cotail i've ever made in a cocktail moment and a complete failure. we'll see you tomorrow night 6:00 eastern for the south carolina primary. "up w/ chris hayes" is next. a huge snowstorm in chicago has prompted the cancellation of 600 flights. our primary coverage is coming up all day here on msnbc. you're going to stay tuned. first i, to the introduce our panel, returning to the program, gary johnson, libertarian candidate for president. last time around he was a republican presidential candidate, now running on the libertarian party line as well as the former governor of new mexico, msnbc contributor melissa harris-perry, also

professor of political science at tulane and author. and also, host of her own show, debuting right here on msnbc on february 4th following this very program, extremely exciting news, really, really excited about all this. michelle goldberg. also coming back, contributing writer for "newsweek," the daily beast and author and msnbc columnist for "the washington post," ezra klein. south carolina, south carolina, south carolina. michelle you're back from there. i'm happy, i'm excited to check in on what you saw firsthand on there. at the beginning of the week, i am really surprised by what haed this week. i am genuinely surprised. i would say it's one of the most surprising weeks we've had in this drawn-out process. there's been a lot of fake surprising weeks in which it was donald trump is pulling ahead of everyone. that was never a real thing. there was no one voting or

nothing on the line. at the beginning of this week, romney had a 23-point lead in the national gallop poll. that lead is down to 10 percentage points, nationally. athree other polls, two which are national and one from south carolina have newt gingrich ahead, both gingrich and rick santorum have said they will re-assess their candidacies if they don't win south carolina. the romney people are basically saying we're expecting to lose, they're trying to play the expectation game. there's news about them buying ad time in nevada. which is one past florida. they're up in the air on florida. basically this all happened in the last week. newt gingrich came back from the dead. and our segment producer, we were e-mailing about it, i literally got up in an editorial meeting and said this is over, romney will win south carolina, ho-hum. my stuff was like, i don't think that's right. we looked at the polling and just like i was saying --

>> i was talking to richard kim at the nation. i have a column due on monday. i was like, i won't to write about newt. >> i was blowing up my own spot. you just blew up richard kim's spot. then there was an e-mail comparing newt gingrich to chucky. this is a great thing about having a tv show. we have the graphics department pull up a newt gingrich/chucky hybrid. >> that's close. i was hoping to sleep after the program. >> seriously. what happened was the monday night debate, not the last debate, not thursday, although i thought gingrich held himself well in political terms. he had a heated exchange where he doubled down on his food stamps comment. that was the thing, the moment that seems to have turned things around in south carolina. here is newt yesterday talking about that exchange and about juan williams saying this.

>> the right to pursue happiness in my judgment implies pursuit or activity which implies the work ethic. i had an interesting dialogue monday night in myrtle beach. with juan williams about the idea of work. which seemed to juan williams to be a strange, distant concept. something worthy of study in an academic environment but certainly not something to be subjected to young people. >> that is so racist, it makes me want to curse on air. that is -- >> i hadn't seen that before. that is unbelievable. that's worse than npr ever said about juan williams. way worse. >> i kept thinking juan williams wishes he had stayed -- >> but this is -- i think this is part of the point, the fact you can name three jobs juan williams has had in the last week, i mean, i certainly have a lot of ideological disagreements with juan williams but the idea

that he is not a hard worker is bizarre. more than that, the other thing that's bizarre, most of juan williams ideological discourse at least over the course of the past decade has tracked closer to this scenario about, you know, hard work. in fact, i recently heard him talk about the poor have to defer gratification, they can't -- they're not going to be able to buy the consumer items. they have to make different sorts of choices. it has a strong narrative, not only personal work ethic but strong narrative. the sense this could be about anything other than race is pretty appalling. >> i think it comes back on gingrich, too the fact that he's -- he's kind of the example of the root of all evil, politicians that leave office and cash in on what it is they've done. the fact that his firm has taken in millions of dollars worth of consulting fees, i mean, come on, this is what's wrong with the system. also, i have one issue with gingrich. in 1997 -- >> just one? >> yes, it is.

>> you're his best friend. >> in 1997, he proposed the death penalty for possession of marijuana in excess of 2 ounces with intent to distribute it. >> is that true? >> from overseas, yes. when asked about his own marijuana use, in 1997, when asked about his own marijuana use, when i did it, it was cool is what he said. basically, basically. >> you're paraphrasing. >> imposing the death penalty on the grounds that its passe? >> when i did it it was cool, against the law. now it's against the law and morally wrong. the first 30 people that we put -- these are his statements. first 30 people we put to death for for marijuana intent to distribute, that will dry up marijuana use in this country. >> you've just identified exactly why everybody in the white house is just could not be pulling more for newt gingrich, which is, "a" -- >> that's right. he has high unfavorables.

>> very high. >> you go through the newt gingrich book of things he said. >> hypocrisy. hypocrisy. >> there's not really another way to put it. if you were a senior republican, a serious republican, not just a serious republican voter, you're watching your party take an immature turn and give in to its worse impulses in south carolina. that has to scare you. mitt romney is not a perfect candidate. there's a lot to dislike about him or like about him for that matter. rick santorum, there's a lot to recommend his candidacy. there are other things you candice like about him. but newt gingrich is, he's just stoking a type of very, very deep resentment. this isn't hope and change. this is resentment and it is anger and it is not a way you can build a general election candidacy. >> right. you were just down in south carolina. >> yes. >> and what i want to do is hear about how this is playing down there but first i'm going to take a break. right after this. this is an rc robotic claw.

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your ex-wife gave an interview with the "washington post" and abc news. in it she says that you came to her in 1999 at a time when you were having an affair, she says you asked her, sir, to enter into an open marriage. would you like to take some time to respond to that? >> no. but i will. [ applause ] i think the destructive, vicious, negative nature of much of the news media makes it harder to govern this country, harder to attract decent people to run for public office. i am appalled that you would begin a presidential debate on a topic like that. [ applause ] every person in here knows

personal pain. every person in here has had someone close to them go through painful things. to take an ex-wife and make it two days before the primary a significant question in a presidential campaign is as close as despicable as anything i can imagine. [ applause ] >> i'll just say on the record i can imagine more despicable things. not to get too technical but to me, this is why he's winning. that moment, and these moments where he's able -- i want to hear from you, michelle, having watched this in action. >> i think you're right, it started on monday. when i first got to south carolina, it was how many stories can you write about romney's still ahead? and today romney is still ahead. then you saw things change on monday. i went to this huge neutrally at a place called mutt's barbecue,

absolutely mobbed. people standing outside. everyone cited that moment. that made them support him. that's why when the news first re-emerged about his ex-wife, i was pretty sure it wasn't going to hurt him, that it could actually help him. it was going to serve up a narrative that a vote for newt is a vote against the hated mainstream media. he spun that perfectly. >> in the course of one week he managed to put an african-american and an ex-wife in their place. >> yes. >> in a very public way. in south carolina on television. this is one thing that as much as the obama white house may be excited about a newt gingrich candidacy, that part -- i think that's right in terms of policy and general election and everything you've said about what this sets up for a general election, i think there's a way that what he's playing is not the content of what he's saying

but his sort of, i will take it to the opponent and i will be the -- >> there's such a strong desire to see obama put in his place. >> right. >> indeed. >> you heard over and over again, his big line on the stump is that i'll debate obama and i won't -- i'll let him use the teleprompter. >> right. >> these are people who believe he is, you know, really stupid and that newt gingrich in his rhetorical brilliance will finally -- >> unmask. >> yes, for the world. >> one of the things watching that clip, newt gingrich is playing a similar role to sarah palin this year. in a funny way has a symbiotic relationship with the media as sarah palin did. sarah palin was wonderful for the media. she said fascinating things and she was controversial to cover. she got ratings. >> fascinating may not be the word. >> i think that's exactly the word. >> gingrich is the same way. what's funny about gingrich and what i think in the end undid sarah palin is a weakness that he didn't share, he knows the

game he was playing. he went on the program with john king and had a pleasant interview. gingrich's resentments are calculated. he can play the other side of that when it's important. >> they're calculated but they're also real. he told a fascinating story at one of the stops about how he came to his pro-life con vicks. he was saying he was in a restaurant in atlanta and a woman came up to him and said i disagree with you about abortion because in my mind it's just a malignant tumor. i don't believe this story by the way. he said that was the moment that convinced him? really? it was spite that -- >> i have a prediction, too, and that is that two days before the primary, he's calling it despicable that this story is coming out. and because of the way he treated it, i'm going to offer up a prediction for two months now he'll be dealing with it going forward. >> yes. i think that's one of the

questions is -- >> it's not a one-day story. >> i think that is the question, is -- i think what we saw with -- now i should say newt gingrich's personal history is not a secret. it's not new ref layings. but to make a comparison to earlier in the primary, when herman cain, when the allegations first came forth which were new as far as most people knew, the immediate affect was to rally around him. it was only after the drip, drip, drip of multiple accusers. i wonder whether the rally around effect is short live or something he can keep going? >> the difference is people already worked through a lot of this. they've already come up with their rationalizations. he begged forgiveness. some christian conservatives have started making king david analogies. david was also very flawed and did terrible things but was still a great leader. i heard this from more than one person. >> really? >> yes. >> you deal with this all the time. the idea of -- >> not this specific thing.

continue. >> the fact that din grich shou -- gingrich, his goal should have made this a one-day story and he didn't by any means. he inflamed it. >> the fact is this is a primary. it would take the other challengers wanting to exploit this. it cannot be that the media, as a set of organizations, media are the ones pressing this. it has to be his opponents would want to exploit it. >> in the context of the republican primary. >> they don seem at this moment. >> theat first. >> it doesn't have to be his opponents. >> everybody's releading. >> party primaries are heavily about the party, political scientists. you know this stuff better than i do. what happened to gingrich the first time around in his first rise, the party coalesced in sun pacs and other ways and began destroying him piece by piece. they're not going to take him

back down in the open marriage. what they will begin doing is moving on things like what governor johnson brought up, the wanting to bring all populous to death. the millions of things that make newt gingrich unelectable in a million different venues through politicians in south carolina and other primaries you trust that are not the candidates, he can stoke the base and have a good debate and can get quick momentum. over the long haul of a primary, we have a long time between super tuesday and the august conventions, the actual republican party itself will not allow this man to be their general election candidate. >> i don't think that newt gingrich will be the candidate. to me, the interesting story is that you're setting up kind of -- we've all been talking about where is the tea party? they seem so fragmented. if they're going to coalesce behind anyone, it ill with be behind gingrich. there's a couple tea party chapters that have made endor endorseme endorsements. you'll set up this thing where the people, the people wanted

him and the party basically said no. >> i want to hear you weigh in on that and melissa as well right after this break. >> my name is jane and

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my story of the week, mitt romney's tax evasions. for as long as i've been politically conscious, one of the rituals of a presidential came pain is each candidate releases his or her tax returns. it makes good sense. a tax return acts as a kind of ethical x-ray for those seeking the highest office in the land. paying the taxes that you owe is one of bedrock requirements of citizenship. if nothing else, it forces those running for office to actually pay their damn taxes. this year mitt romney has indicated he's not sure he's going to comply with this pro forma campaign practice. i'm sure mitt romney pays what he owes. he's running for president, pore pete's sake. it's been strange to watch him

attempt to lay the ground work to keep his returns to himself. here he is addressing it in a recent debate. >> i think i've heard enough from folks saying let's see your tax records. i have nothing in them to suggest there's any problem. i'm happy to do so. if i become the nominee, what's happened in history, people have released them in april of the coming year, that's probably what i'd do. >> catch that probably there? a day after that debate romney responded to a question from a reporter and said this. >> what's the effective rate i've been paying? it's probably closer to the 15% rate than anything because my last ten years, i've -- my income comes overwhelmingly from investments made in the past, rather than ordinary income or rather than earned annual income. >> of course, the penny dropped. romney doesn't want to release his taxes not because of what it will reveal about mitt romney the man but because of what it will reveal about his policies and mitt romney's policies. the republican party's policies

vision for how to address the extreme and accelerating inequality that threatens the nation's very bonds of representation. their answer is to make it worse. growing inequality is the central story of the american political economy over the past three decades. it has two components. on one side is growing inequality in pre-tax income. we've seen a yawning gap open up between the 99% and 1%. ceos made 35 times more than the average worker in 1978. by 2010, even after the financial crisis, ceos made 233 times more than the average worker. the labor market has been producing increasing returns at the very top and stagnating wages in the middle and bottom. but what's even more remarkable is that while pre-tax income has been getting far more unequal, our tax system, the method by which we might gently mitigate this trend has exacerbated that inequality. the top marginal rate has fallen from 70% before reagan to a low

of 35% under the bush tax cuts. now extended through 2012. the capital gains rate, the taxes most wealthy people like mitt romney pay on the dividends and earns on investment has fallen to 15% today. on top of that, the tax code has also been eaten through with determination by the special interests of the wealthy, creating carve-outs and hidden pockets where they can hide their income away. to take one particularly egregious example, the notorious carried interest loophole, allows people that work in private equity and manage hedge funds to classify their income as capital gains, allowing them to pay the rock bottom rate of 15%. tax fairness advocates and progressives have decried this for years. every time changes are proposed to correct it, an army of lobbyists, what political scientist jeffrey winters calls the defense industry, beats it back. according to david cay johnston,

top 400 income earners in 2007 paid on average an effective tax rate of 16%, while a middle income earner can expect to pay 22% of their income in federal taxes. the white house has placed this issue at the center of their agenda, calling for tax changes that would restore progressivety to make sure warren buffett doesn't pay a lower effective rate than his secretary. the original name was the buffet rule. people around the obama campaign have started to call it the romney rule. romney's plan would make this worse. his tax plan would cut his own tax in half. a tax code is a moral document. it is one of the primary ways a democratic nation asserts its values. our tax code currently says we value wealth over work. if you spend 50 hours a week taking care of the elderly in a firm or teaching poor children or putting car engines together, we will tax you at a higher rate than if you make your money off

already-existing wealth. the scandal isn't mitt romney's tax return, the scandal is the tax code that makes it possible. i am loving the fact that we are going to apparently heading into this campaign and we'll be talking about mitt romney's tax returns, and not just his tax returns in terms of what mitt romney does but tax policy, because -- >> i am, too. >> ezra, i know you are, too. i think you wrote, i thought a really good piece. you basically said mitt romney's fellow beneficiaries of low capital gains tax rates and also carrying interest must be ticked off for mitt romney for blowing up their spot. >> i do want to make a point, you're saying his plan to make it worse. i ran numbers on this. in 2001, george w. bush ran for office. that tax cut which is going to be paid for out of a surplus. it's not like you'd have to cut programs for the poor. at least we didn't think so.

was 1% of gdp. mitt romney's tax cut adds a bunch more on top, 3.3% of gdp, three times as large. during a time of deficits. you'll need to take all that money out of program cuts, mostly for seniors and low-income americans. the regressivety and the size of it compared to what bush was doing is incredibly immense. >> and that he lets tax cuts for low-income people expire. that i thought was -- >> in the stimulus. >> -- astonishing. >> let's remember newt gingrich who released his tax returns and made around $3 million a year, he wants to get rid of capital gains taxes entirely. >> romney's much more aggressive than george w. bush's tax cut is the most moderate tax cut of any republican running for president this year. >> i want to bring in david cay johnston. he's a pulitzer prize-winning tax reporter and columnist for reuters and visiting lecturer at the syracuse college of law.

he's author of "free lunch." thanks for joining us, david. >> good morning, chris. >> so how typical -- i mean, i'm really fascinated by this romney story about his squirrelliness about this. you're someone who has just spent a tremendous amount of time reporting on how people who make a lot of money manage to avoid paying taxes on that money. how typical is someone paying a rate like this in your experience? >> if you're in the class that romney's in, that's very typical. look at the top 400 taxpayers. back in 1992, six of them had an effective tax rate of 10% or less. and that may mean they paid absolutely nothing. now it's 30 of them, five times as many. it's a small number but it's 7.5% of people who are making close to $1 million a day. romney's 15%, the way to think about that is, a single worker who makes just a bit over $60,000 pays in federal income

taxes 15% of their income. and the issues that romney's raising, i don't think can be resolved unless he releases his tax returns from the years we care about. he's been running for president since 2007. he's had five years to write a tax return with political purposes in mind. >> right. >> and unlike wage earners who can't do it, he can. his returns from 1984 to 1999, the years he ran bain capital, those are the ones he needs to release and the issues it's going to reveal to the american public, i think, can have a powerful impact on this tax system we have, which once you get into the top reaches, becomes regressive. >> gary johnson, you're running for president on a libertarian party line. you are a republican governor. i'm curious if you would like to step to the plate to defend a capital gains rate of 15% and a structure of rates that is in effect regressive as you get up towards the top of the scale? >> no.

well, so i'm the lone voice. i was the lone voice out there. i get to carry this forward now as the message running as libertarian candidate for president. i share in the outrage of the tea party which is we need to slash spending. but i also share in the outrage of occupy wall street which is this country doles it out unfairly. this is not a level playing field at all. it's up for sale. you talked about the income defense industry. that's what exists in washington right now. so i am advocating the fair tax. i would love for those watching this show to check it out. fairtax.org. i think it is as the name implies. it does away with all federal tax and replaces it with a 23 federal consumption tax which by all calculations will be cost neutral over a very short amount of time and it is as the name implies, fair. the more money you make, the more fair tax you'll pay. >> it's more regressive than the tax code.

there have been a number of analysis run on the federal tax code. >> david, weigh in. >> i have to tell you, governor, you are so badly informed on this, it's astonishing. if we go to this tax, everything you have, you're going to have a receipt for if we're going to have an enforcement mechanism. >> no, no, pay for it at the point of purchase. >> can i finish. >> you're slanderous statements to start with. okay -- calm it down a little bit, david. just calm it down. >> go add ha ena head and finis. >> there will be enormous black markets. >> can i address this as we go? >> wait, wait, wait. late out your case against it. mr. johnson will weigh in. >> thank you. >> you've upgraded to mr. johnson. >> there is a way to have a consumption tax that works. it's a subtraction method value-added tax. every party along the way has an

interest in collecting the tax and ultimately getting it to the government. it helps with exports. reet tail sales system we have now is terribly pore ougs, lots of things are not taxed. i'm absolutely certain it will lead to pressure because of black marketing to have all transactions done digitally, no cash. then your privacy goes away, the litigants, an estranged spouse can figure out where you were, when you were there and what you paid. >> just on the black market comment, first of all, there's black market that goes on today. when you take in your money in the black market, you've escaped it effectively. you take in your money in the black market when it comes to the fair tax, you'll have to turn around and consume with those dollars. i'm going to argue that in fact it will be subject to the fair tax. >> melissa. >> but the fact that the sales tax is significantly more regressive because of the nature of how this spending occurs

relative to the amount of income that people have. >> right. >> in other words, if they think about that bundle of items that a household purchases for working class families, that uned aboutle of a monthly household purchases are requirements for the kind of basics of life. housing and food and clothing and shoes. >> right. >> and for those who are on, for example, mitt romney's level, the bunnedle of things they're purchasing includes a variety of things that they could choose not to purchase. where at the bottom you can't choose not to purchase things because they are requirements. >> this is one of the ways in which sales tax, regular sales taxes we have in most states do end up hitting people who make less money, particularly hard. i want you to talk more about this, david, but we'll take a break and come back. we'll keep talking tax fairness, right after this. ♪ feel the power my young friend. mmm!

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a groundbreak be standard in american politics. he released his tax returns for not one year but 12 years. he said this, one year could be a fluke, perhaps done for show. when you release yours, will you follow your father's example? >> maybe. you know, i don't know how many years i'll release. i'll take a look at what our documents are. and i'll release multiple years. i don't know how many years but i'll be happy to do that. >> brutal moment. brutal, brutal, awkward moment for mitt romney talking about whether he would release his tax returns. we're talking about inequality, the tax system can be whether the tax system exacerbates that inequality or mitigates. gary johnson is an advocate of what he calls the fair tax, 23% flat tax on consumption.

david cay johnston is on the line as well. the point we make on the progressive side about consumption taxes, they are regressive in the way you're suggesting. >> one thing that david point out, too, this will make american exports much more competitive. arguably, the fair tax is cost neutral. in other words, the coca-cola that sells for a dollar today has embedded tax that isn't evident to the tune of about 23%. you take that away, you implement the fair tax, arguably, the coke doesn't sell for $1 anymore, it will sell for 80 cents and be subject to a 23% tax. it's not regressive, i'm going to argue, from the standpoint, it offers everybody in the country a prebate check. we all get $200 a month, which allows all of us to pay for the fair tax up to the point of the poverty level. that's the escape from that criticism. >> it promotes savings and something we really do need in

this country. if we're going to -- >> let me clarify. this is the standard way people amend a flat tax to make it not completely regress ef, right, which is basically you're not taxed on the db the poorette of the poor aren't taxed at all. up to the poverty line. there's a prebate check. >> we all get that check. we all do. >> what it means the people who are making very little money at the very bottom, there's progressivety because the poorest of the poor are not paying taxes. i want to give you a chance to respond, david johnston. >> it's 2,500 years old. it's the invention of the moral principle that the greater your gain enabled by the society you live in, because there is no wealth without taxes and a society, taxes are the foundation of all private wealth. that's what gave birth to democracy in ancient athens.

the idea that this tax will work beyond its terrible administrative problems, i'm not arguing consumption tax, the national retail sales tax, a silly idea invented by and promoted mostly by a radio talk show host, is just no serious student of tax would advocate this, because it can't work. and the idea that we should -- that this prebate is a good idea, excuse me in 1972, george mcgovern proposed that and he was ridiculed by all the conservatives. when he put forth his tax plan to do exactly that in 1972. we've had this shift. >> i want to steer you back to this issue, though, which is sometimes when you hear people make the argument for the flat tax or some sort of -- gary wants me to call it the fair tax. it's flat, whether it's fair is up for debate. sometimes people will make the argument and this is the one that sounds compelling to me, right, which is that there is a wedge opened up between the rate that is on the books and what

people are actually paying. we have a huge problem with loopholes and enforcement and all sorts of ways people hide income that are entirely legal, in the tax code. we now know some of the funds in romney's portfolio are domiciled in the cayman islands, which is usually a way of evading taxes. how do you deal with that issue? there's a libertarian argument that says the system will be gained. you have to come up with something simple. as someone who studies the mechanics of this, what is the response to that argument? how do you deal with the gaming that's happening, that's manifestly happening? >> well, you know, i believe in democracy. and we elected leaders who did these things. the reason the tax code is exploding isn't because of you and me, chris, it's because -- or the viewers of this show, it's because of favors being handed out in return for campaign contributions. we can stop that. there's no reason we can't stop it. when this country was founded, corporations were limited to a single purpose, usually a 20-year life. they had to prove they served a

public purpose in hiring people was not counted. that was considered a necessity of the business. corporations need to go back to the status of being privileged and we need to have a converse that responds to the people. but as long as people say i'd rather watch "dancing with the stars" and pay no attention to politicals and outsource citizenship, people who make money off the system will be in power. >> if the answer to my question is that people need to stop watching "dancing with the stars," i think we are really in a bad spot. ezra? >> i think there with two things. >> we may be. we may be. >> we need to be able to separate two things that get conflated here, a simple tax and a flat tax. there could be three brackets with a simple tax. it's not that hard. the progressivety or the regressivety of the fair tax, there's a prebate. we have the earned tax credit, a child tax credit in the system now. you take those away from the

poor. the other thing, what our system currently has, this is the other side of the fair tax regrisivety that fair tax doesn't, it has higher rates on the rich. you're giving folks a bit of a prebate. compared to the system we have, compared to any regressive tax system, it does not tax people who make more money at a higher rate. >> david cay johnston, i want you to stick around. i want to ask you a question about the multimillion dollar i.r.a. that mitt romney is currently holding. >> i can explain that. >> that's after the break. i'm trading here every day. and i'm customizing everything. everything. from thought, to trade. i'm with scottrade. i'm with scottrade. i'm with scottrade. and seven dollar trades are just the start. ♪ [ rodger ] with innovations like our powerful mobile app and free scottrader streaming quotes,

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walgreens. there's a way to stay well. david cay johnston, one of the things that was revealed, i think it was a 2010 financial disclosure filing if i am correct, mitt romney holds an i.r.a. with a value, i think

it's multiple millions, somewhere between 20 million and 100 million. there are wide spans that are in financial disclosure forms you fill out. why would you have an i.r.a. with that much money in it? the general idea of an i.r.a. is your typical middle-class earner. you pay taxes when you draw it out, thus reducing your tax burden. when you're dealing with an i.r.a. of that size, what's the story? there's been a lot of speculation about what's going on with that i.r.a.? >> there has been speculation that he put low-value stock in it. mostly like what happened is he has a retirement fund at bain that was in a blocker, a blocker is an offshore entity designed to block u.s. taxes. it may have been the only place he had cash to invest. he invested in one of these deals through his rollover i.r.a., perhaps after he left

office. it has a secondary function. an i.r.a. is essentially an asset protection trust. if romney has $20 million in there, that's 10% of what he says is his wealth, not counting the 100 million he gave his sons, effectively has created an asset protection trust so that if everything goes wrong, creditors still can't come after that portion of his money as long as he follows all the right rules. >> i see. an asset protection trust, if you have to defend yourself from creditors, that's a technique for parking it in there. >> without any of the smarmyness of setting up something in the cook islands or anything else. >> welcome to tax talk on "up w/ chris hayes." if you want to live twitter your tax questions, i'll ask them to david cay johnston. he'll dispense advice. melissa? >> i want to expand on what david said and challenge him on, the question of who's at fault for this, how does this happen?

how do we get on the other side of this? i, too, am a big believer in democracy and in certain ways we get the country we vote for. i do think there's a little bit of this of den irigraion that people will take it all. what i appreciated about what david said, look. there is no creation of wealth without the realities of a society that your workers drive to work on roads paid by your government and you educate your workers in the public schools. i think part of what needs to happen in this presidential election year, even beyond the intricacies of the tax discussion is revive discussion about the value of public good. >> david k. johnson, pulitzer prize winning tax reporter, the two books you have written on taxes are two of the best i've read and certainly the best tax books i've ever read. thank you for joining us. >> thank you. >> the best thing i read this

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i've been wanting to do this for a a while and blow through it every week. we asked everyone to come in and prepared to share the best thing they read this week. the best thing i read this week was an essay in "rolling stone" by my friend rick pearlstein one of the best nonfiction writers and amazing story of the modern american right. he wrote a great piece in "rolling stone" about what mitt romney learned from his dad. george rom me who was head of american motor corporation he lost against nixon while being authentic truth teller. the lesson romney learned from that defeat was authentic truth tellers get destroyed in

politics and maniacs like richard nixon are the wunds one rewarded. gary? >> hampton sides, hound on his trail. the novel on the martin luther king assassination. >> is it a novel or nonfiction? >> it's nonfix fickion. >> right. it atracks james earl ray as he prepares to kill martin luther king? >> exactly. the politics that went behind that. the fact he was a george wallace supporter in california. all of these things were really interesting. martin luther king you know, what was happening during that time, the talks that he was giving. just how, if you will, inflammatory it was and how the tensions were at such a heightened level. it was just really interesting. >> ma list? >> i'm teaching a course this semester on america's first ladies and i'm reading woody holton's book.

it's about who the founders were and there was also a critically important what we have to think as prefeminist voice that is also part of -- >> don't forget the ladies. michelle? >> it's hard it to reach that much when you're running around south carolina. i was kind of going to speeches all day and reading joan diddy at night to cheer up. di get to re-read john richardson's classic esquire profile of mariand gingrich and how it explains. >> marianne is the second wife of newt gingrich. >> i road a book by jody kantor. it's a favorable portrait and great book about the personal element and dah mention of a white house which is important and often undernoticed. >> one of the biggest grassroots victories in politics i have ever seen coming up after the break.

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good morning from new york. i'm chris hayes. today is the republican presidential priary in south carolina. msnbc will have special live coverage all day. you're going to want to stick here. alex wagner will be on later and martin bashir and a number of our other prime time hosts hosting the live coverage of the returns. i've been riveted every night. stick around all day. i'm here with gary johnson, formerly the governor of new mexico and melissa harris-perry who launches her own show and it will be following this show next month and it will be awesome. and ezra klein is with us.

this time last week two pieces of legislation that most americans didn't know a thing about. this week, both intellectual property bills are dominating headlines thanks to a epic and historic coordinated day of protests on wednesday. sites like wikepedia, even green peace went completely dark and other sites redacted large parts of their content and google putting a black bar over its logo and collecting 7 million u.s. signatures in one day in an online petition to stop sopa. that one-day protest resulted in a stunning 19 members of congress in one day in the senate abandoning their support for the two bills, including i love this detail -- 11 cosponsors. 11 people with names on the legislation after that one day decided no longer to support it.

chris dodd said those bills were supposed to be a slam dunk but now he, quote, could not remember seeing an effort that was moving with this degree of support change this dramatically. he went on to compare to the arab spring which i think was not the metaphor he wanted to be on the wrong side of. yesterday we learned that harry reid postponed tuesday's procedural vote on the bill. a website said we were the first cable news show to breakthrough with a series discussion about sopa. we had a discussion last week with richard cotton. a company we work for is strongly, strongly in favor of the legislation. here's a little bit of that discussion. >> in terms of what the legislation actually does, saying this wouldn't affect a single u.s. site, alexus, you run a u.s. site and all sorts of people that run, a bunch of companies that run u.s. sites saying this would affect them. >> but, chris, seriously, that

is wrong. the problem with this debate is that this -- >> they are making it up? >> yes. >> why are they making it up? >> this legislation is devoted exclusively to foreign sites. >> we got a lot of people responding to it because this was a serious point of contention in the debate and wanted us to say whether mr. cotton was correct or not. the answer is that it's complicated. it's largely a matter of how the law ends up being interpreted by the courts. it is true that the bill targets, targets foreign sites but that doesn't mean it wouldn't hit other sites as well. the language it uses is broad enough that critics argue, and i think convincingly, good reason to believe courts will interpret provisions of the law as applying to u.s. sites. the laws also include antiis your -- anticircumstance vennion

sites. there is no dispute that american companies credit card processors and advertisers would have to imply with court orders that period of time to a site that has been blocked by the law, found violation of the anti-piracy provisions. it's not the details of the legislation that captured people's imagines this week but the precedented and unprecedented grass roots organizing against it. ezra, you cover washington and the way washington works for a living. i did the same a number of years. >> you've escaped. >> i have and patting myself on the back. i was completely blown away by how effective this was. i've never seen anything like it. >> it is. it goes to show when the voice is heard and people rise up and you them on other issues. in 2007, george w. bush, a huge

grassroots outcry that killed it. there was some washington help on this and i feel like he is always losing fights so he deserves some credit for winning one. senator ron white. it was sponsored by chairman pat leahy a year and a half ago. in the house, daryl issa who has been in support of the bill and created a platform that people are able to come and comment on it. they had held it up so the internet had time to mobilize around it and a an amazing sort of -- >> i'm thrilled that sopa was defeated. i think it's a little bit of a mistake to see this as a grassroots versus good corporation. >> a fair point. >> some big corporations versus some other big corporations, you know? i don't think that if you had

companies like google and all of these huge technology companies on the site of the angels on this issue that you would have had much movement. >> that is right. these corporations had people with them. google i think is more of what you're saying where they sort of said they just moved people to their black box but a lot of these groups are dedicated groups of users who trusted them and believed in them. you said in a way they became and already have a dimension of them where they are sort of organizing notes and they use that to sort of use later that groups like google got on board. >> in some ways -- right. what was so novel about this, right? the reason there is a quote in the politico, unnamed lobbyist saying we're used to massing our armies against the other side's armies and prepared for counterinsurgency. basically, that they were -- they were -- they were playing an inside game. chris dodd was going around capitol hill and talking to people that had a lot of trust

in him because chris dodd was a u.s. senator for years and respective one and worked on a lot of legislation that i view very positively and think he did a good job on. he said this is a really important piece of legislation. they were working the inside game. the opponents of the bill went directly to their users and this was, i think, was so novel was that it wasn't just google and facebook were spending time on capitol hill lobbying against it. they realized they had capital in the form of everyone who visits google every day to marshal and i think it was a radical notion and unprecedented. you've never seen an interest trying to defeat a piece of legislation, interactive with their users and marshal them in this way. >> this is the pushback the bowling alone thesis that social capital has died in this country that there is no social capital, that because our traditional organizations are gone, then -- all gone.

>> just -- socialologies came out with a famous book on that alone and i iconic example of the decline in social groups were diminishing. >> the activity may still be going on but no social capital being built. what this demonstrates isn't that it's died but it may have moved into some new forms that, okay, we may no longer believe in congress but we believe in wikepedia. i think reasons we should have some anxiety about the transition from traditional institutions that are democratic in their very outcomes in the sense that one must show up to vote for those folks. but i do think there is something exciting about the possibility that social capital didn't evaporate but move to a new space and still potentially be harnessed. i'm worried it's not always harnessed towards -- >> yes. a question of whether a frankenstein has been created a little bit with the effectiveness of its action

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the "name your price" tool. now available on your phone. get a free quote today. you're asking a conservative about the economic interest of hollywo hollywood. and i'm weighing it. i'm weighing it. i'm not rushing in. i'm trying to think through all of the many fond left wing people who are so eager to protect. on the other hand, you have virtually everybody who is technologically advanced including google and youtube and facebook and all of the folks who say this is going to totally mess up the internet and the bill in its current form is written really badly and leads to a range of censorship that is

totally unacceptable. the idea we have the government start sensing the internet on behalf of giant corporations economic interests strikes me as exactly the wrong thing to do. >> i am pleased that the attitude has sort of mellowed up here, because the republicans, unfortunately, have been on the wrong side of this issue and this is a good example on why it's good to have somebody that can look at civil liberties and work with coalitions and bring people together. >> those are the republican -- some of the republican candidates talking about the sopa and pipa legislation and what is interesting -- one of the interesting parts of the legislation is the way it confounds every conceivable way of thinking about politics in terms of ideological issues and just makes no sense. ron paul and newt gingrich are on the same side of president obama on this one. issuing this statement. must guard against the risk of online censorship and must not inhibit -- large and small.

here -- and party of the reason i think have you a scrambling of general ideological coalitions is because you have these two interests fighting each other. here is an anonymous person from one of the interests, unnamed movie studio chief talking about the bill. i love this. there has been no greater supporters of him than we have been from the first day and continuing until he was elect. we were all pleased. hollywood supports the democrats. now we need the administration to support us. gary johnson, you wanted to weigh in on this? >> i wanted to make a self-plug here for myself. >> please. >> aclu issued a report a couple of weeks ago and gave every presidential candidate a great on civil liberties and guess who got the highest grade? including obama and ron paul. it was higher up. as governor of new mexico, i may have vetoed more bills than the other 49 governors in the country combined. i vetoes 750 bills because of

the unintended consequence that i saw in so much legislation. legislation that got labeled as telecommunications competitive act, you know? let's bring competition to telecommunications. the fact is it did anything but bring competition to telecommunications. so i vetoed the bill. there is nothing about the internet that the government needs to fix. >> when you make that argument, then you make -- you push me to the other side. when people make the argument and they have about the libertarian argument i've heard that argument applied in all sorts of circumstances in which i want there to be regulation. i start -- am i on the wrong side of this issue? >> let me make a broad point you're saying there is nothing wrong with the internet that needs to be fixed. i think this is more important than the people realize. you read the rest of the white house statement but online piracies are a real problem. but some representatives say

it's a real problem but another way to deal with it. >> if you talk to richard cotton who was sitting here last week. >> it isn't as far as we can tell a real problem. two ways to find out. one in the areas it affects, movies, music, things like that we will see diminution of innovation and see fewer movies and less music and less choices to consumer. what a copyright or patent does is give you control of your work and control to get profits and because you get profits -- >> it gives you an incentive to produce because you own the thing you make. >> the profits are there. the ceos doing very well. a report on this recently. no problem here that needs to be solved in terms of their money. they would like more money and a fair thing to want but what we as consumers need to ask are we benefiting or not benefiting from this move and one way we would be benefiting we get more choice but choice is exploding on things like youtube that would be affected by this we

could see because they would police more choice constrict and also for folks who it's not the worst thing in the world sometimes to be able to try things and decide if you want to see the concert. there is a benefit to certain kinds of piracy what would be called piracy. it's not good and i agree -- in large doses but if it moves people will me sorry bands to participate more in the movie making business and try to put things on youtube. it can be good for consumers. that doesn't get a heard because nobody donates money on that side. >> right. >> legislatively, it's like the voter fraud piece, right? i mean, it feels to me like it is a solution to a problem that is not a very serious problem. or -- so in the case of the voter i.d. laws, notion that what we are doing is stopping all of this voter fraud. when the real problem is voter suppression. the idea we need to fix the piracy problem when, in fact, the far bigger concern when it comes to information so regulation is one thing when we are talking about smog.

regulation is one thing when we are talking about child labor laws. regulation is one thing when we are talking about the hours of workers. but when we are talking about the flow of information even creative information, we generally are going to want to error on the side of providing more margets and opportunities for that. >> voter fraud is a myth. the idea there is widespread piracy isn't actually a myth. >> definitely is. the question is does it produce a problem? >> decimated the music industry, right? there might be people argue convincingly the music industry deserved to be decimated. >> i don't agree. if you look what people are happened to music budgets they haven't changed. >> she they shifted to live performances. people are listening to more music and spending more on concert ticks. a change in economic activity. >> be clear about this. it was a lot better to record an album and make a lot of money from it than it is to tour 200 nights a year. >> how much money do you make

from the album? it's better for the album industry and recording interest. >> there are certain kinds of artists that tour a lot and fill stadiums and others that do not. >> that is the model. business model has changed partly because of piracy and partly because of technology. i think the crucial point here is the strength of the organizing on it was for the people who were trying to kill sopa to make it a speech issue. don't censor the internet. at the end of the day people value speech over commercial interests and i think they were very smart strategically to emphasize that aspect of and that is the most troubling part. at the end of the day that is the thick we care the most about. we will check in with lina taylor with the effort to withdrawal governor walker after this. [ woman ] my boyfriend and i were going on vacation,

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wisconsin democrats preparing for a possible primary to see who will run against republican governor scott walker because earlier this week, they filed petitions with 1 million signatures. 1 million signatures. i should do this. nearly twice what is needed for his recall. next phase is scanning the petition pages so electronic pages can be provided to governor walker. some 30,000 people have tuned in to watch the silent web cast and more are following the action via a twitter feed. people are really watching this. >> take that, "dancing with the stars"! >> we will watch anything! literally! there are almost as -- ths mais amazing. almost as many votes to get him out of office than to get him in office.

that's a really startling number. if you've ever done organizing, political organizing, it is not easy to get signatures actually. it looks easier than it is. you have a lot of -- >> it's really hard. >> it is. >> you go out and try and get nominating signatures and it's terrible. terrible. >> i talked to someone in wisconsin yesterday who said this really was a grassroots undertaking, that what happened was people were doing in all kinds of ad hoc ways in their community and going outside stores. i'd like to bring in wisconsin state senator lina taylor who left the state last year to block an anti-union block by the governor. >> good morning. thank you for having me. >> thank you for coming on. the first question, can you tell me how did this happen? the number has shocked, i think,

everyone. basically, twice as many as were needed. how did this come to be? >> it almost brings tears to my eyes! it's the average joe blow has gone out and collected signatures. people have done everything. they have been outside in the rain and the snow, they have gone to football games and church and grocery stores, and where you can think of setting up camp, requesting people to sign and it has been amazing the amount of response. to be very candid, it's more than a million signatures. we probably got as many signatures as he got votes, but we actually scaled back some of the signatures that were turned in because we did our own screening of the signatures before we turned them in. >> this is famously a problem as newt gingrich encountered some virginia, right? you get signatures and some of them people signing daffy duck or something like that. i wanted to turn to the question of what comes next. i think it's a little unclear.

they are going to certify the signatures presumably and certify a recall and then will there be time for a primary and a general? is that how things play out? >> we do believe we probably will have a primary. i think the question is how quick will the election come is the next thing. the government accountability board has to scan them in. the governor's camp will have an opportunity to screen the signatures but all we need is 540,000 or however it is that we need. so our position is let us get to that number and when we get to that number, you can keep looking at the other ones but it doesn't matter any more. once we get it to that number, an election is frankly bound to happen. so that's the next step. >> in terms of the candidates, milwaukee mayor tom berry was the losing candidate, lost to scott walker by about a hundred thousand votes. there's some conversation, i believe, about him running again. i wonder, you know, his record in terms of how progressive he has been on some of the core issues that were exactly the

things that precipitated the issues that led to the recall that mattered to working people and the labor he was sick day that was represented by a lot of labor and progressives. it seems to me a bizarre result if the uprising that happened last year in wisconsin led to this recall and then led to the election of someone who isn't fundamentally with the base on the issues that has brought him back into the possibility of being governor. >> i think suggesting that tom berand does not come from the base or supports the same values of the base is really not true. as a congressman he has shown himself to be that and as a mayor. does it mean some places we don't always agree 100% with the full range of individuals who are in the democratic party? i'm certain you can say that. but i think what it shows, more than anything, is not whether

tom berand is fully with the most progressive individuals in the base is that we have a number of people who believe that they can bring it home for the democratic party against our governor because he's been so radically against the values of wisconsinites and he has made more than a million badger fans very upset and made them angry badger, so to say. >> do you feel opening a pandora's box? i say that for two reasons. one my understanding of the wisconsin election law there is a loophole which has allowed the governor to raise unrestricted money while there's a petition out for his recall. i think he has raised about $5.5 million the last filing and another filing to come. so we know that there is going to be a tremendous amount of fire directed at whoever is going to run against him, because this has now become a showdown for all kinds of things playing out at the national level. there is that aspect of it. then i wonder about a state of perpetual recall which is to say

if a democrat were to win, what ask to stop them from saying let's do this again and instead of money back into the state to get people back on the streets for another recall against the democrat? >> well, the first thing i'd like to say is in my history of being an elected official, i have not seen this number of recalls. this is more recalls than we have ever had in the course of our state. we have the longest serving legislator in the nation. senator fred risser who has never seen such a thing like this happen in the course of our state. so i think when we start with that, i don't believe that people are going to just excuse me do that consistently. i think the issue is whether or not our governor has embraced the values of wisconsinites and whether or not those individuals are going to come out and say to him that they don't agree. he may have swarms of dollars. he may have dollars. he may have big corporations which is why he chose to tax the poor and the seniors and to give

huge cuts, 2.3 billion dollars of cuts to big corporations in order for him to tax the poor and tax seniors. in him doing that, he may have the dollars but we have the people and we have the votes and i think that that is what more than a million signatures say. you can have the money but do you have the people who will be able to cast the votes to make the difference. and i think that this grassroot effort shows that the people are very upset. >> what i think is going to be interesting is how this plays out. i mean, i think this issue raises collective bargaining. >> clearly, clearly. >> that's the referendum here. >> you think? >> well, and from my standpoint, i have an issue with collective bargaining for public employees. where are the taxpayers interest at that table if the union has paid for the politicians sitting at that table doing those collective bargaining agreement?

i don't think it's right or fair at all to taxpayers. i just have a fundamental difference when it comes to the unions and that is the union sends me two people, the best worker i've ever, the worst worker i've ever had. i can't reward the best and i can't get rid of the worst. i have to pay them both the same and that is the only issue it is for me. >> let me comment on that. if i could comment on that. >> please respond. >> i want to comment on that. first of all, you talk about at the table. the issue that we have here is maybe there is some negotiation that needs to happen and i think kathleen falk, as a county executive, has shown that, as well as the mayor that you can't sit at the table and negotiate. the issue and problem with our governor he took away the table. he said you don't need a table to sit down and talk about, to negotiate what should happen. and that is where we fundamentally disagree with him as wisconsinites. i'm just saying having the courage, governor, to sit at the

table and say what you believe is best and offer an option. don't take away the table and say that people shouldn't be ab even able to negotiate over workplace safety and what we believe would be the best for our children to be educated among those individuals who are on the front line to educate our kids. that's ridiculous and that is a coward. >> wisconsin state senator lena taylor, hang with us another segment. we will take a break and be right back. >> please. you know when i grow up, i'm going to own my own restaurant. i want to be a volunteer firefighter. when i grow up, i want to write a novel. i want to go on a road trip. when i grow up, i'm going to go there. i want to fix up old houses. [ female announcer ] at aarp we believe you're never done growing. i want to fall in love again. [ female announcer ] discover what's next in your life. get this free travel bag when you join at aarp.org/jointoday.

a shot of the pastries and getting heat in here. people are obsessed with food we have here. i have state senator lena taylor from wisconsin and talking about the recall effort and 1 million signatures. melissa, you have something you wanted to ask the senator? >> i was overt reaction to this, where is the public interest at the table when there are public

unions at the table. i mean, the public interest is -- or taxpayers i think is the language you used. obviously, people in unions are taxpayers and contributing members. >> the other piece if you're a parent after kid in the public schools, then having a teacher who doesn't have to work a second job in the evening because your teacher has adequate pay, adequate health insurance, health retirement benefits is in your interest as a parent of a public school student for whom you are paying taxes. >> the key word is being adequate as opposed to something that maybe goes above and beyond. >> i would be for paying teachers something like a basic living -- >> the benefits -- well, when there is no vested interest -- >> sure. what i will say, no, no, what i will say. where i was going to come to an agreement with you here is the difficulty that so many governors and mayors are facing is, in part, the difficulty of this sort of movement back to

involve the states. on the benefits, for example if we had a national health care plan that provided health care coverage for all americans that would not be coming out of your pot as a state. real problems with localities? absolutely. all of that said, i want to quickly suggest i do feel a little bit of anxiety about recalls. like this one makes me excited and i'm thrilled at what looks like this kind of populous impulse in wisconsin but honestly a little bit nervous about a recall that is is not about serious misconduct that is about disagreement. it's part of what the machinery and democracy is meant to do to provide elections, then you lose and you organize and then you run a good, strong candidate next time. it always makes me a little nervous about the quality of our democracy. >> senator, a lot to respond with you there. >> i think i want to start with the last statement that was made

and whether or not this is a serious issue and whether this is not serious misconduct. when you go to the values of wisconsinites and how we feel about education and now we lead in, you know, not maybe number one but in the top leader of cuts to education in the nation, when we look at the number of teachers that we lost, the number of paraprofessionals that we lost. when we look at the effects of the size of our classrooms for our children and the effects this is going to have on being able to provide the budget with health care in our state and so many other places, including voter rights that are being completely trampled on in this state, this is considered like a major issue in wisconsin, because our legacy of so many ways that we have been not just progressive, but decent as human beings. >> i like that. >> all of those things. all of those things have been really affected by governor walker's presence, policies, radicalness, and willingness to

put corporations over people. and one thing that i can say is across the board against the ploil cronyism and all of those things that can happen in different places, in wisconsin, we have always put our kids and our education system first. that's not happened this time and our governor has also been dishonest with the people. you know, i said to them he wouldn't tax them. he taxed the most vulnerable people in our population, our seniors, as well as our working poor. and he did it by giving 2.3 billion dollars in tax cuts to the biggest corporations. so i need to say this isn't just a normal recall. this is saying we have to stand up for what we believe in in wisconsin, to say that walker is not, by any means, someone who reflects our values and that is what this is about. he believes in recalls. he came in on a recall as a county executive.

this is just saying the same thing to him that this is the people standing up more than the number of people that he ever expected to say we don't agree with your policies, they are too radical for our statement and we want you out. and i don't believe that people are just going to be on a perpetual recall system. this is all about what started about january of last year. >> state senator lena taylor from wisconsin giving us a dispatch from the front lines in one of the most interesting political battles in the nation, thank you for your time. enjoyed it. >> it is truly been my pleasure. so what do we know now we didn't know last week? my answers after this. my mother froze everything. i was 18 years old before i had my first fresh bun. the invention that i came up with is the hot dog ez bun steamer. steam is the key to a great hot dog. i knew it was going to be a success. the invention was so simple that i knew i needed to protect it. my name is chris schutte and i got my patent, trademark and llc on legalzoom.

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"weekends with alex witt." what is coming up? >> stuff happening in south carolina, chris. yeah, primary election day, every. romney and gingrich locked in what could be a historical battle. will their slug fest help president obama? saturday morning cartoons not exactly just another super pac ad. people supporting newt gingrich behind this one and talk to the man behind this ad. inside south carolina some facts you might not know about the state and why this could be a make or break day for some of the candidates today. we will cover it all for you. what did we know now we didn't know last week? >> romney is reluctant to release his income tax returns. we know he estimates his own effective tax rate at 15% which means he is paying a lower rate than a lot of people watching this broadcast and romney's own tax plan would give him a tax

cut of more than 40% as compared to obama's plan. we also know now that romney's fellow republicans and the conservative pundit class are nervous about the tax issue and governor chris christie had this to say about it. >> what i would say to governor romney is if you have tax returns to put out, you know, you should put them out and put them sooner rather than later because it's always better, in my view, to have complete disclosure and especially when you're the front-runner. today's race is neck and neck. perry was closer to stephen colbert in the front of the pac in south carolina. gingrich's spike in polling came in his apology on foot stamps so we can leave to you speculate what might be endearing him to south carolina republican voters. who knows. maybe gingrich's success has

been due to his delightful magic tricks. thanks to a 7-2 ruling we know that corey maples will be given another shot of justice after he was convicted of a double homicide in 1997. white shoe new york law firm took on his appeals pro bono but missed a crucial filing deadline during the process thanks to a mail room screw-up. the court ruled the screw-up could bar the lower courts of the merits of maim heple's appe. we know that jeffrey zion is president obama's new acting director of the management budget. we know conservatives and republicans will point out that he once worked for bain and company but we know that bain and company is a management consulting firm and bain capital is the spin-off private equity firm romney ran that enriched

its owners while leaving many companies bankrupt. we know the obama administration has rejected a permit for the controversial keystone pipeline and know this is in part due to the unyielding forceful and determined organizing of climate activists who warn that building the pipeline would leash a whole new source of carbon intensive fuel into our atmosphere and know what killed the project was a congressional rider pushed by the gop that required the state department to shortcut its evaluation of the pipeline. so this is one of those exceedingly rare instances when we have tea party republicans to thanks for a bit of environmental progress and know the republicans decision to give the state department a deadline they knew would result in the pipeline's rejection was likely intentional to create an election year issue and know they have gone so far to release this funny parody video based on rachel's lean forward ad at the hoover dam. >> we have got a project like this waiting for the president's go ahead supported by republicans and democrats, labor

unions. it provide energy security and enough to 130,000 jobs. we have got to figure out why the president thinks we're not a country that can think this big. >> we know the 130,000 jobs estimate comes from a study, guess what? sponsored by the same fossil fuel industry trying to get the pipeline project. finally, we know that among his many other considerable talents, president barack obama can also really sing. here he is at a fund-raiser at the apollo theater on harlem thursday night giving a brief homage to reverend al green who is in attendance. ♪ i so in love with you >> personally, i could have gone for a few more bars. what do my guests now know what they didn't know when the

week began? we will find out after this. hello, i am chef boyardee. perhaps you've seen my picture... on chef boyardee products. i make real italian ravioli. small tender macaroni pies, filled with hearty italian seasoned meat, smothered in vine-ripened tomato sauce. and absolutely no preservatives. so delicious. bon appetito. chef boyardee's legacy of quality ingredients is still in every bowl. real great food. from a real great chef.

we want to find out what my guests know they don't know when the week began. gary johnson, former governor of mexico, current presidential candidate for the libertarian party. what do you now know? >> i guess it's becoming more and more evident to me that people really don't want to -- to acknowledge the problems that are really out there. you talk about -- i believe that we need to balance the federal budget. that means cutting 43% from medicare and, of course, an outrage over that. what people don't understand, in my opinion, is that if we don't do this, we will find ourselves with nothing. so i'm really surprised, something i really wasn't expecting, that republican candidates are down to four in

south carolina and i'm rooting for ron paul, but i'm surprised to see the reaction to ron paul when he talks about balancing the federal budget and cuts that need to go along with military spending and the negative reaction by people from south carolina on that issue. that is a surprise to me. i mean, in a conservative state, in a state that i think -- in any state where people aren't able to recognize that this is across the board, that this needs to take place. >> you're saying for military spending as well? >> well, it's welfare spending and it's war fare spending. it's both but not to acknowledge that in a state like south carolina, i'm surprised. >> melissa? >> i'm sorry. no, i wanted to respond. actually what i found surprising was there was a moment in the south carolina debate where i realized that hns motivate lawrence o'donnell and presidential candidate newt gingrich agree on one of the most important issues of the 20th century and that was how

critical the imprks i bill is to the creation of the american middle class. when newt gingrich talked about the g.i. bills and as a country we made a decision to vest in what we call the greatest generation that we created through that human capital what is now the middle class that is shrinking, it reminded me of the lean forward of lawrence o'donnell who talks about that g.i. bill. although i'm hearing the discourse about cutting the fact two alternatives to balancing a budget. one you cut and the others you raise revenue and could raise revenue by having a more fair tax system. so i was surprised and pleased to learn on one of the most critical issues of the 20th century lawrence o'donnell and newt gingrich agree with one another. >> michelle? >> i know something i didn't know who hours ago thanks to governor johnson. i had not known among -- the big ideas that newt gingrich is famous for one is instituting the death penalty for marijuana

possessions. >> two ounces or more. >> we know that newt gingrich has an authoritarian. to me, this adds a whole new dimension to the kind of president, god forbid, that newt gingrich could be. >> even singapore input is harsh, dude. i spent a lot of time in george w. bush 2000 campaign book for a piece i was doing comparing the two records. it's remarkable how different he positioned the republican party. >> absolutely. >> the first chapter on education and begins with a speech to the latin business council and talks about the importance of immigration and making the ins kinder and gentler. the tax cuts chapter how we can afford tax cuts right now and won't balance them on the backs of the poor. a smaller tax cut than mitt romney is offering and fourth

chapter in the book and doesn't come until page 250. it's striking to see the difference in the republican party's view of itself in 2000 as of today. >> karl rove crafted the strategy for him as a viable republican candidate he was the compassionate conservatively and rebrand conservative and attack the middle and saw how it works out. my thanks to gary johnson and melissa harris-perry and her show launches on msnbc. thank you for getting up. thank you for joining us today. coming up next is "weekends with alex witt." stay with us all day for our special live coverage of today's south carolina republican presidential primary. join us tomorrow sunday morning at 8:00 for full analysis of the results. melissa harris-perry will be back and joined by eliot spitzer and david stockman.

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