joined tonight by Representative Jan Schakowsky, Democrat of Illinois, and a member of the debt panel.

Congresswoman, thanks for your time tonight.


HAYES: Well, first of all, I want to - I wonder why is the chairman of the panel devoting so much energy to slashing Social Security, increasing the retirement age, which is a really regressive way of going about making fixes when that actually wasn't on the plate and that's not the problem with the long-term debt that we're facing?

SCHAKOWSKY: No, the commission is doing the favor of figuring out the 75-year solvency of Social Security after admitting it has nothing to do with the deficit and it's not going to be used for debt reduction either. But we might as well do that, as well. Of course, this is not something that we need to do right now.

And we certainly don't need to save Social Security by cutting Social Security. And not just for future beneficiaries, but actually, we're going to begin right now - by changing the way we calculate the cost of living adjustment. Meaning, we're going to give current beneficiaries less money.

HAYES: You know, one of the things I think that gets really confused in this discussion, I'm wondering if you can sort of walk us through it, is the difference between the deficit we face right now in the short and medium term and what the problems are for the whole U.S. budget in the long-term, say 20 years out. Those two things it seems to me are getting confused in this conversation.

How do you sort of see dividing these up?

SCHAKOWSKY: Well, even if we just first talk about achieving primary budget balance by 2015, which is the first mandate of this commission, what the Simpson/Bowles proposal does not do is talk about how are we going to get the economy going, create jobs, not interrupt any kind of fragile recovery by starting to cut the budget too soon.

And so, what one of the lacking things is that we don't stimulate the economy. There's very little talk even about the need to do the unemployment insurance benefits - which is not only good for the 2 million people that are losing their benefits right now, but is really good for the economy, because those people will go out and spend money.

But long-term, they're talking about a major overhaul of the tax system and claim that by getting rid of all these tax expenditures, that is those deductions in credits, most of which go to wealthier Americans, that are - were going to be able to cut about $4 trillion from the budget over the next few decades.

So, it's both a long-term and a short-term plan.

But their plan for health care is to make seniors pay more out-of-pocket for their Medicare. I mean, you know, there's a lot of talk in the commission about shared sacrifice. But there has not been shared sacrifice for the last two decades. They're acting as if we're starting even.

HAYES: Right.

SCHAKOWSKY: But, of course, all the wealth has gone to the top earners in the country, the wealthiest have gotten richer, and the poor and middle class have gotten poorer. And now, they want to solve these problems on the back of middle-class Americans. And it's just the wrong way to go.

HAYES: I think it's a great way of putting it, that we're not starting all sort of the same place, after these 20 years.

Finally here, I want to ask you - you have come out with some of your own recommendations. What are the big things they didn't - they missed that you would - that you would propose as a path to getting on a better sort of fiscal trajectory?

SCHAKOWSKY: Well, I, of course, looked at the same things, the tax expenditures. I looked at the defense budget, they did, too. But I don't cut military pay, they do. I don't cut military health care, they do.

And I certainly don't cut Medicare. I say that the Medicare ought to be able to negotiate with the pharmaceutical companies to get lower prices. Instead of, you know, digging further into the pockets of seniors who are making the grand average of $18,000 a year - that's what our elderly make - I say let's get it out of the pharmaceutical companies, and let's put a public option back on the table. Let's make sure that the insurance industry actually has some competition from a plan that will hold down the cost.

So, my - what I wanted to prove was - I wanted to prove that we could do this without hurting the middle class.

HAYES: Congresswoman Jan Schakowsky, sorry, I didn't mean to cut you off there. I really appreciate you coming on. I'll throw a financial transactions tax into the mix.

SCHAKOWSKY: Well, I didn't put a financial transaction tax into the mix. But there - there are a number of other ideas beyond getting it from, you know, the people who have been paying the price while the rest of the people have been partying, and, you know, saying that Wall Street needs to pay its fair share, as well. And all of these hedge fund managers who, by the way, live longer, Chris.

You know, when you talk about cutting the age of Social Security, poor people actually aren't living longer. So, you've got a janitor who's going to have to work longer because the hedge fund manager is going to live longer.

So, I think there's a lot of inequities in there, and there are places that the money really is that we can fairly ask for in order to reduce the deficit and the debt.

HAYES: Congresswoman Jan Schakowsky, congresswoman from Illinois and also a member of the debt commission - thanks so much for joining me tonight.

SCHAKOWSKY: Thank you, Chris.

HAYES: The wailing from the right over WikiLeaks after the silence on the outing of Valerie Plame - next.


HAYES: The irony of one media outlet calling for another media outlet to be censored, next.

First, the sanity break. Put on your yarmulke, it's time to celebrate Hanukkah. Sun down tonight, or right now, is the official start of the Jewish holiday which celebrates the rededication of the holy temple after defeating the Assyrian Greek empire. I believe it is celebrated by singing a different version of Adam Sandler's "the Hanukkah Song," while watching "Eight Crazy Nights."

Let's play Oddball.

We begin in Taiwan, China. They say don't mix whites and reds in the washing machine. But they never told you that your toddler shouldn't hide in there. A three-year-old boy became stuck in a washing machine drum while playing spirited game of hide and seek with his mother. Oly oly oxen free. The boy was trapped in the drum for over an hour until firefighters were able to cut him free.

Fortunately, now the toddler will need to find a new hiding spot.

Coming up, the right's hysterics over Wikileaks and Julian Assange and calls for prosecution.


HAYES: The content of a quarter million leaked State Department documents is still being analyzed. Its impact to be determined. Yet, in our third story, the right's predictable hyperventilation over what they think should happen to Wikileaks and its founder, all while questioning President Obama's leadership.

The man behind Wikileaks, Julian Assange, is currently wanted by Interpol, but for allegations that have nothing to do with Wikileaks. That hasn't stopped former House Speaker Newt Gingrich from advocating for Mr. Assange's imprisonment.


NEWT GINGRICH, FMR. HOUSE SPEAKER: He's an enemy of the United States, actively endangering people. And he's going to get a lot of folks killed. And I think that's a despicable act. And we should treat him as an enemy combatant and as an absolute enemy of the United States.


HAYES: The half term Governor Sarah Palin echoing that sentiment on her Facebook page. "He's an anti-American operative with blood on his hands. His past posting of classified documents revealed the identity of more than 100 Afghan sources to the Taliban. Why was he not pursued with the same urgency we pursue al Qaeda and Taliban leaders?"

Congressman Peter King calling Wikileaks, quote, a "clear and present danger to America."


REP. PETER KING (R), NEW YORK: We should go after him for violating the Espionage Act. And the reason I say foreign terrorist organization is they're engaged in terrorist activity.


HAYES: Mr. King is also asserting that the leaks don't bother President Obama because, quote, "his entire political upbringing has been on the left. When he was in school, when they spoke about great American heroes in the 1960s, 1970s, no one was greater than Daniel Ellsberg." Daniel Ellsberg the man who released the Pentagon Papers to the "New York Times" in 1971.

Meanwhile, "National Review" columnist Jonah Goldberg wondered back in October, quote, "why hasn't Assange being garroted in his hotel room years ago?" Mr. Goldberg now taking a more nuanced to Mr. Assange, instead accusing the left of selective rage. "Is there any prominent person or editorial board outside the administration on the left who made a huge stink about Valerie Plame's outing who is remotely as horrified by the on-going Wikileaks travesty?"

Well, since you brought it up, how about those on the right? First here's former Governor Mike Huckabee speaking not about Assange, but the person who provided Wikileaks with the document.


MIKE HUCKABEE, FOX NEWS ANCHOR: Whoever in our government leaked that information is guilty of treason. And I think anything less than execution is too kind a penalty.


HAYES: Mr. Huckabee had a slightly different reaction after President Bush commuted the prison sentence of the only man convicted in connection to the leaking of CIA agent Valerie Plame's identity, Scooter Libby. Mr. Huckabee praised Mr. Bush for his compassion.

Thankfully, Defense Secretary Robert Gates has called out the hysterics, while putting the leaks into perspective.


ROBERT GATES, DEFENSE SECRETARY: I've heard the impact of these releases on our foreign policy described as a meltdown, as a game-changer, and so on. I think - I think those descriptions are fairly significantly overwrought.

Is this embarrassing? Yes. Is it awkward? Yes. Consequences for U.S. foreign policy I think fairly modest.


HAYES: Here with me now is Greg Mitchell. He's my colleague at "The Nation," where he writes a daily blog. He's been live blogging the Wikileaks disclosure. Greg, thanks for coming in.

GREG MITCHELL, "THE NATION": Happy to be here.

HAYES: First, I guess, we're not surprised but the right's reaction, but have you been surprised by the sort of bloodthirstiness of it?

MITCHELL: Yeah, you didn't mention Bill Kristol using language today like neutralize Assange. So I think it's really code language for what people would really like. One of the prominent bloggers at Red State talked about the - his wish was to see him get a bullet in the back of his head. So that's the kind of view that should be - whatever you think about the leaks, whatever you think about what has come out and Assange himself, it should be repugnant to Americans.

HAYES: Yeah. And I want to - I want to bear down on this one point. I mean, the accusation against Assange is that he has endangered people's lives. There hasn't - am I wrong that there has not been any evidence that that is the case?

MITCHELL: Right, that's absolutely true. And of course the point is, even if that is true, how many lives could be saved by many of these revelations? We've had so many important revelations and ones yet to come. People forget that this is going to be going on for days, weeks, and possibly months, related to wars that the U.S. is involved in, in Iraq and Afghanistan, not to mention Pakistan and other areas.

So we don't know what lives may be saved by these revelations and any openness that may come out of it.

HAYES: Finally, I want to ask you this question because you ran under a publisher for years and you're a media critic. It's one thing for the right to sort of go after Assange. It's another when media outlets you would express - expect to express solidarity also seem to be condemning him. Has the press reaction to Assange surprised you?

MITCHELL: It hasn't really. What's interesting is that who - what has been the conduit for these leaks? It's been the press. If the media was going to be fair, they would be attacking the "New York Times" or "the Guardian." I mean, "the Guardian" leaked the document to the "New York Times." So why aren't media people mad at "the Guardian?"

They seem to be aiming everything at Assange. I think that's good. I don't think the press should be attacked for this. So -

HAYES: You're not saying expand the circle of condemnation.

MITCHELL: No, it's amazing that the media doesn't want to attack themselves. They want to focus solely on Assange. I think that's very revealing of what's going on here.

HAYES: What do you think it's revealing of, though? My understanding of the history of the Pentagon Papers is that other media outlets stood with "New York Times." They picked up the ball and they signed on to amicus briefs. Why don't we see that here?

MITCHELL: Well, it's interesting. I think the press - we have seen it with the press. You've had this really unprecedented collaboration around the world with these news outlets. And I think what people don't understand - the biggest thing they don't understand, there's only been 500 documents that have already been released. And unlike previous leaks, Wikileaks has worked carefully with these news outlets in advance to have the documents redacted. And they purposely have done it that way this time. They have the media.

So there's this incredible collaboration that the media's in the middle of. And yet everything seems to be aimed at Assange. And so I - I think that's why we've seen such a violent rhetoric. You're not going to have that. So, you know, the media is hanging in there on this so far.

HAYES: Greg Mitchell, he is my colleague at "The Nation." he writes a great blog. And he's been covering the Wikileaks scandal minute-by-minute. Thanks a lot.

MITCHELL: Thank you.

HAYES: Coming up, why investors may turn any rumblings in the housing market into sub-prime two, the sequel. It's called a put back, as in back where it came from.

Noah's Ark found a home in Kentucky. It also found a flood of tax breaks.

And when Rachel joins you at the top of the hour, the senator who is actually ready to ask Republicans to go ahead, make his day, filibuster.



SEN. CHRIS DODD (D), CONNECTICUT: I don't know how many times I heard Bob Menendez say - he coined the phrase the tsunami coming. I think that was in February or March of '07, almost four years ago talking about this.


HAYES: That was Connecticut Senator Christopher Dodd, opening up a hearing before the Senate Banking Committee today about the foreclosure crisis. As Dodd noted, it is not a new issue. In fact, solutions to the ongoing disaster seem as elusive as Gadot in Beckett's play. Every few months since 2007, when I first moved to Washington, a bunch of officials and bankers call a meeting and get together to say we should really do something about the foreclosure crisis. They do not move.

And yet the problem grows harder and harder to ignore, not just because of 2.2 million estimated foreclosures this year, 14 percent delinquent on their mortgages, and 15 million more who owe more on their homes than they're worth. But because a series of recent revelations that demonstrate that the entire system overseeing and processing the servicing of mortgages is badly broken.

Today, some high-ranking regulators, like head of the FDIC Sheila Bair, openly acknowledged as much.


SHEILA BAIR, FDIC CHAIRMAN: There are also a lot of potential litigation exposures here and law enforcement official - potential for law enforcement actions.


HAYES: There are two big problems. The first has to do with how the mortgage services - servicers do their duty. The mortgage servicers are kind of like property managers of an apartment building, the super, if you will. They don't own the mortgages they're servicing, but they're the ones who collect the checks, process the payments, assess the late fees, do the maintenance and upkeep for the actual owners of the loans.

In most cases, the servicers are the big banks. Still with me? Good.

For a very long time, a lot of these servicers have been behaving very, very badly. They've been denying people chances to modify their loans, even when they qualify. They've added in all kinds of junk fees and have even in some cases instructed people not to pay their mortgages for six months, so they can qualify for the government program designed to aid struggling homeowners, only to then turn around and try to foreclose on them.

The reason the servicers behave badly is because they make a lot more money from delinquency and foreclosure than they do from those who just paid their mortgage every month. In other words, they've got an incentive to be jerks.

That's problem number one. And it's actually, from the standpoint of the entire financial system, the smaller problem. Problem number two is the scary one.


DODD: Since our last hearing, news reports have suggested that the problem may be actually a lot larger than we previously thought. I don't wish that to be the case, but the evidence seems to be mounting that it may, in fact, be the case. An employee of the Bank of America testified in court that the bank's standard mortgage servicing practices failed to meet basic loan documentation requirements, a failure that could call a huge number of loans into question.

If there are more revelations of that nature, this situation could ultimately have ramifications for the safety and soundness of the financial system.


HAYES: The problem goes by the deceptively harmless sounding term put-back. We're not talking about a 6'10" power forward putting back an offensive rebound. We're talking about this kind of put-back.


DANIEL TARULLO, FEDERAL RESERVE BOARD OF GOVERNORS: With respect to put-back liability, right now we had - well, we had already started a process of requiring each of the major holding companies to produce to us their comprehensive capital plan.


HAYES: OK. Let me try to translate this. A put-back in this context is something that should be familiar to all of us. It's the same as returning a defective product to a retailer for your money back. In this case, the item that is being returned are mortgage-backed securities, those same toxic assets that were at the center of the financial crisis, those pools of mortgages that were packaged and sold to investors as a path to eternal riches and are now worth cents on the dollar.

As home owners have begun to challenge their foreclosures in court, they've revealed that in many, many cases, the banks that were pooling all those mortgages and turning them into securities didn't follow the necessary procedures to make them legitimate in the eyes of the law. They were too busy pumping out the next batch to make sure the paperwork was actually right.

And since those securities are now worthless, investors are only too happy to go knocking on the door of the banks and say, hey, this is defective, take it back. If the banks have to take back these securities, they basically have to take the full loss on to their own books.

Now, how much in the defectively constructed securities are floating around out there? No one knows for sure. Estimates have been steadily rising. And today, Federal Governor Tarullo put it at north of 100 billion dollars. But nobody knows. If it gets big, if we start talking about a trillion or two trillion dollars, there's no way the banks can buy back the securities and stay solvent. It would blow up their balance sheets all over again.

In other words, the crash part deux.

For four years, the foreclosure disaster has wreaked havoc on families across the country. Now it looks like it's about to wreak havoc on the entire financial industry again. Here's hoping that finally we get someone in Washington to do something about it.

Coming up, Kentucky opens its arms and its tax breaks to a Noah's Ark theme park. Camels, giraffes, and possibly lawsuits march in two by two.


HAYES: If Orlando and Anaheim can have theme parks dedicated to a mouse with a human brain, then surely Grant County, Kentucky should be able to have their own centered around a big ass 500-foot boat. The catch, in our number one story, comes when you find out that that boat is Noah's Ark. The theme park is based on a literal translation of the Bible's Book of Genesis. And the taxpayers of Kentucky are expected to foot up to one quarter of the 150 million dollar price tag.

The people who brought you the Creation Museum and the governor of Kentucky today announced plans for the Ark Encounter. Let's tour the grounds.

According to the "Louisville Courier Journal," the Cinderella's castle of the Ark Encounter will be a 500-foot long replica of Noah's Ark, complete with animals. The 800 acre park will also including a walled city, a replica of the Tower of Babel - which sounds blasphemous to me - a 500 seat special effects theater, an aviary and a first century Middle Eastern village. Not an actual one, I imagine.

No roller coasters, no Ferris wheels, just Bible stuff. According to the Ark Encounter website, the park will be a, quote, "fun, educational, and wholesome attraction" and will be an asset to the region. The project is a joint venture between the for profits Ark Encounters LLC and the nonprofit group Answers in Genesis.

Answers in Genesis is a group that in 2007 opened Kentucky's Creation Museum, which is dedicated to portraying the Bible's view of history. Among their claims, the Earth was created in six days, just 6,000 years ago, and that at one time, man and velociraptor co-existed peacefully.

According tot he Answers in Genesis website, their mission is three pronged. Quoting here, "we take the absolute truth and authority of the Bible to the world. We teach the relevance of a literal Genesis to the mission fields of the world. We obey God's call for global evangelism for all ethnic groups in the world."

And now they have asked taxpayers to subsidize their Bible-based theme park. The state of Kentucky is complying. Again, according to the "Courier Journal," developers are seeking state tax incentives under the Kentucky Tourism Development Act. They qualify, and Kentucky Governor Steve Beshear indicated they would. They could receive as much as 37.5 million in incentives.

Today, Kentucky's Democratic governor joined the park's owners for the big announcement. He claimed Ark Encounter would create hundreds of jobs for his state, and defended the use of taxpayer money to subsidize the project.


GOV. STEVE BESHEAR (D), KENTUCKY: This is an application for a theme park. The law doesn't allow us to discriminate about the entertainment subject matter of theme parks as long as it's legal and in good taste.


HAYES: Joining me now is Sam Seder or, the host of "The Majority Report," which is back streaming at Majority.FM. Is that right, weekdays? You can also get it on iTunes.

So we have a defense from the governor of this. What do you think about using state dollars for this sort of thing?

SAM SEDER, SAMSEDER.COM: Well, I mean, it's state dollars that come in from their sales tax that take place there. So it's more of a rebate. I mean, I think - I think it's - it's probably would stand the test in terms of constitutionality.

But the real question is, could another religion actually build their own theme park? Would they qualify for this type of subsidy? Because I don't know, frankly, if a Jewish proselytizing or Muslim theme park would do that well in that neighborhood.

HAYES: I would love to see a Lubabature (ph) theme park in the middle of Paducah.

SEDER: Maybe a big furry hat and people could spin around on it. That's the only question, is it, in practice, actually discriminatory, because only a Christian theme park could actually qualify for these subsidies in practice? But I think it's a bit of a stretch. They probably can do it.

HAYES: Right. And that's. in some ways, what's so pernicious about it, right, is they can say, well this is viewpoint neutral, because they know full well Abdul Rauf isn't going to come in and say, I want a Park51 Islamic community center theme park to get this tax break?

SEDER: I suppose. But there is a little history to this. The founders, AIG, of the Creation Museum, Ken Hamm - I think he was on the "McNeil-Lehrer ReporT" back in the day, and said this was expressly to arm Christians in a debate against evolution. And so this isn't - you know, this is a pretty specific agenda that these people are holding.

But frankly, I'd prefer a theme park than the museum, because a museum implies that this is actually real, as opposed to like this is more like Disney. And you have this notion of the world that is more fantastical.

HAYES: I was a little surprised it was a Democratic governor doing this. Although I guess the politics -

SEDER: It's Kentucky. It's Kentucky. I think that's the bottom line is it's Kentucky. And, you know, I think it probably will bring a bunch of jobs. This thing has been enormously successful. They picked that area specifically because it was in - within a radius of one of the largest concentrations of Americans within 500 miles that would attend. And so -

HAYES: Now you're talking about the original Creation Museum?

SEDER: Yes, and I think that's going to be -

HAYES: I've never been. I heard - Michelle Goldberg, who has written a book called "Kingdom Coming" has told me about it. There's the dinosaur - the guy riding the dinosaur.

SEDER: And I spoke to someone actually back on the old "Majority Report." I spoke to someone for 25 minutes as they were in the planning stages of this. And they said, you know, it's going to specifically try and poke holes in evolution. It's going to contend that man walked contemporaneously with dinosaurs. It's going to suggest that evolutionary theory is what they call historical science, as opposed to observational science, which then brings up the question like how do you know that dinosaurs even existed at that point?

But be that as it may -

HAYES: Can God make a suitcase that's too heavy for him to lift?

SEDER: Right. Something about a banana too. Why would you make a banana? But the bottom line is it's been wildly successful. I mean, the real question is, are they going to be able to discriminate against who they hire at this theme park, as opposed to their museum? Because if they're getting state subsidies, that opens the door to a real question: are they the not-profit side or they the profit side? And I mean that literally in terms of making money, as opposed to being prophetic. Yes. That's really going to be the real question.

HAYES: This seems to me lawsuit-bait. Sam Seder is from MajorityReport.FM.

SEDER: It's Majority.FM.

HAYES: Great, thanks so much for joining me. Thank you at home for joining me tonight on Countdown. I'm Chris Hayes, in for Keith Olbermann.