mark: welcome to this edition of the best of all due respect. the president-elect begins to his out key positions in administration. one of the only reporters with a line to the most contentious of trump picks so far. joining us is a guy who is the only reporter who can get steve bannon on the record. josh, van and he's controversial. --t's in it for him to know

take the job? josh: he fancies himself a revolutionary. thisinks he is propagating right wing populist movement that got trump into the white house. it's only appropriate that now is in the oval office that steve bannon will be there right there with him. he doing this because he wants to change america? josh: i suspect it's all three of those. if you look what breitbart news has done it, they have tried to lead this revolution in the republican party and bring in new people. they succeeded in doing that. i think what he sees himself in

doing is formalizing that victory. he can help a president trump realize the vision for a different kind of governing and agenda. not only have you gotten him on the record, you wrote a profile on him about a year ago. a lot of things that critics are saying is that he is a racist, he is an anti-semi, that right part is a reflection of those character flaws. is he a racist? as george bush set of vladimir putin, i can't look into his soul. maybe i have that backwards. i can't look into his soul. he went to harvard business school. isn't some knuckle dragging

rube from the back country. he is the chief executive of breitbart news and it publishes inflammatory, racially charged articles. it propagates a lot of racist themes. that is far outside the bounds of anything we have seen an american politics before. that speaks to the fact that outsiderump is so far the bounds of anything we've ever seen before. it's hard to imagine a guy like donald trump getting elected. it's really not that surprising that he would surround himself with people like steve annan. appointed onbeen alongside reince priebus. he has talked about his desire to exact retribution on paul ryan and the republican establishment. you think if you are paul ryan or mitch mcconnell about

steve bannon and his agenda? josh: i would imagine you are nervous. when you look at the balance of power in the campaign, steve bannon it was more of an architect when it came to steering trump toward an agenda. i think they work well together. steve bannon has said they have. let's be blunt. ryan's previous took a subordinate position to trump. my expectation would be that he would continue that in the white house until donald trump runs into trouble and feels the need to shake things up. mark: what is likely to be the role of breitbart in the company ministration? josh: i think that's an open question. it's difficult for breitbart to navigate the new terrain in

washington. beenhave always gleefully outsiders throwing rocks at the republican and democrat establishment, led by steve bannon. now that he is in their in the white house, it's going to make it difficult to play that same kind of role if donald trump does what he intends to do, which includes establishment republicans and even democrats. it will be interesting to see if they wind up playing the same role they have in the past or if it's a watered-down version of it. mark: thanks very much. you can read josh on our website or in business week. a closer look at how the donald trump cabinet is shaking up. ♪

mark: joseph tarboro reported that donald trump's team is considering nikki haley for the slot of secretary of state. that position seemed like it was heading toward john bolton or rudy giuliani. many people in trumps orbit have been unhappy with those choices and were looking forward to see others brought into the mix. dissension and disruption. today, any people tried to tamp down the notion that things were going off the rails. kellyanne conway spent the day spreading a message of calm. building a government from

scratch is tough stuff. form a government overnight and these are very issue -- serious issues. he is very happy with how the transition is going. he has been presented with a number of choices within each of the departments. he is making those tough decisions. we have an embarrassment of riches. mark: in case that message didn't get through, donald trump went on his favorite social media megaphone to dispute reports there were problems. the haley thing is big. no other personnel news speculated about beyond what we knew yesterday. where do things stand? john: we talked about this yesterday and we will keep talking about it. they are not running late in terms of making the major appointments.

that's not where the disarray is. it's more about the infighting and the fact that they seem behind in terms of doing the bigger job of staffing the government. thosere not quick to hire 4000 people to be an contact with the existing agencies. that's where they are way behind. they should take their time to get it right. mark: i agree there are problems. the transition i most closely covered was the clinton in 1992. they were scrambling. they were beset by policy controversies. if we get a couple of weeks down the road in heaven made significant progress that we can see, there is a problem. i don't think they are all that far behind. we reported there is still no contact going on between the transition and team in the major agencies. mark: i have no idea. john: we have a weird history here.

2000 was kind of street because of the recount. brock obama and his team was way ahead of the curve by some historical standard. let's talk about nikki haley. you pointed out there was a lot of pushback or a lot of reasons against rudy giuliani. he has conflicts with people in countries on the terror watch list. a hugelyey would be positive sign symbolically. i don't know what kind of depth she has on foreign policy. the notion of change -- choosing a mainstream republican nonwhite woman in that job would be a huge step on his watch. cruz in the had ted justice department, tom cotton at the french, that would get a

lot of people's attention. john: there are a lot of gifts there. mark: they are all potentially in a contention. the left would be really unhappy, but they are going to be unhappy about everything. those are picks that would be different from some of the names we've been hearing up to now. already flirted with controversy. there is more. two new ruckus is are being raised over his transitional maneuvers. the first has to do with a story that says he is requesting hissecret clearance for son-in-law. instead of knocking down that report, donald trump put out a reportisputing another that he is seeking clearances for his children.

the second controversy has to do with frank gaffney, a pentagon official who will advise the transition team on national security issues. he has been vocally anti-muslim and has proponent islam a phobic conspiracy theories. donald trump says he has no role on the transition team. how big of a deal are the specific controversies causing a ruckus? i'm still trying get clarification about why it was reported this morning that gaffney was involved. it still doesn't clarify it totally. they say he is not involved now. the fact that they let him be involved is troubling. one of donald trump's legacies is not button-down.

it's not the standard you need in the federal government. jared kushner is going to be involved in the government. people you's thinks it's fine for him to be employed. i think the country for the good of public policy should deal with reality. he is going to be involved. let's figure out what the right standards are and what's permissible and what's not and press for that. let's not act like this isn't going to happen. he is going to be reliant on him for advice. talked about the business ventures and how that's going to work. that is problematic when you have crazy stuff like them putting up profit making stuff on the.gov website. that is so gross and disgusting. frank gaffney is the key issue. is he involved or not?

if he is, it's poison. mark: there is one of two options. they either knew his back rented it and did not that him. scarlet: the dude is poison. he's not the kind of person. mark: if he had any involvement in all, they need to learn a lesson and not do stuff like this. john: especially with some of the problems donald trump has caused for himself in the past. mark: two strategist can see their election connections were wrong and they tell us why when we come back. ♪

>> everyone he knows is voting for trump. maybe i ought to go to connecticut. >> he thinks they are expanding the map. what he is doing is its third and 65. we are going to try to drop kick from here. john: that was a clip of our next to guests discussing the

odds. here now for a follow-up is the former director of the jeb bush super pac and the democratic strategist in los angeles. i got it wrong as well. i will start the thing. i got it wrong. i got it wrong. i got it wrong. this is not just me blaming you. i got it wrong. that, why did you -- so confident for so long there was no way trump would win, what do to get wrong? mike: that is the question. i got it really wrong. the only person who was more surprised than me was donald trump. here's what i think i missed and i saw a good op-ed who also got it wrong. we look at the numbers.

we look at the polling data and the demographic makeup of the electorate. it was pretty clear. he did get 2 million fewer votes than hillary clinton. i did not think he would do better with latinos and i thought he would get a historic african-american turnout, which she did not do. i knew he would do well with non-educated white working-class people, i did not think he would break the meter. away reagan numbers there. i've never seen anything like it. that kind of thing in places like there and the michael moore towns was enough to give him a lead of about 100,000 votes in those three states. he won fair and square. that has not been seen before. i have learned a good lesson.

bill: i was wrong, unfortunately i relied on the news media for information. the truth is the polling was wrong in some fundamental ways. we saw donald trump do extremely well with noncollege educated people. the mythical suburban woman disappeared. nobody really caught the magnitude of the rural discontent with secretary clinton and the popularity of donald trump. coalition was not able to be replicated by the clinton campaign. there wasn't a level of turnout. they did not get the numbers with a number of

key constituencies. is the democratic party in as bad of shape and some people are saying? who are the leaders? bill: the congressional leadership will be out front. obviously, this is a big deal for senator schumer. he will be a major player. there will be a lot going on in the senate in terms of whether trumps legislative agenda succeeds or not. we will have a new chairman. it's going to take a while today got of this. there will be a lot of reflection. every day you find out some new information and some new data or something the campaign focused on or did not focus on. fundamentally, the biggest mistake was is this a change election or was this about donald trump's temperament and disposition.

it turned out to be by a 10 point margin a serious change election. i think a hell of a lot of people miss that. mark: if they want to remake the electoral college map and locked in some of the gains republicans of made it, what could they do? mike: he's got to double down on what got him there. section ofinced a the country they have not had a raise in real wages for a long time that they should be upset and blowup washington. now he's got to keep that promise. that's going to be a heavy lift. that's where the power of his coalition is. all of the political junkies got this wrong, we're looking at county by county election returns. he underperformed in some republican suburbs. he over performed in rural areas.

he's going to have to find a way to keep that bond and deliver some things. on anwe've had people we've talked about the way mitt romney condemned trump. what you think is the right course for republicans who did not just criticize donald trump or say he couldn't win, it said he was intellectually unfit for office. what should republicans in that position do now? mike: i instinct has been liquor. once i moved behind that, the president deserves a shot to succeed. free gop.iatus radio i hope he understands that the campaign won fair and square. there is a stain on his campaign that has divided the country for some of the things he has done. he has an opportunity to lift up

the dialogue. we need to see more of that. he needs to put this thing back together or he is going to be like lbj during watergate. i hope he rises to the occasion. just raw numbers, the guy arrived in 2008 on a historic victory. he leaves with a party in shambles, utter disarray. to what extent is barack obama responsible for the state of abject disarray of the democratic party? what responsibility does he bear? he isthe other irony is now at the height of his popularity. i think there wasn't an effort for a long time before barack obama to focus on legislative races on the democratic side. they were not as aggressive as

they were among republicans. they both later role in it. the other think it is pretty clear, they got a jump on us in it wasuses. sometimes candidate quality or campaign equality. we have been getting clobbered in governors races and we've got to fix both of those. we've got to fix both of those. we've got to focus and we tend to be more of a washington oriented party with a one size fits all message. we may have to figure out how to talk to people differently in different parts of the country. we haven't been doing that. mark: i can't believe you suspended the radio show. mike: it's a podcast, to be clear. that makes it sound more legitimate than it really is. it's one of the top republican podcasts.

i have buried the resistance transmitter in the radio. i want the president to succeed. if he acts like he did during the campaign, republicans should oppose him when he's wrong. obviously, i do in a sort of theoretical way. will i be disappointed if he doesn't succeed? probably not. i think mike hit it on the head. his success is going to be based on his behavior. can he modify his behavior in a radical way and be reassuring to people instead of a leader of less than 50% of the voters. as -- wrong as you were, we are happy to have you here. mark: we will speak with the south carolina democratic party chair.

that's right after this. stay tuned. ♪

mark: as the democratic party regroups, the race to lead the committee is on. we are joined by someone who has thrown his hat into be the chair, jamie harrison joins us from columbia, south carolina. thank you for joining us again. jamie: thanks for having me. mark: tell us why hillary clinton lost the election? vote: she won the popular and a lot of that has to do with the selection being about people wanting to feel like they mattered.

you had african-americans who have said for the last two years that black lives matter and young people, even bernie democrats who said there voices did not matter. you had it rural working-class isple saying donald trump speaking to us because we do matter. in that sense, the democratic party has to get back to making sure that people understand we are listening to them and that we appreciate them and know that they do matter. that is where the fight is about the future of the democratic party. mark: who's fault is it that that didn't happen? jamie: i don't know that it's one person's fault. this has been simmering for a long time because our state parties have not the love and the support that they desperately need it. the frontline of having a strong party is the grassroots level. that is state parties.

we have to invest in state parties. in south carolina, the only way we break through is if we have a national partner that can help us and provide the resources and the talent they have in washington dc. we have the muscle down here in south carolina. you have to have that partnership. john: a large part of the electorate, the part that was sanders, they think the dnc was corrupt in this last cycle and rigged the process to give hillary clinton the nomination. do you agree with that? was a lothink there of long-time relationships with the clinton administration and they were probably too close. i had a friendly relationship with a lot of people in the clinton campaign.

i also had a lot of friends on the bernie sanders campaign, some of my staff was there. we have to make people trust the system again. we have to make them trust the party again. -- way we doait that is show them that we respect them and that we are going to invest in them. that's how you get them to once again come back to the party. you became the chair of the party, what would you do? feel that the dnc has been stacked against them. what would you do to make them believe that the dnc was playing fair going forward? isie: the operative word going forward. you can't go back and clean up whatever happened. all you can do is tell people to look at what we are going to do and work with us to build that. there are a few things.

young people want to make sure their voices are heard. makingow, instead of copies and picking up coffee, they want to have a seat at the table. we need to add a millennial chair or what we have in south carolina. -- of our vice chairs is under 35. young people need to have a seat. there are things we need to do with our state parties. we need to amp up and increase the money we are giving to state parties so they can be the innovation centers for all the things we can do on campaigns. we have a fellowship here in south carolina for weed told this bench of talent. we call it the jim clyburn political fellowship. we train one person from every of havingh the goal 250 young people across the state trained to run for office and run our county party operations.

those are the types of things that if we did them in the states we could strengthen it so it doesn't matter if you have a charismatic leader like barack obama or a policy wonk like hillary clinton. you can still get the vote out. mark: there are some people formerly in the race. who was the font greater -- front runner? jamie: they have to be a full-time chair. they have to be dedicated to running the dnc and working. mark: who was the front runner? are you the front runner? is it wide open? jamie: i think it's wide open. i don't know if there is a front runner right now. many of the members i am talking to say we want to listen to everybody and see who is going to be in the race and we will make a determination from that point. go ahead.

john: will debbie wasserman schultz go down in history as a bad chair? jamie: there were positive aspects of her chairmanship. there were things that did not work well. need to save them? you have a lot of people who are upset with the dnc. she was very helpful here in south carolina. there are a lot of people who did not feel that way. friend andher a good i know she tried. we have to move on from that and build the next generation. mark: we only have a few seconds left. as the focus on the base in building up the base or focusing on the center of the electorate? what is the center of the democratic party?

by addition and not subtraction. that is reaching out to working-class people in rural america where we have lost over the past few years. it's addition, not subtraction. donald trump is going to disappoint a lot of people who voted for him. we will be able to add those people in 2018. from eachstrategists side, two are set. ♪

john: welcome back. .ith us is liz smith epsteinad because boris is not here. theave stephen schmidt, analyst for john mccain's presidential race. there is some dispute about how messed up the transition is. liz: it's really messed up. and i a chaos candidate don't think people want a chaos president. nothing he has done has called people's fears. i don't think that much.

transition, you float a lot of trial balloons. factionslike all the in his camper are throwing spaghetti at the wall to see what sticks. they are saying it's already broken out into a knife fight. what's going on over there? steve: it's disorganized and chaotic. one would expect nothing less. we will have a clearer sense in a couple of weeks from now. -- they said they are going to drain the swamp. it's news to them that the transition team was stocked floor-to-ceiling with lobbyists. now it's going to take time to get them all out. that's probably assigned its consistent with his message. is underki haley

consideration for secretary of state. in terms of optics, what do you think of that pic? steve: she was an impressive leader in south carolina. i think she is someone who is a serious candidate potentially for future higher office. i have no idea if she knows anything about national security issues or the complexity of the world. we will find out in hearings. far outside the national scary realm. mark: what do you think of a prospect of a secretary haley as opposed to a secretary giuliani? john: it's less frightening. less frightening to hear her then bolton or giuliani. to steve's point, what is her

experience? what qualifies her to sit down fees national leaders? surroundedp hasn't himself with a lot of heavyweights on his side. the biggest concern that a lot of people have is how is he going to handle an international crisis? don't you want him to be surrounded with some foreign policy heavyweights? she doesn't qualify as one. they are throwing spaghetti against the wall to see what sticks. if you looked at just the range of names of have been floated, not just for secretary of state but defense, crisco bok, all of these names. can you discern what the ideology is or what trump actually believes? on the basis of what we have seen so far? steve: there is no way to look

at those names and see what the agenda is or the governing philosophy at any level. some of the names floated are the political equivalent of the cast of the cantina scene from the star wars movies. people who are simply not confirmable. i think it bears mentioning today that warren hatch shot down cold the notion that they are getting rid of the filibuster. they can lose three votes on any nomination. john mccain and lindsey graham are going to take a very tough line of people who have diluted sensibilities about the intentions of vladimir putin. lis: you also have susan collins. they are not looking at the number of republicans in the senate. i think they can be a real

roadblock going forward. they are throwing out some random names. crisco bok is the one that scares me the most. what's going on in your circle in terms of accounting for why she lost and the fallout from that? first of all, i think people are coming to terms with she lost and not that donald trump one. my fear is that some people are taking the wrong message from this. talk to theed to white working class or talk to latinos and blacks voters, we need to go with the standard people or with the clinton people. in 2016, we saw all the heavyweights throw its weight behind one flawed candidate and not allow any debate.

we should have a chair debate across the country. let's go to all the states that hillary clinton lost that democrats should of one and had a debate. i don't have a favorite in the chair race. jamie harrison is a good guy. ray buckley is a good guy. keith ellison is a good guy. need to have a robust debate about where we go forward. will the company ministration reach out to democrats? an and norma subgrade with chuck schumer. he wants to get things done. donald trump will have to work effectively with democrats. the notion that this is a unified republican monolithic block is just wrong. this is the closest we have ever been to a european-style coalition government. the donald trump party and the republican party are not the

same party. when donald trump and his transition says we are going to spend $1 trillion on infrastructure, you have republican members of congress laughing out loud. there is no appetite to spend $1 trillion on infrastructure. his coalition and his ability to work effectively is going to be tested. that is why the steve and an issue is such a serious one. if democrats refused to let up, and i think they will refuse to let up on that question, it's going to cripple in a fundamental ability the ability to have coalitions. want to stay with you because we have been doing this with some of our friends, people who were confident. there was no way donald trump

could win. do -- you were really wrong. steve: i had a lack of imagination. i never thought it possible that 6 million democratic posters -- voters would sit the election out. i underestimated her deficiencies as a candidate. i called donald trump very early in the primary. i thought he would be the nominee. i did not think at the end of the day that the american people would vote for someone who was so unprepared and demonstrably so during the debates, that had the character deficiencies that he had, i was wrong about it. country isf this something else. i do think you will now see a lateral line that defines politics. you will see people who

benefited from the technological revolution and globalization. in some ways, you were more flagrantly wrong. lis: maybe out of optimism that people would not vote for donald trump. i gave into the same flawed assumptions, that young voters and latino voters and black voters would turn out against donald trump despite the fact that hillary clinton was not articulating a reason for them to do that. that is something democrats need to learn from. we don't want to just work on white working-class voters. next, what's really happening inside trump tower right after this. ♪

mark: the trump transition at speeds along and we are joined by two reporters awaiting his arrival in it january. jennifer jacobs is nrdc arrow. talk about the republican leadership in the house. there was talk that paul ryan might lose his job and then he was unanimously reelected.

casey: it's the one thing that seem to help republican unity coming out of the election, the freedom caucus, the right wing conservative agitators that so frustrated john boehner had then totemplating a challenge speaker ryan. donald trump made unity among house republicans imperative. the mood in the room when they met, they got those hats sitting on those chairs. people inside the room told me that the mood was solid. people were happy to be back and the in the situation they are. it was not euphoric. they control both houses of congress. the celebration would be hard to contain and that's not the case. they are still nervous about what this means. he has not one the selection on

conservative policies necessary. they are talking about spending a trillion dollars on infrastructure. there are so many questions up. house republicans have gotten to a better place, but it started off pretty confusing. mark: ted cruz was a supporter of donald trump. then they were bitter rivals. now he wasn't trump tower and his name is being floated for attorney general. what are the prospects that could happen? jennifer: they needed him to come up. it was kind of an audition. all of these reporters are staked out in the lobby and watching who shows up to go up the elevator. ted cruz was one of them. they were denied it had anything

to do with a cabinet post. his own staff said it had to deal with the senate and ted cruz wanting to promote his agenda. team keepstion floating names. i was told that they were discussing ted cruz for attorney general. he did not necessarily know that area he was being auditioned. mail, we to the daily were asking some questions about justice and homeland security. we are waiting to see how they got along. when i asked today, what is the reaction, they said strong. john: let me stay with you on the security clearance story. jennifer: jared has been the focus today. a lot of the transition team members have been defending him saying he doesn't have a personal vendetta against chris christie and the were other

reasons why some of these people are being pushed out and why the lobbyists are being pushed out. there is controversy about whether he would get a top-secret clearance to attend the daily briefing. i was told that essentially one person inquired about

emily: i'm emily chang and this is "best of bloomberg technology." we bring you all of our top interviews from the week in tech. coming up, facebook in the eye of a post-election storm. c.e.o. mark zuckerberg strikes back at critics who say the social media site swayed the presidential race. plus snap is filing to go public. sources say what may be the