COUNTDOWN with Keith Olbermann, January 13, 2004

SYNOPSIS:

OLBERMANN: NBC's David Gregory with the president in Mexico, many thanks. More on the back pedal in a moment, first: If the rapidity with which the Treasury Department opened its investigation of O'Neill strikes you as contrasting with the measured pace the Justice Department used in opening its investigation of the leak about the CIA status of Ambassador Joe Wilson's wife, you are not alone. Columnist Paul Krugman noted the same thing in his column today in the "New York Times" and he joins us now. Mr. Krugman, good evening to you.

PAUL KRUGMAN, COLUMNIST, "NEW YORK TIMES": Good evening.

OLBERMANN: You deserved today that thus far, administration officials have attacked Mr. O'Neill's character but have not refuted any of his facts. Do you suppose that explains the same day service on investigating what he did or did not do wrong?

KRUGMAN: Well, I am not sure what it is exactly that they're -- whether it's the absence of a fact challenge. I'm kind of amazed. I think that, just on political grounds this was stupid. There's no possible way that they can improve their case by going after him on this and -- but it is kind of amazing. Right? In what conceivable way did flashing a -- the cover page of a secret document on TV endanger National Security? There's something very wrong with these people.

OLBERMANN: Certainly, Mr. O'Neill has now distanced himself, almost as quickly as the investigation started, from these headlines that the war in Iraq was essentially planned before Mr. Bush's inaugural address was over. Did he back away? Was he pushed or did the media just blow the original story out of proportion?

KRUGMAN: Some of all of those. I mean, it -- the story was not actually as clear cut, I mean, even the -- I think that "CBS" picked the wrong thing. It's act -- the book is a damming indictment of the administration, but it is primarily about the dominance of politics over substantive policy, and there are a lot of places where he basically calls people liars, but he did not -- the business about Iraq was more of an atmosphere thing than it is a specific charge that they were -- that they were concocting the war as of January 2001.

OLBERMANN: So, in focusing on that headline about Iraq, do you think the rest of us have essentially missed the thirst of the book?

KRUGMAN: Sure. I mean...

OLBERMANN: Yeah, and the focus of the criticism of the administration?

KRUGMAN: Yeah, I mean, there are killer quotes in there. There is Dick Cheney at the very same time that he's in public saying, "I am a deficit hawk" saying in private, "deficits don't matter." There's George Bush saying in public, "the fast majority of my tax cuts go to the bottom end of the spectrum," and in private worrying in front of his advisers that we've given everything to rich people, "shouldn't we do something for the middle?" So, those are the things that really should have been focused on, and Iraq. The story about Iraq is in the book, is that Iraq was top of the agenda in the very first meeting of the National Security Council under Bush, that Donald Rumsfeld is talking about the wonderful things that regime change in Iraq will do and not at all about the threat that Iraq poses, right from the beginning. That's where you should be going, not with this sort of gotcha stuff.

OLBERMANN: Does it surprise you? Have you seen anything that has moved this quickly in terms of the political controversy, at least in the last few decades?

KRUGMAN: Well, there've been a few more, but this is -- it's pretty fast. Look, I mean, this is a -- this is a bombshell book. It's a book anyone, even if they love the administration, it's a book that everyone should read and what is amazing to me is that this administration -- in a way they've confirmed, everybody talks about their vindictive streak by immediately turning this into a secrets investigation. I think the phrase some people are now using is "intimidate" for the whole process by which they go after anybody who crosses them.

OLBERMANN: Paul Krugman of the "New York Times," thanks for your perspective and thanks very much joining us, tonight.

KRUGMAN: Well, thank you.

OLBERMANN: COUNTDOWN underway with day three of O'Neill's long day's journey into night. Your preview of our No. 2 story, tonight -- four story, rather: Extraordinary population dilutions and the madness of crowds.

Originally broadcast, 1.13.04