creating american jobs. >> can we solve the problem with jobs -- >> i think we could. >> there are a billion people in some of these countries and they have money. thank you, kathleen matthews. >> it's great to be here. >> it's delightful. there she is. take a look. there she is. that's hardball or softball for now. i'll be back tomorrow night. "the ed show" with ed schultz starts right now. good evening, americans, and welcome to "the ed show." tonight from new york. john boehner caves and accepts the senate's payroll tax cut extension. it's a win for the democrats and a win for 160 million americans. this is "the ed show." let's get to work. >> if you can get this fixed, why not? why not dot the right thing for the american people? even though it's not exactly what we want. >> republicans have caved, and middle-class americans get the victory. tonight, chuck schumer of new york on john boehner's failed strategy. representatives garamendi and ellison on what's next for the democrats. and e.j. dion of the "washington

post" on the lasting damage this cave causes for republicans. >> i don't think it's unusual. i do think prior presidents would have done the same thing. >> mitt romney gets busted taking another new position regarding the president's decision to kill osama bin laden. democratic strategist bob schrum is here with the latest. >> i think that the president should play much more of a lead role rather than going shopping for his dog. >> john mccain, eric cantor, sarah palin, and fox news are howling about obama's dog. they're all going in the zone. and racial remarks come back to haunt the latest gop front-runner. are. >> but you did read them. >> not all the time. on occasion, yes. >> dr. james peterson on the controversy ron paul wishes would just go away. >> good to have you with us tonight, folks. thanks for watching. the tea party's mission to destroy this presidency and the economy, well, it's failed for now. they're still on the move. tonight, john boehner buckled to

the senate's two-month extension of the middle-class tax cuts and unemployment insurance. boehner has been getting heat and pressure from all sides. he couldn't win. today president obama stood his ground and turned up the heat on the speaker and the republicans. >> nearly every democrat in the senate voted for that compromise. nearly every republican in the senate voted for that compromise. democrats and even some republicans in the house voted for that compromise. i am ready to sign that compromise into law the second it lands on my desk. so far the only reason it hasn't landed on my desk, the only reason, is because a faction of house republicans have refused to support this compromise. >> the senate minority leader, mitch mcconnell, also turned on the speaker today. mcconnell released this statement. although he was spinning it

pretty good. "working americans have suffered enough from the president's failed economic policies and shouldn't face the uncertainty of a new year's day tax hike." nice take, senator. but late this afternoon speaker boehner buckled to all the pressure. he held a conference call with house republicans to announce he wanted to pass the senate bill by unanimous consent. tonight boehner, well, he ate some crow. >> senator reid and i have reached an agreement on payroll tax relief on behalf of the american people. key parts of this agreement are that on january 1st no american worker will see an increase in their taxes. >> that was the sound of john boehner caving. so what does this mean? where does the tea party go from here? i think in the next few months we're going to find out what political revenge is all about. and i would imagine that somewhere tonight john boehner's having a stiff drink trying to figure out what his next move is going to be. because i do get the sense these tea partiers are not going to give up. their mission was to go to

washington, defeat president obama. tonight they are the losers and the winners are the american people. those 160 million americans who were sitting on the fence, waiting for some conclusion out of washington, hopefully they will get it tomorrow morning. get your cell phones out. i want to know what you think tonight. tonight's question, is john boehner the most ineffective speaker in recent memory? text a for yes. text b for no to 622639. our blog is there with you as well. ed.msnbc.com. we'll have the results later on in the show. joining me tonight is new york senator charles schumer on the democratic leadership team. senator, congratulations. >> well, thank you. it's a victory for the middle class. middle-class people over tea party politics. that hasn't happened enough this last year, but it happened fittingly at the end of the year, and we hope it's a metaphor for 2012. >> well, have the republicans been exposed for the party that puts politics over people? i mean, i think the way this whole thing has played out it has not been good for them.

>> i think that's right. what they've done this whole year is play brinksmanship and paralysis. but they've been very clever about it. and you know, people have sort of said a plague on both your houses. what began with the debt ceiling and now continues with this issue, the american people have pretty good sniffers and they're beginning to smell that this tea party is extreme and not really interested in what's good for americans, not simply that they might have a different viewpoint, they want to cut government more than others but rather that they're basically trying to paralyze government and get nothing done. and it is true people are upset with government. but it's not because it's doing too much. it's because it's doing too little to help them. >> there hasn't been this much political light so, to speak, between the senate minority leader and the speaker over in the house. what do you make of that? is this really a dividing point? >> let's hope so. in the past speaker boehner and mitch mcconnell have worked in

tandem and it's been pretty effective because the house by its rules can pass something by a mere majority. so they send ow stuff to us, and mitch mcconnell and the republicans don't let us pass anything and they say the house has passed a bill, why hasn't the senate? when the real question is why haven't the democrats and republicans come together because you need both to pass things in both houses. but i think that mcconnell, he's a very smart politician, and he realized that boehner simply following the tea party, the hard right people, was hurting the whole republican party and in fact risked his goal of both defeating obama and gaining a senate majority. they're a lot further away from it today than they were two weeks ago. >> do you think there's going to be any problems tomorrow with unanimous consent? >> well, you never know. >> i mean there, might be some radical tea partiers. >> yeah, you could have had five of these guys call each other up and say we're flying to washington and we're going to block it on the floor. but then because very smartly leader reid said we're not going to support this until speaker

boehnerner publicly does, and the fact he now has to publicly support this on the floor of the senate -- house. the floor of the house. the fact is if they call the whole house back every democrat will vote for it, enough republicans will vote for, it hopefully speaker boehner won't just totally go back on his word. that it will pass. so they're stuck. >> i want to get your reaction to something the speaker said tonight. here it is. >> politics will be politics. our team believes it's always right to do the best thing. if you do the right things for the right reasons, the right things will happen. everybody's already agreed that the best policy is a one-year extension of these policies. all we're fighting for is what everybody's already agreed to. >> yeah, there's a lot of fallacy in that statement. two weeks ago the majority of republicans, a while ago eric cantor, were for no middle-class payroll tax cut because they thought that it would help the economy too much. and now of course they said two months isn't enough. well, if two weeks ago you're

saying i don't want any of it and now you're saying i want a bigger one, it doesn't pass the laugh test. and again, the american people sort of saw through that. so what speaker boehner said isn't right. his party, if they had been resolute for this middle-class tax cut for the last six months, maybe they'd have a leg to stand on. but they didn't. they were against it, against it, against it. >> have you -- could you point to any other time where the democrats have held together so strong on an issue? >> no. >> there was no caving at all. >> but i will tell you, since september we've done a lot better. >> yeah. >> why? well, we have focused on the economy, jobs, and income inequality. we came out united finally for the tax on incomes over a million dollars. we came out for a jobs program. and sea wid, look, even if it doesn't pass we're going to put it on the floor of the senate over and over and over again. and here's what's happened. is it people now believe that democrats are much better at helping the economy than republicans.

this is the first time in 30 years when you ask the american people who's better at tax policy. they prefer democrats to republicans because we separated the middle class from the millionaires. >> does that carry over to 2012 with political momentum? >> i believe if we stick with it it will. we have to stick to the three issues of jobs, the economy, and income inequality. the american people are with us. not with the republicans on those issues. if we stick with them and don't expect every week we're going to have a major victory but it's like stalingrad, you fight it house by house by house, we will be in good shape in 2012, even if the economy is not rip-roaring back, which i hope it is. >> senator, good to have you with us tonight. >> good to be here. it's a good evening. >> it is a good evening. it's a good evening for the american people. and i have to say this. this was all so unnecessary, wasn't it? >> totally unnecessary. look, i said at the beginning of the week on your fellow msnbc show that if we held tough they would have to cave because the american people are on our side. >> and the american people are

with the democrats on a lot of issues, not just this one. so i hope -- >> we have to stick with them. and the dissension in the republican party, ed, is for real. my guess is there are a whole lot of mainstream conservatives who will not r are nare not teao are calling boehner and saying you can't follow the tea party over the cliff because it's going to hufrt rt us. >> we'll have more on the tea party. senator, thanks. happy rolls holidays. good to have you with us. now let's turn to congressman john garamendi of california and congressman keith ellison of minnesota. good to have you with us tonight. keith, i want to ask you first, what is your reaction to boehner's change of heart? what do you think broke him? >> well, you know, i'm glad that good sense finally prevailed over there. you'll know that when the senate deal got done boehner came out and said it was a victory and then he got on the phone with his caucus and they told him that they weren't going for it and then he kind of just capitulated to their

obstructionism and then that kind of caused the mess that we had last week and then here we are again. the main thing i want to say, ed, is look, last april they almost shut the government down. last august they almost defaulted on our national debt. obstructionism is the way that they do business. maybe today marks a departure from that very, very unfortunate thing they're doing to the american people. >> congressman garamendi-d the tea party learn a lesson tonight, that maybe they don't carry a big enough stick, or how do you think they'll respond with the speaker moving forward? >> i think they're going to come back and fight fiercely for what they've always said they wanted, to shut down government, small government, get government out of the way. i think they're going to continue to fight for that. i suspect we're going to have further battles and it's not going to be very far away, ed. the remaining ten months of the payroll tax reduction is still to be determined. that's going to be a big fight beginning in january up through february. and we're not going to let this thing go. and we're not going to make the middle class pay for a

middle-class tax reduction, which is precisely what the republicans tried to do. >> well, doesn't sound like they're going to give up. republican congressman kevin brady of texas, the house gop tax cut negotiator, said the following tonight. he says, "i'm willing to fight on but in the end house republicans felt like they were re-enacting the alamo, with no reinforcements and our friends shooting at us." congressman ellison, will the tea partiers revolt against boehner and force a vote tomorrow or will this be smooth sailing? >> you know what? no one can really tell. i doubt it. but nothing they do surprises me. i could tell you this, though. that john is absolutely right. you know, we are going to be arguing for the next ten months and we're going to be fighting every step of the way. it's going to cause a -- it's going to call for a resolve and it's going to call for the american people standing up demanding that we have sane, reasonable government and that we have some compromise. so get ready to be active out there, american people because it's going to require that. >> how much does this

politically damage the speaker, congressman garamendi? what does this do to john boehner? >> well, he's clearly weaker. he's clearly weaker. and that may be a good thing for the american public because we still have to get that jobs bill passed. we still have to build the infrastructure. we still have to put the teachers back to work, the police and firemen. and we've got to make sure that we get this economy moving. so the jobs program still has to be done. if the speaker is weaker, maybe, maybe we could push through the remaining elements of the president's american jobs program. it's exceedingly important. and by the way, they still have not abandoned their field of trying to terminate medicare and privatize social security. those fights are likely to continue in various forms through the remainder of 2012. now, we're going to fight very, very fiercely for this. this is about the very future of the american middle class and about the future of this economy. >> if 2012 is anything like this most recent fight, it's going to

be a dandy down to the wire every time. i think the president played this about as good as he can. but one thing i really respect the democrats for on this one, gentlemen, is that it seemed all along you were prepared to walk from the deal. you were prefrpd to say this is far as we're going to go, draw that line in the sand, and i think that made a big difference in all of this. and i think it's going to garner a lot of support from folks out there who are on your political side. thanks so much. congressman john garamendi, keith ellison with us tonight here on "the ed show." remember to answer the question at the bottom of the screen and share your thoughts on twitter @edshow. we want to know what you think. up next, after john boehner's big loss i wonder if the republican caucus is still calling him braveheart? e.j. deion of the "washington post" is here to weigh in on all of this. mitt romney said he would have taken out osama bin laden the same way president obama did. we'll introduce him to a guy who said the absolute opposite. his name's mitt romney, and it happened four years ago. stay with us wp.

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john boehner and the tea partiers in the caucus lost big-time today. this evening boehner was asked about the political consequences of digging in his heels on payroll taxes and whether it was worth it. here's the answer. >> doing the right thing for the right reasons is always the right thing to do. and while everyone asked for a full-year extension of these programs, a lot of people weren't willing to put the effort in as the holidays were approaching to get it done. our members were. >> joining me now is e.j. dion, senior fellow at the brookings institution and columnist for the "washington post" and friend of mine. e.j., good to have you with us tonight. >> thank you. >> happy holidays. how come it was the right thing to do today but not the right thing to do yesterday for john bow sner what happened here? >> because i think he added up all of the things other republicans were saying.

you know, we got so accustomed to the newspaper headline "democrats in disarray." it was almost programmed into the computers. i don't think we've ever seen since president obama took office the kind of disarray you saw in the republican party. the senate republicans did one thing. they thought the house was on board. the house sabotaged that. senate republicans say, well, wait a minute, boehner never told us that this was going to have that sort of problem. boehner himself signaled that he actually accepted this deal and then got pushed back by some of his own right-wing members. and i think what's going on in the republican caucus in the house is not just some of the younger members. indeed, a few of them said wait a minute, i don't want to go to the voters, having killed the payroll tax cuts. it's the sort of second, third, fourth-term really right-wing republicans who are kind of making an alliance with some of the most conservative republicans. and it creates a huge problem for boehner now in going forward. >> well, i was going to ask you

about this. when was the last time we've seen a speaker placed in such an untenable political position as he was today? there's no political up side for boehner at all here that i can see. >> the only -- i've been trying to figure this. the only political up side i can think of is if boehner did indeed go to his caucus and say, guys, we've got to pass this or we're going to be in a heap of trouble. he will be in a position to say the next time, hey, you'd better listen to me. look how badly that went the last time around. but i do think that there have been so many cases where speaker boehner just couldn't get his caucus to go where he wanted it to go that you wonder how long does this speakership last or for that matter how long is he going to want this job under these circumstances? >> well, i mean, look, the personality of the tea partiers and how dogmatic they are, i don't see them backing down at all. earlier this week boehner's caucus was calling him

braveheart for staying the course. here it is. >> look, this is a braveheart moment. you, mr. speaker, are our william wallace. let's rush to the fight, get us back to washington. let's get our work done. and we're doing that. >> is that what you told john boehner, that he's your william wallace? >> that's exactly -- well, i call him mel gibson. i couldn't remember william wallace. but now i know, of course, and yes. >> well, e.j., mel gibson died in that movie, and i think politically john boehner followed those footsteps somewhat today. >> i think this was -- i think this was more the gang that couldn't shoot straight, myself. you know, what's interesting is that within that republican caucus you do have people who seem to be living in their own political world. and i think it's people who represent really, really conservative districts where, you know, that old reagan line i've always liked quoting before, you know, the right hand doesn't know what the far right hand is doing.

and in this case you've got districts where it's very right or even righter than that. and so they believe they can go off and do this. they won't suffer much back in their districts. but there are a lot of members from pretty democratic districts now who are looking over their shoulders because of the next election. >> they are so ideologically bent, the tea partiers. this is why they went to washington. to be non-conformists. this is why they went there, to disrupt, to delay, to break down the obama agenda. and i just -- what do you think their next move is going to be? are they going to put up with boehner? are they going to revolt? are they going to see more of this? >> i don't know if they had the votes to toss him out. they just have the votes to make his life miserable. >> miserable. >> but this puts them in a particularly bad position because how many times have you seen democrats insisting on a tax cut and republicans saying no, we don't want to go there, which is where they started out on this thing. they didn't like this tax cut. and i think the big political shift which as senator schumer said earlier is being reflected

in the polls is for years the choice was republicans are the tax cut party, democrats are the tax increase party. now we're really talking about wait a minute, what kind of tax cuts benefit middle-class people and what kind benefit rich people? >> great to have you with us. e.j. dionne, here on "the ed show" tonight. thank you. >> good to be with you. >> in "psychotalk" tonight, republicans prove they can attack president obama on just about anything. now they're going after his dog. >> plus, i'll have a very special guest here on set to help me out with this very special "psychotalk." earlier in 2011 protests started in wisconsin, and by the end of the year they spread across the country into ohio and michigan. we'll show you why working-class unrest was a year in the making. [ male announcer ] you are a business pro.

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and in "psychotalk" tonight, i have a special friend here to help me out. his name is rex. hey, rex. how are you doing, buddy? don't go way. we've got to work here. we've got to do "psychotalk." how are you doing? he's been in the kennel. he's a little camera shy today. he even puked on set earlier. but i think he's okay now. how are you doing, buddy? yes. he's a good dog. he's a beagle. a little camera shy, huh, bud? you know, but some republicans are taking a stand against dogs like rex, or at least one belonging to the president of the united states. the fox news radio website threw a fit about a white house holiday card featuring the obamas' dog, bo. fox's article complained, the

card makes no mention of the word christmas and instead focused on bo, the first dog. sarah palin told fox the card was odd and wondered why the president's christmas card highlighted his dog instead of traditions like family, faith, and freedom. well, today there's even more evidence that the republicans are anti-dog. they're upset with president obama spending quality time with good old bo. well, the president has been stuck in washington, d.c. because john boehner's obstructionist tea partiers are at it again while his family is out in hawaii vacationing. so the president took his dog christmas shopping. i mean, what else are you going to do? you're home alone. you've got the dog. but some republicans, they just couldn't handle that. >> i saw the president out yesterday doing his christmas shopping. saw he brought his dog with him. you know, we're here. he could bring his dog up here. we are pet-friendly. >> i've never taken my dog shopping. i mean, he took his dog shopping. >> i think that the president should play much more of a lead role rather than go shopping for his dog. >> now, we just played some sound bites of republicans

there, and he doesn't like them. look at that. settle down. [ barking ] i know we've got to work with them, rex, but you can't work them over all the time. all right. i feel the same way sometimes. all right. they're not at the back door. this is the good exit over here. settle down. everything's fine. all right. john mccain is already on vacation in arizona. but he still has the audacity to slam president obama for not working hard enough. look how they got rex worked up. of course, republicans have only turned against dogs since president obama took office. i didn't hear them complaining about president bush's holiday videos. >> sure, barney, you and miss beasley could be junior park rangers if you want to. barney, if i'm not mistaken, you've already got a pretty big job to do right here at the white house with the christmas decorations. ♪ >> you'd better wake up, fella. there's a lot of work to do around here. we're sprinting to the finish,

not napping to the finish. >> he doesn't like barney either. so it was okay for president bush to spend time making movies with his dog, but president obama can't take bo to spend some money supporting american businesses? democratic dogs, don't you think they deserve love? they have feelings too. have a heart for bo and my friend rex. it's the holiday season. for republicans to criticize president obama for taking his dog to petsmart is just ridiculous. plain old "psycho talk." good job, rex. and one last note. my friend rex, he's a 2-year-old beagle. and you can see he's a pretty good watchdog against republicans. now, he was left at the shelter. quite a story here. when his owner lost his job. and he had to move into a shelter himself. rex and his sister are both available for adoption from the sean casey animal rescue here in new york. the shelter is at 155 east 3rd street in brooklyn. or you can give them a call at

718-436-5163. all right. everything okay? all right. republicans are gone now, rex. everything's okay. but i've got to do the story on mitt romney. mitt romney says any president would have taken out osama bin laden. democrats are firing back. the fallout over ron paul's past continues. he says he didn't know about the racist content in his newsletters bearing his name. an interview paul gave proves otherwise. stay tuned.

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mitt romney will say anything to put president obama in a bad light. even if it's flat out false. now he's stealing a line from donald trump saying the president's decision to kill osama bin laden was no big deal. >> i don't think it's unusual on

the part of this president to have finally taken out osama bin laden. after all, we've been looking for him for some time. intelligence finally gave us a good indication of where he was. he gave the order. and i do think prior presidents would have done the same thing had they been in the same position. >> really? democrats have pounced on romney's dishonesty. the dnc released a new ad featuring prominent republicans saying the bin laden raid was a gutsy call. former defense secretary robert gates is not sure any president would have done the same thing. >> i've worked for a lot of these guys, and this is one of the most courageous calls decisions that i think i've ever seen a president make. >> but romney says that he would have gone into pakistan without the support of its leaders, just like obama did. >> that was the right course for him to take. i supported that at the time and do now. in a similar circumstance i think other presidents, even

candidates like myself would do exactly the same thing. >> well, in 2007, when then senator barack obama from illinois said he would go into pakistan to get bin laden, this was mitt romney's response. "i don't think those kinds of comments help to draw more friends to our effort." mitt romney doesn't even agree with mitt romney about his attacks on the president. no wonder republicans keep looking for anybody but mitt. let's turn to bob schrum, democratic strategist and professor at new york university. this is probably the best example of how this guy will say anything and do anything and quet tyet the republicans just let it go by. does romney know he's contradicting himself, bob? >> sure, he knows he's contradicting himself. but he can't live in this republican party by taking any other position. what if he were to say the raid was a mistake? he'd do himself enormous damage. look, he has no sense of shame about these things. he's running ads in iowa

blasting newt gingrich, blasting rick perry now for their heresies against conservatism. he has no sense that he himself is guilty at least in conservative eyes of major apostasies. this is a guy who was pro choice. now he's pro life. a guy who said he was better on gay rights than ted kennedy which is absurd. now he's against gay rights. just go down the list. issue of conscience after issue of conscience, he'll say anything to become president. >> here's something else romney said in 2007 about getting bin laden. "it's not worth moving heaven and earth, spending billions of dollars just trying to catch one person." now compare romney's quote to this one. from barack obama from around the same time. "if we have actionable intelligence about high-value terrorist targets and president musharraf won't act, we will." how can romney possibly hope to have a leg up on president obama when it comes to national security when there are such distinct examples about credentials and acting on them?

>> he can't possibly hope to have a leg up. the fact is that if you look at any opinion polling, even in times when the president's had difficulties over the economy, although that's getting better, people have given him enormous credit as commander in chief. they have huge trust in him to conduct this fight against terrorism. and romney himself i think -- you know, he was governor of massachusetts. he's relatively unschooled in foreign policy. he kind of makes it up as it goes along. the thing that's interesting about the president is people worried that he didn't have enough experience, that that phone was going to ring at 3:00 in the orning, he wasn't going to give the right answer. on question after question after question, whether it's going after bin laden, finally keeping the commitment to leave iraq, the way he's drgone in afghanistan, that phone has rung at 3:00 in the morning and he's given the right answer. >> george h.w. bush has come out in support of mitt romney. he seems to be picking up more

support from traditional republicans. what does this mean, and does this help? >> oh, sure, it helps. the republican establishment's going to win again. the republicans are almost certainly going to nominate the next guy in line. we've been searching for the unromney for months and months and months. i think romney is probably going to win. i think he may very well win iowa. because he's the uncain. he's the unbachmann. he's the ungingrich. he's the unpaul. >> you think he can win iowa? >> i think he can win iowa. look, there are some polls -- there's one poll that shows him slightly ahead. i think he's dumping a huge amount. his super pac. millions of dollars of negative ads on gingrich and now perry because they don't want perry to revive because either he's going to win iowa in his view, that's his game plan, or he's perfectly happy, he wins by losing. if he comes in second and ron paul comes in first. because ron paul is an unthinkable republican nominee. the republican party will never nominate him. any attempt to actually get to the point of nominating him would shatter that party.

>> i've had some staunch conservatives like richard vigory tell me not romney, not now, not ever. and of course the tea partiers are unsatisfied with him. do they sit this one out? >> no. in the end -- well, look, one possibility is that paul will take revenge by going out there and running as the third-party candidate. but in the end they all said, a lot of them said not mccain, not now, not ever, and when he got the nomination they were for him, however grudgingly. romney is -- there's an old saying in politics, who else you got? we've been through all of them. they don't seem to have anybody else. i mean, gingrich i thought might be teflon, but he isn't. instead he turns out to be velcro. all these charges are sticking to him. and quite frankly i think romney's on his way to the nomination. >> well, i'll be in iowa next week. i'm looking forward to seeing what the romney camp is doing down there. bob shrum, have a great holiday. thank you for being with us tonight. >> merry christmas to you, ed. >> you bet. protests over financial inequality dominated headlines

in 2011, but the facts show we've been headed in this direction for many years. we've got charts. we have charts to prove it with ezra klein. coming up next. ♪ and just let me be [ male announcer ] this is your moment. ♪ your ticket home ♪ [ male announcer ] this is zales, the diamond store. ♪ [ male announcer ] they've been tested, built and driven like no other. and now they're being offered like no other. come to the winter event and get an exceptional offer on the mercedes-benz of your dreams. it's our way of showing a little holiday spirit. but hurry -- the offer ends january 3rd. ♪ because for every two pounds you lose through diet and exercise, alli can help you lose one more by blocking some of the fat you eat. let's fight fat with alli.

♪ next, our charts say it all. charting the income gap in this country. ezra klein will join me tonight. later, ron paul walks out on a cnn interview when he's asked about racist content in newspapers published under his name. don't forget to tweet us using the hashtag edshow. we're right back. stay with us. and the end of a journey that began here, when the swipe of a visa card gave one man a chance to bring happiness to ten friends... and humiliation to one. if you want this ticket, i need you to wear this helmet. i'm not gonna do it. i'm not gonna do it. i'm not gonna do it. [ sobs ] [ male announcer ] use your visa card for a chance to win. to see more of the story, visit our facebook page. it's 4g, so you can do more faster. so, kathryn, post more youtube videos of your baby acting adorable. baby. on it.

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there has been a lot of talk this year about income inequality and inequality basically in this country in a lot of different facets of life. people are in the streets and politicians are running scared. for months i have told you that this chart right here is the one that you need to consume as an american. i've said that this chart tells you everything you need to know about the income gap in this country. because over the last 30 years we can take it back to 1979, for most americans wages have stayed

flat. that's the blue line. the top 1% of income, where has it gone? it's gone through the roof. and you might think that's a good thing. what about the folks down here? what do you think they think? that's where the majority of americans-r big-time. it makes sense, in a lot of sense, when you see it all in simple terms like this. ezra klein of the "washington post" also gets the impact of charts. he put together some of the best ones from this year, like this one, which shows corporate profits skyrocketing over the past three years while compensation for workers, where does it go? it goes in the opposite direction. economist jared bernstein drew a helpful doodle on here to show you how bad the chart really is. here's another chart, if you want to know why people are in the streets. this is the number of hours a month an average person needs to work in order to pay their rent. hours per month just in order to pay the rent.

this is 1950, 1960, 1970, 1980. here we go. 1990. look what has happened in the last 20 years when it comes to people just having to put hours into work just to pay their rent. it's gone up steadily over the past 60 years, but it's more than doubled in the last decade. so who's getting ahead? let's bring in msnbc policy analyst ezra klein, who pulled together the year's 18 best charts for the "washington post." ezra, great work. >> thank you. good evening. >> how do we reverse these lines that we're talking about in these charts? i mean, can they turn around that fast in your opinion? >> not that quick, no. so the first chart that you showed, that's coming from jared bernstein. what you're seeing there is a massive rebound in corporate profits with no rebound in compensation. that is a little bit tough to turn around because in order for that rebound in compensation to come back these businesses need someone to sell to in america. a lot of that rebound you're

seeing was coming from selling overseas and going into new markets. the other chart you showed, the one about the toil index, that's from robert frank at new york university. and his point is that we've gotten into a competition with one another, we just keep buying bigger and bigger houses not because they make us any happier but because everybody else is buying bigger rouse houses and those houses are in better school districts, we need that for our kids. it's a cultural thing and societal plan. he's got tax plans and other things that would help us get around it but it would fake a while to turn anything that big around. >> ezra, it's pretty clear that the white house and democrats have emed the message of income inequality. what made them finally see the light? >> i think they saw it all along. i think the reality is that occupy wall street had a very, very big role in changing the conversation. there's another chart we don't have here tonight but it's by dylan byers over at politico and he showed the media mentions of inequality before and after occupy wall street, and that chart just goes up. it is a straight line up. they had a dramatic role in changing the conversation.

and i think they showed the white house that inequality was striking a chord with people, that it was a way that helped people to think about what had happened to the economy in recent years and this sort of unfairness in which it had stopped working for people who had been playing by the rules and begun working all too well for people who didn't seem to be playing by any rules at all. >> i want to show you another chart. this came from mark standee. it shows the decline of household debt over the past three years. is that an optimistic sign? people are paying down debt. but it also -- that's what it looks like. but also the access to money might be playing in here too because the markets are tighter when it comes to someone getting a loan. >> so mark zandy says this is his most optimistic chart. what you're seeing is delinquent households, households having trouble paying off their mortgages. what you're seeing is what economists call deleveraging beginning to play itself out 37 not totally. we've got a lot of debt in this country with a lot of people buried under bad loans, a lot of people underwater on their mortgages i don't want to

minimize any of that but that giant rise has begun to finally moderate and that begins to suggest that if we could just get a couple months w0u9 some mass i6 crisis somewhere in the world something like the euro debt issue we're having right now there is room in the country at this point for recovery. see that right now. we're having pretty good growth in this quarter. might end up 3.5, 3.7. but next quarter might be back down to about 2%. >> ezra klein, always a pleasure. good to have you with us tonight. >> thank you. >> ron paul denies having anything to do with a series of newsletters containing racist statements. but two interviews paul gave over a decade ago say otherwise. dr. james peterson, next, stay with us. [ female announcer ] crest 3d white was recognized

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it looks like ron paul could win iowa, and now the candidate's past is getting a closer look. in the '80s and '90s paul put his name on several newsletters. ron paul's political report. ron paul's freedom report. you get the idea. well, here are a few examples of what was published in those newsletters. "we are constantly told that it is evil to be afraid of black men. it is hardly irrational." "order was only restored in l.a.

when it came time for the blacks to pick up their welfare checks." paul was asked about the newsletters by cnn. >> i didn't write them. i disavow them. that's it. >> so you read them but you didn't do anything about it at the time? >> i never read that stuff. i've never read -- i was probably aware of it ten years after it was written. >> these things are pretty incendiary. you know, the -- >> well, because of people like you. >> no, no, no, no. come on. some of the stuff was very incendiary. and you know, saying that in 1993 the israelis were responsible for the bombing of the world trade center, that kind of stuff. >> yeah. good-bye. >> all right. all right. thank you, congressman. >> paul's claims are not holding up. here's a 1995 c-span interview in which paul seems to be quite knowledgeable about his newsletters' content. >> i also put out a political type of business, investment newsletter. it sort of covered all these

areas. and it covered a lot about what was going on in washington. >> and a 1996 "dallas morning news report" shows that not only was paul aware of the newsletters' content, he wrote some of it. "paul wrote in his political newsletter in 1992 that 95% of black men in washington, d.c. are semi-criminal or entirely criminal. he also wrote that black teenagers can be unbelievably fleet of foot. dr. paul defend defends his writings. in an interview he said they were being taken out of context." joining me now is dr. james peterson, director for african studies and associate professor of english at lehigh university. professor, good to have you with us tonight. >> thanks for having me. >> should these statements disqualify this man from office of the presidency? >> i believe so. especially to the extent to which we can actually connect him to them and the extent to which he plays sort of political maneuvers and tries to deny himself from being involved with them. right?

because that goes to credibility, but then also goes to his own political ideology. and his social ideology. remember, also, this is not just racism. there's anti-semitism there. there's some sexism there. there'shome homophobia there. there's a lot in these newsletters that if we sort of put ron paul in the same context as someone like a herman cain or newt gingrich where we go back 15, 20 years and look at their behaviors and look at what they did as a way of interpreting what they're going to do going forward, that for us should suggest that ron paul either has to come up and -- come out and really apologize and explain this away or we're going to run into some problems down the line. >> he said in a 1996 "dallas morning news" interview that his statements were taken out of context. what do you think? >> well, that's kind of the stock answer for these kinds of issues. again, it's very, very difficult for me to believe that a newsletter that has his name on it, even in the '90s, is something that he's not going to vet or in any way see. i mean, wouldn't he understand then that that would -- or that could diminish his brand? and so wouldn't he sort of be

policing that a little more closely? that answer just doesn't make sense. and i think when you see him walk away from the cnn reporter, that's very, very telling. that suggests to us that he's not prepared to handle being the front-runner in this sort of republican presidential revolving door and not prepared to handle the heat for some of the things that he said in some of these newsletters. >> do you think he's lying? i mean, he said in that interview that he hadn't read them and he didn't write them, and then in the other interview he acknowledges knowing about its content. i mean, what do you make of that? >> i don't want to call him a liar, but i think, you know, he needs a much better political calculus for how he's handling this right now. the bottom line is the content of those newsletters is disturbing. it's racist. it's sexist. it's homophobic. and in some places it's anti-semitic. and he needs to answer the charges of that news qulert because it had his name on it. there's no escaping that. he can say he didn't read it or he did read it. he needs to sort of explain that away. more than disavowing it too, he's got to explain what was the process of circulating those

letters. did he actually make money off of that? and look, there are a lot of white supremacist groups rallying to his defense right now. those are the same kind of groups that i believe supported that newsletter in the beginning. he's got to distance himself from that or yes, i think it will diminish his capacity to do well in this race, especially beyond iowa. >> do you think the republican party should step into this one? should the rnc chair make a statement? should someone in a leadership position step up and say that this is uncalled for or -- >> in a perfect world, yes. the rnc and other conservative leaders would step up and sort of distance themselves from this, explain they're not a part of this. but this is not a perfect world. >> they're not used to doing that. that's for smurp. >> no, they are not. >> dr. james peterson, have a great holiday. >> you too, sir. >> i'm ed schultz. and again, here's the information for the sean casey animal rescue here in brooklyn, new york. if you'd like to know more about rex, who joined me earlier in the show tonight, rex and his sister --