updated 3/13/2006 11:02:29 AM ET 2006-03-13T16:02:29

Guests: Ken Mehlman, Chuck Todd, Haley Barbour, Roger Simon, Howard Fineman

CHRIS MATTHEWS, MSNBC ANCHOR:  Tonight from Memphis, John McCain will ask delegates to the big Republican get-together here to write in the name of George W. Bush in tomorrow‘s straw vote for president.  With a new poll with even worse numbers, Republicans here are circling the wagons around the White House.  Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews.  Welcome to the kickoff of HARDBALL‘S decision 2008 election coverage, picking the next president. 

Tonight, the historic Peabody Hotel has been transformed into headquarters for the biggest political event in the country, the Southern Republican Leadership Conference, the first showdown of the 2008 presidential wannabes.  The candidates are here, and reporters from around the country are here.  Top GOP leaders from 26 key states are here.  It all starts now.

But today a bombshell was dropped on this party.  A new AP poll has devastating numbers for President Bush.  Only 37 percent approve of the job he‘s doing versus 60 percent who disagree.

In light of those numbers, Senator John McCain will ask delegates tonight to write in the name of George W. Bush in tomorrow night‘s straw poll.  In a way, it‘s the ultimate reality show here.  But the stakes couldn‘t be higher.

Who will stand out and win the straw vote tomorrow night?  And who will be picked?  Who will you pick in HARDBALL‘S online poll?  Who do you want to be the next president? 

We begin tonight with HARDBALL correspondent David Shuster. 

Well, a lot of strange things tonight.  First of all, the lousy poll numbers, down to 37 percent, the lowest ever for the president, in the Associated Press Poll. 

And now we have John McCain, not always the president‘s best buddy, saying throw all votes—you might be thinking of voting for me for the president we have now. 

DAVID SHUSTER, HARDBALL CORRESPONDENT:  Oh what is so interesting, Chris, is John McCain tonight is actually speaking to state delegations, trying to convince the state delegations that he should be the next leader of the Republican Party, but he doesn‘t wants even sort of numerical judgment about whether he is the leader of the Republican Party. 

So what you have is John McCain in his speech tonight, and again, he‘s the main speaker as far as these possible presidential candidates.  He is  going to say look, there are some bigger things to worry about than straw polls, and if you‘re thinking of voting for me, please don‘t, just write in the name President George W. Bush. 

In any case, it‘s fascinating political drama.  And all of this of course at what has become the biggest political event for Republicans this year.  In part because this used to be a conference comprised just of the southern states. 

They added the midwestern states, and as a result you have more than 1,800 party activists, organizers, party chairs, the type of people that each one of these possible presidential candidates would do die to have helping them win their next presidential campaign. 

This is all put together by a local lawyer from Memphis, John Ryder. 

Here‘s how he described the event. 

(BEGIN VIDEO CLIP)     

UNIDENTIFIED MALE:  I mean, this year is the premiere opportunity for party activists, county chairmen, state committee members, grassroots activists from all over the country to hear the potential candidates for 2008, back to back, side by side, make comparisons and make choices. 

(END VIDEO CLIP)     

SHUSTER:  This is also an opportunity for people to exchange political trinkets, whether it is buttons or bumper stickers or all sorts of other paraphernalia.  And what is so interesting, Chris, is we find actually more items that were against Hillary Rodham Clinton than were for any one of these candidates tonight. 

MATTHEWS:  So I was going to ask you, now you have answered my question.  Is the issue here more finding a comfort level with someone like Bill Frist, who is going to be on in a minute, or George Allen, the up and comer, or even John McCain, who is kind of been a maverick here?  It‘s all about fear, Hillary is coming. 

SHUSTER:  Yes, I mean, there were bumper stickers downstairs that said happiest is Hillary Clinton‘s face on a milk carton, and those were selling out. 

I mean, you‘ve got more of the sort of anti-Hillary bumper stickers that are selling out than George Allen buttons.  And George Allen buttons are the number on selling button, so there‘s a lot of fear, and there is also a lot of eagerness among this crowd to listen to these possible presidential candidates and try to report back to the state just to which one of these candidates seem to be doing the best job. 

MATTHEWS:  I think they are obsessed with Hillary. 

Anyway, thank you, David Shuster. 

Today I spoke with one of the 2008 contenders, a real contender perhaps, the hometown favorite here in Memphis, Tennessee, Senate Majority Leader Bill Frist of Tennessee. 

(BEGIN VIDEOTAPE)

MATTHEWS:  Senator Frist, are you hoping you can win this straw vote down here in Memphis this weekend? 

SEN. BILL FRIST ®, TENNESSEE:  You know, Chris, I‘m going to look at the results and look at them closely, but really what is great about it is the excitement that is being caused here.  The fact that we are even having a straw poll, I think is a lot of fun.  We have got our activists out, working hard, working all the delegates that are here.  It‘s fun. 

MATTHEWS:  Well, back in ‘98, George Bush won down here, the current president, and that launched him on his way to the White House.  Do you think it might do that to the person who wins here? 

FRIST:  You know, Chris, I don‘t know.  I think this is one of the first times we‘ve had a lot of people coming in.  It is a regional conference, midwestern and southern.  Here we have got people from 26 states, almost 2,000 people or more than 2,000 people. 

What a lot of the focus is going to be on is capturing the ideas, the Republican philosophy of lowering taxes, fiscal responsibility, taking those, capturing the activists themselves, capturing that energy, then going towards these 2006 elections first. 

MATTHEWS:  Let me ask you about Senator John McCain‘s move.  He‘s going to move tonight to ask the delegates not to vote for him if they‘re thinking of doing so but voting for George W. Bush as a symbolic support for the president. 

FRIST:  Yes, well, I think that‘s interesting.  I hadn‘t heard that, but I think it shows the importance of all of us Republicans sticking with those basic principles of President Bush, lower taxes, voting for lower taxes, fiscal responsibility, individual accountability.  So I think that‘s a nice idea. 

I think our activists are going to sort of react in different ways.  A lot of them like to get in and compete.  But I think rallying around the president is not a bad idea. 

MATTHEWS:  Do you think that John McCain may be trying to cut his losses, if he‘s expecting to lose to you? 

FRIST:  Oh, no.  Listen, I don‘t think so. 

MATTHEWS:  You don‘t think there‘s a game here possibly? 

FRIST:  No.  Well, you know, when you said that, because I didn‘t know about it, you think of this sort of music city miracle that we had about five or six years ago in Tennessee, welcomed everybody to Tennessee, where you kind of take a football and you throw it to the side.  So that may be what‘s happening. 

But still it‘s a lot of fun.  The excitement is there.  Everyone has got those ideas.  We‘re putting them forward, a lot of debate, a lot of listening. 

MATTHEWS:  You know who is not having fun these days is the president of the United States.  His numbers are way down again in the Associated Press Poll, down to the lowest ever.  If you look at a trend back to 9-11, he‘s been downhill now for four years.  When is it going to end?  When is he going to stop going down in the polls? 

FRIST:  You know, I don‘t know when.  As you know, in politics—you know better than anybody—the polls are just a snapshot in time, and we‘re out there almost in a movie, every day and every day changes. 

I know the president is handling it well.  He‘s governing with meaningful solutions.  He‘s staying on the issues, whether it‘s pro-growth, whether it is on taxes, fighting the war in Iraq, winning the war on terror.  And ultimately I think that policy will determine the politics, which will determine the ultimate goals to watch in November. 

MATTHEWS:  You use those generalized terms, but in fact there‘s a number of iconic events recently.  Certainly Iraq is a big iconic reality out there, what people feel about it, the continued casualties, the uncertain future of that country.  Katrina and the way the federal government handled it or mishandled it.  This whole issue of the ports. 

There hasn‘t been a bright light for the president in a long time, has there? 

FRIST:  Chris, I think you‘re right.  It is tough.  Nine-11, recession initially, Katrina, homeland security, the Dubai Ports, the other day, it‘s just been one thing after another, but then you look at the job report numbers recently, another quarter of a million jobs created in the last month. 

Right now, ownership at all-time high.  Minority home ownership up.  The economy growing, strong, five million jobs created since 9-11.  That is the backdrop that economic security is something people care about.  This president is strong in fighting the war on terror, in making our homeland safe and he has a pro-growth jobs creating economy.

MATTHEWS:  Well, you made a good case that doesn‘t often get made, how good the economy is compared to how it was.  But if it‘s doing well, that‘s usually the way people feel about their own situations.  Why are they saying they are not impressed with the president‘s job performance if the economy is as good as you say it is? 

FRIST:  Well, I think people are—they want to secure America‘s security in terms of their safety and their homeland security.  And I think that‘s what played out in the Dubai Port deal in the last several days.

They want to talk about securing their own health.  They feel very insecure in health because of rising health care costs.  Those are the sort of the issues that we‘re going to be dealing with today, how we lower those health care costs, so that security is actually felt in that larger environment of job creation, lower taxes, pro-growth policy put forth by this president. 

MATTHEWS:  Speaking of health care, I want to ask you about Hillary Clinton.  She‘s leading in all the polls of Democrats.  Is she someone that the Republicans have their eye on as the probable opponent? 

FRIST:  Yes.  I think there is no question.  You talk to all of these hundreds and thousands of people who are here and everybody gravitates towards what Hillary Clinton has represented, health care costs, I just mentioned. 

We know that we need to lower our health care costs by giving individuals a health care plan that they can own and take with them.  It‘s a huge contrast to the Hillary care that we saw put on the table about 10 years.  That contrast is playing out in all of the activists discussions that are going on.

MATTHEWS:  Have you ever looked at a map of the United States and figured what states you‘d beat Hillary in? 

FRIST:  No.  No. 

MATTHEWS:  Bless your heart.  You‘ve never looked at a map. 

FRIST:  I promise.  It‘s great to be here in Tennessee, welcoming 2,000 people here including 26 states, so right now I‘m concentrating on those 26 states. 

MATTHEWS:  These states are very important.  The Republican Party is increasingly centered in the south in its intellectual strength.  The Democratic Party only wins when they have got a southerner on the ticket.  Why do you think the south is so dominant now in American politics after years of being weak end of the Democratic Party? 

FRIST:  Chris, I think in part—and I don‘t think all elections are run on either economic issues or values issues, but I think the south is very much in touch with mainstream America, people who do care about individual security in terms of health, in terms of education, in terms of economic security, securing America‘s prosperity.

And I think those values are reflected by those 2,000 people who are here today.

MATTHEWS:  So as goes Tennessee and Memphis, so goes the union?

FRIST:  Well, we will have to wait and see.

MATTHEWS:  As opposed to Massachusetts and Vermont, you mean?  Are you willing to say that this part of the country is more representative than Massachusetts and Vermont, the home of a Democratic Chairman Howard Dean? 

FRIST:  I think absolutely.  I think right now if you get the contrast between Howard Dean and the Republican party, we know where we stand, we know what we believe, we know where we‘re going.  And Howard Dean and their party represents the party of no.  This whole culture of criticism and running on platforms of pessimism is not where Tennessee is or Mississippi or Georgia or Texas or most of America. 

MATTHEWS:  Do you think the president, between now and the election, needs to shake up his administration for the Republicans to have a good chance?  In other words, maybe a new chief of staff, maybe some new political people in the White House, better executive response to situations than they‘ve been doing with Katrina, with Harriet Miers, with the shooting incident even.  Well, whatever your view.  I‘m asking for it? 

FRIST:  Yes, you know, I have so much confidence in this president.  It may be because of my relationship and watching him operate.  In terms of, yes, moral vision, but in terms of boldness.  He knows exactly where he‘s going, he knows exactly what he believes.  And it‘s that principle of leadership—regardless of who your chief of staff is or your political adviser is, it ultimately is important and it‘s also what attracts America at those final polls whenever they‘re to be taken. 

MATTHEWS:  Well, he‘s won twice, are you going to win? 

FRIST:  Well, I‘m not running for anything, Chris.  I‘m governing.

(CROSSTALK)

MATTHEWS:  You‘re on vacation with your family.  Thank you very much, Senator Bill Frist, Republican leader of the Senate.  Thank you, sir.

FRIST:  It‘s good to be with you, Chris.

MATTHEWS:  Thank you.

We‘ll be right back from Memphis in just a moment, with the chairman of the Republican National Committee, Ken Mehlman.  He‘s the guy duking it out with Hillary these days.

And a reminder, our coverage of the Southern Republican Leadership Conference is live all weekend on our Web site, MSNBC.com.  Watch my interviews with the party‘s biggest players.  Plus, check out speeches by the top contenders online.  It‘s all on our Web site, hardball.MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, live from the Republican Leadership Conference in Memphis.  The state of the GOP, according to RNC Chairman Ken Mehlman, when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back from the Peabody Hotel in downtown Memphis, Tennessee, where the top Republicans—including the man you see here, John McCain—have gathered as they take the first step forward picking the next president.  McCain arrived just a moment ago. 

We‘re going to look right now at a man who‘s been duking it out with Hillary Clinton now for weeks, the Republican Party Chairman Ken Mehlman.  Here he is. 

(BEGIN VIDEOTAPE)

KEN MEHLMAN, RNC CHAIRMAN:  Thanks for being here. 

MATTHEWS:  You and Hillary are duking it out!  I mean, this election is two and a half years off, and you‘re out there hitting her, and she‘s hitting back. 

MEHLMAN:  Well, I can tell you right now that I have no plans to run for the nomination in 2008. 

MATTHEWS:  Well, she thinks you‘re her number one competitor.  She—you say she‘s angry; she says I‘m not angry.  Somebody says she‘s brittle; she says I‘m not brittle.  I‘m sure you‘re going to call her a liberal and she‘s going to say I‘m not liberal.  What‘s the game plan?  Why are you drawing into this place so early?

MEHLMAN:  Well, I was asked a question about what I thought about her as a candidate.  I said, which I believe, that she is very formidable, that whoever the Democrats nominate goes in with Kerry‘s level of support.  The two most important things, I think, to a candidate running for office are their record and their temperament. 

And I think somebody that runs for office, having voted consistently against tax relief, voting against Alito and vote against Roberts—and then would use Martin Luther King Day, a day when we celebrate the great reconciler, to divide Americans along race—I don‘t think most Americans think that‘s what you should do on Martin Luther King Day.  I think it revealed a level of anger that is going to be a challenge for her, as it‘s been for Republicans and Democrats in the past when they‘ve responded in ways like that.

MATTHEWS:  So you‘re talking about her comment that the House of Representatives, which is Republican-run, is a plantation? 

MEHLMAN:  Yes. 

MATTHEWS:  And that was a racist—racial card.

MEHLMAN:  Well, I thought it was just so surprising when—Martin Luther King Day, it‘s one of the great days we can all come together.  One of the great things about America is that heroes like Martin Luther King, like FDR, like Ronald Reagan, lions of the 21st century, we all come together behind. 

We don‘t say “I agree with this person on this or that person on that.”  And so instead of using that day as a way to say let‘s about what unites us, she used to divide us along racial lines.  I thought that was very wrong. 

MATTHEWS:  See, I think you‘re very smart, Ken.

MEHLMAN:  You‘re very kind.

MATTHEWS:  Kenny Boy.  I think you know what you‘re doing, and I think what you‘re doing is drawing her out as a candidate way ahead of her schedule.  And getting her into a petty argument whether she‘s angry or not, it makes her small.  It also puts Bill in play, because the more you talk about Hillary as an actual candidate, then her husband becomes part—it‘s fair game. 

MEHLMAN:  Well, look, I think that...

MATTHEWS:  Don‘t you want Bill Clinton to be fair game in this election early on, as well as her? 

MEHLMAN:  I think that my reaction was like most Americans who watched somebody, a politician, who would divide Americans along racial lines on the day that we all should be celebrating someone who brought America together across racial barriers. 

MATTHEWS:  If Hillary Clinton runs for president, do you think Bill Clinton will be a likely target of your party.  Hit him as well? 

MEHLMAN:  I think that whoever is on the ballot, we‘re going to talk about the issues, we‘re going to talk about where they stand on the issues.  I‘ve always tried to think—and focus on politics about attacking problems, not attacking people. 

MATTHEWS:  You‘re the one who said she‘s angry, you say she‘s brittle. 

Those are personal comments. 

MEHLMAN:  Those are comments about comments she made on important issues that I think reflected a level of anger. 

MATTHEWS:  Yes, but you‘re going after her character.  You‘re saying that she‘s angry.  That‘s a way to stir her up.  That‘s rattling her chain.  Come on, you know what you‘re doing. 

MEHLMAN:  Well, no, what I‘m doing is what I think most Americans saw, and I thought it was inappropriate.

MATTHEWS:  Let me ask you about the president of the United States.  I am still amazed that he‘s not popular, personally.  I think he‘s fine personally.  When you‘re with him, he‘s a charming guy.  His numbers are way down, not just for approval but personal favorability.  Why do you think the personal favorability has gone down? 

MEHLMAN:  Again, look, polls go up, polls go down.  Sometimes when a poll number‘s...

(CROSSTALK) 

MATTHEWS:  But isn‘t it relentlessly heading down over the last three years?

MEHLMAN:  I think when the personal favorability—I‘ve seen it up, I‘ve seen it down.  Here‘s the bottom line.  Our country faces tremendous challenges today.  Reminds me of a time you wrote about in one of your books, and that is the late 1940‘s. 

We face new challenges today.  The war on terror is not something we‘re experienced in dealing with.  The global economy is not something we‘ve dealt with the way we‘re dealing with it now, and it requires Washington to change and reform.  This president has put forward very bold policies to do that. 

But nevertheless, in periods of great change, like Harry Truman faced, you have anxiety.  And I think that that‘s one the reasons you see the public saying, you know, I agree on these issues, but I‘m still anxious. 

MATTHEWS:  Let me ask you about your party as you begin to shape up for the next election for president.  Is a concrete factor you‘re looking for in a candidate—I was talking David Vitter, the senator for Louisiana, and he was talking about the need to get somebody who‘s a conservative that everybody feels like is one of them, but also someone who‘s reform conscious, like McCain, who will solve some of the problems like Enron, you know, this—what‘s his name? -- Jack Abramoff thing.  This whole problem of sleaze.  Can you find such a person who is both a conservative and a reformer? 

MEHLMAN:  Well, I‘ll tell you this.  My job is to be the referee.  I‘m not going to comment on the quality of the teams that are playing. 

MATTHEWS:  But what about what you are looking for, the standards? 

MEHLMAN:  I think that what I want is someone doing what this president is doing, and that is changing government, reforming government, using conservative principles to deal with the new challenges we face. 

Nine-eleven changed the world.  I think it‘s going to go down in history as every bit as significant as December 7, 1941.  That day, December 7 showed us that our false illusions, the two oceans, didn‘t protect us.  FDR stepped in and said I have got a plan. 

The president does too because 9-11 showed us that waiting until the terrorists strike wasn‘t going to keep us safe in the future. 

MATTHEWS:  Karl Rove, who is the president‘s deputy chief of staff and his political adviser, has said there‘s a pre-9-11 thinking among Democrats.  They don‘t get what you just said.  Is that what you believe?  Democrats don‘t get the world you described. 

MEHLMAN:  I think Joe Lieberman does.  I think a lot of the Democratic leaders don‘t.  Let me give you some examples they don‘t.  Why else would Harry Reid brag politically we killed the Patriot Act? 

MATTHEWS:  Well, it‘s not dead. 

MEHLMAN:  Well, it‘s revived, no thanks to him... 

MATTHEWS:  Right.

MEHLMAN:  ...who voted against it, by the way, the second time.  Why would folks knowing the lessons of the last 20 years, knowing how the terrorists saw us leaving Beirut, knowing how they saw when we left Mogadishu, knowing how they saw that our weakness encouraged in some way more terrorist attacks—why would people then say we should cut and run in the central front in the war on terror on Iraq? 

That would encourage more jihadists.  That‘s would make us less safe. 

I think that‘s a pre-9-11 world view. 

MATTHEWS:  Do you think it was smart for us to go into Iraq? 

MEHLMAN:  I do. 

MATTHEWS:  Why?

MEHLMAN:  I think it was smart because the lesson of 9-11 is in a world where 19 people can kill 3,000 with nothing but box cutters, you can‘t let threats grow and gather.  The whole world thought he had weapons of mass destruction.  And if he had had weapons of mass destruction, we know it was right to remove them, but would we be safer if we waited? 

In a world where the nexus between terrorist organizations and dictatorial regimes is so dangerous, it was the smart and the safe thing to do after 9-11 to remove him from power, which keeps all of us safer and makes all of us safer.  Does it mean it is hard?  Absolutely.  Is it a challenging war?  It is, but we‘re safer because we did it. 

MATTHEWS:  Why do you think a majority of the people now think it was a mistake to go into Iraq? 

MEHLMAN:  The war is hard.  I think that just as during the Korean War, people had doubts and people had concerns.  It was a new war.  It was a new challenge.  They weren‘t sure it was the right way.  People are always going to be like that when you face the challenges you do. 

We have also got to do a better job of reminding people of the connection, and it‘s so interesting, our friends on the other side - it‘s another example of the pre-9-11 world view—they say 9-11 wasn‘t connected to Saddam Hussein. 

But the point is 9-11 taught us that we can‘t wait.  We can‘t just respond to the connections.  We have got to avoid the next one. 

MATTHEWS:  But the interesting thing is you‘re making a big case in the difference between Republicans and Democrats and how they approach the situation in the world.  Hillary Clinton has been supporting the president‘s war effort.  Does that make her immune to this kind of division, an attack by you guys? 

MEHLMAN:  Well, I think that her overall record is going to be important.  I think whoever the Democrats nominate in 2008, what they did on the war in Iraq, what they did on the Patriot Act, how they stood on the need for the National Security Administration to intercept terrorists before they hit us, all of those are important issues that the voters are going to look to. 

MATTHEWS:  Do you think they might put together a bipartisan ticket next time and put Lieberman on it? 

MEHLMAN:  Again, I‘m not going to predict that. 

MATTHEWS:  Hillary Clinton, she‘s a woman.  Maybe could be the first woman president.  She‘s the wife of Bill Clinton and she is perceived to be a liberal.  What‘s her biggest weakness? 

MEHLMAN:  I said it before, I think that the weakness she has going forward are one, the record, out of the mainstream record on taxes, out of the mainstream record on the judge‘s votes, talked about the need to reduce the number of abortions but 100 percent NARAL rating, National Abortion Rights Action League.

I also think again the typical American who looks to see what kind of person this is it isn‘t going necessarily to want to vote for somebody whose response on Martin Luther King Day is to divide Americans along racial lines. 

MATTHEWS:  I got to ask you a news question.  What happened to Gale Norton since she resigned? 

MEHLMAN:  I don‘t know.  I know that she has served a long time. 

She‘s a very effective lawyer, was the attorney general of Colorado. 

MATTHEWS:  No issues differences with the president? 

MEHLMAN:  My sense is she probably having spent six years in a very hard job wants to go home with her family and have a continuing good career. 

MATTHEWS:  You‘re doing a great job, Kenny boy. 

MEHLMAN:  Thank you.  Thanks a lot. 

(END VIDEOTAPE)       

MATTHEWS:  When we return, what‘s at stake here this weekend in Memphis and where‘s Rudy?  The former New York mayor consistently polls at the very top of the Republican pack.  Can he win down here?

And later Mississippi Governor Haley Barbour.  Our live coverage from Memphis continues after this. 

And tomorrow night, the results of the big straw poll.  Tomorrow night we‘ll be live on MSNBC and MSNBC.com.  That‘s tomorrow night at 9:00 Eastern with the big results of the first test of Republican thinking for 2008. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back now with Chuck Todd, who is editor and chief of “The Hotline.”  You‘re having this straw vote tomorrow night here in Memphis.  What‘s the importance?

CHUCK TODD, “THE HOTLINE”:  I think it‘s going to tell us a little bit about where are the GOP, what I call the grassroots elites.  These are the people—they are the ones that do a lot of the grunt work in the states, that‘s going to tell us where they want to go, who they want to work for, who they want to go door to door for, so it will tell us a little bit about which one of these guys excites them about 2008. 

MATTHEWS:  Suppose it goes like this.  Frist gets 35 percent.  Allen gets about 30.  Huckabee and the other guys get 10 each.  What does that tell you? 

TODD:  I think that tells you that George Allen is going to be a strong contender because Allen—it would show that Allen was able to—you know, this isn‘t his home state.  He didn‘t have as big of a home state contingent as say a Frist or a Huckabee or something like that. 

MATTHEWS:  So page seven of “The Washington Post” Sunday morning is Allen runs strong in poll? 

TODD:  I think that‘s right.  I think that‘s exactly how it will be played, and more importantly, donors would see that.  And that‘s really who the results matter to.  It matters to that donor.  Whose stock should I buy? 

Donors sitting out there—those rangers and pioneers, they look at this stuff as sort of the way a Merrill Lynch analyst is looking at earnings or potential earnings of Google, and they‘re saying oh, you know what, I‘m going to buy that stock. 

MATTHEWS:  What did you make of John McCain‘s gambit?  Tonight he is going to endorse a write-in for President Bush over all the other candidates.

TODD:  It is interesting gambit.  For one, it gives him an out if he doesn‘t do well.

MATTHEWS:  It‘s like throwing the ball into the sidelines.

TODD:  A little bit.  It‘s a little bit of an out.  It‘s a little—he is playing some games.  The only thing he risks here—these folks are very sophisticated.  These are political activists.  They are not just people that vote.  They are actually people that vote, so they kind of get what McCain is doing.  It may—he may—he‘d better be careful.  It might backfire.  But then again, maybe he doesn‘t care.

MATTHEWS:  You may, it may look hot dog. 

TODD:  It may look a little bit like, you know, why he‘s messing around with this?  The fact is, the only—the reason these people came, because they want to talk about ‘08.  They‘re junkies.  The people that are poll...

MATTHEWS:  What are these poll numbers doing to these people?  I mean, it‘s not like—somebody said earlier tonight, it‘s a snapshot.  It‘s not a snapshot.  I‘ve been looking at polls for years now.

TODD:  No, it‘s a gradual...

MATTHEWS:  It‘s a continuous slide, you know.  It‘s a luge.

TODD:  Gravity or something, yes.

MATTHEWS:  It‘s like a luge.  It goes down month after month.  And it started at 9/11, when the president was at his peak.  If this keeps going the way it‘s going—and I can‘t think of a thing that‘s going to stop the damn trend.  We‘re not going to turn the war out of Iraq tomorrow.

TODD:  No.

MATTHEWS:  The economy‘s not going to boom for workers again.  It‘s doing OK.  It‘s not doing at all well.  How is this going to affect November?  And the 2008 election?  Is it possible that Hillary could be elected president because this trend is so bad for Republicans? 

TODD:  Look, history says that the Democrat is automatically favored after the Republicans have held office for two—I mean, it‘s just what history shows.  So sure, the Democrats should be the odds-on favorite to win in ‘08.  She‘s the nominee out of anybody, so I mean...

MATTHEWS:  So is anybody sitting on the Democratic side when the economy continues, or the situation for the president, the war in Iraq...

TODD:  Heck, yes.

MATTHEWS:  She can win. 

TODD:  Sure.  It doesn‘t matter, because at some point, it becomes about two parties and less about her.  But, you know, look, she complicates a lot of the—a lot of this stuff. 

MATTHEWS:  The situation has been like this day in journalism, it‘s highly fluid. 

Ok, thank you, Chuck.  You‘re great.  Good luck in the poll tomorrow. 

We‘re going be watching and reporting on your results tomorrow night. 

TODD:  Anyway, always interesting.

Haley Barbour is going to be coming up.  He‘s, of course, the governor of Mississippi.  He‘s been through Katrina and all of it.  By the way, check in with Hardblogger for the behind-the-scenes action here in Memphis.  Our team of bloggers is tracking all the contenders here this week.  And just go to hardblogger.MSNBC.com.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL.  We‘re live from Memphis and the Southern Republican Leadership Conference, the first step for Republicans running for president in 2008. 

Joining me now, Mississippi Governor Haley Barbour. 

Well, we‘re used to seeing you down in the middle of a storm somewhere down here with all the debris around you.  How is that going, by the way? 

GOV. HALEY BARBOUR ®, MISSISSIPPI:  We‘re making real progress.  I mean, we got a tall mountain in front of us.  It‘s going to be years, but we‘ve made real progress.  All our schools have been open for almost four months now.  People are back at work.  Everybody has a job who wants one.  Housing is going to be our biggest issue for a long time, Chris. 

MATTHEWS:  What is the impact of Katrina politically in this region for the next decade? 

BARBOUR:  Well, despite Washington and New York, people in Mississippi are very grateful to the Congress and administration.  They‘ve been very generous with us, given us a lot of latitude and a very good tax package that‘s going to help us rebuild.  The Mississippi Gulf coast is going to come back bigger and better than ever. 

MATTHEWS:  So you‘re happy? 

BARBOUR:  I‘m happy we‘ve improved on it a little bit, I mean...

MATTHEWS:  Yes, I know.

BARBOUR:  The results are working in Mississippi. 

MATTHEWS:  I‘m amazed to see—there‘s a piece in one of the northern papers about how the casinos are already popping down here.  The casinos are always ringing up the change. 

BARBOUR:  We have three of the nine casinos that are located in Biloxi are back open, and they‘re doing 60 percent of the business, with a third of the volume back open.  So there‘s pent-up demand.  But the big thing, the shipyards, the refinery, Dupont, NASA, all the big things are back to normal.  And I mean, look, Mississippi Gulf Coast is going to come back bigger and better than ever, it‘s just going to take some time. 

MATTHEWS:  I see you mention the ports.  How did that thing run down here?  There are three weeks of fighting between the Republican Congress, the Democratic congresspeople and the president of the Dubai Company pulled the plug.  But how did that affect the people down here? 

BARBOUR:  Well, actually...

MATTHEWS:  Because you and I talked on the phone, and you said you‘ve got some ports that were under P & O, too. 

BARBOUR:  P & O used to run the port in Gulfport.  But people understand where are that—or at least people involved with the ports—that the security is not provided by the port management, it‘s provided by the Coast Guard, by the military, by the government function.  No matter who is running the port, it‘s not a big deal. 

Look, what we ought to worry about are all these containers that coming from ports overseas, because that‘s where they get checked.  Stuff that we check at Gulfport, Mississippi, is going somewhere else.  The stuff that comes into Gulfport has been checked at Hong Kong or Taipei or somewhere. 

MATTHEWS:  Let‘s talk politics for your party.  You‘re not running for president, right? 

BARBOUR:  No.  But just—a lot of nice people were nice to ask me or encourage me, but with the hurricane, look, that‘s got to come first. 

MATTHEWS:  Every year, we talk about senators.  Since you and I were born, senators are going to get elected.  There was like one ever elected, Kennedy, and he was alone—he wasn‘t really a senator, he was more like a celebrity, a war hero.  Is it going to end up being a governor again?  Governor Allen, Governor Romney, an executive?  Don‘t we tend to end up picking executives for president? 

BARBOUR:  Well, we do.  But let me just tell you something much more important than that for today‘s purposes.  This conference needs to be about the 2006 elections.  If Republicans come in here and get distracted thinking about 2008, then shame on us. 

Second mid-term elections for two-term Republican presidents are historically bad for Republicans.  You know, look at 1986, 1974, 1958.  We got to be focused on this.  And this November election in ‘06 is important here in Tennessee, Arkansas, Alabama, Georgia, South Carolina, Texas, Florida.  All across the South and the Midwest where there are a lot of people here. 

These are huge elections in 06 and anything that distracts for that, man, we‘re running off down a rabbit trail.  We need to forget about...

MATTHEWS:  You mean the Democrats—you‘re a Republican, governor.  You mean some Democrats could make some surprising wins down here after Katrina? 

BARBOUR:  We can‘t take anything for granted, OK?  I remember in 1958, we lost 13 senators in Eisenhower‘s second term.  Reagan, who was very popular, we lost eight senators in his second term.  We‘ve got to be focused on 2006.  And anything that takes our eye off that ball for 2008 is a bad distraction. 

MATTHEWS:  OK.  Great of to have you.  Governor, thank you.  You‘re doing hard work down there.  Thank you, Governor Haley Barbour of Mississippi. 

Up next, who is the best Republican to beat Hillary in 08?  I‘m still thinking politics in 08.  We‘re back from Memphis when HARDBALL returns.  And again check out MSNBC.com.  Tom Curry takes the temperature of the Republican Party heading into the big weekend here in Memphis. 

That straw vote tomorrow night, especially, which we will report at 9:00 tomorrow night.  Its results.  Who is the most popular Republican candidate this weekend in the south?  This is HARDBALL only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to Memphis and HARDBALL‘S live coverage of the Southern Republican Leadership Conference. 

Joining me now, “Newsweek‘s” Howard Fineman and Bloomberg‘s Roger Simon.

You guys are the two of the best.  No, I see you all the time.  And you are also great. 

(CROSSTALK)

MATTHEWS:  I remember you doing that wonderful interview with Jesse Jackson in the middle of the night at a fish house one night right on that sidebar stuff.  What is the good color piece down here tonight? 

ROGER SIMON, BLOOMBERG:  The nostalgia of the candidates for someone who is not here.  As George Bush‘s power weighs an influence, affection is building for him.

MATTHEWS:  Oh really?

SIMON:  Yes, I think so.  This has been the toughest week for him.

MATTHEWS:  So the tougher it gets, the more these people hold for him? 

SIMON:  Well, as his influence over the party diminishes as we head toward November, people like him more in the party.  He becomes a father figure.  He is after all still the head of the party even though he suffered a big defeat.

MATTHEWS:  Is that why John McCain is loving him to death tonight?

HOWARD FINEMAN, NEWSWEEK:  That‘s why he is loving him, loving him, loving him.

MATTHEWS:  Saying vote for the president, don‘t vote for me.  I don‘t deserve it.

FINEMAN:  I‘m going to go Roger one better on that.  I think there is nostalgia here but not only for the George Bush at the beginning of his presidency but for Ronald Reagan.  My favorite button that I have seen out here so far is I‘m miss Ronald Reagan. 

MATTHEWS:  Well that‘s a lot of where it began.

FINEMAN:  That‘s where it began. 

MATTHEWS:  Let me ask you about the Hillary negativity here.  You first, Roger.  You‘ve seen some buttons to that effect. 

SIMON:  Yes, she has become the great demon of the Republican Party, from Ken Mehlman, the party chair, to the rank and file Republicans.  They are waiting for their chance to run against her, and I‘m sure she‘s happy to do it. 

MATTHEWS:  Do they want to or would they rather run against a less exciting, if perhaps less vulnerable candidate? 

SIMON:  I think they think they are not going to have that choice.  I think people here are really convinced Hillary has got it sewed up two and a half years before election day. 

MATTHEWS:  So death, taxes and Hillary Clinton.

SIMON:  That‘s what they are saying here.

FINEMAN:  Also whatever ground they may lose with their base, however unsure they may be about the ports deal or taxes or the deficit, the one thing that can bring the Republican base together, evangelical and non, is the prospect of a Hillary Clinton presidency. 

MATTHEWS:  So she is to conservatives what Frank Rizzo used to be to blacks.  He was the tough love undercover cop in Philly. 

FINEMAN:  She‘ll do it.  She‘ll bind them together.  She‘ll bind them together. 

MATTHEWS:  Let me ask you about the possibility of a surprise positive vote here for someone.  George Allen, will the headlines in “The Washington Post” Sunday morning say strong showing by Allen? 

SIMON:  Not with John McCain sort of having people write in President Bush.  It would be smart, I think, for every candidate to say write in President Bush.  What is it worth it for Bill Frist, the favorite son, to win now, with the president of the United States coming in second?  He would be, I think, better off saying vote for George Bush. 

MATTHEWS:  So you think they might all throw in their chips? 

SIMON:  Could be. 

FINEMAN:  That would be the smart thing for Frist to do also because the only big news that could come out of here in a way would be the embarrassment of Bill Frist.  We‘re after all in Tennessee.  We‘re right smack in the middle of Memphis. 

MATTHEWS:  So you say worst case and best case for Allen would be if Allen changes places with Frist and wins this thing? 

FINEMAN:  Yes, I think it would be very helpful to Allen.  Because already the inside the beltway, smart money is that Allen has already done that, so in an odd way, there are already expectations among us for George Allen. 

MATTHEWS:  OK.  Two factors here, the warmth factor, who is more like us and the second one, the fear factor, how much do we hate Hillary, fear her?  What‘s the strongest? 

FINEMAN:  Here? 

MATTHEWS:  Yes.

FINEMAN:  Among the delegates, I think they‘re much more unified on what they don‘t want than on what they want.  That‘s why I thought that button that said I miss Ronald Reagan is actually significant.  I‘ve seen it around.

MATTHEWS:  It is not getting him back.

FINEMAN:  I know, but they want the sense of unity and purpose and new beginnings and crusade that Ronald Reagan began, that George W. Bush capitalized on. 

MATTHEWS:  Do you think Ron Reagan would get big applause in here? 

How about Patty Davis? 

FINEMAN:  Yes, not quite him but the old man, yes. 

MATTHEWS:  Nancy would get a big applause. 

FINEMAN:  Yes, she would too.

SIMON:  I sense some real nervousness if they don‘t have a Republican front-runner.  I mean it is early, but Republicans like to choose a front-runner, establish a candidate early.  And they‘re a little bit upset...

MATTHEWS:  This early? 

SIMON:  This early.

FINEMAN:  They‘re also a little suspicious of McCain as an establishment candidate. 

MATTHEWS:  Well, they are always suspicious of McCain. 

FINEMAN:  Of course.

MATTHEWS:  You don‘t need to finish the sentence, do you? 

FINEMAN:  Exactly, no.

MATTHEWS:  Could it be that he‘s up to a gamesmanship that they‘ve come to dislike? 

FINEMAN:  Yes, he has got a lot of friends here though.  You walk around this lobby as I have been doing talking to people a lot of people like the Georgia State chairman really like the guy.

MATTHEWS:  Point to this weekend eight years ago Bush won here. 

FINEMAN:  Yes.

MATTHEWS:  Could this launch his campaign?  Will it launch his campaign, Roger?

SIMON:  Yes.  I mean that shows you how much an established authority this is.  The establishment should get one without coming here. 

FINEMAN:  What launched George W. Bush‘s campaign is he wired the governors before it ever started. 

MATTHEWS:  What launched his campaign was his successful birth.  Well done, George W.!

FINEMAN:  Spoken the way John McCain used to speak, but now would never dare. 

MATTHEWS:  He would never say it again.  He would never say lucky genes one more time.  Now he‘s my kind of guy.  I love these marriages made in heaven.  You know, McCain just loves the president.  You know what, I think politicians like other politicians when they‘re really down, and they really need them. 

FINEMAN:  Yes.  Yes.  Well, McCain is pursuing a brilliant strategy so far.  He really is.

SIMON:  The thing—this is going to be a lot of fun, this election. 

MATTHEWS:  Hey, we got three more years of this.  Anyway, Howard Fineman, Roger Simon.  We‘ll be right back from the beautiful Peabody Hotel in downtown Memphis, the lobby made famous by the duck walk, a tradition that started by Chuck Berry back in the 1940s.

And tomorrow at 9:00 a.m. Eastern, a special Saturday night edition. 

Live on HARDBALL, we‘ll have the results of that big straw poll down here. 

Could be a big winner for somebody for George Allen or Bill Frist.  That‘s

tomorrow night at 9:00 p.m. Eastern on MSBNC and MSNBC.com

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Live in Memphis at the Peabody Hotel, a hotel famous for its ducks.  Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  We‘ve got a big day today, and it‘s a beautiful one out there, and we thank God for the weather. 

These are the world famous Peabody ducks.  Believe it or not, it started out late one night in 1930 and was really designed as a hoax or a practical joke. 

MATTHEWS:  So Dan, tell me about the life of these ducks.  What‘s their life like?

UNIDENTIFIED MALE:  Well, the life here at the Peabody is we get them from a private reserve in Northeast Arkansas.  They serve a term of three months, about 90 days.  If they‘re doing real good, I might keep them a week or two.  Then they‘re released back on that reserve.  Another trivia question for you—there are 165 species of duck in the world, 25 in North America, and only five can be trained to do what they do. 

MATTHEWS:  So you—how long does it take you to train these ducks to do this walk? 

UNIDENTIFIED MALE:  Believe it or not, they are so intelligent, it takes me about a week. 

MATTHEWS:  Let me ask you about how the pattern is.  Every day around 11:00...

UNIDENTIFIED MALE:  Every day at 11:00, they‘re marched...

MATTHEWS:  You bring—you march them in. 

UNIDENTIFIED MALE:  That‘s right. 

MATTHEWS:  Every day.  What was the role of booze in all of this? 

UNIDENTIFIED MALE:  Actually, the role of booze was—they had the story of them getting done hunting late one night, and they were drinking a little Tennessee-sippin‘ whiskey, which is now Jack Daniels.  They just thought it would be a good prank to bring some back.  They had three of them in the cages in the back of a pick-up truck.  It pulled up out front, and that was later in the evening. 

So the history and the tradition is they brought them in, and just threw them in the fountain.  Well, they thought they were really kidding around.  Well, the ducks enjoyed it.  The next day, they were still on the fountain, so they started feeding him in here. 

MATTHEWS:  So I understand there‘s a French restaurant that does not serve duck. 

UNIDENTIFIED MALE:  That‘s right.  Chez Phillipe (ph) is a four-star French restaurant, the only French restaurant in the world that does not serve duck. 

MATTHEWS:  What about le canard (ph)? 

UNIDENTIFIED MALE:  Yes, exactly.

MATTHEWS:  I don‘t know what to say.  It‘s unique in the world.  Only in Memphis.  Only at the Peabody Hotel.

UNIDENTIFIED MALE:  Thank you everybody, have a great day!

(END VIDEOTAPE)

MATTHEWS:  Well, that was an unusual thing to cover, the march of the ducks.  Nice music, by the way.  Here we are at the Peabody Hotel.  We‘re about to close down our first live hour tonight.  We‘ll be back again at 7:00, but I want to talk to some of the people here tonight about what‘s going on in their minds at this big Republican get-together. 

Diana, what‘s on your mind?

UNIDENTIFIED FEMALE:  My name‘s Diana McLaughin (ph), I‘m from Parksville, Tennessee, and I‘m here to find out what our party is going to do for the military.  My husband is serving with the 101st.

MATTHEWS:  That‘s his picture. 

UNIDENTIFIED FEMALE:  That‘s his picture.

MATTHEWS:  And where is he located over there?

UNIDENTIFIED FEMALE:  I can‘t say.

MATTHEWS:  I know.  I always make that mistake.

UNIDENTIFIED FEMALE:  Northern Iraq. 

MATTHEWS:  OK, great, thank you, Diana.  Let‘s go to this other gentleman here. 

UNIDENTIFIED MALE:  Paul Boyd (ph) from Memphis, Tennessee.  I‘m supporting Bill Frist for president in this (INAUDIBLE)

MATTHEWS:  You‘re a loyal Tennessean?

UNIDENTIFIED MALE:  I am a loyal Tenessean.

MATTHEWS:  A volunteer.

UNIDENTIFIED MALE:  Volunteering my senator, yes , sir. 

MATTHEWS:  Oh, you, sir?

UNIDENTIFIED MALE:  Yes, I‘m David Patterson (ph).  I‘m from Knoxville, Tennessee.  I‘m also going to be casting my ballot for Bill Frist for president. 

MATTHEWS:  Now you guys have all jumped here.  You, Madam?

UNIDENTIFIED FEMALE:  Hi, I‘m Stephanie Huntington (ph) from Knoxville, Tennessee.  As of right now, my support‘s for Condoleezza Rice.  But I learned over this weekend (INAUDIBLE).

UNIDENTIFIED FEMALE:  Hi, I‘m Ivy Kapel (ph) and I am from Oak Ridge, Tennessee, and I‘m for Condi as well. 

UNIDENTIFIED MALE:  Adam Gross (ph) from Clarksville, Tennessee, supporting Frist as well. 

MATTHEWS:  So let me ask you all, what would you—would you support John McCain if he were the nominee? 

UNIDENTIFIED FEMALE:  No.

MATTHEWS:  No, why not?

UNIDENTIFIED FEMALE:  I don‘t feel he‘s true to the Republican party. 

UNIDENTIFIED FEMALE:  No.

MATTHEWS:  Would you vote for Hillary? 

UNIDENTIFIED FEMALE:  No. 

UNIDENTIFIED FEMALE:  No.  George Allen.

MATTHEWS:  Who—you don‘t think McCain is a Republican, a real Republican?

UNIDENTIFIED FEMALE:  No, I believe he rides the fence.

MATTHEWS:  You believe he what?

UNIDENTIFIED FEMALE:  I believe he rides the fence on too many issues. 

UNIDENTIFIED FEMALE:  I agree.

MATTHEWS:  Wow.  You guys think he‘s...

UNIDENTIFIED MALE:  I think he‘s a Republican, I think he‘s an opportunist, though.  I think he‘s an opportunist. 

UNIDENTIFIED MALE:  I have to agree.  He has not been very supportive of the president...

(CROSSTALK)

MATTHEWS:  Anybody have thoughts about George Allen, the other candidate?

UNIDENTIFIED FEMALE:  He seemed nice, but I don‘t know enough about him.

MATTHEWS:  George Allen?

UNIDENTIFIED MALE:  I think he‘s—is a conservative alternative. 

MATTHEWS:  But you could imagine voting for him but not for McCain? 

UNIDENTIFIED FEMALE:  Right. 

MATTHEWS:  What about this guy Mitt Romney?  He made his first appearance down here tonight.

UNIDENTIFIED MALE:  Very impressive. 

MATTHEWS:  What did you like about what he said? 

UNIDENTIFIED MALE:  He really supported the Republican party.  I didn‘t expect that from somebody from Massachusetts.  He was a red state conservative, as far as I‘m concerned.

MATTHEWS:  OK, well thank you.  It‘s great to have you here.  Tough day for John McCain.  Join us again in one hour at 7:00 Eastern tomorrow live, HARDBALL. Our coverage continues through the weekend on MSNBC.com, where you can watch speeches by the candidates and my interviews with the heavy-hitters of the Republican Party.

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

END   

Copy: Content and programming copyright 2006 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2006 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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