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OLBERMANN (on camera): Good evening. This is Monday, September 15th, 50 days until the 2008 presidential election. The clang of the opening bell at the New York Stock Exchange this morning might as well have been the ringing of the first proverbial 3:00 a.m. phone call of the presidential campaign. Our fifth story on the COUNTDOWN: With an economy in crisis on hold, the Republican nominee all but calling as his chief economic advisor, former Senator Phil Gramm, anyone now complaining about or worried by the state of the nation`s economy a whiner. Directive number one from Senator McCain today, pay no attention to that economic crisis behind the curtain. In case you are concerned that the Dow dropped more than 500 points today, it`s biggest one day loss since the September 11th attacks, or that Lehman Brothers is filing for bankruptcy because of huge losses of its mortgage holdings or that soon after its purchase of Merrill Lynch, Bank of America might become the Bank of America, the only one left. Perhaps you can take solace in Senator McCain`s reassurance at his first campaign of the day that the fundamentals of the economy are strong.
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MCCAIN: You know that there`s been tremendous turmoil in our financial markets and Wall Street. And it is -- people are frightened by these events. Our economy, I think, still, the fundamentals of our economy are strong, but these are very, very difficult times.
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OLBERMANN: McCain economic advisor, Phil Gramm having said in July that the U.S. is facing only a mental recession and that the nation itself is a nation of whiners. Often overshadowed since Denver, the Democratic running mate seizing on those remarks today. America, meet Joe Biden, again.
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SEN. JOE BIDEN, (D) VICE PRESIDENTIAL CANDIDATE: Don`t tell me that the woman I recently met in Missouri, who worked for 13 years at the Chrysler minivan factory and then saw her job shipped up to Canada, don`t tell me she`s a whiner. Don`t tell me that the engineer who saw his job shipped overseas because the company was talking a tax break overseas instead of having tax break to stay, don`t tell me he`s a whiner. These people worked hard. These people did everything they were supposed to do. These people are ready to work hard again. Our job is to give them jobs so they can work hard again.
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OLBERMANN: So, if you are John McCain and your economic adviser thinks Americans are whiners and you, yourself, have claimed this morning that the economy is still fundamentally strong, what do you do when that remark proves to be remarkably tone deaf? You try to blame the Obama campaign for it. No, I`m not kidding. At his afternoon stop in Orlando, Florida, Senator McCain attempted to claim that the, quote, "fundamentals of the economy" he had been talking about are American workers and that by attacking his statement, Senator Obama was attacking American workers.
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MCCAIN: The economic crisis is not the fault of the American people. And my opponents may disagree, but those fundamentals, the American worker and their innovation, their entrepreneurship, the small business, those are the fundamentals of America and I think they are strong.
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OLBERMANN: Earlier tonight in Pueblo, Colorado, Senator Obama firing back.
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OBAMA: I think it`s good that Senator McCain is celebrating the American worker today. But, it would have been nice, if over the last 26 years that he`s been in Washington, that he actually stood up for them, once in awhile.
OBAMA: It would have been nice if he didn`t vote against the minimum wage 19 times or if he didn`t vote to privatize Social Security and hand it over to Wall Street. Senator McCain, you can`t run away from your words and you can`t run away from your record. When it comes to this economy, you serve firmly with George Bush in a failed economic theory. And what you`re offering the American people is more of the same.
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OLBERMANN: Let`s turn to Paul Krugman, op-ed columnist for the "New York Times," professor of economics at Princeton University. Dr. Krugman, thank you for some of your time tonight.
PAUL KRUGMAN, NEW YORK TIMES: Hi, there.
OLBERMANN: The fundamentals of the U.S. economy, in saying he meant the American workers are the fundamentals of the economy, did Senator McCain reinforce his previous observation about himself that economics is not necessarily his strong suit?
KRUGMAN: I have to say, you know, I guess history is not his strong suit because that`s Herbert Hoover.
KRUGMAN: I mean, how is it that 75 years later, Republicans still can`t stop themselves from, you know, quoting Herbert Hoover about how things are OK? I was -- this was just stunning. I mean, it was, you know, that, look (ph), ad lived. I mean, I think that was -- this is what he really believes. Unbelievable. I was shocked.
OLBERMANN: So, he believes the economy is strong and the Bush administration seems to be betting that the financial system can handle the collapse of the Lehman Brothers and whatever is to follow without any intervention or any major intervention at this point. How -
KRUGMAN: That`s not quite right, actually.
KRUGMAN: Because what they`re doing is they`re actually throwing a lot of money at the financial system in general.
KRUGMAN: And it wasn`t specific. So, actually, the taxpayers are being put on the hook. There`s been a lot of moral hazard, as they say, being created. That`s why the Dow fell only 500 points today because there`s a lot of money being pushed out that is ultimately taxpayer money.
OLBERMANN: So, when Governor Palin said today, it was good to see that the government was not going to come in and spend any taxpayer money on Lehman Brothers, she was misinformed?
KRUGMAN: Yes. I mean, it wasn`t Lehman, they know (ph), it was sort of what the left hand took away the right hand push onto the roulette table. So, it was -- unfortunately, it`s not true. I mean, we are actually -- we are seeing a socialization of risk. I`m not sure there`s no alternative (ph) because the deregulation policies pushed us into this. But no, risk is still being socialized. It`s just they decided that Lehman was not going to be the place where they make the stand.
OLBERMANN: The senator and the Republican campaign obviously selling themselves throughout the campaign as a break from the Bush administration on the subject of the economy and this sub-subject gigantic, disastrous black holes opening up in the middle of the economy. Is McCain actually a difference from Bush?
KRUGMAN: No, if he had said, at any point, look, you know, we need some regulation, we need some policing, if there was -- I`ve actually been trying to see if I can come up with anyone sort of on the Republican side who has said anything, who said anything about the housing bubble, who warned about subprime. You know, I can`t see it. The fact of the matter is he`s -- and you know, what he says is, well, we`re going to clean up Washington, and then I`ll clean the markets. I don`t understand.
OLBERMANN: And, the one connection, the one historical connection between Senator McCain and perhaps some of the things that set up the dominos that seem to be falling in the economy right now, his formerly official economic advisor now, simply the guy who draft his economic plan, Phil Gramm, the guy who coined this term about whiners in the nation and the mental recession -- did his role, when he was the chair of the banking committee, did he, in fact, set up some of those dominos and some of the current crises?
KRUGMAN: Yes. I mean, if you`re going to ask who is responsible for the, you know, which people in official capacity would bear the most responsibility for getting us into this mess it would be, number one, Alan Greenspan, and then, number two, Phil Gramm. He`s at the core of this. I mean, it`s -- and by the way, whatever they may say officially, everybody knows that if McCain becomes president, Phil Gramm is, the odds in favor (ph) for him to be the treasury secretary.
OLBERMANN: What would that do to the American economy, do you think?
KRUGMAN: Oh, boy. Well, you know, under current management, Hank Paulson, I have some sympathy for, the (INAUDIBLE) works for the czar, he can only do so much given the guy he works for. But boy, Phil Gramm, you know, Ben Bernanke, I think Hank Paulson understand that we could manage to have another Great Depression if we work at it hard enough. I think Phil Gramm might be just the guy to do it.
OLBERMANN: Continuing -
KRUGMAN: Sorry, that`s a bit strong, but -
OLBERMANN: But if it`s necessary, so what if it`s strong.
OLBERMANN: The last point here. Even in a McCain world, in that sort of bubble, where nobody in Arizona gets to buy a Budweiser without the OK of the missus, is that economy strong?
KRUGMAN: I actually haven`t looked at Arizona. But, look, I mean, there are no -- aside from, you know, people selling oil and the repo trade, I think, is doing really, really well. That business is good these days. But no, I mean, this is an economy which if this is not an economy in recession, then the problem is with our definition of recession. This is - - this is a lousy economy. Unemployment is spiking, industrial production way done, according to the figures released today. And the financial thing is got, you know, everybody is scared.
OLBERMANN: Paul Krugman of the "New York Times" and Princeton University, as always, great thanks for your time, and more especially, your insight tonight, sir. Thank you.
KRUGMAN: Thanks so much.
OLBERMANN: For more on the politics of this, time now to bring in our own Eugene Robinson, associate editor and columnist at the "Washington Post." Good evening, Gene.
EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Good evening, Keith.
OLBERMANN: If this election ends up being as it often has threatened to be a referendum on the economy, is that ultimately good news or bad news for Senator "The fundamentals are strong" McCain?
ROBINSON: Well, I think, you have to say it`s bad news for McCain and probably as good as it gets for Obama. I mean, you know, McCain has -- he famously did say he doesn`t really get this whole economics thing and to come out and say the fundamentals are strong on a day when the Dow, you know, as Dow is just inching over the cliff and heading down. It`s just, you know, he doesn`t get the economy. I think we can safely say he was right. So, I think that`s good for Obama and bad for McCain.
OLBERMANN: And you just heard Paul Krugman there, comparing that language to language that Herbert Hoover used. Herbert Hoover is the antichrist of American economics, even people who been through sixth grade history, and then gone home, know what Herbert Hoover did and did not do or at least the party to "did or did not do," and what happened to him politically. There`s no greater millstone you can hang around a presidential candidate`s neck, is there?
ROBINSON: I can`t think of one. If you would think that, you know, if you were going to be a Republican candidate for president, they ought to give you a book of Herbert Hoover's sayings, so you can study it and work hard at never saying, you know, anything that he ever said, especially about the economy. I mean, it`s, you know, it was remarkably, I thought remarkably tone deaf to the reality of what`s happening today and what`s been happening for months in people`s lives.
Originally broadcast, 9.15.08