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updated 6/6/2006 7:19:53 PM ET 2006-06-06T23:19:53

Guests: Kay Granger, Ellen Tauscher and Jack Welch

CHRIS MATTHEWS, MSNBC ANCHOR: A third of conservatives — did you hear that? Conservatives — want the Republicans to lose control of congress this November. Are we watching the downfall of power? Let’s play HARDBALL.

Good evening, I’m Chris Matthews. Welcome to HARDBALL. Direct from Boston tonight, will the political sins of the father afflict the presidency of the son? President Bush determined to avoid the political fate of his father, who was rejected by Christian conservatives, today at the White House endorsed a constitutional amendment banning gay marriage from the United States of America.

Will President Bush be successful in avoiding his father’s destiny and win back support of the Christian conservatives? Last month an A.P./Ipsos poll found 45 percent of conservatives disapprove of President Bush’s job performance.

But the issue of gay marriage has proven to be successful in rallying his Bible base to the polls. More on this in a bit. Later, did you know Jack? We’ll talk to one of the titans of American industry, the legendary figure, Jack Welch. But first, HARDBALL’s David Shuster has this report from Washington.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over): Facing record-low approval ratings, problems in Iraq, high gas prices at home and little progress in a second-term agenda, President Bush today put the spotlight on gay marriage.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Marriage is the most fundamental institution of civilization and it should not be redefined by activist judges.

SHUSTER: In an event attended by key Christian conservative supporters, the president urged congress to alter The Constitution.

BUSH: You are here because you strongly support a constitutional amendment that defines marriage as a union of a man and a woman, and I am proud to stand with you.

SHUSTER: Even congressional Republicans say the amendment has little chance of passage, but it’s the kind of effort that Christian conservatives have been demanding. The latest polls show that 45 percent of conservatives disapprove of the president’s job performance and 65 percent disapprove of the Republican-led congress.

TONY PERKINS, FAMILY RESEARCH COUNCIL: I think this president still has a lot of support. The question is will he be able to advance these issues far enough along to re-energize people that make up the core of his constituency.

SHUSTER: In some ways President Bush finds himself in a position similar to where his father’s Republican Party was in 1992. At the time, president George H.W. Bush, running for re-election, was trying to reclaim conservative support. He had been wounded during the Republican primaries by challenger, Pat Buchanan, who revved up conservatives at the GOP convention with this fiery speech.

PAT BUCHANAN, FMR. PRESIDENTIAL CANDIDATE: There is a religious war going on in this country. It is a cultural war as critical to the kind of nation we shall be as The Cold War itself, for this war is for the soul of America, and in that struggle for the soul of America, Clinton and Clinton are on the other side and George Bush is on our side. And so to the Buchanan brigades out there, we have to come home and stand beside George Bush.

SHUSTER: President Bush used his convention speech to talk up social conservatism.

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I believe in families that stick together, fathers who stick around, and I happen to believe very deeply in the worth of each individual human being born or unborn.

SHUSTER: But for many conservatives already angry with the president over his tax policies, the rhetoric on abortion was not enough, and in a year when the economy dominated the presidential campaign, George H.W. Bush lost the election to Arkansas governor, Bill Clinton.

This year conservatives are already angry with the Bush administration over years of rising government spending, the president’s immigration proposal, and the problems in Iraq that have led to the very nation building George W. Bush once adamantly opposed.

On the issue of gay marriage the latest polling shows the nation has become more progressive and continues to move away from the position of Christian conservatives. Voters under 40 now overwhelmingly approve of allowing gays and lesbians to marry and among all voters, while 53 percent oppose gay marriage, 42 percent of those voters who are opposed also believe that amending the Constitution for it is a bad idea.

JOE SOLMONESE, HUMAN RIGHTS CAMPAIGN: When your base is dwindling away from you to the degree that it is, this is a sort of, you know, right out of the political playbook, that you’ve got to go hard at your base and try to re-energize them any way that you can. Unfortunately, it’s on the backs of millions of Americans, and I think that’s disgraceful.

SHUSTER: But while critics may bash it, the strategy has worked in the past. In the 2004 presidential campaign, Republicans put gay marriage bans on the ballot in 11 states. The issue brought Christian conservatives to the polls and helped George W. Bush win re-election.

(on camera): This time, of course, the president is trying to help Republicans maintain control of congress, and so after the Senate is finished debating gay marriage, the Bush administration will help put the spotlight on the issue of flag burning.

The question is whether the political strategy will work or whether it will fail, as it did with Bush 41, by leaving the impression the president is out of touch with the issues most Americans really care about. I’m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS: Thank you, David Shuster. Will President Bush and the Republicans be able to rally the base to keep control of congress? A hot question. We couldn’t have a better guest, in fact, better colleague than Pat Buchanan and MSNBC political analyst and Bob Shrum, a HARDBALL political analyst. Pat, you’re the one that made this story big. You’re the one that wanted to take back America block by block from the bad guys.  Can the Republicans still do that number?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: Chris, I think if George Bush had run on the cultural and social and moral issues in 1992, his father, he would have been beaten Bill Clinton. It was the only area Clinton was vulnerable on. And by letting Clinton run on the economy, where Bush had 16 percent support, Carville and Clinton just destroyed the Republicans.

MATTHEWS: So it’s not the economy, stupid.

BUCHANAN: Bush had to change it from the economy to cultural and social, moral issues if he was going to beat Clinton. Carville’s strategy was perfect. Stay with the economy no matter what they talk about, because Republicans couldn’t win on that.

Let’s take it up to this year, Chris. I think this is a — this issue is not as acute, it’s not as hot as it was in 2004 when it wasn’t Republicans that put it on the ballot, it was Margaret Marshall, that justice up in Massachusetts and Gavin Newsome in the West who upset the country totally, so that people were running out, getting signatures, putting it on the ballot. And it won from 58 percent in Ohio to 85 in Mississippi.

What this issue does when it’s hot, it brings Hispanics, it brings African-Americans and it brings Reagan Democrats into league with traditional conservatives. But I don’t think the issue is acute now, it’s not hot, and unless the Supreme Court or some court does something stupid, it’s going to be very difficult to see how you rally people on an issue which is really not current, when so much else is on the table.

BOB SHRUM, HARDBALL POLITICAL ANALYST: Well, listen, pat helped defeat the first President Bush in 1992 and his strategy would have made the election worse for him. This is a junk constitutional amendment. It’s a transparent fig leaf over the gigantic failures of this administration.  You’ve got Iraq, you have gas prices — oil prices at $73 a barrel, health care crisis, middle class income is crashing, and what’s the answer? The president holds a press conference in the Rose Garden and says banning same-sex marriage is at the top of his agenda.

MATTHEWS: Do you think it is?

SHRUM: They’re not trying to save marriage, they’re trying to save the Republican majority in the mid term elections this year. But it’s not going to work. If you look at the most recent poll on a list of 29 issues, where they ask people to volunteer what they wanted the president and congress to do something about, gay marriage didn’t appear.

MATTHEWS: You’re against the gay marriage amendment, right?

SHRUM: Absolutely against it.

MATTHEWS: Pat, you are for one?

BUCHANAN: I’m for one. I would prefer congress to restrict the jurisdiction of the appellate and Supreme Court so that this decision was made locally and by states and no state could impose it on another state.  But in the last analysis, I would vote for this amendment, yes.

MATTHEWS: But, Pat, you are a states rightser (ph) on many issues.  Why not let a liberal state like New York or Massachusetts, let them vote on it? Why not let Utah have its own marriage laws and say no state can make any other state do its thing?

BUCHANAN: Exactly right, Chris, if you could make it stick. The problem is the marriages in Massachusetts, the gays moved to Florida and they say we want tax deductions that you have for married people, we want them for us. But Florida says you’re not married in our state. And they say, under the Full Faith and Credit Clause (ph) you have to say we’re married, so it goes to the Supreme Court. That’s the reason I’m for the amendment.

MATTHEWS: Do you believe in states’ rights and should a state, a conservative state like Utah say no gay marriages in this state, period? You can move here from Buffalo or New York City or Massachusetts, you can move here, fine, but you’re not married in this state. Do you accept that?

SHRUM: Under the Defense of Marriage Act, which I would not have voted for, the states do have a right to do that. Marriage ought to be left to the states.

The fact that there are gay marriages in Massachusetts, I have a great marriage, it doesn’t affect me. You have a terrific marriage. Pat, I think you and Shelly (ph) have a terrific marriage. You’re not affected by the fact that gays can get married in Massachusetts.

MATTHEWS: Why don’t you ask him if he is.

SHRUM: How are you affected, Pat?

BUCHANAN: I am one of those who believes that really this country is basically a decadent society. It has lost its moral compass, and the American people by and large, or maybe it’s not that big a majority now, but they want this enshrined in their Constitution and the courts and the country again and again do not give the people what they’re demanding.

Whether it’s immigration, it’s this, or prayer in school, I think you’re coming to a crisis in this country, a crisis of the regime where people think this ain’t a Democratic republic, that’s a lot of propaganda.  The elites tell us what they want, and that’s it, no matter how we vote.

MATTHEWS: Is a worse case scenario for you, Pat, is that the country basically becomes largely Hispanic and gay?

(LAUGHTER)

BUCHANAN: Well, here’s the thing.

MATTHEWS: No, isn’t that the worst case scenario? When you go to bed at night, isn’t that what you worry about?

BUCHANAN: I think what’s coming is the complete balkanization of America and I’m afraid it’s going to be by ethnicity and culture, and language, and every other way. And we’re going to be like the Balkans, only we’ve got a much larger and more prosperous country. And so then it’s not like the country you and I grew up in Chris, whereby we were mono- cultural.

MATTHEWS: It’s already not that. It’s already not that. But let me ask you, here’s the question. The American people require under our Constitution a 3/4 vote, basically, of the states. Pat, you know the Constitution as well as we do and it makes it difficult to amend the Constitution on purpose, so you don’t have prohibition of liquor and you have to reverse it three years later.

BUCHANAN: But Chris, it’ll go through the states in a second, the problem is the United States Senate. The problem is the Senate. You’ve got to get two-thirds there. They’re not up for every six years. You put this amendment out there to the states and the three-fourths of them will pass it.

MATTHEWS: Why don’t they do it if the public wants it, Pat? Why don’t they do what the public wants?

BUCHANAN: Because the Senate, you’ve got guys like Teddy Kennedy, who are untouchables. They’re not up for six years. The issue is very hot, then it dies down and they don’t face the voters maybe for four years out.  So that’s how they hold it up. You get the guys who are in November up there and they’re for the vote and they’re in a close state, you see where they stand.

MATTHEWS: What’s worse, Bob Shrum? You’ve been getting easy up here in your hometown pretty much. What’s worse, George W. Bush’s gay marriage push and you would consider that a political ploy, right?

SHRUM: It is a political ploy.

MATTHEWS: Or Hillary Clinton’s flag-burning bill?

SHRUM: I think the flag-burning bill was a terrible idea. I don’t think she ever should have introduced it.

MATTHEWS: Does she believe in it?

SHRUM: You’d have to ask her.

MATTHEWS: No, come on, I’m asking you. Isn’t it just more political blarney?

SHRUM: I think it was a very bad idea. If it was a political ploy, it backfired.

BUCHANAN: Hey, Chris...

SHRUM: ... Now come on, you’ve been talking for a while, let me say two things. Number one, a committed gay couple living in a relationship is not a sign of decadence.

Number two, Pat, when your ancestors and my ancestors and Chris’ ancestors got off the boat, the Yankees who ran the country said it was terrible, it was going to lead to the balkanization of America, it was going to change America in terrible ways. This has been going on for years and years and years. I mean, the same people from Georgia, for example, who are going wild on immigration right now and saying we have to keep Hispanics out were the same people who were saying we have to keep blacks down.

BUCHANAN: But you don’t understand your history. Now, let me talk about this. You don’t understand your history...

SHRUM: ... I think I do.

BUCHANAN: Now let me talk a minute. You don’t understand your history. From 1890 to 1920 we had a huge immigration, 20 million people, or something. Then we had a 40-year time-out to assimilate, Americanize, teach them the language, the history, the culture.

So by the time Chris and I went to school or me even in the 1940s and 1950s, they were Americans. I didn’t know where they came from. We didn’t know where any of us came from. You don’t have that. You’re importing parts of nations.

SHRUM: Pat, I don’t know where you went to school, but when I went to school they knew I was Irish. We knew the kid across the aisle was Italian.

BUCHANAN: What did he speak? Did he speak Italian or did he speak Gaelic or Italian or what?

SHRUM: Well, actually, you would have fit in just fine with the people who, during World War I banned the teaching of the German language.  What we had between 1924 and 1964 was 40 years of...

(CROSSTALK)

MATTHEWS: ... If I recall this meeting 20 years from now, will we have the same argument? Will there be a fight over gay rights or will we have accepted, Pat, for better or worse, the right of gay people or at least the opportunity of gay people to get married? Will that be behind us?

BUCHANAN: Listen, I think culturally and socially this country is headed downhill. I think you’re probably right there, Chris, but I do believe ethnically, culturally, linguistically, if we don’t get control of the borders, America is gone and we’re going to be a completely Balkanized nation. 

(CROSSTALK)

MATTHEWS: There’s a lot of what you say that appeals to the guts of people like me, until you think about it. But do you believe there’s something really complacent about America? Why doesn’t everyone have the outrage that you have in your tone about these issues of gay marriage and illegal immigration? Why don’t they give a damn, like you do?

BUCHANAN: I’ll tell you why, because the cultural revolution of the 1960s has succeeded in converting a significant slice of the people. And frankly, Shrum is right, maybe a majority of the young people, they don’t care about a lot of things we used to care about. There’s no doubt about it. I mean I won’t deny it’s winning. I mean Nixon and Reagan would not win 49 states today, and the reason is the cultural revolution has moved and influenced politics and all the rest of it.

MATTHEWS: Ronald Reagan was just named the most popular president since 1945. I’m not sure you’re losing yet.

BUCHANAN: Well, he wouldn’t win 49 states, Chris.

MATTHEWS: That’s a great group here. Bob Shrum up here, from New York. Pat Buchanan from Dixie.

(LAUGHTER)

MATTHEWS: Anyway, coming up, how will the Haditha investigation change U.S. actions in Iraq, and will Iraq push voters to the polls for the midterm election, here in November?

You’re watching HARDBALL, here on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL, as the military continues its investigation into the Haditha killings, how has the incident affected our troops on the ground in Iraq. Democratic Congresswoman Ellen Tauscher from California is a member of the Armed Services Committee and she’s traveled to Iraq three times, most recently last November. And U.S. Congresswoman Kay Granger is a Republican from Texas and she’s also toured Iraq three times.

So, what’s the impact, Congresswoman Tauscher, of Haditha on the troops?

REP. ELLEN TAUSCHER (D), CALIFORNIA: Well, I think that they’re disturbed, as all Americans are. These allegations are very serious, we need to finish these investigations. If there is something we need to prosecute, we need to do so immediately and then we need to punish severely.

The real, I think, issue here is you have to step back a second and ask what is the problem that has caused this potential kind of atrocity to happen. I think you have to look all the way back to the fact that we continue to look at the bottom of these problems. We get to the bottom of these problems, but we never quite get to the top of them.

MATTHEWS: What’s that mean?

TAUSCHER: It means that we have never gotten to the top of Abu Ghraib. It means that we haven’t gotten to the top of many of these allegations. And the civilian leadership of the Pentagon has continued to insist that things are going fine, that we’re going to be able to move troops out soon, when in fact we’re moving troops in from over the horizon in Kuwait.

MATTHEWS: You believe — just a minute. You’re saying something very strong here, congresswoman.

TAUSCHER: Yes, I am.

MATTHEWS: And I want Congresswoman Granger to respond. Are you saying that the high command of the United States military in Iraq in country is encouraging the slaughter of civilians? Because that’s what it sound like.

TAUSCHER: Of course not.

MATTHEWS: Well what do you mean by at the top?

TAUSCHER: I’m talking about the civilian leadership. I’m talking about President Bush and Secretary Rumsfeld.

MATTHEWS: They’re encouraging the slaughter of civilians?

TAUSCHER: They are not encouraging the slaughter of civilians, but they certainly have too few troops in the country, we know that, and it has caused many of these troops, including the troops that are now subject to prosecution because of these allegations to be there three or four times.

And it leads back to the amnesty problem, Chris, that we have faced from the very beginning of this misadventure, which is that we never had a plan of what to do when the country was without Saddam Hussein. We never had enough troops on the ground. We’ve rotated too many of the same troops in and out and now we find ourselves in the post-government phase of this with a country that basically has no defense minister still/

No interior minister still, no security yet. And our guys — this is really — this really isn’t a question any longer of how we get out, it’s a question of how we get out of the way because we do have an increasing sectarian violence going on there.

MATTHEWS: Right.

TAUSCHER: And what exactly are our troops meant to do? Are they meant to be fighting the bad guys, the two out of 10 al Qaeda-like guys that are in Iraq? Or the eight out of 10 that are fighting, which are Iraqis versus Iraqis?

You know, we have an agreement that we have, the State Department, negotiate with every country where we have one American fighting man or woman. It’s called the SOFA agreement, a status of forces agreement.

We need to have negotiations immediately begun between the United States and the Iraqi government to really say what our troops’ job is, what is their job?

MATTHEWS: I have to get the other voice here. Let me ask Congresswoman Granger. Two charges, one is that the Haditha mass massacre of those people, whatever was around it, in terms of the legality, illegality, the wrongness of it. These people are dead. Congresswoman Tauscher said that’s because we have too few troops, too many tours of duty by the same guy, back and back and back into the hell zones over there, and she says it’s about policy. Do you accept that, or is this a bad apple situation?

REP. KAY GRANGER (R), TEXAS: No, I do not accept that, and Congresswoman Tauscher is a good friend of mine. But we’re talking about, right now, first of all is allegations, not proven fact, but allegations of misconduct.

MATTHEWS: But they’re dead, though. There’s not an allegation that they’re all dead. Several families are dead now. But they’re not fighting people.

GRANGER: That’s right, but there is an allegation of misconduct and what we’re looking at is absolutely we need the investigation that’s occurring, it needs to continue, and determine if there was misconduct and what exactly happened there.

And if there was misconduct, then those responsible need to be prosecuted to the extent of the law certainly. And find out exactly what happened. And then they are dealt with.

But let’s don’t take this — first of all, let’s don’t make the assumptions, because the investigation has not been completed. So let’s not make assumptions about what guilt or not guilt, but also, be very careful about what we’re saying about our troops over there.

And yes, Congresswoman Tauscher and I both have been numerous times to Iraq and I’m going again in a very short time. We’ve got men and women over there doing a fine, a wonderful job. And they’re highly trained.  They’re trained before they get to Iraq, talking about moral, ethical and legal misconduct of what’s right and wrong and then overseeing.

So they’re doing a magnificent job. If there is misconduct, if they do something wrong, they should be prosecuted. There is no doubt about that. But let’s don’t right now make an assumption about what all our troops are doing, much less what those are doing in the Pentagon.

MATTHEWS: So you don’t accept the charge made by Congresswoman Tauscher that we’ve had troops — too few troops to do too big a job, and that requires these men, especially men to go into combat tour after tour.  You do not hold that accountable here.

GRANGER: They have been, they have gone, some of them three times, but they are soldiers, sailors, marines, and they’re well trained and they know what their jobs are. And just because we’ve sent them once, twice, three times, does not mean they can do something that’s illegal.

MATTHEWS: OK, I agree with that. We all agree with that, I think.  Let me come back. I want to know whether you agree or disagree with Congresswoman Tauscher about the fact we’re facing an Iraqi enemy in large part. Four out of five people we’re fighting are Iraqis, and using terms like terrorists doesn’t help us understand that. Al Qaeda, she argues is, is only one fifth of the people we’re fighting.

I want your agreement or disagreement on that fact. Who is the enemy we’re fighting in these situations? We’ll be right back with more with Congresswoman Ellen Tauscher of California and Kay Granger of Texas.

And later, best-selling author and former General Electric CEO Jack Welch is going to be sitting with me talking about the economy, but more importantly, the war and how this war is being managed. And he’s going to look at it as the CEO of the most successful company in world history.  You’re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back. We’re back with Representative Ellen Tauscher of California and Representative Kay Granger of Texas.  Congresswoman Granger, who are we fighting over there? Are we fighting Iraqis or are we fighting terrorists from outside? Who are we fighting?

GRANGER: We’re fighting insurgents. We’re fighting people who don’t want a secure Iraq, who don’t want a Democratic Iraq, who want this to stop. People who don’t want to lose control or want to regain control.

We always have short memories, but what we’re remembering are the pictures we saw of the Iraqis who were standing in line, walking miles to vote, to have an open election, a free election, and we’re getting closer and closer to that with now elected officials, a Constitution. And there are people who do not want that to happen and they’re fighting us and they’re fighting Iraqis.

MATTHEWS: Do you have confidence that they will fight for their country? America found its own way to liberation through the help of the French obviously, but the United States basically fought for its own independence. Do you think these people are willing to fight or die for a Constitution? Do you believe that?

GRANGER: Yes, I do.

MATTHEWS: If they are, then we don’t have to stay there very long.  We should be able to get out pretty soon, if they’re willing to fight and die for a Constitution.

GRANGER: And we want to get out, and they want us out. But we want to leave it with a secure — enough security provided by the Iraqis, not by us — that’s why we’ve trained over 240,000 Iraqis, to be their own security force and their own police force.

That was always the plan. That’s what we’re doing. So that when we leave they will be providing their own security, which they didn’t very well not through one election, but two elections. They did it very well.  They were the front lines of the security that provided for the security of that election.

MATTHEWS: Congresswoman Tauscher, you get equal time here. Do you believe that the people you met in Iraq are willing to fight or die, whatever is necessary, to defend their new constitution, or are we the reason they’re fighting? We’re paying their salaries, giving them uniforms, we’re training them, giving them three squares a day, is that the reason they’re fighting?

TAUSCHER: Well, let me say, first of all, I stand second to no one in support of our troops. But let me get back to Iraq. You know, the last time I was there was in December and it was just before the election. And I think we were all very optimistic that this election, if it came off, that we actually could have a unity government.

We don’t have a unity government right now. We actually have a government who can’t even name a defense minister, or has slipped another deadline yesterday, or an interior minister. These are the two people that are meant to provide security. What has been the chronic problem since day one of the toppling of Saddam Hussein? Security.

We’ve never had enough troops on the ground to provide security to secure the country. That let bad guys in. But we all know that the bad guys are only two out of maybe 10 of the fighters. This is an Iraqi low- grade civil war going on to bigger things of a much more sectarian violence, and we are in the way.

MATTHEWS: Should we get out, Congresswoman?

TAUSCHER: What we have to do is figure out how to get out, not only honoring our fallen and the half a trillion dollars that we have borrowed to pay for this adventure, but we’ve got to do it in a way where we don’t leave a same volatility or a more chaotic place.

(CROSSTALK)

MATTHEWS: I’m trying to find your policy difference with Congresswoman Granger. What’s the big difference?

TAUSCHER: First of all, I think we have to insist that the Iraqis begin to control their country and that the Iraqi government begin to stand up its military so that we can get back to our fight. We still have people in this world, Chris, that want to kill us, and some of them are in Iraq, but they’re all around the world, and we need to get back to the war on terror, and that means that we should bifurcate this fight in Iraq.

What I would suggest we do is have Iraqis deal with the sectarian violence and the counterinsurgency and we get back to finding Osama bin Laden, Zarqawi and the other bad guys that are currently in Iraq and we begin to disassemble ourselves out of this thing so they can take over their country.

MATTHEWS: Thank you. We have to go. That’s the Murtha approach, basically. Thank you very much, Congresswoman Ellen Tauscher and Kay Granger of Texas.

Up next, Jack Welch, the former G.E. boss gives his take on the state of the economy. More importantly we’re going to talk about the management of this war with a guy knows how to manage people, and this mid-term election coming up. You’re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(CNBC MARKET WRAP)

MATTHEWS: Welcome back to HARDBALL. Tonight from Boston, Jack Welch is one of the most successful businessman this country has ever produced.  He is the former chairman and CEO of G.E., the parent company of this one and NBC and MSNBC, and the best-selling author of numerous books including “Winning,” which he co-authored with his wife, Susie.

Jack is with me here in Boston this evening to talk politics, business and anything else. According to him he doesn’t mind answering questions.

Let’s talk about this war in Iraq in a kind of cold-blooded way.  Let’s talk about it as an enterprise. We went in there with a mission to topple a bad guy, Saddam Hussein. We found a new mission emerging up, a resistance, an insurgency, which has cost this country 2,500 lives now, almost 10,000 serious wounds, and these are permanent wounds on people, these are lost legs, arms and everything. And that wasn’t planned for.  Who do we blame, the guy who wrote the mission statement, or the guy who’s carrying it out? Do we blame Bush, Rumsfeld, or who?

JACK WELCH, FORMER G.E. CHAIRAMN & CEO: Look. Bush was elected. He is elected. Bush selects his team. There’s obviously been some execution errors here, and he has to decide as commander in chief who stays and who goes. And he’s making those calls.

MATTHEWS: But there were people who made the recommendation that we go to Iraq — he can’t easily get rid of vice President Cheney, who may have been the chief hawk, but Wolfowitz is over at The World Bank, he’s been rewarded with a nice soft, upbeat, positive third world job. Feith is over at Georgetown, Scooter Libby is facing the law. The guys who really pushed the war are stuck and you can’t get hid of them or gone, so we’re left with the executioner, the guy who is supposed to carry out the war, Rumsfeld. Should he go?

WELCH: Well, I don’t know all the facts. But obviously Rumsfeld — and State, State’s got to be involved here. They didn’t do the job either.  So you’ve got two branches of government that didn’t do their job, two elements of the Executive branch that didn’t do the job.

MATTHEWS: Is it possible the president didn’t do the job because he didn’t study history in school? I’m asking a serious question. If the mission statement is to go into a country and topple a bad leader and it doesn’t include a mission to face an inevitable insurgency, because people don’t like you coming into their country, isn’t that a failure of the plan originally, of the idea?

WELCH: The follow-up of the plan was clearly flawed. Let’s not kid ourselves about that. We didn’t execute. I mean, mission accomplished, yes. But the aftermath wasn’t planned for. Let’s call it. But now we’ve got to somehow extract ourselves.

MATTHEWS: Let’s talk quality control, again using corporate terms.  You have guys in the field more brave than I’ll ever be out there facing guys in every 360-degree direction from you shooting at you, setting up mines, setting up IED’s, ready to kill you on site the minute you leave the Green Zone.

I understand what they are under. Some of them may have engaged in wiping out a whole family, a whole collective group of people, 24 of them.  Certainly people were involved in torture, this weird kind of graphic torture we saw with dog collars and all kinds of sexual weirdness at Abu Ghraib.

When you see that kind of incident occurring, do you blame how high up? Do you go to the management level, the intermediate management? The guy running the shop? Who do you blame?

WELCH: Well, first of all, I have enormous sympathy for those guys.  I mean, they’re out there fighting. We’re sending them over there to protect us. They get in the midst of a mad house and then they misbehave, crack or whatever. And obviously, they’ve got to be dealt with because they cracked. But it isn’t as cold-blooded as people like to jump on them.  These guys were under enormous pressure.

MATTHEWS: But could it be bad leadership? If somebody said to you, I don’t care how many prisoners resist you and don’t tell you what you want, there is to be no torture in this prison. If somebody had said that from the beginning instead of saying something like soften these people up, give them a bad weekend and we’ll be back Monday morning.

WELCH: The prison thing is clearer than Haditha is, without question.  The prison thing is just bad quality control. But in the midst of the other battle where you’ve got a buddy blown up, you know, Chris, I’ve never managed life and death situations, so I don’t think it’s very fair for me to say what you do in a life or death situation. Clearly in a prison situation that’s not life or death, that was bad quality control.

The rules weren’t established. But under the heat of fire, which I’ve never been, I —

MATTHEWS: Let me tell you where you might have been, in a cover-up.  Something went wrong, you didn’t want everybody to know about it, a lot of people have those situations. Why advertise it? Apparently the military had that situation. Apparently what happened in this case is they had guys who went nuts, you know, they shot everybody in their family out of because the most popular guy in the unit had just been blown up.

Somebody said, what good does it do to advertise this around the world? I can see doing it for patriotic reasons, by the way. Why do we want the world to know a few mad dogs went nuts in some house. Let’s cover this baby up.

WELCH: I wrote about this in crisis management. There are no secrets. So the first rule of crisis management is get everything out on the table, because there are no secrets. It’s going to be out. Tell it your way, how it happened, define the situation.

MATTHEWS: But suppose its capital crimes involved? How do you tell it your way? We murdered these people because we were really angry about losing our buddy.

WELCH: I’m telling you, cover-ups don’t work. That’s what I’m telling you. They don’t work. You can go through history.

MATTHEWS: You don’t know the cover-ups if they worked.

WELCH: Come on, get out of here

MATTHEWS: The good ones we get away with, right?

WELCH: No, no, no,

MATTHEWS: So you feel basically you can look at this with clear eyes and see Abu Ghraib prisoners were systematically tortured by a bunch of people doing whatever they were doing.

WELCH: It was bad leadership.

   MATTHEWS: They were not clearly trained and they weren’t clearly managed. In this other case, in an extreme situation in battle where somebody gets killed you really like and you just act on that impulse.

WELCH: That’s a tougher call for me. I don’t know if it is for you, but it’s a tougher call for me.

MATTHEWS: I’m trying to see the impulsive justification for — here’s the way I look at it. An IED goes off here. There’s two houses right next to it. They knew it was there. They don’t step on it. That’s prima facia. Therefore they are part of the bad guys.

WELCH: That’s why I’m not black and white on this one.

MATTHEWS: We’ll be right back with Jack Welch.

(COMMERCIAL BREAK)

MATTHEWS: We’re back with best selling author and former G.E. CEO, Jack Welch. Two questions. We only have a short time. The first question is Donald Rumsfeld.

WELCH: Well, you’ve got to decide whether he prosecuted the war the way you wanted it to be done. There’s no question that mistakes have been made. Were they his, were they the State Department? I don’t know all the facts.

MATTHEWS: Do some people in top authority, like you’ve been, keep aboard a guy who’s obviously failing, so that he takes the heat?

WELCH: No, no.

MATTHEWS: No. You don’t think he’s using him as the guy to take all the heat? Because everybody is saying fire Rumsfeld, fire Rumsfeld, and the president rides above that.

WELCH: No. That is the worst game in town.

MATTHEWS: Worst game in town. Let me ask you about business. We can now talk about a trial, we don’t have to worry about guilt or innocence. These guys have been found guilty by a jury of their, not their economic peers, but by citizens. Enron, two top guys. I was listening to the juries afterwards when they went down.

One juror said this Enron guy Kenny Lay, the president calls him Kennyboy, acted like he was trying to take over the courtroom, tried to take us over as jurors. We didn’t like him, we condemned him. Skilling, the number two guy, the financier guy, they said this guy knew so much about the math and the accounting of that firm, he obviously knew what was going on. Interesting jurors. Regular people have just decided that big shots deserve to go to prisons for long terms.

WELCH: More importantly, the system worked. The system, without Sarbanes-Oxley, worked. They captured the bad guys, they prosecuted them, and they convicted them. And what we’ve got to recognize is this business thing can’t be dumped on by everyone.

Business is the engine of this society and the system worked, they caught the bad guys. Now let’s get on with taking risks, investing in growth and doing all the things we have to do and not drown ourselves in guilt and everything else over this. We caught a lot of bad guys in this game and, yet, now is the time to move forward and grow this economy.

MATTHEWS: I was reading the paper today and some business people, at least have been found by the press, maybe the liberal press, who actually feel guilty for being known as business people today.

WELCH: I give speeches to 250,000 people in the last four years.  People feel like, oh, my God, I’m in business. They don’t want to say it.  Look, you’re in business, Chris. You realize you go out and get ratings, people spend money to advertise. You’re in business. Do you feel dirty doing this?

MATTHEWS: No.

WELCH: OK. And these people shouldn’t either. Good people doing good work. There are tens of millions of people. There’s some bad guys, but there are bad guys in every game. We’ve got to route them out. We’ve got the laws to do it. Enron proved that bad guys get caught.

MATTHEWS: Have you ever been in a room or heard about a room where guys actually sit in a room and admit they are bad guys? Where they sit in a room and say, we are going to fleece, like Fannie Mae, I’m going to triple, quadruple my bonuses. I’m going to take money out of the stockholders. I’m going to take it out of the firm’s money. I am going to do this and we’re all going to agree to screw the little people. Does that ever happen?

WELCH: I don’t think so.

MATTHEWS: How did it happen with Enron?

WELCH: What happens is, it’s a role. You get into it, and people get going. I don’t think people think they’re doing things wrong when they’re doing it. I’ve had whistle blowers who were involved in problems, convince themselves that they were right. They’ve talked about it so many times they think they’re right. Look, bad guys got caught in this game and were punished. Thank God the system worked.

MATTHEWS: Will they be shunned by other business people or will they go back to the country club and be accepted?

WELCH: These guys aren’t.

MATTHEWS: Well, they’ll be going to a different kind of golf course in the future. But do businessmen forgive other businessmen who break the rules.

WELCH: No

MATTHEWS: Really?

WELCH: No, no way.

MATTHEWS: Ok, thank you very much Jack Welch. Your latest book is called “Winning,” and it’s always doing well. It’s in paper back. You can probably pick it up for what $12?

WELCH: Not paper back yet.

MATTHEWS: Well, it says so up there. It’s still in hard back for about thirty...

WELCH: ... Bad eyes.

MATTHEWS: It will be out soon. The name of the book is “Winning,” if you can afford it.

Up next, “NEWSWEEK’s” Howard Fineman talks about the politics of gay marriage, flag-burning and courting the base on the right by President Bush. Anyway, we’ll be right back with more HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Elections tomorrow, gay marriage today, and the Clintons now and forever. Here to tap into all of it is “NEWSWEEK’s” chief political correspondent, Howard Fineman, who is also an MSNBC political analyst.

Howard, thank you for joining us. Tomorrow there going to be a primary in California. I should say this weekend. Steve Wesley against Nick, what’s his name? What’s that guy’s name? Angelides. Who will win that one?

HOWARD FINEMAN, NEWSWEEK: I don’t know. That’s my honest answer.

MATTHEWS: Well, I don’t either. I thought you might. Let me ask you about this vote in San Diego to replace Duke Cunningham. Are we going to get an interesting result?: That’s a partisan election. Republican and Democrat against each other.

FINEMAN: I think that’s a crucial one. And everybody’s going to be looking at that to read the tea leaves through the fall. Because immigration is the big issue there. And it is in San Diego which is right on the front lines. You’ve got the corruption accusations that the Democrats are making because that was Duke Cunningham’s seat. And we’ll see what sticks, corruption or immigration. That will set the terms of debate for the fall, nationally.

MATTHEWS: You know, I was thinking about Schwarzenegger, who had such a difficult year last year, after coming in with so much popularity. We covered that race when it came in. It seems like he has a real question facing him. Is he going to face a real, believing, liberal, Phil Angelides who has been active in party politics for years? He’s a very good guy but a very liberal guy against the guy Steve Wesley who is a little hard to read. He is almost like a little too cleverly put together, politically, it seem after watching him.

Who would you rather fight if you were Schwarzenegger, the moderate who is not quite un-synthetic enough to be a politician, enough genuine, perhaps, or against the genuine liberal?

FINEMAN: Well, I think Schwarzenegger would rather fight the traditional liberal, Phil Angelides, because Arnold’s had a lot of trouble with the Republican base, such as it is in California. And it is absolutely indispensable to him if he’s going to have any chance of getting reelected. So, I think that’s probably his preference.

MATTHEWS: Let me ask you about the Clinton marriage story. Over the weekend, “The New York Times’” ombudsman, Byron Calame, went over it again and talked about different points they thought they shouldn’t have mentioned. They shouldn’t have mentioned the other woman, if you will in that story, the way it was alluded to. Perhaps they shouldn’t have used some of the language they used about Bill Clinton is often seen in public but rarely, if ever, with his wife. They thought that language was a little too racy. Is this debate about “The New York Times” article going to be the story of the debate with the Clintons?

FINEMAN: Well, I think this is more about “The New York Times” in this case than it is the Clintons. I think what “The New York Time” was telling itself in announcing to the Clintons and the world is, that this topic is on limits. We can discuss this. We can report about it if we want. The story itself didn’t have all that much that was new in it. But to me, it was “The New York Times” laying down a marker, saying we reserve the right to report on this relationship any time we want to from here on out. It is fair game. And I think ultimately, that’s what the public editor of the New York times agreed with.

MATTHEWS: The overall was, Howard, that you didn’t write about somebody’s sex life unless it affected their policy making, their job, their responsibilities, unless it involves something like a conflict with a lobbyist relationship or a potential extortion situation or a spying case.  But, you didn’t just talk about a guy because he had a one-night fling with somebody or a little affair on the side, if it didn’t involve his job.  People tell me that rule was different for Clinton. Because he was impeached on a matter that related to that, Monica Lewinsky, he will forever be judged by a different standard.

FINEMAN: I think that’s true. I think also the Clintons rewrote the book in other ways. They were really the first tag team, I mean the first husband and wife team to sort of advertise itself in that way. The so- called blue plate special from back in the 1992 campaign. Everybody knows that Hillary Clinton was a powerful, influential and important, smart figure, not your traditional political spouse. That was true when Bill Clinton got in the national politics a while back. And it remain true now that the other person is running. So there is a whole different set of rules for the Clintons. That’s been true from the very beginning and it remains true now.

MATTHEWS: What’s your take on the political potency of the president going back to these cultural issues like gay marriage?

FINEMAN: I don’t think it has a lot of juice in it, Chris. There are only six states that have marriage amendment ballot initiatives. Four of them are in the south. I think they’re already on red state turf there. I think a lot of conservatives are very upset about a whole lot of other issues with this president. Whether it is immigration policy, spending, gasoline prices, even the war in Iraq. And I don’t think that this is going to mean that much nationally.

The president’s standing, it might help in a couple house races here and there but I’m not even sure it will make that much of a difference. I was just speaking with Harold Ford, the moderate Democrat running in Tennessee. He is for the traditional marriage ballot initiative that’s on the ballot in Tennessee. So, he is avoiding the damage that way. A lot of other Democrats will do the same thing on the local level.

MATTHEWS: Great stuff, as always, Howard Fineman, thank you for everything.

Play HARDBALL again with us Tuesday night at 5:00 and 7:00 eastern.  Election 2006 heats up, big time tomorrow. Eight states have primaries and San Diego voters will decide who replaces the disgraced former Congressman Duke Cunningham for the rest of this year. We’ll have all the news, always the political news, because we do politics on HARDBALL.

Right now it’s time for the “ABRAMS REPORT” with Dan.

Watch “Hardball with Chris Matthews” each weeknight at 5 & 7 p.m. ET

Copyright 2006 MSNBC and Voxant Inc.

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