updated 6/4/2007 1:37:50 PM ET 2007-06-04T17:37:50

Guests: Wayne Slater, Michael Wolff, Dan Bartlett, Eric Jackson, Frances Moore Lappe, Jonathan Capehart, Jonathan Allen

CHRIS MATTHEWS, HOST:  Another big loss for President Bush as the leader of his palace guard, Dan Bartlett, resigns.  Also, Hillary under scrutiny.  What have the authors found?

Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews.  All by himself.  Dan Bartlett and Karl Rove have been the palace guard for 13 years, protecting George W.  Bush from harm and outside influence.  Now Bartlett is leaving.  Will the last person leaving the White House please turn out the lights?  Karen Hughes, Scott McClellan, Don Evans, Harriet Miers, Don Rumsfeld, Paul Wolfowitz, Douglas Feith, Scooter Libby—Bush‘s Texas posse and his hawkish brain trust are all skipping town.  Who‘s left to mind the ranch?

Plus, Hillary under glass.  We hear she doesn‘t like to be watched.  She‘s not authentic, says Watergate prober Carl Bernstein.  But if the woman isn‘t Tammy Wynette, is no cookie baker and nobody‘s fool, then who is she?  And if she doesn‘t like people poking around her head, how are we going to make out who she is, and how is she going to make it through the media gangway with all its sound effects, echo chambers and fun house mirrors?

Oh, yes, one other thing.  If Hillary and fellow Democratic candidate John Edwards thought Saddam Hussein was reason for us to invade Iraq, why didn‘t they read the intelligence report?  Good question.

Tonight we‘ll talk to the man leaving Bush‘s side, Dan Bartlett.  He‘s coming to HARDBALL.  Plus, who does Wall Street want to be the next president, and who scares them to death?  We‘ll talk to CNBC‘s Jim Cramer.

We begin tonight, however, with NBC‘s David Gregory, who‘s at the White House.  David, thank you for joining us.

DAVID GREGORY, NBC CORRESPONDENT:  Sure.

MATTHEWS:  David, you‘ve been a real pro in watching these people.  What does it mean that the guy who you and I have to deal with, you more than I have to deal with in terms of communications policy, who sees the president, who doesn‘t—what‘s it mean that he‘s leaving?

GREGORY:  That it‘s a big hole because it‘s not just a counselor in the sense of somebody who‘s got the president‘s ear and who‘s masterminding all the communications strategy, but it‘s somebody in the person of Dan Bartlett, who‘s been by the president‘s side going on 14 years, when Dan was still in college at U.T. and working for George W. Bush, who wanted to run for governor in Texas.  So it‘s somebody who knows the president‘s mind, who can speak to him in a pretty frank way, who has on occasion had to, you know, get up in his face and talk to him.

I can remember a couple of episodes, one, of course, having to do with Hurricane Katrina and having to show him a CD, a DVD of some of the coverage that let the president know how bad it was, and other occasions that have been written about, the 2004 election, election night, you know, whether the president should go out and assert that he‘d won the thing before Kerry conceded.  So that‘s the kind of role he‘s played.

Has‘s also been, frankly, the most powerful person in the communications shop, in the press shop, the people that people like you and I deal with more than the press secretaries.  He has had access to the president.  That was the case when Karen Hughes had his job as counselor, and it was the case when he was counselor himself.

MATTHEWS:  Well, who‘s the president going to rely on, now that Dan‘s leaving the job?

GREGORY:  It‘s a good question.  You know, he‘s got a chief of staff in Josh Bolten who‘s also been around him for a long time.  And—but there‘s a new cast here, a cast of people who have come in now in this second term who don‘t go back to the Texas years.  But this is a very delicate time.  And you know, there was a feeling within the White House, I think, really, in the president‘s mind that Bartlett would be one of those guys who was on the final chopper ride out to Andrews and on the last flight back to Texas.

Now look who‘s around in the White House.  Karl Rove is really the most prominent Texan who still around, and he‘s got his own issues in terms of how the public sees him, Democrats, Republicans, and so forth.  So it‘s going to be a big gap and a tough time.  You know, you‘ve got the immigration fight.  You‘ve got the president picking a fight with the conservative base on immigration.  And of course, Iraq, and it‘s going to be a very contentious fall when it comes to dealing with the Iraq funding debate.  Dan Bartlett was behind all of that in terms of how to frame the issues.

Now, let me just say something else I think is important.  You know, Bartlett will take time to look at his tenure here and the decisions that were made.  This is also a communications operation that has come under fire, that has been defensive at times.  There was a policy, really, from the president that wanted to deal with the press as a kind of special interest group and try to be more controlling of the message in that way, and Dan Bartlett was the executioner in that regard and sometimes was criticized as being too late to respond to issues where they needed to deal with the press and engage the press more than they did.

MATTHEWS:  Well, the president seems to me, without getting too personal—I don‘t like to attack him personally, although I‘ve been skeptical about his foreign policy, obviously—he doesn‘t seem like someone who meets new people that often, that he relies on old relationships like Karen Hughes, like Karl Rove, like Dan Bartlett.  He doesn‘t seem like the kind of guy who meets new people in his life as president.

GREGORY:  It‘s an interesting point.  I don‘t think the president is somebody who, like, for instance, you know, Bill Clinton might have been, where he would, you know, seek out people and get a lot of their insight on a particular issue in a kind of off-the-cuff way.  I think on matters going back to stem cell research or, indeed, the Iraq war, the president would solicit outside opinion, but of course, on the Iraq war, I think that came a little bit later.

So I think fundamentally, that‘s true.  The president has been more careful about outsiders who give him advice, outside of, you know, good friends that he may rely on.  And that‘s why that troika, the ones who came from Texas with him, are the ones he relied on not just because of his own comfort level—and that mattered—I mean, the repartee, and you know, the president‘s sense of humor, a kind of towel-snapping sense of humor—all of that, he relied on this Texas gang for.  But it was also unvarnished advice that he got on various matters.

Now, look, even that point is a subject of contention because there are plenty of people who will say, Well, did the president really get unvarnished advice when it came to the war?  Some of that gets, you know, real inside the decision making, and there‘s yeses and nos to that question, as well.

MATTHEWS:  And there‘s a question whether people were kept from talking to him.  He had a very limited circle.  Thank you.  Stay with us, David.

GREGORY:  Sure.

MATTHEWS:  Sticking around with us.  Let‘s look at the straits President Bush is in right now and the tight focus on Hillary Clinton.  Starting with the president, joining us now is “Vanity Fair‘s” Michael Wolff, a brilliant writer, and “The Dallas Morning News‘s” Wayne Slater, author of “Bush‘s Brain.”

First—and then there was Rove,  With the resignation of the president‘s confidant, Dan Bartlett, who among the president‘s inner circle is still around?  Former chief of staff Andy Card is gone, and adviser Karen Hughes is off at the State Department.  Is it just Karl Rove now?  And can he alone save Bush‘s presidency and hold the Republican Party together?

Michael Wolff, that‘s a hell of an agenda for one guy, Karl Rove, to keep the Republicans together when they obviously are not together on this illegal immigration problem, and of course, fighting a war that most Americans think we shouldn‘t have fought now.

MICHAEL WOLFF, “VANITY FAIR”:  Can I ask something else?  You know, the really interesting thing here to me is, how come, after 14 years, Bartlett goes?  He can‘t give the guy another year?  It is arguably the pivotal point in his presidency.  He either rises or falls on the next 12 months.  So how come Bartlett goes?  What‘s up?

MATTHEWS:  Well, David, you‘re still with us, David Gregory.  Is there evidence...

(CROSSTALK)

MATTHEWS:  ... or is it just burnout?

(CROSSTALK)

WOLFF:  That doesn‘t—I don‘t think that works.  After 14 years, it just doesn‘t suddenly say, Oh, OK, I‘m burned out.  This is the time.  The rubber is supposed to meet the road here.

GREGORY:  Well, Michael, let me just suggest to you I think that‘s perhaps an overly cynical view.  I mean, the reality is that the pivotal moment—I don‘t know when there hasn‘t been a pivotal time for this presidency.  And you‘re right, we‘re in the middle of one right now.  You‘re also right that I‘m sure the president wanted him, and others like a Rove, to stick around, especially because of how delicate—I made that point—the next 14 months or so are going to be for this president, 600 days, but...

WOLFF:  Well, then—I mean, I think that...

GREGORY:  But let me just—hold on.  Let me answer your question because you raised a particular point.  Let me just—I also happen to know, reporting on this place, that this is a real grind.  And for Dan, who turns 36 years old today, who‘s got three young kids and who works from 6:30 in the morning to 8:30 at night, it‘s a reality in this town...

WOLFF:  Yes, I‘m...

GREGORY:  ... that that takes a real toll on people‘s family.

WOLFF:  ... sorry, we all have hard jobs.  You know, you can‘t just say this is a grind, so you have to go.  You‘re in the White House.  Something is wrong here.  Something is odd.  And there‘s a signal being sent here.  And I think the signal is—and I think it‘s unavoidable—I want to get away from this place.  This place is—you know, I got to save myself.

MATTHEWS:  Well, I tell you, let me just tell you, we‘ve watched a lot of White House together, David, and I‘ve certainly watched more than any of you, and I got to tell you, people leave.  They just leave.

Let me go to Wayne Slater.  Is this going to hurt Bush, to lose one of his two palace guards?

WAYNE SLATER, “DALLAS MORNING NEWS”:  Yes, I think it is.  I mean—and you really went down the list earlier in the program, talked about all the people who have left, and half of that group were members from Texas, folks who were in the boiler room here in Austin, Texas, 1993, when George Bush began his first successful campaign for governor.  And now we‘re down to one.  There‘s one Texan left to turn out the lights, Karl Rove.

The key to Dan, one of the keys, is that he kind of engaged the president in the Texas sensibility that there was something outside the Beltway that people like Dan Bartlett could communicate with the president about.

I kind of agree with this idea that Bartlett may not have been as forthright inside the White House as he could have been in pointing out what was going on outside.  He brought some bad news to the president, but I think he served as a reinforcement inside that made the president feel more comfortable in his skin.  The guy was loyal.  The guy‘s been there from the beginning, a guy who he grew to trust.  He‘s gone.  It‘s a problem.

MATTHEWS:  Well, that‘s a great question for David.  Again, I think you‘re the expert.  Without getting too nasty with a guy who‘s obviously leaving the government service right now, was Dan Bartlett helpful in opening Bush‘s eyes to the real world around him, or was he simply an enforcer, someone who kept Bush operating on his own instincts and basically kept him fearful of outside influence and outside observations?

GREGORY:  No, I think Dan was capable and willing and demonstrated that he would challenge the president on aspects of policy where he had direct influence.  And I think his influence particularly on the war, he was not a policy maker in the room about whether we go or don‘t go.  Let‘s be clear about that.

In terms of how to present the strategy, I think he did push the president, and I think he got pushed back on some areas.  One example, more direct communication with the American people about sort of educating the American people about what was really happening in Iraq, using maps, really taking the people to school on this.  I think he fought a losing battle on that.

I think he understood the media culture pretty well and tried to bring that inside the White House to try to explain to the president and others what the narratives were that they were having to contend with.  And of course, his job was to also fight back at us, to try to push us and—away from certain story lines and try to challenge us.  And I think—you know, I think he did all those things.

(CROSSTALK)

MATTHEWS:  Did he discipline people that he didn‘t like?

GREGORY:  I‘m sorry?

MATTHEWS:  Did he discipline people that he didn‘t like, punish them?

GREGORY:  No, not in the traditional sense.  I don‘t think that they really tried to blacklist people or ice people out.  Look, they were not forthcoming enough to have it be, you know, that big of a fallback if they didn‘t do that.  I think he did try to fight hard, but he did it in a way that was aboveboard.  And that was always my experience with him.

WOLFF:  Can I—can I...

MATTHEWS:  OK, thank you for joining us.  David has to leave now, David Gregory, White House correspondent for NBC News.  Thank you for joining us.

Michael Wolff, your turn.  I‘m sorry.

WOLFF:  Yes, just a counterpoint, and I think it‘s important to keep this in mind.  This has not—it would be hard to argue that the Bush White House has had a successful communications operation—I mean, certainly not for the last number of years.  So in some sense you could look at this as a real opportunity for the Bush White House.  I mean, I don‘t think you can say Bartlett has been a success.  And I think you can say, you know, Bring in somebody else here.  We got a real problem.  Let‘s restaff.

MATTHEWS:  OK, we‘ll be right back with Michael Wolff of “Vanity Fair” and Wayne Slater of “The Dallas Morning News.”

And coming up later, White House counselor Dan Bartlett himself is coming here.  He‘s the one, by the way, announced today he‘s leaving.  Plus, CNBC‘s Jim Cramer is coming here.  That should be exciting.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Welcome back to our weekly, by the way, rough and tumble roundup with “Vanity Fair‘s” Michael Wolff and “The Dallas Morning News‘s” Wayne Slater.  He‘s author, by the way, of “Bush‘s Brain.”

Next up, exposing Hillary Clinton.  Last week, “The Washington Post” gave us a glimpse of two new books exposing Hillary Clinton‘s political ambition, her handling of Bill‘s affairs and her own personal secrets.  Today Carl Bernstein, the author of one of those books, spoke to Matt Lauer on “Today.”

(BEGIN VIDEOTAPE)

CARL BERNSTEIN, AUTHOR, “A WOMAN IN CHARGE”:  I think that she has developed an inauthenticity that is perhaps her greatest political problem.  Certainly, her advisers think that she is often perceived as inauthentic, and increasingly so, even in this campaign.  If she can get over that, she might be able to lead much more effectively.  But again, partly because of invented, self-invented biographical details, she does come off as inauthentic.

(END VIDEOTAPE)

MATTHEWS:  Boy, that—you know, the book is a beautiful book, Michael and Wayne.  It doesn‘t look to me like at all a hatchet book.  It‘s a balanced book, many people say who have gotten through the book.  But clearly, calling someone inauthentic is to say they‘re a fraud, in a nice way.  What do you make of that assessment by Carl Bernstein, after spending, what, eight years putting this book together?

SLATER:  You know, my feeling is that he‘s actually saying the other thing.  He‘s saying that she‘s not phony enough, that she hasn‘t invented a soft, cuddly persona for herself, that she is...

MATTHEWS:  Well, that is the height of cynicism.

SLATER:  Well...

MATTHEWS:  You‘re saying if a person comes off as inauthentic, then they got to keep working at the inauthenticity.

SLATER:  Well, no.  I‘m saying that she is inauthentic because, basically, you see what you get there, that she is—she is a highly disciplined, fairly wooden...

MATTHEWS:  I see.

SLATER:  ... not that charming a person.  So what Carl is saying is she‘s not charming.  So—and I think what that means is he didn‘t get the goods.  You know, he had a big book, eight years.  You know, you go on national television, and your big scoop is she‘s inauthentic, you know, you didn‘t get it.

MATTHEWS:  You know, Wayne and Michael, a friend of mine who‘s—I haven‘t seen him in a while, but he‘s a Canadian pollster.  He says that the key to any leader in any culture, really, at least any Western culture, is they have to have a motive.  They have to be like somebody like Roosevelt or Reagan or Lincoln, you know why they‘re there.  And secondly, you need to have passions where you can see them cry once in a while, see them laugh, see a real person there.  And third, spontaneity, where they really do react, that the lights are on and there is someone home.

I think—you‘re right.  I think, Michael, you‘re saying, and Wayne, you respond, that Hillary doesn‘t seem to be spontaneous, that she seems wooden, organized, disciplined, very professional, but not the kind of person who has interesting and novel reactions to real events.

SLATER:  Well, being sort of disciplined is one thing.  Being perceived as cold and calculating, expedient, where her husband showed his heart, is another thing.  The question is whether she is, as Michael said, when you can fake the authenticity, you got something going here...

MATTHEWS:  Yes.

SLATER:  ... or whether she really is this cold, calculating person.  She may, in fact, be that, but that‘s what I think people are reacting against.  In a campaign, Chris, you know this, voters are looking for someone beyond the issues—the specific issue set, looking for someone out there they can communicate—and touch, they can make contact with.  Who is this person?

MATTHEWS:  Yes.

SLATER:  And I have a sense throughout—I remember meeting her back in 1988 -- I don‘t know who she is.

MATTHEWS:  Yes.

SLATER:  This enormous shield is in front of her.

WOLFF:  But I think—I think...

(CROSSTALK)

WOLFF:  ... you can take that, and I think you can spin it and sell it in a different way.  If she can say, I can solve your problems, I can solve your problems because I‘m the person who is disciplined enough, who‘ focused enough...

MATTHEWS:  Yes.

WOLFF:  She is not—we have just gone through almost eight years of George Bush, Mr. Cuddly, Mr. I Love You, Mr. I Have a Nickname For You.  And that got us into Iraq. 

I think people are looking for a very, very different signal at this point. 

(CROSSTALK)

MATTHEWS:  You know what I think they are looking for, guys?

(CROSSTALK)

MATTHEWS:  I‘m thinking they are looking for a person who, if they knew your situation, would be helping you out, would be rooting for you.  If they knew what it was like to make 30 a year, to have tuition bills, to have health problems, would she be helping you out?

I think you‘re right.  I think, Michael, you are right. 

And, by the way, I love your stuff in “The Weekly”—in “The Weekly Standard.”  Why did I say that?  In “Vanity Fair.”  I love it.  It is brilliant. 

Anyway, thank you, Michael Wolff and Wayne Slater. 

Up next, the counselor to the president, Dan Bartlett himself, is coming here.  He‘s stepping down.  He announced it.  Let‘s talk to him on the way out.  Let‘s muster him out, Dan Bartlett, in just a minute on HARDBALL.

You‘re watching it on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Dan Bartlett is counselor to President Bush.  He has been with President Bush back since his first campaign for governor 14 years ago.

(LAUGHTER)

MATTHEWS:  Today, he announced he is stepping out into that cruel world known as the private sector. 

(LAUGHTER)

MATTHEWS (singing):  For he‘s a jolly good fellow.  For he‘s a jolly good fellow. 

Dan, all these years...

DAN BARTLETT, COUNSELOR TO PRESIDENT BUSH:  Appreciate that.

MATTHEWS:  ... and months of trying to get me in to see the president, and I know did you your best. 

(LAUGHTER)

MATTHEWS:  So, I forgive you.

Let me ask you about Peggy Noonan, a real conservative stalwart, a true believer, as you and I know.

BARTLETT:  Right. 

MATTHEWS:  She wrote today—quote—“What conservatives and Republicans must recognize is that the White House has broken with them.”

Fair shot or not? 

BARTLETT:  I don‘t think that is fair. 

I understand that there‘s a lot within—a lot of people within our party that have deep misgivings about the immigration bill that the president supports.  This has been a very contentious issue within our party, and within the country, for that matter.  There are deep divisions within the Democratic Party on this issue as well. 

But the bottom line is, what President Bush is saying is, those who have the most misgivings about particularly border security, this bill is our best chance to fix those problems.  The president is honestly recognizing the fact that the government, over the last 20 years, has not done its job when it comes to securing the border. 

What he is also saying is that a comprehensive approach is the best way to solve those problems.  And the president is not trying to break from his party.  What he is trying to do is lead his party in a way that he thinks will solve these problems, the problems that the conservatives have been pointing out for some time, while, at the same time, addressing some of the other issues that maybe the conservatives don‘t agree with, but, in totality, is the best way to move this country forward. 

MATTHEWS:  Well, isn‘t the problem that conservatives want the law enforced, and this is one area of the federal government where the law is not enforced?  People come in this country to get jobs, in most cases—not for welfare or health, but for jobs—and they break the law in coming in.  And nobody ever tells them they have got to leave. 

No one—people—and they get hired by business.  The law is broken by business every day.  And—and the government turns its—its—its sight from it.  Isn‘t that why people don‘t trust the government on this issue?  It hasn‘t enforced the law.

BARTLETT:  Yes.  In short—in short, the bottom line is, is that the 1986 reforms didn‘t work.  There were commitments made then that were not held.  And we have recently done a lot better job when it comes to securing our border. 

But the argument the president would make is that you just can‘t go at it from just a border-security-only perspective, that you can‘t just put up fencing and—and use the technology, while it is critically important.  And the beauty of the bill is the fact that it requires those types of benchmarks to be met before the broader reforms kick into place. 

But what is important is, you have to do something about the demand.  Why are people trying to cross the border?  They are trying to fill the jobs that are not being done here.  And they‘re doing it because they want to put food on the table for their children. 

So, we have to address that issue, have a rational system that says, let somebody come over temporarily, work in jobs that Americans are certifying—in a certified way, not doing.  And then they can return home. 

It is this very underground system that we have...

MATTHEWS:  Yes. 

BARTLETT:  ... created in our country.

And we are—there‘s many times where interior enforcement wasn‘t done.  Like I said, we are doing a better job, but, rightfully so—and conservatives have led this charge—have pointed out that the government, over the last 20-some-odd years, has fallen down on its responsibilities. 

MATTHEWS:  But wouldn‘t everybody in Latin America, all the way down to Tierra del Fuego, want to come here, if they could, to get—because the money is going to always be better here?

BARTLETT:  Well...

MATTHEWS:  You say we have jobs, but the point is, people come in because they want to make money they can‘t make in the south. 

When is that ever going to stop?

BARTLETT:  No question about it.  And...

MATTHEWS:  Why would that stop under any new system?  People would still want to come here, still want to make money, and they would want to stay.  Nobody wants to go home once they are here. 

BARTLETT:  Well, Chris, you make a good point.  And you have got to raise...

MATTHEWS:  Would you go home?

BARTLETT:  That does raise other issues outside...

(CROSSTALK)

MATTHEWS:  Would you go back home where you came from, if you could live in America? 

BARTLETT:  Well, what you have to do is raise—you are raising issues that go beyond immigration reform.  It‘s, how do we lift people out of poverty in our own hemisphere?

That requires trade.  That requires education investments that we are making in Latin America.  It takes a comprehensive approach, which I would say this president recognizes and has pursued.  And he had a long trip down to South America to make these very points.

But the bottom line, Chris, is that there is a recognition in our country that there are jobs here that we are not going to do, that there are people here...

MATTHEWS:  OK. 

BARTLETT:  ... who are here illegally. 

We have got to address this issue.  You just can‘t wish this problem away.  You have got to address it in a comprehensive way.  That‘s what the president is trying to do.

MATTHEWS:  What job are you going to take now?  What are you going to do?  What have you got in your mind?

BARTLETT:  That‘s...

MATTHEWS:  You must have some big vision of greatness out there. 

(LAUGHTER)

BARTLETT:  I have got a vision, but I don‘t—it is not reality yet, because the bottom line is, it is too hard, working inside the West Wing, to actually try to seek a job on the outside. 

Now that I have said that I‘m going to leave, I‘m going to pursue some opportunities.  Don‘t know specifically what they may be.  It may keep me here in Washington.  It may take me back to Texas. 

But I—you know, I look forward to—to taking on a new chapter in my life. 

MATTHEWS:  Well, don‘t go work for FOX, OK? 

(LAUGHTER)

BARTLETT:  OK. 

(LAUGHTER)

MATTHEWS:  Thank you, Dan Bartlett.  Thanks for joining us.

BARTLETT:  Or MS—OK.

MATTHEWS:  Well, no.

BARTLETT:  Thanks.

MATTHEWS:  We might be offering a job right now to you. 

Anyway, thank you.

Come by and talk to the peeps here. 

Anyway, up next—congratulations, by the way, a long 14-year service, unblemished by scandal. 

Anyway, up next:  New children‘s books teach kids their left from their right politically.  And how young is it too young to learn about donkeys and elephants?  Can‘t we just leave the kids out of politics?

And this Sunday on “Meet the Press,” join Tim Russert, along with James Carville, Mary Matalin, Michael Murphy—Mike Murphy, that is—and HARDBALL‘s own Bob Shrum about Bob‘s new book.

And, here on HARDBALL on Monday, Bob is coming to talk about that new book.  It‘s called “No Excuses.”  It‘s about all those political campaigns he was in that didn‘t turn out so well.

You‘re watching HARDBALL on MSNBC.   

(COMMERCIAL BREAK)

VERA GIBBONS, CNBC CORRESPONDENT:  I‘m Vera Gibbons with your CNBC “Market Wrap.”

Another record-breaking day fueled by some good economic news—the Dow Jones industrial gaining 40 points, and closing at a record high of 13668.  The S&P 500 closed at a record high for the third straight day, after gaining more than five points, and the Nasdaq up more than nine. 

The economy created 157,000 jobs last month.  Meantime, the unemployment held steady at 4.5 percent.  Consumer spending up five-tenths-of-a-percent in April, but personal income down a tenth-of-a-percent. 

GM, Chrysler and Toyota all reported sales gains in May, while Ford sales dropped almost 7 percent. 

And shares of “Wall Street Journal” owner Dow Jones rising above $61 -

that‘s a dollar more per share than media mogul Rupert Murdoch is offering for the company.  Shares rose on reports that the controlling Bancroft family is reconsidering Murdoch‘s offer and perhaps others. 

That‘s it from CNBC, America‘s business channel—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

A California book publisher says most of the books geared to children have a liberal bias.  And he‘s working to change that. 

Eric Jackson publishes book like “Help!  Mom!  There Are Liberals Under My Bed!.”  He‘s now taking on global warming with “The Sky‘s Not Falling.”  That‘s the name of a book, a book for kids, taking the conservative position.  I think it is the conservative position.  I‘m not sure.  It takes dead aim, of course, against Laurie David‘s upcoming book published by Scholastic Press, “The Down-to-Earth Guide to Global Warming.”

Eric Jackson of World Ahead Publishing joins us this evening.  Also with us is author Frances Moore Lappe, who takes issue with the types of books Mr. Jackson publishes. 

Let me—let me go right now to Mr. Jackson. 

Why do kids—what age group are you pointing to here with this book? 

ERIC JACKSON, PRESIDENT, WORLD AHEAD PUBLISHING:  Well, first of all, thanks for having me on today, Chris. 

And the age group that we are looking for is actually the same as Scholastic.  That‘s the 9-to-12 range.  So, we are actually looking to put out a book that is speaking to the exact same audience that Scholastic‘s upcoming book will be targeted at. 

MATTHEWS:  Well, what—what is—let me go just through one of the subjects here.  “”Help!  Mom!  There Are Liberals Under My Bed!” what is that story about?  Put it in your own words.  Do the storyboards, if you can, verbally. 

JACKSON:  Sure.

That is—that is a fun little illustrated story that tells the story of a couple of boys that set up a lemonade stand, and there are liberals that show up that, coincidentally, look like Hillary Clinton and...

MATTHEWS:  Coincidentally, but you—you did it—that on purpose, right? 

JACKSON:  Well, that was—that was the author and the illustrator‘s work product.  But—but, yes, it is certainly satirical.  It‘s fun for adults to enjoy a chuckle at.  And it has a story that is really about the American dream and about the free market.

MATTHEWS:  What is it that kids should fear from—from the person who you are describing as a liberal, that is obviously Hillary? 

What—what should they fear?  What should the kid who is setting up an independent lemonade stand, who doesn‘t have to pay taxes on it, obviously, regular kids in the neighborhood—our kids have done it—what—what should they fear from a liberal?  What is the message here?

JACKSON:  Well, the message of that particular book was not so much fear.  It does have a playful title.  But, really, what it was trying to drive home is just how important the American dream is, and how important the free market is, and how, if you work hard, you can actually achieve great things. 

MATTHEWS:  And a liberal is going to come along and make you sell broccoli with your lemonade?

JACKSON:  Well, let‘s hope not, but that was one of the amusing little stories that was in that book. 

MATTHEWS:  Let me ask you.

Let‘s bring in Frances.

Frances, what do you make of this kind of publishing?

FRANCES MOORE LAPPE, AUTHOR, “GETTING A GRIP”:  Well, there is nothing fun about it to me. 

(LAUGHTER)

LAPPE:  It‘s pretty scary. 

We‘re—we are violating rule one of good parenting, which is, do not frighten.  And a title like that is very scary.  Something under the bed is what kids fear.  So, it is—it‘s just exactly the wrong approach, in my view. 

MATTHEWS:  So, if it was a conservative—if this was a liberal reporter, or a liberal publisher that was putting out something like beware of whatever, of—of right-wingers, or something, you would—you would have the same attitude? 

LAPPE:  Absolutely. 

And rule two of good child-rearing, of responsible parenting, is, don‘t create whole classes of people, groups of people who suddenly are the enemy.  I mean, I thought conservatives believed in respecting the individuality and really celebrating that.  And creating groups that are the enemy is the opposite of that. 

MATTHEWS:  You know, I have got to ask you, do you have kids, Eric? 

JACKSON:  No, I do not. 

But one thing I was curious about, Chris, is whether or not Frances would agree that this book by Scholastic that they‘re putting out, which actually—actually makes some pretty stark claims—it, really, when you flip through it, indicates that polar bears are dying, that glaciers are melting, and that it really is directly responsible—that people driving non-hybrid cars bear much of the blame. 

I mean, to me, that sounds like quite a major scare tactic.  And, frankly, the book that we are putting out, “The Sky‘s Not Falling,” which will also be available in September, on the same day of this Scholastic book, is really meant to counter that, to counter this sense of fear, and to help children understand, hey, it is a complicated issue, but it‘s not necessarily something that you need to be worried about. 

MATTHEWS:  Well, Frances, what do you make of that? 

By the way, let me ask you this.  Do you think kids of that age should be encouraged to have any public policy, Frances?

LAPPE:  I think...

MATTHEWS:  Should they be encouraged to embrace the need for hybrid cars to cut down on CO2 emissions?  Should they be encouraged to understand that there is, whether it is cyclical, or it‘s seasonal, or it‘s serial, the fact is, glaciers are melting, and what we should possibly be doing about it?  Is that wrong, to educate kids to that? 

It seems to me that me kids, at a fairly young age, either become interested in public affairs or they don‘t.  You don‘t say, wait until you are 21 to start thinking. 

LAPPE:  Absolutely.

And what we want to stimulate is kids‘ curiosity, their thinking, figuring out—being problem-solvers.  And what most excites me, and what I think our primary responsibility is toward children, say, in grade school and—and on, is to enable them to act on that innate desire to be helpful, that innate desire to be a problem-solver. 

And that is why I so appreciate the movement in schools called apprentice citizenship.  And part of engaging with the world, yes, is learning about climate change and what we each can do.  That doesn‘t have to be scary.  That can be empowering. 

MATTHEWS:  Let me ask you about the liberal under your bed.  Was that your idea, Eric?  Did you come up with that title? 

JACKSON:  No, I did not.  That was something that the author came up with.  And we thought it was a very clever and well-executed book.  But I do—I do find...

MATTHEWS:  What is meant to be a kid‘s reaction? 

Say you are 8 years old, and you are a girl, and you pick up a book, or your mommy gives it to you, or a teacher shows it to you, and it says under it, “Help!  Mom!”—with exclamation points—let‘s take a look at this—“Help!”—exclamation point—“Mom!”—exclamation point—

“There Are Liberals Under My Bed!” 

And there, there are people that look like—well, clearly, one is Hillary Clinton.  And I think the other is Teddy Kennedy.  And the other is a donkey, obviously a Democrat.

Is this propaganda? 

JACKSON:  Well, I think it‘s—I think it‘s good, clean fun, Chris.  is what I would say.

MATTHEWS:  Is it—let me ask you if it‘s anything but...

(CROSSTALK)

MATTHEWS:  But is it—is it scary propaganda?  I mean, if this were...

JACKSON:  No, I don‘t think it‘s—I don‘t think it‘s...

MATTHEWS:  ... mommy, there are some right-wingers under my bed, and they showed a bunch of guys in military uniform with boots, or whatever, would that be propaganda?  I mean, where do you draw the line as to what is just scaring the heck out of kids? 

JACKSON:  I think a little satire that actually appeals to adults gives them a good chuckle.  Kids don‘t know who Hillary or Ted Kennedy is, thank goodness for that.  I think there‘s nothing wrong with that. 

But let me ask you, what is scary?  I think this scholastic book—

MATTHEWS:  Let me tell you why.  I do not want to take sides in this.  But I‘ll tell you something, Frances made a point—she must be some sort of psychologist, Frances.  But when I was a kid and I would see the Invisible Man with Claude Raines (ph), I would go home every night, after seeing it at the midnight spook show, with my dad at the drive in, I would come home every night and check under my bed, and feel around completely under the bed to make sure the Invisible Man wasn‘t under my bed. 

And I‘m fairly—I‘m not going to say I‘m totally normal.  But I‘m clearly not crazy. 

JACKSON:  I won‘t call you on that one, Chris. 

MATTHEWS:  Well, but if this book comes out—first of all, liberal is a word that used to mean for freedom, for tolerance, for maybe social change, and here it is clearly a word that is meant to scare people. 

JACKSON:  Well, I guess it used to mean that, but in the present day it may mean something different. 

MATTHEWS:  Well maybe it does. 

JACKSON:  Let me tell you where the title came from, since it seems to be an issue for you.  The title actually came from the author.  She said she was describing why she wanted to vote for George Bush over Al Gore, and described what a liberal was.  And apparently here child, whom she was describing this to, hopped off the bed and looked under it to see if there was a liberal down there.  So it actually was a funny little incident from the author. 

MATTHEWS:  Frances what do you make of that?  Does that justify the title? 

LAPPE:  Absolutely not.  It is frightening, as you say.  I was that kind of kid myself, and I think many are. 

JACKSON:  I hear the term frightening and fear quite a lot, but I haven‘t heard you weigh in on what you think about the scholastic‘s book.  Here, let me just hold it up again.  And this book actually is quite, quite scary, if you ask me.  I flipped through it.  It talks about two-thirds of all species disappearing. 

And actually, it says very clearly, very plainly that Carbon in the atmosphere is the cause for this.  It tells kids, hey, you need to go get a hybrid car.  Well, some parents don‘t have as much money as Al Gore to afford to go out and get a 30,000 dollar car.   

MATTHEWS:  Let me tell you what scares me, Eric.  What scares me is when I watch Jay Leno on Jay Walking on “The Tonight Show,” and he interviews people, grown up people in their 20s and 30s, who don‘t know anything about their country.  And then he says, what do you do for a living.  And one of them says I‘m a teacher.  That is what scares me. 

Anyway, thank you Eric Jackson.  Thank you Frances Moore Lappe.  And next, CNBC‘s Jim Kramer.  He‘s going to shake things up around here.  I am going to ask him who are the Wall Street money guys and money women afraid might be the next president.  Who is the boogey man of this presidential campaign for the money folks?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Does Wall Street fear some of the candidates running for president right now?  Jim Kramer is host of “Mad Money” on CNBC.  Well, Jim, I guess Kucinich scares the heck out of them.  I don‘t know who else.  Who makes the guys with the money afraid they might be president? 

JIM KRAMER, “MAD MONEY”:  There‘s a guy that knows the hedge fund game who wants to take all the money away from the hedge fund games, Edwards.  He was a hedge fund manager and he wants to depopulate all the wealthy ranks.  I regard him as public enemy number one. 

MATTHEWS:  So what would Edwards do?  He is a wealthy fellow.  He‘s got a very successful law practice behind him.  You say—I know he has got the hedge fund deal, where he is making a half million a year off it while he runs for president, but is he actually a hedge fund manager?  Is he a guy who makes business decisions? 

KRAMER:  I understand that he actually has a percentage of the win apparently.  I mean remember this is private.  You don‘t really know what the deal is.  But I know this: he knows that hedge fund people make too much money.  And when you have somebody who even thinks like too much money, and you have guys making a billion dollars, that is not going to be what you want in the White House. 

MATTHEWS:  Let‘s imagine—and I‘m doing this totally arbitrarily, although it‘s as good a bet as any, Hillary is the Democratic nominee for president next year, with a running mate that doesn‘t really—say Evan Bayh is her running mate.  I‘ll put money on that.  And then let‘s say Romney manages to squeak into this thing, and he‘s got a running mate.  someone else who‘s not that important. 

Hillary versus Romney.  Is that a statement to Wall Street that there‘s a choice over what the tax rate is going to be? 

KRAMER:  Big, big!  Can I just tell you something right now.  I interviewed Romney.  He tried to hire me in 1994.  Why do people now say well, I don‘t want to have a Mormon as president.  I never thought of him as a Mormon.  He is like the best businessman in North America.  And that is how you should think of him. 

MATTHEWS:  So if he gets to be president, his economic policy would be lower taxes, continued lower taxes, less spending, and Hillary‘s would be what in comparison to that? 

KRAMER:  I think that Hillary‘s—look, Bill Clinton was pretty good on taxation, so I don‘t think hers would be that bad.  It is just that Romney would be a guy who would say our Gross Domestic Product just was less than one percent last quarter?  That‘s outrageous.  We are going to be a growth nation. 

What ever happened to something like that out of Washington?  I don‘t hear anybody talking about growth.  Romney is a guy who favors growth. 

MATTHEWS:  Would a Republican like Romney, a free trader, continue our relatively open policy toward China and the brick countries, all the big developing countries, Russia, China—

KRAMER:  Yes, because he knows that our domestic companies have no growth.  This world is divided right now.  Our country is divided between the companies that export, and they are doing double digit growth, and the companies that are solely based in America, and they are dying.  They are dying.  Romney will help those companies. 

MATTHEWS:  Well let me ask you about—Is anybody going to bring aid to those parts of the country that are dying?  I mean, if you drive across America—and you probably occasionally go into fly over country yourself, on land. 

KRAMER:  Absolutely.

MATTHEWS:  You don‘t just fly, and you look and you go to places like Michigan, Ohio, western Pennsylvania, you drive across the country, you come to one town after another where all they have left is a Blockbuster and maybe a diner, maybe a diner, maybe a Wal-Mart. 

KRAMER:  Could be a Dominoes. 

MATTHEWS:  How are we going to change that?  Is that just where we are headed?  Those towns are going to just keep dying on the vine? 

KRAMER:  Look, I talked to Elliot Spitzer, the governor of New York.  Remember, two-thirds of New York is like what you just described.  And nobody seems to have a plan.  I know that Governor Spitzer would like to have—I don‘t hear any plans for the third of America that has just been left behind. 

I think it is only a third.  Some would say a half.  And I keep waiting.  But at least Romney understands business.  He understands taxes.  He understands capital creation.  He reminds me very much of what I thought Bob Reuben when Bob Reuben was treasury secretary. 

MATTHEWS:  Was he the best? 

KRAMER:  Man, since Hamilton. 

MATTHEWS:  Let me ask you, if you were developing this country and you were running for office, and you wanted to help the regular people outside of Manhattan, can a governor—can he put together, or she put together an economic development plan that makes use of educational facilities, that makes use of federal money, that puts infrastructure together, that encourages investment, and can you a state like Pennsylvania or Ohio, that has been having a hard time?

Is it doable or are people in those states just going to suffer, decline and decline and decline, and watch the continued development in northern California and Reston, Virginia and places like that, and route 28 in Boston?  is that just going to happen that shift of wealth? 

KRAMER:  I don‘t know if you have been following the things that Schwarzenegger has been doing, but I thought California was a basket case.  I thought that they could never come back.  They had horrible worker‘s comp.  No business wanted to locate there.  They had developed a reputation that if you went to California, you were going to do poorly.  And that has all changed, even in the face of a tremendous housing recession.

Schwarzenegger has got that state moving, meets with Democrats, builds up a coalition, cuts taxes, fixes worker‘s compensation, now working on health care.  I think that Schwarzenegger is the blueprint. 

MATTHEWS:  OK, thank you.  Anything we ought to be looking at right now with this market booming?  Are there any good buys left out there? 

KRAMER:  Absolutely.  A lot of the companies are still selling at 10 or 11 times earnings, the oil companies, still very cheap, Chris.  I would buy any oil company. 

MATTHEWS:  Oh Jesus, that is the last thing I want to hear.  Anyway, thank you Jim Kramer, what a good guy.  How can you not make money when you are paying four bucks a gallon? 

KRAMER:  That‘s the point.  That‘s the point.

MATTHEWS:  You‘re pouring money into the tank.  Somebody‘s going to get it.  Anyway, thank you Jim Kramer. 

KRAMER:  Can‘t beat them, join them, my friend.

MATTHEWS:  Make money off what you‘re spending it on.  Anyway, “Mad Money” is on at 6:00 and 11:00 every day on CNBC. 

Up next more on Dan Bartlett‘s exit, and the new books about Hillary Clinton.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  For a final look at this week‘s top hot stories, let‘s bring in the HARDBALLers, “Washington Post‘s Jonathan Capehart, who writes on the op-ed page.  Actually, he writes on the ed page as well.  And “Congressional Quarterly‘s” Jonathan Allen.  We‘ve got two Jonathans. 

Jonathan A, you are first of all.  This Bartlett leaving the White House, take a look at these.  These are people that have left, Karen Hughes, Scott Mcclellan, Don Evans, Harriet Myers, Don Rumsfeld, Paul Wolfowitz, Douglass Feith, Scooter Libby.  They are all gone.  The posse from Texas, the neo conservative hawks, gone. 

JONATHAN ALLEN, “CONGRESSIONAL QUARTERLY”:  The only person that‘s been with the president now longer than Bartlett that‘s still there is the first lady, and even that was tenuous for a while. 

MATTHEWS:  His tenure lasted longer than most marriages these days, 14 years.  What does it say that Bush, who is not known for making new friends easily, not liking people in Washington or in the New York Metropolitan area that much, is he ever going to meet anybody new that has an idea he can use. 

ALLEN:  I may be in the gross minority here, Chris, but I actually think that there is not a whole lot left on his agenda to do.  And that may be a natural time for some of these people to take off.

MATTHEWS:  do you think it‘s true that Hillary, when she says the president is simply stubborn is not just more than an anti-male invective by a women, but, in fact, means something, and he is stuck in his place, and he‘s not going to do anything new, so why don‘t these people leave and get better jobs? 

JONATHAN CAPEHART, “THE WASHINGTON POST”:  But, you know, he is coming up on the end of his second and final term as president.  What we are seeing is not a mass exodus for the exits because, you know, the ship is sinking.  It‘s because it‘s the end of the second term.  This is normal.  This is natural. 

And it‘s unfortunate that people who have been with the president for a long time leave, but they are going to leave.  They have to have lives after 1600 Pennsylvania Avenue. 

MATTHEWS:  Why don‘t they stay—somebody pointed out, Michael Wolf of “Vanity Fair” said, if you‘re going to leave, what‘s the rush?  Won‘t don‘t you leave another year and a half.  The guy needs you.  Why leave him the lurch, if you‘re Bartlett?

CAPEHART:  That‘s a question for Bartlett.

MATTHEWS:  Yes, well I know it is.  Let me ask you about Hillary Clinton.  She‘s got—I‘m not sure she‘s taking a battering, but she‘s definitely with these two new books, and there‘s another one coming later (INAUDIBLE) in the fall—these are books all about her personally, and my hunch is she does not like that, just because she is one of these private people.  When is your reaction to this Jonathan? 

CAPEHART:  Well, I think the campaign is calling it rehash for cash. 

I have not read any of the books. 

(CROSS TALK)

CAPEHART:  The point I am trying to make is that I have not read the books, but it would seem to me that if the campaign is surprised that there are books coming out about her personal life, about her life with President Clinton, that would be shocking.  They had to know that this was coming, that something was going to come. 

MATTHEWS:  If they are going to come back to the White House, the whole story is going to be told again, reminding everybody.  What about this story that Hillary Clinton—by the way, she has is a beautiful picture on the cover.  It‘s hard to believe this is anything more than a balanced book with that gorgeous book on the cover.  It‘s beautifully put together, this book by Carl Bernstein. 

Let me ask you Jonathan, do you think that Hillary Clinton should have

it says anything about her that for 30 years she hasn‘t told anybody she flunked the BAR.  I mean, poor John Kennedy Jr. flunked the BAR A couple times, and he took nothing but national harassment over it on all the talk shows. 

Here is a woman, at least as prominent, kept it secret even to her closest friends.  Does that tell you something about her psyche that she won‘t even share that with her best buds? 

ALLEN:  Well, I think it says that she‘s sensitive and probably a little bit insecure about having flunked the BAR.  This is a woman who has staked her entire reputation on intellect.  And I think that that‘s something that probably hits at that a lot of bit. 

A lot of people fail the BAR, but it is probably something that she felt some embarrassment about at the time.  And then once you don‘t tell somebody, each year it goes on, it‘s more likely you‘re not going to tell them. 

MATTHEWS:  But do you think it‘s useful to know this Jonathan?

CAPEHART:  It‘s useful to know, but I don‘t see—this is not going to derail the campaign, I don‘t think . 

MATTHEWS:  Do you think that she is too prickly, too against being discussed, that that will be an issue in the campaign?  That it is just going to get her down, all these books coming out is just going to wear her down? 

CAPEHART:  It could wear her down if she allows it to wear her down.  I think if I were on that campaign, I would say just keep doing what you are doing.  What else can you do. 

MATTHEWS:  -- first lady and say, senator, just live with it?  I don‘t think so.  I wish we had more time.  Please come back next week.  Jonathan Capehart and Jonathan Allen.  Right now it‘s time for “TUCKER.”

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

END   

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