CHRIS MATTHEWS, MSNBC HOST:  A low-level staffer, totally incapable.  Got the point?  A message to future Trump job applicants, don`t do the crime if you can`t do the time.  Well, this Friday we`re going to talk to some of those former Trump White House staffers including Anthony Scaramucci, Omarosa Manigault Newman.  That`s all this Friday.  What a night.

This is HARDBALL for now.  Thanks for being with us.  “ALL IN” with Chris Hayes starts right now.

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ALI VELSHI, MSNBC ANCHOR:  Tonight on ALL IN.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  We`re taking by the way billions and billions of dollars in tariffs are coming in and China is paying for it not our people.

VELSHI:  Donald Trump gives up the game on a key issue.

TRUMP:  We`re doing this for Christmas season just in case some of the tariffs would have an impact on U.S. —

VELSHI:  Tonight, new recession warnings and new concern about the Trump economy.  The White House defends its plan to curb legal immigration with a suggested edit on the Statue of Liberty.

KEN CUCCINELLI, ACTING DIRECTOR, U.S. CITIZENSHIP AND IMMIGRATION SERVICES:  Give me your tired and your poor who can stand on their own two feet and who will not become a public charge.

VELSHI:  Plus, new reporting on the mad scramble in the Department of Homeland Security to combat white supremacy in the wake of El Paso.  And what we`re learning from new state-by-state polling that does not paint a pretty picture for the president in 2020.  ALL IN starts now.

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VELSHI:  Good evening from New York I`m Ali Velshi in for Chris Hayes.  For more than a year, President Trump has lied and claimed that his tariffs on Chinese goods are paid for by China and not by Americans.  He`s tweeted the lie on several occasions.  He`s repeated it numerous times at his rallies.  He said it at a rally in Cincinnati, Ohio not even two weeks ago.

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TRUMP:  Don`t let them tell you.  The fact is China devalues their currencies, they pour money into their system, they pour it in, and because they do that you`re not paying for those tariffs, China is paying for those tariffs.

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VELSHI:  Just an argument to be had here and we might have it, but today the President blinked.  His U.S. trade representatives released a statement on Trump`s next round of planned tariffs on Chinese goods, saying, “It was determined that the tariffs should be delayed to December 15th for certain articles.  Products in this group include for example cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”

Now, why would Trump wait to level tariffs on goods like cell phones, laptops, video game consoles, toys, computer monitors, and shoes until the middle of December?  I think we may have given it away in the graphic.  But let`s let the president explain himself.

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TRUMP:  We`re doing this for Christmas season just in case some of the tariffs would have an impact on U.S. customs, but so far there`s none.  The only impact is that we collected almost $60 billion from China, complements from China.  But just in case there might have an impact on people, what we`ve done is we delayed it so that they won`t be relevant on Christmas shopping season.

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VELSHI:  The Christmas shopping season.  The reason President Trump wouldn`t put tariffs on those items right before Christmas is because Americans are the ones paying a higher price and Trump knows it`s not good politics to make Christmas more expensive when you`re running for re- election.

But this is just the latest in the president`s ongoing trade war with China that has had a consistent and tangible effect on the U.S. economy and stock market.  In 2018, when Trump first announced his tariffs, stocks fell.  Earlier this month when Trump announced more tariffs, stocks fell.

When China responded by allowing its currency to weaken, U.S. stocks had their worst day of the year.  Today stocks rose following Trump`s announcement that he`s delaying some tariffs but not enough to recover from yesterday`s steep drop.

Trump`s trade war with China has been stoking uncertainty.  Just last month, the Fed was forced to cut rates in part because of the global drag created by Trump`s trade war.  And now Politico reports, economists at Goldman Sachs, Morgan Stanley, and Bank of America all warned the Trump`s bitter trade war with China is taking a bigger bite out of economic growth than expected.

Here with me now, someone who understands economics and trade policy from the inside out, Jared Bernstein, a former Chief Economist to then-Vice President Joe Biden, a Senior Fellow at the Center on Budget and Policy Priorities.  Jared, good to see you.

JARED BERNSTEIN, FORMER CHIEF ECONOMIST TO THEN-VICE PRESIDENT JOE BIDEN:  Thank you.

VELSHI:  Donald Trump has been saying that China is paying those tariffs.  Mechanically speaking, that`s just not how it works.  A tariff is paid for by somebody who imports a good to sell it in a different country.

BERNSTEIN:  No question.  Those are the exact mechanics when an export comes into our shores and there`s a tariffs imposed on it, that tariff is imposed by the U.S. company importing that good to the U.S. Customs Service.

What happens next is that those companies try to pass that tax increase, that tariff, forward to consumers and that`s why we`ve seen if you actually separate out the prices of goods that face tariffs than those that don`t, we`ve actually seen prices increase more significantly on the goods facing the tariff.

There`s no question that this has always been the case and in fact, you and I have talked about it before.  What`s new today is as you say Trump finally blinked and admitted himself.  There was a bunch of equivocating language in there but it`s not worth listening to that at all because the fact of the matter is U.S. companies pay tariffs, and they then try to pass those towers forward to U.S. consumers.

VELSHI:  If I try to say be really magnanimous and give me the argument for Donald Trump continuing to say that the Chinese paid that $60 billion, what would that argument be?

BERNSTEIN:  Well, that`s actually an important piece of the puzzle because it`s not like these tariffs are good for China or any other export who faces them.  Because they raise prices to U.S. consumers and because they raise the costs of importing these goods from China to U.S. firms, those firms are going to try to find other sources to import those goods, other countries that don`t face the tariff.

And there`s no question that this has hurt the Chinese economy.  In fact, if you ask me and most other economists, they will tell you that thus far – – and I think your earlier run through some of the numbers really got to this, thus far this trade war has been all pain and no gain.

It`s been all pain for American companies whose imports are more expensive.  It`s been all pain for American consumers facing higher prices.  It`s been all paying for farmers and lots of other Trump constituencies that have faced retaliatory tariffs from countries like China.

I just don`t find any upside to this at all.  And in fact, I would argue that maybe the Trump administration hard-headed as they are is finally getting the message with what they did today.

VELSHI:  We are hearing now from the major banks.  We know that the global economy slows.  It does that on a cyclical basis.  But they are saying that the trade war itself is — could be a contributor to a recession or the next recession we`ve got or at least the depth of that recession.

BERNSTEIN:  Yes.  Well, that`s because the trade war has a couple of basic macroeconomic impacts.  First of all, it raises prices and that means real incomes will grow more slowly.  But because it dampens both imports and exports, it`s been lowering the extent of trade throughout the globe.

And we — I myself have had lots of criticisms, some of which are not that different than some that you`ll hear from the administration in terms people who — people in places who have been hurt by trade.  But an overall sense, these global supply chains are pro-growth throughout the globe.  And once you start hacking away at them in many cases, these supply chains took many years, decades to develop, you`re going to hurt global growth.

Now, I don`t think that the trade war thus far has been recessionary to the point that I can you know forecast any further than economists can see around the next corner, but they certainly have raised prices and hurt growth.

VELSHI:  Jared Bernstein, good to talk to you as always.  Thank you for joining me, Jared Bernstein.  Since this whole trade war with China is not going exactly as the President planned and he is running for reelection next year, his campaign is turning to — I`m not kidding — plastic straws and other cultural flashpoints to shore up the base.

I didn`t actually realize plastic straws were a cultural flashpoint.  To talk about that, I want to bring in Michelle Goldberg an op-ed writer for The New York Times and MSNBC Political Analyst and Ben Howe Co-Host of The Fifth Estate podcast and the author of The Immoral Majority: Why Evangelicals Chose Political Power Over Christian Values.  Welcome to both you.  Thank you for being here.

Ben, a simple question, the President says things that are provably wrong.  This was just an example the conversation I had with Jared.  But that`s just — there are a lot of things like that.  It doesn`t seem to matter to some people.  His base remains solid.  Why?  Why does endlessly lying about things that actually matter to people like their income and like the economy and like their 401ks not matter?

BEN HOWE, CO-HOST OF THE FIFTH ESTATE PODCAST:  Because the team, the Republican team, the GOP has trained them to believe and there are so many people I know who will object to the fact that I don`t think this is true.  So there`s a culture war going on.  Our very lives are at stake.  The enemy is within — it is the left and we`re at war.

So if we`re war, these kinds of things, they don`t matter nearly as much.  We`re in the battlefield.  We have to meet the left on the battle or our children are going to suffer you know, 1,000 years of darkness will ensue.

VELSHI:  And somehow plastic straws made their way into this.  I mean, this is even hard for me to get my head around.  Plastic straws have now been a symbol, have become a symbol for Donald Trump to use as how the left is imposing its will on everybody in 1,000 years of darkness —

MICHELLE GOLDBERG, MSNBC POLITICAL ANALYST:  Right.  And it`s actually a kind of a useful symbol I think of the you know, infantile petulance that the culture war tends to reduce to.  I mean, it reminds me of freedom fries.  It reminds me of rolling coal.  Do you remember those cars that were specially engineered to be extra polluting just to own the libs?

You know, and I understand that people find — people find paper straws annoying.  They don`t like making this very small sacrifice to help the environment.  But again, it`s just it`s so — for people who call their enemies snowflakes, I mean imagine this degree of political umbrage because you have to drink out of a cup like an adult.

I mean, it`s astonishing but I think in some ways it shows the — you know, it shows how little they have left, right?  Because on the one hand these cultural war issues are going to be really effective and firing up their base, but their base has never been a majority of the country.  It`s not even a majority of the states that have disproportionate impact and give us the majority of Electoral College, right?  They need something beyond their base.

VELSHI:  So this is interesting to me because, Ben, at some point, and I get the argument about how and I think we see it on lots of examples around the world about people creating an enemy, concocting an enemy, building that enemy up to rally the troops.  But at some point, there`s going to be an election in a year and a half.

And do the folks who are believing this rhetoric not reckoned with what`s actually happening in their lives and say hey, this is a long culture war we`ll keep on going with this?

HOWE:  No, I don`t think so.  And I think honestly with how divisive things have been for the last few years and with how amped up the opposition even to Donald Trump is, there`s more than enough evidence for anyone who wants to believe there`s a cultural war to go around.

People are able to cast every situation as life and death when they know someone who`s been the — you know, suffer the impact of a social justice mob or somebody on the left you know, with Antifa and all these other things that you watch the news, you see all of these acts of violence, and I think it gets people scared.  And that is what works in these elections and I really think that`s why Donald Trump will probably win.

VELSHI:  Do we — what does one do if one wants to have an election that`s actually based on issues or outcomes or provable things and we`re in this culture war?  I mean, is there some way to get out of it politically and get back to a sensible arrangement?

GOLDBERG:  Well, I think that it has to be focused less on winning over Donald Trump`s base.  I think that they are —

VELSHI:  Where they are.

GOLDBERG:  — not gettable, right.  But I think it has more to do with escaping this prison of minority rule that we`re in, you know, because we have both the counter-majoritarian system of the Electoral College, you also have kind of widespread voter suppression.

But even with all of that, there are ways if people kind of work hard enough, organized hard — organized enough to you know, restore majority rule in this country, right.  And to me, that`s the important thing is that a majority of people voted against Trump, a majority of people have never approved of his presidency and his approval rating while pretty stable is ticking down a little bit.  I can`t imagine that it`s going to grow up.

VELSHI:  But it stayed in a range.

GOLDBERG:  It stays in a range, but it goes down I think when people start feeling the material effects of his incompetence, right.  So it went down pretty noticeably around the time of the government shutdown.  I`m pretty sure it would go down similarly in a recession, and perhaps as people start to see.

Although Americans aren`t super attuned to foreign affairs particularly given the kind of constant circus of this administration, but the you know, the kind of hollowing out of America`s national security apparatus, of its foreign policy apparatus, you`re starting to see all over the world what that looks like.

I mean, there are flashpoints and chaos in every part of the globe and kind of America has just completely receded from its traditional role.  At a certain point whether or not you know, the average American voter is closely following the risk of nuclear war between India and Pakistan or is closely following the state of Hong Kong, at a certain point, I think that people will start to be aware of just the ambient chaos and unrest.

VELSHI:  You don`t think so, Ben?

HOWE:  No.  I mean, I`m sorry, I don`t — what I think is there are a lot of people who are really concerned on left Democrats and so on, very concerned about Donald Trump, very concerned about the GOP.  They`re concerned about school shootings.  All of these problems are real and it`s a problem.

And so there`s an urgency, and it`s a real urgency that they feel.  And that fuels a lot of what happens on the right.  Because when people feel urgent, there is a desperation to them and an anger that can come out and that is often expressed in a way that feels like battle to people on the right.

GOLDBERG:  Right.  I understand.  But the point is that those people in the right are not a majority.  I mean, even with their disproportionate power, they are not a majority.

HOWE:  They — in my experience, the base on the right animates so much of what the rest of the Republican Party follows.  You look back at the alt- right —

GOLDBERG:  Right, but the Republican Party is not the majority.

HOWE:  But when the — when the alt-right first came on the scene, you know, they were following tactics that were not being used necessarily at the time by conservatives.  And a lot of conservatives were calling it out and they were saying don`t do this and don`t do that.  Two, three years later, I`m seeing you know, the head of CPAC acting just like somebody who would have trolled me in 2016.  They adopt these behaviors across the party.

GOLDBERG:  Right, but the majority of the country doesn`t like it.  I mean, that`s why you suddenly see all this reporting about Texas be of all places being in play.  I mean, I understand that the base is solid and the base is committed, but the base is at most what 40 percent of the country.

HOWE:  But when you — when you get down to that middle section who`s going to be more concerned about you know, what`s happening right in front of them, they don`t know all of these nitty-gritty things.

They know that there are no tariffs or — they don`t know there`s no tariffs, but they know that the video games didn`t cost more, the cellphones didn`t cost more on Christmas.  That`s what they know.  They know that they got a tax decrease at some point.  These are the things —

GOLDBERG:  But no, the tax cuts are extremely unpopular.

HOWE:  They`re extremely unpopular among people who know enough about them.

GOLDBERG:  No, among the majority of Americans.

HOWE:  Majority of Americans saw more of their paycheck.  Most people are – –

GOLDBERG:  But they don`t think it.  The majority of — I mean, look at all the polling.

HOWE:  I think the rhetoric from a guy as loud as Donald Trump is easily going to cut through that, easily going to cut through that.

GOLDBERG:  All the polling is that the majority of Americans disprove that —

HOWE:  Yes, but–

VELSHI:  To the polling, to that point, and we`re going to talk about polling a little later in the show.  If that base hasn`t moved, what`s the solution?  Because that base has not moved since 2016.  Even in the 2018 elections which were a relative success for Democrats, that base was unmovable.

GOLDBERG:  Well, I don`t think there`s anything — so that base is unmovable, but again I think the solution to that is to stop letting 40 percent of the country hold the majority of the country hostage.  And the only way you can do that is organize electorally to overcome them.

HOWE:  My issue with that is with polling in specifically.  You`ve got Republicans now who will say, well, I`d be open to a primary of Donald Trump, you know.  So, therefore, Donald Trump is unpopular.  And the same kinds of polls happen in 2015.

But the truth is when you get closer and closer to election day, and the fear is amped up so high, and for the people who are in the middle, ou you`ve got Donald Trump who has a huge — biggest microphone in the world, and apparatus at his disposal, it`s telling everyone that their paychecks are bigger and that the mainstream media has been lying to them about the tax cuts, I see —

GOLDBERG:  Who is everyone?  I mean, the media — the media is not popular in this country but it`s actually never been held in higher regard because of Trump`s opposition to it.

HOWE:  But the point about the polling to me is that it is much easier to say things — you`re saying that the polling is reflecting this and I`m saying —

(CROSSTALK)

HOWE:  — when you`re that far away from the election, it`s very easy to be principled.  As you get closer to Election Day, you start making decisions on a more selfish basis or on a very short-term basis.  And so far, fear has been winning.   It won last time.

GOLDBERG:  It didn`t win.  It didn`t win in — it didn`t win in 2018.

HOWE:  It won in 2016.

GOLDBERG:  Of course, it did.

HOWE:  And in 2018, I would argue it did better than people thought it would.  I don`t think the fact that there were losses in the Republican side is as reflective of the amount of anger that was being directed at Trump.  Given the amount of anger that was directed at Trump and the polls that were negative for him, he should have done worse than he did.  I think fear does work and will continue to work.

VELSHI:  I`m — the bartender says I can`t have another refill so otherwise I would have enjoyed continuing this.  I appreciate it.  This is a good and important conversation that we have to have.  Thanks to both of you for having it.

GOLDBERG:  Thank you.

HOWE: Thank you.

VELSHI:  Michelle Goldberg and Ben Howe.  All right, still to come, as the impeachment tally rises in the House, just how successful is the Democrats unprecedented courtroom strategy?  Congressman Ro Khanna and the Democratic game plan in two minutes.

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VELSHI:  The number of House Democrats supporting an impeachment inquiry of Donald Trump continues to tick off.  The new total is an even 120.  North Carolina Congressman David Price today joined the majority of his party in the House favoring an impeachment inquiry.

House Democrats came into power looking to hold the president accountable but in almost every turn this administration has refused to cooperate.  So Democrats are increasingly using the courts in an unprecedented fashion to try and carry out their oversight responsibilities.

As the New York Times reports today, eight months into their majority, the House is going to court at a tempo never seen before.  Fighting in courtrooms as much as fighting in hearing rooms.  The House has already become a party to nine separate lawsuits this year while also filing briefs for judges in four others.  More lawsuits are being drafted according to a senior aide to Speaker Nancy Pelosi.

The question is when are these courtroom battles going to start yielding results for Democrats?  Here to help me answer that question Congressman Ro Khanna, Democrat of California, and a member of the House Oversight Committee.

Congressman, good to see you in person.  That`s a privilege I haven`t had.  Let`s talk about this.  What does success look like to your constituents, to people who said go in there and hold this administration to account?

REP. RO KHANNA (D-CA):  Well, it means getting the evidence of the wrongdoing.  And here`s the thing.  Usually, these things are settled through accommodation.  You know, when people have a fight with neighbors, you come to a compromise.

Here in the administration has refused to compromise, refused to have an accommodation.  It`s unprecedented, and that`s why we`re having to go to court.  And it`s unfortunate that we having to do so but we have no recourse.

VELSHI:  So to the extent that there are 120 Democrats who are in favor of an impeachment inquiry, that`s more than half of the caucus, you`re not part of that.  You don`t — you don`t come into that 120?

KHANNA:  Well, I support Nadler.  I support the impeachment inquiry.  I haven`t gone on television calling for it because Nadler has a process, and he has a timeline, and I didn`t want to put pressure on him based on that timeline.

He wanted to make sure we filed the court hearing against McGahn.  He did that.  Now we`re in an inquiry and I support him on that.

VELSHI:  Does that mean you could be added to the 120?

KHANNA:  Sure, if they want to.  I mean, I don`t know how they`re counting these things, but I absolutely support him in his — in the decision he`s made.

VELSHI:  So do you have a binary view of going through court or an impeachment inquiry or do you think they should both be happening?

KHANNA:  I think they both are happening.  And let`s look at the Don McGahn case which the Republicans are criticizing us saying why are we putting it in the same court.  Here`s why we`re putting it in the same court.

The underlying evidence of the grand jury testimony, we need that so that we can ask Don McGahn what he previously testified to.  So that`s why we`re getting the evidence and that`s why it`s in the same court that`s also doing the impeachment inquiry that Nadler has conducted.

He`s been very systematic and methodical about this and I think people will be very pleased with what his results are.

VELSHI:  Now, there are some people who say this is not the job of Congress.  We need you to get on with it.  There are some Democrats who are concerned that if the Democrats look too eager on impeachment, something could happen.  It could be a response like there was to Bill Clinton`s impeachment.

There are others who say that you should be single-minded of purpose here.  How do you thread that needle?

KHANNA:  We can do both.  We have a constitutional obligation to do both.  We can hold the president accountable.  We can hold him accountable for his misconduct, but we also have a major agenda.  We`re talking about rural broadband and getting that passed.  We`re talking about an infrastructure bill and getting that passed.  We`re talking about bringing health care to folks who don`t have that and getting that passed.

I think the Democrats are going to campaign ultimately in 2020 on improving people`s lives.  But we can`t just say for politics let`s ignore the wrongdoing.

VELSHI:  So for instance, gun safety, something that has an overwhelming majority of support in this country in both parties.  You guys in the House passed a bill in February.  Mitch McConnell is not doing anything about it.  This is emblematic.  He`s referred to himself as the grim reaper to these bills because things don`t happen.

KHANNA:  Right.

VELSHI:  So when it comes to election time, and you have those constituents who say what did you do for me, how do you say — how do you make the argument that you`ve been working for them despite the fact that some of these lay-up bills aren`t getting done.

KHANNA:  Well, we show them everything that the House has passed.  We passed the universal background checks a few months into Congress.  And Mitch McConnell, look, if you talk to anyone in the Senate, Republican or Democrat, they will say Mitch McConnell is there to do one thing, appoint conservative justices, appoint conservative justices — judges.  That all he cares about.  And he will block everything else for that single pursuit.

And I think the American people will get that, that we are passing bills on infrastructure, on jobs, on broadband, on gun safety, on getting back into the Paris Accords.  We have passed more bills in the last six months about over 200 bills and the Senate is just not passing them.

VELSHI:  What do you think about the presidential election?  Where things stand now and who do you think is going to be — we`re talking in six months, who do you think we`re talking about?

KHANNA:  Well, I`m biased.  I am one of the cultures for Bernie Sanders and I think he`s running a phenomenal campaign.  He`s out in front in New Hampshire, an apologist today.  But I think this race comes down to three people, Bernie Sanders, Elizabeth Warren, and Vice President Biden.

They are consistently in the lead in the early states.  They`ve got a strong showing in South Carolina.  And I think ultimately it`ll be one of those three.

VELSHI:  Ro Khanna, good to see you.  Thank you for joining us.

KHANNA:  Thank you for having me on.

VELSHI:  Congressman Ro Khanna of California.  Coming up next, the stakes of the president weighing in on one of the most tense situations in the world.  His comments on the massive Hong Kong protests and what it does to an already volatile environment after this.

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VELSHI:  For the second day in a row, anti-government protesters shut down one of the world`s busiest airports in Hong Kong.  The situation turned violent late Tuesday night local time when riot police arrived on the scene.  At one point, a group of protesters surrounded a police officer, beating him with his own baton until, watch this, he drew his pistol, and they scattered.

Residents started protesting in Hong Kong back in June objecting to a proposed bill to allow  extraditions to mainland China.  The demonstrations have since evolved into a broader pro-democracy movement with thousands taking to the streets to object to Chinese encroachment on the semi- autonomous region.

Now, for its part, China has been making increasingly threatening gestures toward the protesters, today releasing this propaganda video purporting to show armored troop carriers heading to an area that borders Hong Kong.

And into this extremely tense volatile situation, the president of the United States just weighed in, tweeting out that U.S. intelligence says China is moving troops, and that everyone should be calm and safe.

But of course this is far from the only international crisis he has butted into recently.  Joining me to talk about that is Nayyera Haq, former State Department senior adviser, acting as spokesperson for secretaries Hillary Clinton and John Kerry, and former White House senior director under President Obama.

Nayyera, this is another installment of a world that is starting to become a little unhinged because no one is actually all that worried about what America is going to say or do or what the consequences of this kind of behavior is.

NAYYERA HAQ, FORMER STATE DEPARTMENT SPOKESPERSON:  And that`s the unfortunate part of all of this, right.  Donald Trump doesn`t value words other than just sounding like a bully and sounding tough and strong.  And this is where diplomacy and words really matter.

So when he says something, oh, calm and safe, it projects to the world the U.S. doesn`t care.  At this moment, Hong Kong protesters are waving the American flag. They were singing the American  national anthem because according to Reagan, the United States used to be this shining beacon of light, of freedom, and hope around the world, and that`s the symbolism of America overseas.  We know that`s not the symbolism here anymore.

VELSHI:  I spoke to a protester today who said this is — we`re holding up American values.  And I think that`s a signal that we`re hoping America will do something to help us out as China moves in on us.

HAQ:  And it doesn`t have to be military, right, that`s the false promise that Trump has made that everything has to be might is right.  The power of diplomacy and being that country that has espoused freedom of religion, freedom of the press, to just be an observer, be a participant, be engaged.

Donald Trump has turned American engagement in the world, the idea of America first, to really be America alone.  And it`s just this trend that we`re seeing around the world that people no longer have the right to self-determination, right.  We see it in our culture wars that we talk about here, like who do you think you are.  The idea that you should just put up or shut up, that if you live here, then you have to behave a certain way, that`s at the heart of what`s going on with Hong Kong being integrated into China, and we know also with Kashmir being integrated into India.

VELSHI:  Right, this is a Muslim majority state in India, in which I think for 10 days now the Indians have cracked down on.  There is no Internet.  There is no communication with anybody there.  And the president says he`d happy to negotiate.  He`d  be happy to mediate. 

HAQ:  Now both of those countries are nuclear powers.  And this has been a territory under dispute with a line of control demarcation between the two countries.

VELSHI:  Across which Indian and Pakistani soldiers have stood for decades.

HAQ:  Nearly 72 years that this has been unresolved space.  There is about 35 million people there who have, according to the UN, which was invited in to be a participant and to engage as an observer at least, they were given the right to vote in self-determination.

In recent days, India, barely using any constitutional authority, decided to essentially launch a full-scale occupation in Kashmir.  And the ruling party there, the BJP, has been playing on nationalist religious sentiments, same thing in Pakistan, nationalist religious sentiments.  And we`re seeing echoes of that here in the United States.

The BJP has used the idea that these are people who don`t really want to be part of India, yet they`re taking our resources from us.  So they need to behave a certain way.  And that`s the tone of lack of diversity, lack of inclusion that we`re seeing recede elsewhere in the world as well.

VELSHI:  Part of the issue here is that there should be a role for America, even if you`re a non-interventionist, even if you`re one of the folks who doesn`t think America needs to be the policeman to the world, there is a role for America to play, moralsuasion (ph), influence, financial influence, and we`re losing that.

HAQ:  Right, the idea that people want access to American markets, they want access to American culture, that has always given us a seat at the table.  Donald Trump, though, has made it that the United States is no longer an honest broker of values, you simply have to pay enough money and stay at the Trump Hotel and he will take you seriously.  So it`s the autocrats, the dictators are doing that, the Saudi — the regimes of the world know that they`re doing the pay to play, and it`s no longer about helping people who are oppressed overseas find their voice.

VELSHI:  Nayyera, good to see you.  Thank you for being here.  Nayyera Haq.

All right, just ahead, in the wake of El Paso tonight, there`s no reporting that the Department of Homeland Security is now in a, quote, mad scramble to get a handle on domestic terrorism.  That story is next.

(COMMERCIAL BREAK)

VELSHI:  It was almost two years ago to the day that Neo-Nazis, wielding torches, marched through Charlottesville, Virginia chanting racist and anti-semitic slogans like “blood and soil,” and “you will not replace us.”  The day after that march, a Neo-Nazi drove his car into a crowd of counterprotesters killing a woman named Heather Heyer and injuring dozens of other people.  That happened two years ago.

And despite the sheer terror of that attack and how that killing grew to symbolize what hate looks like in this country, Heather Heyer`s murder is still not included in the FBI`s national hate crimes report.  That omission underscores just how far behind the U.S. government is in dealing with hate crimes and domestic terrorism.

And now The Daily Beast is reporting the Department of Homeland Security, after diverting resources away from domestic terrorism, to focus on things like immigration enforcement, is now scrambling to refocus their efforts on domestic terrorism.

Here with me now, one of the reporters who broke that Daily Beast story, Betsy Woodruff.  Betsy, good to see you again.  This has been something that people have been warning the administration about, including the Department of Homeland Security, for some years.  Since the beginning of the Trump administration, there was some sense they were deliberately turning away from something that intelligence officials said was really a threat in favor of something that they felt was more politically palatable, and that was Islamic terrorism.

BETSY WOODRUFF, JOURNALIST:  And in fact one of the most significant warnings came a decade ago in 2009 when an analyst at DHS wrote an analytic product warning about what he believed to be the rise in right wing — far right white supremacist terrorism.

Instead of being taken seriously, the analysis was leaked.  Congressional Republicans were  outraged.  Veterans groups said that this analytic product was going after the troops, because it said that these far right troops were trying to recruit soldiers coming back from deployments overseas.  And the then DHS Secretary Janet Napolitano actually apologized for portions of that report.

And what I`m told by DHS sources, is that that moment was really significant, because it sent a message to people in the Department of Homeland Security that if you want to do work combating far right and white supremacist terrorism, you`re taking your career in your hands, and you might lose your  job.  That had a years` long chilling effect.  And then combining that with the fact that this White House saw domestic terrorism as a very, very low priority, if a priority at all, for quite some time.

We had DHS just not responding to domestic terrorism with a level of seriousness that advocates were demanding.

VELSHI:  And that`s not just sort of a political statement, right?  One can say look, Betsy, you got to take this seriously, this domestic terrorism thing.  This is an infrastructure, it`s the way things are funded, it`s the departments that money goes to, it`s the number of people assigned to investigate  particular things; or when you hear of a new incident — in fact, there is a Daily Beast report today  about a man arrested for threatening a massacre in Ohio, I believe.  He had 10,000 rounds of ammo on  him.

If you are not attuned to what you`re looking for, you don`t actually have the staffing and  the resources to go in a particular direction.

WOODRUFF:  Under this administration, a group of analysts in DHS`s internal intelligence office that focused on domestic terrorism were disbanded.  Many of them were sent out to the field.  That`s something that DHS sources told me was gravely concerning.

In addition, DHS has focused overwhelmingly at the very explicit, very repeated direction of the White House on immigration and border security.

So any spare resource, any spare person, any spare money is getting shipped to the border.  In fact, officials from the agency in DHS that focus on elections security and on protecting vital infrastructure, which by the way includes places of worship and schools, officials from that agency were among the officials who were uprooted and shipped to the border as part of the immigration surge.

And when you move around resources like that, of course it`s going to have an impact, of course it`s going to have an impact on the capability of the department.

VELSHI:  Betsy, good see you.  Thank you, my friend, for joining me.  Betsy Woodruff of The Daily Beast.

Coming up next, the Trump administration is now trying to sell its restrictions on legal immigration with a suggestion that we need to re- imagine what the Statue of Liberty symbolizes.  We`ll explain after this.

(COMMERCIAL BREAK)

VELSHI:   Today was one of those days where you started to wonder how long will it be before the official position of the Trump administration is that we need  to change the poem at the base of the Statue of Liberty.  Its the poem that is engraved on a bronze plaque inside the pedestal of the Statue of Liberty welcoming immigrants.  It is arguably one of the most well-known poems in American history.  Part of it reads, quote, “give me your tired, your poor, your huddled masses yearning to breathe free.”  Those are words that have been cited by Americans for a 100 years, from the time their school children representing the American ideal.  And yet that`s a poem that has been a source of contention for the Trump administration as its policies become more and more antithetical to that idea.

We first saw this in a bizarre press conference with Trump senior adviser Stephen Miller two years ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The Statue of Liberty says give me your tired, your poor, your huddled masses yearning to breathe free, it doesn`t say anything about speaking English or being able  to be a computer programmer.  Aren`t you trying to change what it means to be an immigrant coming into this country?

STEPHEN MILLER, WHITE HOUSE ADVISER:  I don`t want to get off into a whole thing about history here, but the Statue of Liberty is a symbol of liberty and light in the world, it`s a symbol of American liberty lighting the world.  The poem that you`re referring to was added later is not part  of the original Statue of Liberty.

In 1970, when we let in 300,000 a people was that violating or not violating the Statue of Liberty law of the land?  In the 1990s, when it was half a million, was it violating or not violating the Statue of Liberty law of the land.

Tell me what years meet Jim Acosta`s definition of the Statue of Liberty poem law of the land?

(END VIDEO CLIP)

VELSHI:  Two years later, the poem still seems to be a source of trouble for the Trump administration.

(BEGIN VIDEO CLIP)

JIM ACOSTA, JOURNALIST:  Is that sentiment, give us your tire, your poor still operative in the United States, or should those words come down, should the plaque come down on the Statue of Liberty?

KENNETH CUCCINELLI, U.S. CITIZENSHIP AND IMMIGRATION SE RVICES ACTING DIRECTOR:  Well, I`m certainly not prepared to take anything down off the Statue of Liberty.

(END VIDEO CLIP)

VELSHI:  So, that was the acting director of U.S. Citizenship and Immigration Services, Ken Cuccinelli, yesterday, not ready to answer for the policy that he was announcing, which would turn the screws on legal immigrants being in direct contradiction with the poem at the base of the Statue of Liberty.

Well, today he went on National Public Radio and was clearly more prepared not to defend the  policy, but to change the poem.

(BEGIN AUDIO CLIP)

RACHEL MARTIN, NPR:  Would you also agree that Emma Lazarus` words etched on the Statue of Liberty, “give me your tired, your poor” are also part of the American ethos?

CUCCINELLI:  They certainly are.  Give me your tired and your poor who can stand on their own two feet and who will not become a public charge.  That plaque was put on the Statue of Liberty at almost the same time as the first public charge law was passed, very interesting timing.

(END AUDIO CLIP)

VELSHI:  Now, we`re not sure who wrote that version of the poem for Ken Cuccinelli, but it sure seems Stephen Miller`s version of American history is making its way around the White House.  And the Stephen Miller vision for America sure is making its way into U.S. policy.

(COMMERCIAL BREAK)

VELSHI:  If the presidential election were held today, according to brand new state-by-state polling of Trump`s job approval, he could lose the election by 300 electoral votes.  That`s a calculation from New York magazine extrapolating from the latest data of the online polling group Civics.  419 electoral votes to the Democrats, still to be determined, 119 electoral votes to the Republican, Donald Trump.

For more on that and the 2020 race, I`m joined by Sean Trende, senior elections analyst at RealClearPolitics; and  Ariel Edwards-Levy, reporter and polling editor at HuffPost.  Welcome to both of you.  Thank you for being with us.

Sean, first of all, just interpret that for me.  That is a poll about Donald Trump`s approval rating extrapolated into if more people in the state don`t like Donald Trump than do, he may not win  that state`s electoral college votes.  They piled that altogether and came out with that result.  As a pollster, what do you think?

SEAN TRENDE, REALCLEARPOLITICS:  You know, I think it`s a useful kind of rule of thumb where things stand.  I think we all know the president`s job approval is not strong and that that`s going to translate to a difficult election for him.

The problem is when we actually get to the election, it`s not going to be just any Democrat who`s running against him, it`s going to be D democrat with real policies, some of which will be popular, some of which will be less so.  That`s going to shape the direction of the 2020 election.

VELSHI:  So that`s an important point, Ariel, that a president, or Donald Trump, can be underwater in terms of popularity, or more people can think he`s unpopular than popular, but it`s kind of relative to who he`s running against.

ARIEL EDWARDS-LEVY, POLLING EDITOR, HUFFPOST:  Yeah.  And I think we saw that very clearly in 2016 when you saw two candidates who were unpopular and voters who were having to make the choice sometimes for the lesser of two evils. And, you know, I think there`s a constitutional requirement that somebody points this out when we`re talking about 2020, but the polls just aren`t predictive yet, because we don`t know who the candidate is and there is so much that`s still left to happen in this campaign.

VELSHI:  Sean, there is a poll from RealClearPolitics — a national poll — that talks about Donald Trump`s approval ratings, and insofar as these numbers indicate, they`re in line with the polling that New York magazine used.  43 percent approve, 53 percent disapprove.  There`s not a ton of movement in these numbers.

TRENDE:  No, the president`s job approval is remarkably consistent over the last almost year at this point, somewhere between 42 percent, 41 percent on the low end, sometimes it gets up to 45 percent.

Look, if it stays in that band, he`s going to have a very, very difficult time winning re-election, there`s no doubt about that.

VELSHI:  There are some places, though, Ariel, that you wouldn`t think a Republican president would have a tough time winning re-election, but Texas continues to come up as a topic, a state, that is in play.  Politico writes — quoting from Will Hurd — “if the Republican Party in Texas doesn`t start looking like Texas, there won`t be a Republican Party in Texas, said retiring Congressman Will Hurd.  Last cycle was, quote, without a doubt a wakeup call to most elected officials.  Texas is indeed purple.”

Demographic change is leading a lot of that.  That`s not just Donald Trump`s unpopularity. 

EDWARDS-LEVY:   Yeah.  And I mean I think Texas is one of those states that`s so heavily symbolic that there`s always a lot of attention to whether this is going to be the cycle that it finally flips.

But the fact that we`re talking about that does mean something.  And, you know, demographics always sort of tend to lag at the ballot box behind what`s actually happening in the states, but we`ll see whether that can actually catch up this time around.

VELSHI:  Sean, there`s — the Democrats have put in polling and fund- raising goals to ensure they don`t have 25 people on a stage at the next debate.  About nine people, I think, have qualified so far.  In terms of the fund-raising part of it, the number of individual donors, and that means they can give any amount of money, Tom Steyer has qualified on that front.   He still needs one more poll in which he`s above 2 percent in order to qualify.  And that has led to a lot of criticism that these DNC rules about the number of donors are out of step with polling and allow a guy as rich as Tom Steyer to some extent to buy his way, Steve Bullock said to buy his way onto the debate stage.

TRENDE:  Well, I can understand how someone like Governor Bullock or Senator Gillibrand or some of these candidates who have been in and are struggling to make the stage could be frustrated.

But look, Steyer – the only way he is going to make that stage is if he convinces 130,000 people to give him a dollar, and if he gets some level of support in the polls.  That`s what these cutoffs are meant to do, it`s meant to assure that this late in the game there`s at least some level of support for the candidates.

I think when we get to November, Steyer is going to have a much tougher time making that cutoff.

VELSHI:  And Ariel, I mean, the Democratic Party can fix it if the rules look too lenient by increasing the polling requirement, but is there some argument to be made for the unintended consequence of talking about the number of donors resulting in candidates spending far more than a dollar to get a dollar from a donor?

EDWARDS-LEVY:  Yeah, you certainly have created a set of incentives where that`s what candidates are going to focus on if those are the requirements.

And look, I don`t know that there`s any particular perfect way to make the cutoff, but eventually this field will have to start winnowing down and voters are going to have to start focusing on, you know, a couple of realistic options.

VELSHI:  Sean, let`s talk about white nationalism and the role that that is going to play.  I think people who worry that it`s a threat have thought it`s a threat for a long time, but now it`s quite possible that this becomes central to the election.

A recent HuffPost/YouGov poll asked is white nationalism a threat to the United States?  56 said yes.  Do you think President Trump supports white nationalism, 44 percent said yes versus 24 percent who say he opposes it.

How does Donald Trump deal with this?

TRENDE:  Well, I think Donald Trump is just Donald Trump and he does what he thinks.  I don`t know that there`s any way he particularly deals with it.  It`s a blemish on his administration, it`s a blemish on his record. 

What his strategy probably is, is to try to scare people about the Democrats and hope that the economy doesn`t go into recession.

VELSHI:  Guys, thanks both for joining us.  Sean Trende and Ariel Edwards- Levy, thank you both.

That`s ALL IN for this evening.  I will be back here with you tomorrow evening, and at 1:00 in the afternoon with Stephanie Ruhle and then again at 3:00.

But right now, it is time for “THE RACHEL MADDOW SHOW” and it starts right now. 

Good evening, Rachel.

  THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END