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All In With Chris Hayes, Thursday, March 13th, 2014

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ALL IN with CHRIS HAYES
March 13, 2014

Guests: Michael Goldfarb, Alexis Goldstein, Mary Burke, Mary Burke, Vednita
Carter, Shenna Baskin, Monica Jones


CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris Hayes.

Breaking news at this moment from Philadelphia where a U.S. Airways Flight
1702 departing Philly for Ft. Lauderdale aborted takeoff and its nose
slammed into the ground, after officials say the front landing gear
collapsed on takeoff. Foam was spread on the runway as a precaution and
cell phone video shows passengers being evacuated by slides on to the
runway. Thankfully, there are no reported injuries among the 149
passengers and crew onboard.

This news comes as the mystery surrounding Malaysia Airlines flight MH370
intensifies. Six days after it disappeared, there are new reports tonight
and new speculation, but still no answer to the question, what happened to
that Boeing 777 bound from Kuala Lumpur to Beijing?

In a blockbuster report from "The Wall Street Journal" today, U.S.
officials citing data from an automated system on the plane are said to
believe the MH370 was airborne for five hours. That would be four hours
after the initial loss of contact. Malaysian authorities are denying that
report.

Also tonight, ABC News is reporting that U.S. officials believe two
communication systems onboard the aircraft were shut off separately 15
minutes apart which could indicate a deliberate act. A source saying the
U.S. team, quote, "is convinced that there was a manual intervention and
likely not an accident or catastrophic malfunction that took the plane out
of the sky."

As of yet, a Malaysian officials have not responded to that report and we
should caution each new report spawns new theories and brand new
speculation, but because there is only so much we really absolutely know
for sure, there are basically a few theories investigators can really work
with.

(BEGIN VIDEOTAPE)

HAYES (voice-over): At 1:30 a.m., Malaysia Airlines Flight 370 made its
last contact with air traffic control. And then it disappeared. Six days
after it seemingly vanished, we know almost nothing about what happened.

Though there`s been endless speculation and rampant conspiracy theories,
there are generally four plausible theories about what happened to Flight
370. Here they are:

Theory one, hijacking or terrorism. Early on in the investigation, it was
revealed the two passengers boarded the flight with stolen passports
fueling speculation of foul play. But since then, those two men have been
ID`ed as Iranian nationals. One who was reportedly seeking asylum in
Germany, and U.S. officials say they don`t believe the two had terror ties.

If Flight 370 was a victim of terrorism, no group has come forward to take
credit for the attack. And the Pentagon, which has technology that can
detect flashes around the world, has said there was no evidence of
explosion. And if the plane was hijacked, well, where is it?

Theory two, pilot suicide. It is exceedingly rare, but there have been
three suspected incidences of pilot suicides on international flights since
1997. Most famously Egypt Air Flight 990 which crashed into the Atlantic
in 1999 killing 217 people.

TV ANCHOR: Fatal mystery of Egypt Air Flight 990 now focusing on a single
crew member. Was it a deliberate crash?

HAYES: United States investigators said the flight crashed because of a
co-pilot`s manipulation of the airplane controls. Egypt ruled it was a
mechanical malfunction.

Total and complete lack of communication from Flight 370 is the reason some
support this theory. Both forms of communication, the transponder and the
radio, are controlled by the pilot. It is highly unlikely that both would
fail but could be, in theory, turned off by a pilot or crew member intent
on taking the flight down.

MITCHELL CASADO, FLIGHT SIMULATOR INSTRUCTOR: There`s absolutely nothing
that could go wrong with the airplane that would cause the transponder to
turn off and the plane to automatically start doing a turn.

HAYES: On the other hand, there were 12 crew members onboard, and there is
simply no evidence other than precedent to indicate a deliberate crash.

TOM COSTELLO, NBC NEWS: Meanwhile, investigators continue to look at the
backgrounds of the crew, the 53-year-old captain and his 27-year-old first
officer. So far, we`re told they have turned up nothing of concern.

HAYES: Theory three, mechanical failure. We know that Flight 370 lost all
communication and there are disputed reports about how far off course the
plane could have strayed.

But here`s the problem with this theory. First of all, the Boeing 777, the
model of the missing plane, is one of the safest in flight.

LATANE CAMPBELL, INTL. AIRLINE PILOT: If somebody told me I had one chance
to fly one airplane across any part of the country, or any part of the
world for that matter, it would be the 777. It`s an exceptionally reliable
airplane.

HAYES: Secondly, a mechanical failure would have had to have been so
catastrophic it took out all communication, but apparently did not cause
the plane to break up in flight.

Theory four, human effort. It`s the leading cause of commercial airline
accidents responsible for up to 80 percent of crashes. But the errors are
often compounded by external problems like weather or technical issues.

The last time a plane just disappeared, Air France Flight 447. The flight
experienced a series of weather and technical issues but ultimately it was
a pilot error that took down the flight. Some of the last words on the
black box when the pilot realized what had happened, "Damn it, we`re going
to crash. This can`t be happening."

The reason Malaysia Airline Flight 370 disappearance is so baffling is that
in the absence of more evidence, none of these theories seem convincing.
All we really know for sure is nothing like this has ever happened.

(END VIDEOTAPE)

HAYES: Joining me now, Michael Goldfarb, former chief of staff for the
Federal Aviation Administration.

And, Michael, because there are so many --

MICHAEL GOLDFARB, FORMER FAA CHIEF OF STAFF: Good evening, Chris.

HAYES: Good evening.

There are so many conflicting reports pinging around, I thought maybe we
would sort of start at the most basic and build out what we actually hard
confirmed beyond a shadow of a doubt know. Can we do that?

GOLDFARB: Maybe. It`s a complete and utter mess. There is no
investigation. If there was, it started yesterday when finally the
Malaysian authority worked with NTSB and the FAA and Boeing and others and
began to put some fidelity behind the investigation.

So, what do we have? We have a plane left Kuala Lumpur and it disappeared.
Facts end. That`s it.

The reason yesterday we were excited about the satellite potential spotting
was precisely because we had nothing, but that seemed to be within the
flight path.

Then, we had a military radar indicating a bing, a blip. Military radars
are primary, very unsophisticated. They can simply paint an object, not
tell a lot more about it.

So, we`re all over with your theories. Which one do you want to start with
first?

HAYES: Well, let`s start with -- let`s start with mechanical failure.

GOLDFARB: Yes.

HAYES: And I think the one thing it seems like we -- the one thing that
hasn`t been disputed is the loss of communication. That is the one thing
that it seems is hard confirmed, all the stuff about the flight path, all
the stuff about it flying five hours.

Talk me through what are the different communication systems on that plane
and how would they cascade to failure if they weren`t manually shut down?

GOLDFARB: Well, I think we should look at the question more broadly.
There`s -- the plane is like an iPhone in the sky. It`s data feeding to
satellites, it`s pinging the airline on the ground. It has an ACARS
reporting system. It`s constantly communicating.

A sophisticated plane like the Boeing 777 has enormous communication
capabilities.

But we`ve been focusing on how could they be knocked out without a
catastrophic failure? It might not be the right question. You might
remember Payne Stewart in a corporate jet where the pilots and passengers
lost consciousness. There was a slow depressurization and they were
rendered unconscious. And the plane headed on for hundreds and hundreds of
miles.

So, when we look at mechanical problems, we note the FAA has cited the 777
for an airworthiness directive which is simply a recall. That talked about
a potential crack in the fuselage near the Satcom antenna that may render
the aircraft some kind of catastrophic or depressurizing event.

So that has to be looked at. I know we`re off on the terrorist side, but
the investigators, NTSB and the board and others absolutely have physical
deterioration of the aircraft or physical cause as certainly a leading
contender right now.

HAYES: So, so, walk me through this because this is I think the thing I`m
having a hard time. I was reading in on the Payne Stewart example today.
In that case, the slow depressurization, this haunting, awful spectrum in
which everyone lost consciousness and eventually the plane just kind of
ghost planed gliding with the windows frosted over.

In that case, did those communications facilities shut down as well?

GOLDFARB: No.

HAYES: No.

GOLDFARB: That`s the point.

HAYES: That would mitigate against the depressurization idea. The big
thing to me, the open question is why would all those communication systems
go out?

GOLDFARB: Right. Well, you know, once again, you know, we have to also go
back -- I`m sorry, I`m losing my feed here. We have to also go back to
potential catastrophic failure of the aircraft. And if that, in fact,
happened, a rapid depressurization of that plane, everything would have
gone out. The transponder, all the reporting back to the airline, and
Rolls-Royce would go out.

HAYES: Let`s talk about the possibility of a kind of concatenation of a
variety of problems. I mean, the Air France -- the famous Air France
flights that goes back in the Atlantic. It`s the horrible kind of winning
the wrong lottery after winning the wrong lottery after winning the
lottery. You have bad weather, then you have an improbable mechanical
period, then you have pilot error.

GOLDFARB: I`m losing you.

HAYES: I`m sorry, I`m totally --

GOLDFARB: I can talk to that. But can you hear me?

HAYES: Yes, I`ve got you.

GOLDFARB: All right. So, let`s take the fact that all pilot errors are
usually -- mechanical errors are usually a combination of things. Whether
it`s weather and pilot error, on Air France, we had a faulty air speed
indicator, that the pilots weren`t trained how to compensate for it, in
fact, made the wrong decisions.

We`ve had that often. It`s normally not just a pilot error. It`s
something mechanical. The MD-11 Swiss Air flight in Nova Scotia, smoke
from the electrical system, from the communication system. The pilot
decides to dump fuel off Nova Scotia as oppose to land in Halifax and the
plane didn`t make it and crashed at Peggy`s Cove.

So, we have these examples where there`s a combination of things. But even
in Air France, Chris, we knew in day one because of the reporting back to
Air France of that aircraft, we knew there was a problem. We knew
basically what kind of problem it was. We didn`t know why. We didn`t know
the exact location.

In this case, we have none of that. It`s curious that Rolls-Royce, who
hasn`t confirmed, by the way, that in fact the engine performance was
continuing for four hours or not. That`s just simply a theory. It`s
curious that we have nothing back on the airframe to Malaysia Air from the
time we lost that plane.

So it wouldn`t be that you`d have the engines communicating without the
structural part communicating because they use the same pipe. They use the
same communication channel.

HAYES: Explain that again because this is the thing I think I`m having a
hard time getting my mind around. When you talk about the iPhone and when
you talk about the layered communications, right?

GOLDFARB: Yes.

HAYES: Just to walk through those so I`m clear on this. Obviously, the
first is the pilot, right? The pilot talking to air traffic control and
passing from one zone to the next.

GOLDFARB: OK.

HAYES: Go ahead.

GOLDFARB: The pilot -- over the ocean, there`s no radar so the pilot does
not talk to air traffic control in mountainous terrain, when there`s no
ground infrastructure or even the ocean. The pilot communicates to a third
party. The third party communicates then every 15 minutes to air traffic,
any country. And that plane is tracked along precise routes over the ocean
and supposed to report every 15 minutes. That`s the primary communication.

Secondary systems, and the 777 has so much redundancy, it is hard to
believe it would lose it all at once. Secondary communication is a
constant feed of data back to airline operations on every aspect of engine
performance and how that plane is performing.

So, there`s -- you know, and the transponder then is the last layer of
protection. It`s a safety device that, in fact, the pilots have there if
everything else failed, you`d still have a paint of the target, know where
the plane was.

HAYES: And that transponder is sending out along a frequency, right?
That`s a sort of steady stream of pings that are being picked up.

GOLDFARB: Yes. That`s right. It`s an aviation-only frequency that it
does. So, you have all this communication. Did it lose it suddenly? I
mean, perhaps it did.

Was it catastrophic? Perhaps.

Did the plane turn toward the Indian Ocean? When the White House said
today that we`re sending a fleet there, everybody said oh my God, the plane
turned, we`re looking at the Indian Ocean, they`re simply doing what any
good investigation would do.

HAYES: Right.

GOLDFARB: You follow the lead.

So, we have the plane going west. We have the plane east. Everything is
still on the table.

The tragedy is we have to find out what happened to that 777. Boeing needs
to know that. People who get on one this morning or tomorrow has to know
that there`s nothing systemic on that plane that would affect the rest of
the fleet.

HAYES: Michael Goldfarb, former chief of staff for the Federal Aviation
Administration -- that was remarkably lucid and grounded. Thank you very
much.

GOLDFARB: You`re welcome. Thank you.

HAYES: All right. Coming up, we all know people on Wall Street make bank.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My name is Jordan Belfort. The year I turned 26, I
made $49 million which really pissed me off because it`s three shy of a
million a week.

(END VIDEO CLIP)

HAYES: There`s a new figure you will not believe that puts the income gap
in this country into stark relief. Prepare to be incensed and astounded,
ahead.

(COMMERCIAL BREAK)

HAYES: Coming up, we`re going to discuss whether the underground sex
industry in this country should be made legal. And a woman arrested for
prostitution who`s headed to court tomorrow to contest the charge will be
my guest.

(COMMERCIAL BREAK)

HAYES: New data on the size of Wall Street bonuses, an annual tradition,
and this time around, we learned that Wall Street bonuses in New York, just
New York, last year, totaled $26.7 billion.

And here`s a really fun fact about those bonuses. The total amount of
bonuses paid to Wall Street was $11 billion more than the total amount made
by every full-time minimum wage worker in all of America in the previous
year.

Let me say that again. The amount of Wall Street bonuses paid in 2013 was
$11 billion more than the total income of every full-time minimum wage
worker in America in the previous year.

Now, that is a fundamental fact about how this economy works, a defining
feature. And right now, there`s an array of battles hedging toward trying
to shrink that gap.

McDonald`s workers in three states filed suits alleging the company and
some franchise owners illegally underpaid employees by erasing hours from
their time cards, not paying overtime and ordering them to work off the
clock.

McDonald`s in a statement did not claim the charges were specious, rather
said it was committed to undertaking a comprehensive investigation of the
allegations.

Also today, President Obama announced an expansion of overtime eligibility
for low-paying salaried jobs.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m directing Tom Perez, my
secretary of labor, to restore the common sense principle behind overtime.
If you go above and beyond to help your employer and your economy succeed,
then you should share a little bit in that success.

(END VIDEO CLIP)

HAYES: Shrinking the inequality gap between the haves and have-nots has
two sides of the ledger. There`s the lifting the wages and the prospects
of the have-nots. There`s taking down the excess of the haves.

Right now, there is not much discuss of the latter in Washington, but there
is a very good reason to think that redistributing money from haves to
have-nots would actually make the economy perform better as a whole.

Every extra dollar going into the pocket of low-wage workers adds about
$1.21 to the national economy. Every extra dollar going into the pockets
of a high-income American by contrast only adds about 39 cents to the GDP.

So, $26.7 billion in Wall Street bonuses injects only about $10 billion
into the economy, putting the same amount of money, $26.7 billion, into a
minimum wage increase would inject $32 billion into the economy, three
times as much.

Joining me now, Alexis Goldstein. She used to collect paychecks from
Merrill Lynch, Deutsche Bank and JP Morgan Stanley, working in information
technology. Now she`s communications director for the Other 98 Percent.

And, Alexis, we will begin with a question of the psychology of bonus time
in Wall Street. How -- that Jordan Belford quote is great. It captures
this fundamental thing. Too much is never enough.

What is the psychology of the bonus on Wall Street like?

ALEXIS GOLDSTEIN, FMR. VP, MERRILL LYNCH: So you have to understand that
the goal of a lot of people on Wall Street is accumulate what we call F-U
money. It`s a sum of money that`s so vast, you can go around and say F-U
to whoever you want completely without consequences.

HAYES: I think everyone`s had something like that desire. But is the
thing to order and structure your life around, it is a bit odd.

GOLDSTEIN: It is and it`s very juvenile. I think another part of sort of
the bonus culture is there`s this strong sense that we deserve this, we
earn this, we work harder than everybody else. I studied the right thing
in school. You know, these fast food workers, maybe they should have
studied harder.

And there`s a lack of acknowledgement. It`s a judgment about what hard
work is deserving and what hard work is undeserving.

HAYES: And there`s also the aspect of the compensation structure in Wall
Street I think is important for people to understand is that it is a rigged
game in many ways insofar as there are ways for Wall Street managers to
make money whether the deals they`re doing are doing well or poorly.

Private equity has all kinds of ways of building in fee structures so
you`re taking money out of your pockets. Even if the deal you created goes
bankrupt.

GOLDSTEIN: That`s right. You get a little bit of commission whether or
not your client makes money, and I actually had somebody tell me on Wall
Street that it didn`t matter if you performed as an employee or not, all
that mattered is if you had a managing director who had your back.

So, it`s just all about, you know, kissing the right behind and making sure
that, you know, you rip your clients` face off and get the commission money
regardless of whether or not your client comes out right at the other end
of their trade.

HAYES: The other thing about this -- and this is true of CEO competition,
is that even if it`s staggered and relative between people, right, it can
not be the case that everyone is outperforming the mean.

GOLDSTEIN: That`s right.

HAYES: There are a lot of people making a lot of money, just by
definition, this is definitional, there are a lot of people making money on
Wall Street who are performing underneath the average of Wall Street
performance.

GOLDSTEIN: Yes. I think a lot of people believe, genuinely believe on
Wall Street if they were to go become teachers they`d be the best teachers
in the world. But if they had to drive a garbage truck, they`d be the best
garbage truck driver.

But it`s just not true. They are overpaid for what they do. There`s a
subsidy that the biggest banks still get. It`s $83 billion a year. And
what that means is because the markets still thinks they`re too big to
fail, people that loan them money loan them at an artificially low rate.
That`s $83 billion a year and it seems like they`re pocketing a lot of into
bonuses.

You know, I mean, while fast food workers have to go on public assistance
because they`re getting paid poverty wages, oh, shocker, McDonald`s is also
subsidized in that way, too.

HAYES: Right.

GOLDSTEIN: So, as a country, we worship the rich and we despise the
working poor. We worship the bailed out rich and despise the working poor.

HAYES: There`s a report today. I think there`s two arguments to be made
on this inequality question. One`s a matter of simple justice and
fairness. And I like that because it get my lefty heart all aflutter.

But there`s a practical argument to be made about the performance and
stability of the economy as a whole. And I couldn`t believe this. This is
a new report today from IMF, of all people.

I remember being in campus in college and protesting the IMF for their
vision of a neoliberal vast unequal world. The IMF of all people saying
inequality is a drag on growth. This is not a pinko, lefty outfit, the
IMF. This is an extremely conservative, historically, outfit.

And they`re saying extreme inequality like we`re seeing actually is hurting
growth.

GOLDSTEIN: Well, I think that goes back to the F-U money concept. People
who are extremely wealthy tend to hoard their money. You talk about it in
your book. It`s this idea of practical inequality.

It`s not about I`m making $40 million a year or whatever it is. I`m making
less than the idiot at the desk next to me, and I want more. And so, I
don`t put money into the real economy.

Whereas people who are just struggling to get by, pretty much every bit of
that dollar they earn is going to right back into the economy.

HAYES: Alexis Goldstein from the Other 98 Percent, formerly of Wall Street
-- thank you very much.

GOLSTEIN: Thank you.

HAYES: Coming up, Wisconsin`s Republican Governor Scott Walker is in a
tight race for his job.

(BEGIN VIDEO CLIP)

AD NARRATOR: Why would you start your campaign out with a lie? The facts,
unemployment`s going down under Walker. And we can`t trust Mary Burke.

(END VIDEO CLIP)

HAYES: The attack ads are already out, but the governor may be trying
something else to get an edge, too. I`ll talk to his opponent, Mary Burke,
about what he`s up to, next.

(COMMERCIAL BREAK)

HAYES: This fall, Wisconsin Governor Scott Walker will face his third
election from the voters of Wisconsin in four years. And while he`s
probably feeling pretty good about winning in 2010 and surviving the 2012
recall election, new polling this week should have him worried.

The new numbers from Rasmussen generally considered a GOP-friendly polling
outfit show Governor Walker tied with his likely Democratic challenger,
former state Commerce Secretary Mary Burke.

So, that`s bad news for Scott Walker this week, but here`s potentially good
news for a guy facing a tough race. Republicans in his state are moving
ahead this week with restrictions on early voting, restrictions that will
make voting less convenient for Wisconsinites in heavily Democratic areas.

Plus, there`s the state controversial 2011 voter ID law. It was held up in
court during the 2012 election. But rulings in the lawsuits against it are
expected soon. If it is struck down, Walker wants everyone to know he`s
fully prepared to call the legislature to a special session to fix the law
and get it on the books in time for the election in November.

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER (R), WISCONSIN: The only real thing I thought that was
pressing and may still continue to be pressing depending on what the court
reacts on is voter ID. If the courts, regardless of which court it would
be, were to say we think this -- you can have it if not for this provision
or that provision, we want to modify that so that a law like that were in
effect before the next election.

(END VIDEO CLIP)

HAYES: Scott Walker, in other words, wants to make sure it`s harder to
vote in Wisconsin, just in time for voters there to decide on his own
reelection.

Joining me now is Walker`s likely Democratic opponent this year, Mary
Burke, former Wisconsin secretary of commerce.

We reached out to Scott Walker`s office to invite him on the show. And we
would love to have him as well sometime.

(INAUDIBLE) to have you here.

MARY BURKE (D), WISCONSIN GUBERNATORIAL CANDIDATE: Chris, great to be
here. Thanks.

HAYES: OK. The first question is, this guy has been three tough two
election in four years basically. What difference -- what`s different in
the case you`re making now than the last two cases unsuccessfully made
against him?

BURKE: Well, a couple of things. First, I`m a very different candidate.
But 2010 wasn`t a great year for Democrats across the country. So that was
a different time, as it is now. The recall election became about one
issue, Act 10, and that`s about it.

We also know that in Wisconsin. We believe in fairness. You know, people,
some people didn`t go to the polls or they voted for Walker simply because
they said maybe it wasn`t fair to recall --

HAYES: Didn`t believe in the process.

BURKE: Exactly. So this is going to be a great race. It`s going to focus
not only on Walker`s record as governor, which the people of Wisconsin, I
think, will not agree has been good on terms of jobs. And it`s also going
to be about a different vision for the state.

HAYES: So why should you be governor, not him?

BURKE: We need, frankly, to focus on the issues that matter most to the
people of Wisconsin. I have a 30-year track record as an executive in the
private sector. I put problem solving ahead of the politics. It`s not
working in Washington, and it`s not working in Madison to have politicians
putting special interests and partisan politics above the issues that
matter most to the people.

HAYES: That is about who you are, not what you are going to do. What are
you going to do that is going to put Wisconsin on a better track than what
Scott Walker has it?

BURKE: I`m going to create more jobs. That`s what people in Wisconsin
care about.

HAYES: Can governors do that?

BURKE: Yes, they can. They can invest in the type of things like
education and infrastructure. We have to make sure our students when
they`re graduating from high school are going to be trained and ready to
take on careers or go to college. Our economy needs to be creating way
more people with the skills to meet the jobs of tomorrow. And Governor
Walker has actually cut education at a time when we need to be doubling
down and investing in education and making sure our kids are prepared for
the future.

HAYES: The jobs, jobs argument has been an early one in this campaign. I
want to play a little part of an ad from your first ad hitting Scott Walker
for his jobs record. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Under Walker, unemployment`s up. Job prospects are
down to 45th in the nation. And the layoffs continue.

(END VIDEO CLIP)

HAYES: Now, unemployment going up, this got brushed back by quite a few
people. "Politifact" in Wisconsin, the Walker campaign saying, no, no, the
official unemployment rate in Wisconsin when Scott Walker took over was
higher than it is now. Is that a lie?

BURKE: No. I mean, the unemployment rate when I was commerce secretary
was 4.8 percent. It`s 6.2 percent under Walker. That`s up in anyone`s
book that I know.

HAYES: But do you really believe that? Do you really believe that you
were responsible for the unemployment rate as commerce secretary in that
period and he`s responsible for it now? It is macroeconomic factors in the
country?

BURKE: Well, you know, the Republican Governors Association`s attack was
that I had somehow caused 130,000 job loss along with a huge budget deficit
that occurred two years after I left commerce. So this is just laying out
the facts, which people need to know in Wisconsin. The unemployment rate
was 4.8 percent when I was commerce secretary. It was a great time. We
had 73,000 more jobs in the state than we have currently. So those are the
facts.

HAYES: Act 10 which was the sort of defining feature of 2-1/2 years of
Wisconsin politics. Would you repeal it in office?

BURKE: Well, I believe our public sector employees have the right to
collectively bargain. That doesn`t stand in the way of having effective,
efficient and accountable government. We have to make sure we are
attracting great people to the public sector.

HAYES: With that thought, would you repeal the act?

BURKE: I`d work hard.

HAYES: There`s restrictions now on early voting that are being
implemented. There`s the contentious voter I.D. law. What`s your reaction
to the move by the Republicans in the state to cut back on voting time?

BURKE: I think it`s a desperate attempt to influence the election in
November. And it shows that they are worried. You know, making sure,
putting up barriers to people voting. I mean, this affects seniors,
veterans, students, disproportionately affects those in urban areas. As
governor, I want to make sure everyone who`s eligible to vote is able to
vote.

HAYES: Your business career was in the company, Trek, makes bicycles in
Wisconsin. Treat company. Makes great bikes. How big is the bike voting
bloc in Wisconsin? Can you turn those people out? Are those kind of,
like, defining caucus, you can get to the polls?

BURKE: Yes, I think they`re going to be my people.

HAYES: I think so, too. Question is how many of them are. Mary Burke,
who is running for governor of Wisconsin. Thank you so much.

BURKE: Thanks for having me.

HAYES: All right, coming up, a new first of it`s of kind report on the
economics of the sex industry in this country has some amazing information
in it. Sex workers in Atlanta offer Veterans Day specials. We`ll talk
about what else is in that report and debate whether it makes a persuasive
case for making that industry legal. Stick with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: And our national
interest will be served only if this project does not significantly
exacerbate the problem of carbon pollution. The net effects of the
pipeline`s impact on our climate will be absolutely critical to determining
whether this project is allowed to go forward.

(END VIDEO CLIP)

HAYES: That`s the marker. That is the marker the president laid down for
whether he would approve the very and increasingly controversial Keystone
XL Pipeline. Which would carry tar sands down from Alberta, Canada,
through the middle of the U.S. into Texas. The State Department`s recently
released environmental impact statement seemed to pave the way for its
approval because that statement concluded that the proposed pipeline
project is unlikely to significantly affect the rate of extraction in oil
sands areas.

State Department basically shrugged their shoulders saying, look, pipeline
or no pipeline, the stuff is going to come out of the ground, anyway. Mr.
President, go ahead. Now, along comes this group, Carbon Tracker, saying
no, no, no, no, not so fast. Carbon Tracker is devoted to the prospect of
tallying up fossil fuel emissions and they`re about as good at it as
anyone.

And in their report, they suggest the State Department just plain got it
wrong. That quote, "The differences in transport costs will potentially
affect as much as 510,000 to 525,000 barrels per day of bitumen, tar sands
production." So a large volume of the tar sands won`t be economically
viable unless the pipeline is there to make it cheap enough to be
economically viable.

Meaning if the pipeline is not there, some of it won`t come out of the
ground. According to carbon tracker, the additional output enabled by the
pipeline through 2050 is equivalent to the annual greenhouse gas emissions
from 1 billion, with a "b," passenger vehicles, or carbon dioxide emissions
from 1,400 coal-fired power plants, or even all of the United States` co2
emissions from last year.

As my colleague, Ed Schultz, has been detailing on his program, there are a
whole lot of reasons not to build this pipeline, but this -- this is the
best reason to just say no.

(COMMERCIAL BREAK)

HAYES: The average weekly salary for a pimp in Atlanta, Georgia, is almost
$33,000. In Denver, Colorado, it`s just over $31,000 a week, which means
if you`re pimping in either of those two cities, odds are you`re making
more than $1.5 million a year. You`re a 1% percenter. Since that`s cash
money from an illicit trade, we presume it`s not exactly being heavily
taxed.

In eight cities across the country, pimping can be lucrative work. A lot
of the folks doing the work object to the term pimp. One man put it,
quote, "I don`t believe in the word pimp. It is like the tooth fairy from
the old 70s movies. That`s not me."

All of this data comes from a massive new report from the Urban Institute
conducted with the help from the U.S. Department of Justice, which takes an
unprecedented comprehensive look into America`s largely underground sex
economy.

Researchers use both qualitative and quantitative data, conducted
interviews with pimps and law enforcement officials and analyse the sex
trade in eight cities with a goal of understanding how big the underground
sex trade is and how it works.

Most of the data focused on the business side of the sex economy. As one
law enforcement worker noted, quote, "The younger the girl the higher the
price. So you could have a girl at 18 that`s going to charge $450 an hour
or $350 an hour as you see them get into their 30s, unless they have a
specialty, you`ll see them at maybe $150 an hour."

Most frequently cited business expense reported by 66 percent of the pimps
and traffickers interviewed for the study was cars, transportation, 65
percent cited housing. Conversely, just 14 percent reported condoms as a
business expense. Of course, aside from the few counties in Nevada, this
entire economy exists in the black market.

Outside the purview of regulation, worker protection, occupational safety.
In short, all of the things that help protect other workers are simply not
present at all in this entire economy. And given the experiment we`re
currently running in Colorado, in Washington State, right now in which
we`ve taken a formally elicit trade in marijuana and legalized and
regulated it.

I can`t help but wonder after going through statistics on this whether the
problems that come with sex work come from the prohibition of sex work or
from the work itself.

Joining me now, Vednita Carter, founder and executive director of Breaking
Free, an organization that helps women leave the sex industry. She was a
stripper before becoming an activist, and Sheena Baskin, co-director of the
Sex Workers Project of the Urban Justice Center, an organization that
provides legal and social services to individuals who engage in sex work.

Vednita, should we legalize? Should we take away the prohibition that
drives all this into the underground, away from the reach of the law?

VEDNITA CARTER, BREAKING FREE: We definitely should not legalize it. Many
people don`t understand the dynamics of being sex trafficked, prostituted.
They don`t understand the harm that it has on the women and the girls that
are involved in it. Legalization, as I know of it, I look at Nevada. A
state that it is legal in.

And I work with many women and girls that have worked in Nevada. Just a
really quick thing. I run an organization, we work with between 400 to 500
women a year and so have seen it all. I`ve heard it all. I have been
involved. And I know the impact that it has.

HAYES: When you talk about harm, though, the argument is that a legal
regime would result in harm reduction. A client assaults you, a client
doesn`t pay you, a pimp attempts to say hold your passport as ransom or
I.D. as ransom. You can call the cops without fear of getting arrested in
any of those cases. Right now that legal protection is not afforded to
women.

CARTER: Well, we believe it is afforded in Nevada, right here in the
United States. That is supposed to be afforded.

HAYES: You don`t see the results of harm reduction happening --

CARTER: No, I don`t. There`s no way that you can mask the harm that`s in
it. No matter what you do. The harm is not just being beat up. The harm
is not just being used in the life -- well, it is being used in the life.
You`re with between 5 to maybe 20 guys a day, OK? We`re talking about a
sex act. We`re talking about one woman or one girl having 10 to 20 guys a
day. That`s the harm right there.

HAYES: I think that`s a good point to go to you, Sienna. This is the
question, right, that our society deems that particular trade of sex for
money as inherently harmful. As inherently exploitative. As inherently a
bad thing that we want to diminish. We want to control. We want to
outlaw. Is that the right moral intuition? Is it the right societal
intuition?

SHENNA BASKIN, SEX WORKERS PROJECT: I think the perspective that we come
from is we want everyone to have a right to safety. To have a right to
opportunities to thrive and, you know, and do what they want to do in their
lives. We find that criminalization, while there are these other harms
that people face in the sex industry, criminalization is just one more harm
that they face.

Criminalization makes it harder to report a crime against you, like you
said. The act, the experience of being arrested and incarcerated is really
traumatizing in and of itself. And the -- it can lead to deportation, loss
of job opportunities. So we really have to -- if we`re looking at policies
look at those harms as well.

HAYES: Can I press you on this question? I understand the sort of
practical policy argument here. But there`s a deeper sense, right?
Because the --

CARTER: Definitely.

HAYES: -- the emanation of these law, right, is coming from some kind of
collective moral intuition. It`s not necessarily coming from some
technical survey of what will reduce harm. That`s not the way we make laws
in this country, right? That collective moral intuition is a powerful one.
I feel you have to address that.

There`s the harm reduction. There`s a sense that people say sex is
different. The exchange of money for sex is fundamentally and inextricably
bound up in something that looks ugly to us. Do you think the intuition
that`s guiding that policy is true?

BASKIN: I think that intuition is very personal and I think people have
different feelings about sex, about the exchange of sex for money. I don`t
think that intuition is necessarily a good thing to guide policy, because
even if you believe that prostitution is inherently harmful, you have to
also confront this fact you are then arresting people who have already
suffered that harm.

HAYES: What about that? I mean, what about the fact that arrest is
traumatic? Arrest gives people a record. It screws up people`s lives.
How is that helping people?

CARTER: At the same time, let me tell you that over 50 percent of the
women that we work with tell us there are certain times in their life while
they`re in the life of prostitution that they deliberately want to get
arrested. They say sitting in a jail cell is better than being on them
streets or being in that escort service. Wherever it is that they`re being
bought and sold.

That it`s better to be there just to get away, to get some rest, to get out
of harm`s way. So, I mean, there`s different attitudes about that. You`re
right. I don`t believe that women should be criminalized for prostitution.
I think it should be decriminalized for them. For the women. I think the
buyer. The buyer should be charged.

HAYES: Right. OK. Here`s an argument I`ve heard. That is made by a book
by Melissa Grant that`s out that I recommend to people. Basically says
something, and I sort of wrestled with, when we talk about prostitution we
say these are people who don`t have other options. She says, people do a
lot of work in this economy when they don`t have other options.

There`s a lot of other work that is brutal, bad, that people don`t like
that they say if I didn`t have to do it, I wouldn`t do it, right? We don`t
criminalize or legalize that activity and do criminalize and legalize this
activity. Why?

CARTER: I`m telling you something. Until you`ve been with 20, 30, 40 guys
in one day, and I mean this, you can`t even begin to understand the harm in
that. OK? There`s -- it doesn`t matter what anybody says. In this life
of being sex trafficked, you have to wear a lot of hats.

HAYES: So being sex trafficked, I`m glad you said that, because I think
sometimes in this conversation we, that term gets thrown around.

CARTER: Yes, it does.

HAYES: And it overlaps sex work. Sex trafficking I think you get the
picture of a 14-year-old whose passport has been held and smuggled in as
essentially a slave. That`s not necessarily representative of everyone who
is trading sex for money.

CARTER: We think about trafficking. I can be trafficked from St. Paul to
Minneapolis, from New York to Chicago. Trafficking. When you think of sex
work, let`s say that, sex. When I think of sex, I think of something that
is enjoyable.

HAYES: Right.

CARTER: That I`m with somebody that I possibly care about. Want to be
with. When I think of work, I think of a job. I think I`m going to be
protected from sexual harassment, from many different things. That can
come in good benefits. I think there`s going to be many things I`m going
to be afforded.

HAYES: Right, that`s the vision. That`s the vision in countries that have
decriminalized is that those things that you talk about associated with
work could possibly be there. Vednita Carter from Breaking Free and Sienna
Baskin from the Sex Workers Project. Thank you so much. There`s a lot
more to talk about this topic. I hope we revisit it. Thank you both for
coming.

All right, there`s a new initiative in Phoenix called Project Rose that
seeks to save sex workers by arresting them. One of the people arrested is
an Arizona State University student who is set to go to court tomorrow, and
she will be my guest, next.

(COMMERCIAL BREAK)

HAYES: We`re back. Joining me now is Monica Jones, a student at Arizona
State University who`s studying social work. She was arrested last year
during a police sting operation and anti-prostitution diversion program in
Phoenix known as Project Rose. She will be in court tomorrow to plead not
guilty to the charges of manifestation of prostitution. Monica, can tell
me a little about Project Rose and the circumstances under which you are
arrested?

MONICA JONES, TRANSGENDER RIGHTS ACTIVIST: Project Rose is the
collaboration with the Phoenix Police Department and ASU School of Social
Work and the Catholic charities.

HAYES: And this project, the idea behind this project, is to go to people
that are involved in sex work and essentially arrest them and then attempt
to divert them into other lines of work?

JONES: Yes. Using -- to get victims of sex trafficking into the diversion
program.

HAYES: So the idea is get people, arrest them and use that arrest as the
means of sort of extracting them from the industry?

JONES: Yes. It`s the saver mentality.

HAYES: Do you think that`s effective? How do you feel being on the side
of that and having an arrest record now?

JONES: Going to school at ASU, Arizona State University, and being in the
school of social work program there and going through this whole process of
walking while trans and assume I`m a sex worker because I`m walking down
the street from my neighborhood. It`s that whole rhetoric of because
you`re trans. You`re a sex worker or because you`re a woman in poverty,
you`re a sex worker. And so this whole -- this law only targets women in
low-income areas.

HAYES: Right. The idea is they target geographically, go into an area,
make a bunch of busts and raids and that`s how they find the people they`re
arresting.

JONES: Yes.

HAYES: So you`re going to go to court tomorrow. You`re going to plead not
guilty, I take it?

JONES: Yes. I go to trial tomorrow. I hope to win and be found not
guilty.

HAYES: What`s the case you make before the judge?

JONES: That I was just walking, I have the right to walk in my own
neighborhood. I have the right to go to a local bar and have the right to
be a human being.

HAYES: Let me just get this straight. You were just arrested for walking
down the street?

JONES: Yes. Just walking and just being stopped and asked a couple of
questions, and it was an undercover. They falsely arrested me for
manifestation of a prostitute.

HAYES: What does manifestation mean in that case?

JONES: Manifestation, just being in a known area, a prostitute, which is
any low-income area, and walking and dressed the way you`re dressed.

HAYES: I see. So the charge here isn`t that there was some, you know,
they caught you on solicitation. The charge is literally you were dressed
in a certain way, walking in a certain area at a certain time and that
thing is the thing that is criminal is.

JONES: Yes. That is.

HAYES: That is manifesting. It`s against the law to dress a certain way,
walk a certain way, be a certain kind of person in a certain part of
Phoenix is what you`re telling me?

JONES: Yes, it is.

HAYES: That doesn`t seem right.

JONES: Yes. It`s the way they use the law and this law was brought about
because people feel that sex work brings in drugs and high crime rates.
And so they want to spot the sex worker and get them out of the area.

HAYES: I see. This is a way from the legal standpoint to essentially like
have these kind of raids, get rid of undesirables. The charge is
manifestation. That`s something else. Sex workers rights activist, Monica
Jones. Thanks for being my guest tonight. Good luck in court tomorrow.

JONES: Thank you, bye-bye.

HAYES: All right, that`s ALL IN for this evening. "THE RACHEL MADDOW
SHOW" with the one and only Rachel Maddow starts now. If anyone can find
this plane, I have faith in you, Rachel.

RACHEL MADDOW: I don`t, but I`m going to do my best to explain why people
are having such a hard time.

HAYES: That would also be helpful.

MADDOW: Yes, thanks, man. I appreciate it. Thanks to you at home for
joining us this hour. This morning, we did wake up to a big news story on
this subject that looks like a really big breakthrough on the ongoing
mystery of what happened to --

END




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