updated 8/7/2007 10:50:03 AM ET 2007-08-07T14:50:03

Guests: Harold Schaitberger, Tony Blankley, Mark Green, Ron Christie, Michael Isikoff, Jonathan Allen, Amanda Carpenter

CHRIS MATTHEWS, HOST:  Big political news.  Are the Republicans going down on abortion, vying to be the most anti?  Who‘s winning the battle between the second and third wives‘ clubs, between Obama and Hillary?  And how about Rudy‘s confession?  The sinner speaks?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  You know, sometimes you wonder what these people really expect us to believe.  Mitt Romney ran for office twice in a pro-choice state, Massachusetts, and told the voters he was pro-choice.  That‘s why he has the credential, that title of governor, to run now for president.

Now he says it was all a mistake, he should never have gotten himself elected in Massachusetts by buying into the majority politics of that state on abortion rights.  But again, if he hadn‘t gotten himself elected by bowing to the pro-choice politics of that state, he wouldn‘t have the standing now to run for president.  So I‘m not sure mistake is the right word we‘re looking for here.

Could it be that the other “M” word is more in order, something like “masquerade”?  Or could it be that his current portrait of himself, the one he began in his run-up to this campaign, as a politician who wants to outlaw abortion, is the true masquerade?  It‘s hard to tell since both self-portraits, one devoutly pro-choice, the other devoutly pro-life, have seemed just right for each occasion, one to sell the liberals in Massachusetts, the other to sell the conservatives in Iowa.

Got to keep an eye on this guy.  He just tagged Obama for switching from being a Jane Fonda to a Dr. Strangelove.  But if I were Mitt, I might be a tad bit careful about calling out another fellow for changing his mind.

Other big stories tonight: Has Obama got the weight to fight and beat Hillary Clinton?  Is he showing it or not?  And that other bout between Jeri Thompson, Fred‘s young wife, and Judith Giuliani.  What about the women who want their men to beat Hillary?

Anyway, tomorrow is “Super Tuesday” on MSNBC, and the Democratic contenders are revving up for a big event in Chicago.  MSNBC‘s Keith Olbermann, the host of “COUNTDOWN,” will moderate the AFL-CIO Democratic presidential forum live at 7:00 PM Eastern.  I‘ll be hosting our post-forum coverage beginning at 8:30 PM with the candidates, the surrogates, and live reports from the so-called spin room.

But first, as I said, the big name in politics today is Mitt Romney, and HARDBALL‘s David Shuster has this report.

(BEGIN VIDEO CLIP)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Leading the Republican presidential polls in Iowa, former Massachusetts governor Mitt Romney is now getting hammered from the right.  Voters are hearing tape-recorded phone calls from Sam Brownback‘s campaign questioning Romney‘s position on abortion.  One recording was played at Sunday‘s Iowa debate.

UNIDENTIFIED FEMALE:  Mitt told the National Abortion Rights Action League that, You need someone like me in Washington.

GEORGE STEPHANOPOULOS, MODERATOR:  Senator Brownback, do you stand by that attack?

SEN. SAM BROWNBACK (R-KS), PRESIDENTIAL CANDIDATE:  I certainly do. 

It‘s one word describes that ad, and it‘s truthful.

SHUSTER:  Romney said the charge was false, but he failed to give any details.

STEPHANOPOULOS:  And what is untrue...

MITT ROMNEY (R-MA), PRESIDENTIAL CANDIDATE:  I am pro-life.  That‘s the truth.

SHUSTER:  Romney later acknowledged his position had been pro-choice a few years ago, but he added...

ROMNEY:  And I get tired of people who are holier than thou because they‘ve been pro-life longer than I have.

SHUSTER:  Romney, though, focused most of his attacks on Democrats.  In recent weeks, Barack Obama said he would meet with any foreign leader but also said he would not hesitate to launch attacks in Pakistan.

ROMNEY:  I had to laugh at what I saw Barack Obama do.  I mean, in one week, he went from saying he‘s going to sit down, you know, for tea with our enemies, but then he‘s going to bomb our allies.  I mean, he‘s gone from Jane...

(LAUGHTER)

ROMNEY:  He‘s gone from Jane Fonda to Dr. Strangelove in one week!

SHUSTER:  Attacking the Democrats was a major theme throughout the debate.

RUDY GIULIANI (R-NY), PRESIDENTIAL CANDIDATE:  In four Democratic debates, not a single Democratic candidate said the word Islamic terrorism.

REP. DUNCAN HUNTER (R-CA), PRESIDENTIAL CANDIDATE:  Not a single Democrat candidate paused in their rush for the exit to say to our Marines, Good job.

SHUSTER:  But it is Mitt Romney who is under the spotlight right now.  While Romney is leading the pack, Iowa polls show his support in the Hawkeye State is soft and that only 19 percent of Iowa Republicans say they are very satisfied with their choices.  Part of that number reflects a field aligned with an increasingly unpopular President Bush, and for his part, Romney is trying to create some distance.

ROMNEY:  I don‘t know what president—all the things President Bush has done, but I can tell you I‘m not a carbon copy of President Bush.

SHUSTER:  But conservatives say there are issues of trust with each of the top-tier GOP Candidates.  Rudy Giuliani is pro-choice, supports gay rights and has endorsed gun control.  John McCain is viewed as unpredictable.  And Mitt Romney on abortion has flip-flopped, although he says he has always been secretly pro-life.

ROMNEY:  The greatest mistake was, when I first ran for office, being deeply opposed to abortion but saying I‘d support the current law, which was pro-choice and effectively a pro-choice position.  That was just wrong.

MATTHEWS:  The pressure on Romney in Iowa is starting to show.  In a recent radio interview, during a commercial break, he appeared to lose his cool when the interviewer argued Romney‘s pro-choice position on abortion as governor was inconsistent with his religious beliefs.

ROMNEY:  My religion is for me and how I live my life.  It tells me—my church, the leaders of my church, who I know well, and who I have been a leader of my church—says—with the same vehemence, we have our own beliefs.  We also vehemently believe other people should be able to make their own choices.  They make their own choices.

(CROSSTALK)

ROMNEY:  So don‘t—don‘t confuse what I do as a member of my faith with what I think would be good government.

MATTHEWS (on camera):  Getting elected, though, is clearly a priority for most politicians, and Mitt Romney is no exception.  His pro-choice position a few years ago made it possible for him to be elected governor of Massachusetts, just as his pro-life pronouncements now are crucial to Republican primary voters.  The issue is whether Romney is really a man of core beliefs or a candidate who will say anything to win.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEO CLIP)

MATTHEWS:  Thank you, David.  Harold Schaitberger is president of the International Association of Firefighters.  He‘s also a member of the AFL-CIO‘s executive council and political committee.  The AFL-CIO, by the way, is sponsoring tomorrow‘s Democratic forum.  And Tony Blankley is the editorial page of “The Washington Times.”

Tony, first of all, you—you—what is this about?  These Republicans running for president, seems like no other issue matters in Iowa, they got to prove they‘re pro-life, no matter where they were last week.

TONY BLANKLEY, “WASHINGTON TIMES”:  Well, look, I mean, all of them, with the exception of Romney and Giuliani, I think have always been right to life.  Giuliani is still not right to life.  Romney is recently so.  I think there‘s a legitimate doubt about the sincerity of any politician who comes to an issue, a moral issue like this, fairly late in life, in your 50s, when you‘ve been active in politics.  I think that‘s a...

MATTHEWS:  Especially on the eve of running for president.

BLANKLEY:  Yes.  Yes.  Of course.  I think that‘s a legitimate issue.  Now, I think he—I think Romney gave away more than he had to when he said it was wrong for him—when he talked about being secretly—being personally against abortion but being in favor of it.  That‘s been the standard position of Cuomo.  So many Democratic politicians say, I‘m personally against it, but I‘m in favor of it as far as the law is concerned.  So I thought he gave away more than he needed to on that.  And he still hasn‘t fully satisfied, I think, a lot of conservatives that he‘s sincere on the central issue of whether he is now, in fact, against abortion.

MATTHEWS:  Harold, what do you think of the Republicans getting focused on this issue?  Is it going to hurt them in the general election to prove who‘s the most pro-life if they end up by nominating somebody who is pro-choice, like Giuliani?  They‘ll look kind of stupid, won‘t they?

HAROLD SCHAITBERGER, INTERNATIONAL ASSN. OF FIREFIGHTERS:  Well, I think what‘s going to hurt them is if they are not willing to speak toward the issues that really affect workers and working families, if they are not going to speak to the issues, really, about affordable health care for average middle-class workers, if they‘re not going to be speaking toward the issues—the progressive issues on workers being able to unionize, leveling the playing field.  I think if they missed the opportunity to speak to America‘s workers and working families, they are going to miss an opportunity for any kind of consideration at all.

MATTHEWS:  So you don‘t think the abortion issue should be right up front?

SCHAITBERGER:  Well, I think the reality is the abortion issue tends to be up front, but I know that from our view, from labor‘s view, certainly from my union‘s view, that it will be the issues that deal with the security of our workers economically, whether or not they can afford health care, whether or not they‘ll be able to have education available for their children, and whether we‘re going to start spending a lot more money keeping Americans safe in America, as opposed to the billions of dollars that we‘re wasting over in the Middle East.

MATTHEWS:  What do you think of Hillary saying that she‘s got no problem in taking lobbyists‘ money from corporations?  That certainly caused a wow out there in her bloggers‘ debate.

SCHAITBERGER:  Well, I think—I think the senator has every right to accept money from those that represent a variety of interests in our society.  And I can tell you that we‘ve been proud to support a number of these candidates, both politically, financially, and with our membership‘s support.

MATTHEWS:  Well, what‘s it tell you she takes money from labor and takes it from management when they‘re at odds with each other?  Who‘s she owned by?

SCHAITBERGER:  Well, I‘m not so sure that they always have to be at odds with each other.  I think that there are players out in the corporate and in the business community that have some interests that could be consistent with labor‘s interests and with working families‘ interests.  I mean, if we‘re going to have various parts of our society, segments of our...

MATTHEWS:  OK...

SCHAITBERGER:  ... business community be able to provide health care and partner up with workers in the AFL-CIO to provide health care, then I don‘t see any conflict in that at all.

MATTHEWS:  Well, I wonder, Tony, about the fact that hedge fund operators can avoid taxes by claiming it‘s all some sort of capital gain, and they‘re supposedly in bed with the Democrats, working stiffs—what have they got in common?

BLANKLEY:  Look, I think we...

MATTHEWS:  These Democrats are taking money from hedge fund guys.

BLANKLEY:  I think we just saw the true nature of campaign contributions.  Major interests, whether they are corporations or unions, contribute to have a seat at the table, have a chance to make their case to the candidate, whether it‘s a senator or a president.

MATTHEWS:  But Hillary says there‘s no influence (INAUDIBLE)

BLANKLEY:  Well, look, everybody says it has no influence.  Every—the truth is, it‘s always got a little bit of influence.  And depending on the issue and how much money and where the rest of the electorate is, it could have a lot of (INAUDIBLE).  Usually, as you know, the smaller the visibility of the issue, the more the special interest can influence.  If it‘s a big issue like...

MATTHEWS:  Nobody‘s watching.

BLANKLEY:  Yes.  You can‘t—you can‘t buy people to switch their position on abortion or something, but you can influence them strongly to have some small change in either a tax...

MATTHEWS:  Right.

SCHAITBERGER:  And Chris...

(CROSSTALK)

MATTHEWS:  I find that hard to believe.  I agree with Tony.  I cannot believe that Hillary Clinton said that buying TV advertising for candidates, helping them get elected, has no influence on their thinking.  That just runs against common sense.  Why would they be spending all this money if it wasn‘t to influence politicians?

SCHAITBERGER:  Well, Chris, if you really want to clean the system up and you want to make it pure...

MATTHEWS:  No, I just—I just don‘t like...

(CROSSTALK)

SCHAITBERGER:  ... we need public financing.

MATTHEWS:  No, no.

SCHAITBERGER:  If you want to really take the money out of the system...

MATTHEWS:  She says we don‘t have a problem.  She says it doesn‘t influence her, we don‘t need anything to change.  She said it has no problem with her.  She could take bundles of money from the hedge fund people and all the other corporate interests, lobbyists, as she puts it, and it doesn‘t influence her vote.  Do you believe that, Harold?

SCHAITBERGER:  I believe...

MATTHEWS:  That your money—money you give to her doesn‘t influence her?

SCHAITBERGER:  I believe the money that all of the candidates receive at least allows them to be able to put their message forward, to be able to put their issues—their position on the issues forward.  I‘m not certain that it really gives you any real insight in overly influencing their position.

MATTHEWS:  Well, then, how can you tell your people to kick into PAC money if it doesn‘t do any good for you?

SCHAITBERGER:  Because we make our decisions based on a candidate‘s performance and track record, and what, in fact, they have done, not what they are saying.

BLANKLEY:  Look...

MATTHEWS:  Oh, it‘s payment for past support.  But you don‘t—OK, Tony, I can‘t—that‘s pretty hard to deal with right there.

BLANKLEY:  Look, I mean, everybody understands, and I don‘t know why we have to be so discrete about it.  Obviously, money has some influence.  It doesn‘t buy everybody all the time, but of course it has influence.  That‘s why hundreds of millions of dollars are given to politicians all the time, because they try to gain some influence.  There‘s nothing hideous about that.  That‘s the way the world works.

MATTHEWS:  Excuse me.  Why do the trial lawyers—they‘re not exactly known as philanthropic—give tons of money to Democratic politicians?  Tons of money!

BLANKLEY:  Of course.  I mean, but I don‘t see...

MATTHEWS:  Because they want to be protected from caps on damages. 

That‘s what they want.

MATTHEWS:  And adult voters don‘t need to be shocked by the reality that there is influence in the world.

MATTHEWS:  I just find it amazing that somebody as sophisticated as Hillary Clinton denies the obvious.

Anyway, we‘ll be right back with Mr. Schaitberger of the firefighters and Tony Blankley.  They‘re staying with us.

And tomorrow on MSNBC, it‘s “Super Tuesday,” all-day political coverage culminating in the AFL-CIO‘s Democratic presidential forum.  My colleague, Keith Olbermann, will moderate live from Chicago starting at 7:00.  I‘ll be back at 8:30 to dig into what really happened.  That‘s tomorrow on MSNBC.

You‘re watching it, HARDBALL, on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re back with Harold Schaitberger of the International Association of Firefighters and Tony Blankley of “The Washington Times.”

Let‘s take a look right now—here‘s what Rudy Giuliani said when asked about what mistakes he‘s made.  It was at the convention—the debate yesterday.  Let‘s take a look.

(BEGIN VIDEO CLIP)

GIULIANI:  To have a description of my mistakes in 30 seconds?

(LAUGHTER)

STEPHANOPOULOS:  Defining mistakes.  Just one defining mistake.

GIULIANI:  George, your father is a priest.  I‘m going to explain it to your father, not to you, OK?

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Harold Schaitberger,, what did you think of Rudy Giuliani hanging a lantern on his problem, as Bobby Kennedy used to say?

SCHAITBERGER:  Well, I‘ll tell you what, I could answer his mistakes in 30 seconds partially in failing to provide the radios to the New York firefighters before 9/11 and failing to place his emergency management headquarters appropriately off the World Trade Center site and making sure that he didn‘t stop the dignified recovery of the fallen, both firefighters and civilians.  I think there‘s a number of mistakes that the former mayor has made, and I‘m surprised he wouldn‘t be able to enunciate a few of them in 30 seconds.

MATTHEWS:  What was he like to negotiate with over pay?

SCHAITBERGER:  I don‘t handle the local negotiations, and that‘s irrelevant to our position, as you well know, Chris, and...

MATTHEWS:  No, it usually is relevant...

SCHAITBERGER:  ... our strong views...

MATTHEWS:  ... to most positions of labor, when they have to deal with a municipal situation.  They don‘t usually like the mayor because the mayor has to say no to the municipal employees.

SCHAITBERGER:  Well, that‘s not always the case, by the way.  You know, we have great examples of relationships between labor and management in cities all across this country where negotiations work, where we‘re able to hammer out fair collective bargaining agreements and where both the city management and labor succeeds.

MATTHEWS:  Let me ask you, Tony, about this interesting battle between the third and the second wives‘ clubs.  You got all the press coverage this last weekend about Judith Giuliani—we can‘t call her Judy, Judith Giuliani—the third wife of—it sounds like an Arab country—the third wife of Mayor Giuliani.  You‘ve got the second wife of Fred Thompson.  They‘re getting all this play.  Are they considered trophy wives?  Why the focus on these wives, these latter-day wives?

BLANKLEY:  Well, I think the—I‘m not terribly impressed with the journalism on picking on these women, who are quite accomplished and who happen to be reasonably attractive, and in the case of Thompson—good heavens, he‘d been divorced what, 17 years before...

MATTHEWS:  Right.

BLANKLEY:  ... he met the woman.  She has been a professional in politics and...

MATTHEWS:  Well, what‘s all the beef about her being powerful and ready to campaign?

BLANKLEY:  Well, look, you have attractive women, and whether it‘s “Newsweek” or “The Washington Post” or anyone else, they‘re going to focus on it.  And being conservatives and Republicans, I have to confess I think the media takes just a little bit more fun at going after Republican wives.

MATTHEWS:  So liberal women reporters go after conservative women...

(CROSSTALK)

BLANKLEY:  It seems kind of -- (INAUDIBLE) sexist exactly, but it seems disproportionate to give this much print on women who happen to be the spouses of candidates, who have done nothing to be scandalous at all, and yet they‘re covered as if there‘s some scandal...

MATTHEWS:  As if they‘re the other women.

BLANKLEY:  ... as if there‘s some scandal involved, and there‘s not.

(CROSSTALK)

BLANKLEY:  I think it‘s kind of not respectable on the part of the media for doing that.

(CROSSTALK)

SCHAITBERGER:  Chris, I think it‘s a pretty sad situation.  You know, we‘ve got good American jobs that are leaving our country.  We have 47 million Americans that don‘t have health care coverage.  You know, we have schools that are in disrepair.  We have an infrastructure, as we‘ve seen most recently in Minnesota...

MATTHEWS:  Yes, but we know that.

SHAITBERGER:  And you know, to focus on the spouses.

MATTHEWS:  But the problem.

(CROSSTALK)

SHAITBERGER:  . of candidates as opposed to a focusing on the really core issues.

MATTHEWS:  Right.  But the front pages are filled with the news of that bridge falling down.  Everybody knows you had a problem of repairing bridges.  The tabloids of New York, The New York Post, page after page of stories of bridges that are falling down.  It‘s not like you have to choose between an interesting story, a juicy story about people‘s wives and these more substantive stories. 

I disagree.  I don‘t think it‘s an either/or story.  I think there is going to be a lot of focus on who these guys are married to.  Anyway, thank you, Harold Shaitberger.  And thank you, Tony Blankley. 

Up next, the market bounces back, thank God, today after last week‘s meltdown.  I guess it‘s freezing up again.  CNBC‘s Jim Cramer, I can‘t wait, “Mad Money,” is coming here to tell us why things are looking so good on Wall Street tonight.  And then thank God for that.  You are watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  After a dismal week on Wall Street last week, the stock market rallied today.  The Dow closed up, the S&P was up.  But are we out of the woods yet?  Let‘s go to Jim Cramer right now of CNBC‘s “Mad Money.” 

Up about almost 300 points today.  Is that salvation, Jim? 

JIM CRAMER, HOST, “MAD MONEY WITH JIM CRAMER”:  Chris, a lot of people feel the Federal Reserve heard what happened last week, has seen what has happened in the mortgage market, and may give us a break when they meet tomorrow.  If that is the case, a lot of the stocks that were toxic turn into houses of pleasure, and we saw buying today. 

MATTHEWS:  So has that already been discounted or could we have another big break tomorrow? 

CRAMER:  We could have another big break up if the Federal Reserve says, look, we are monitoring the situation.  We are not going to let the liquidity come out of the system.  Meaning, we are not going to let 7 million homeowners be forced out of their homes.  That was the optimism I saw today. 

Last week we had all pessimism.  I think that it is probably some more muted.  I don‘t think that the Federal Reserve comes to anybody‘s rescue, but I think they are going to recognize that we have got a couple of problems. 

MATTHEWS:  Is this going to be a rate change? 

CRAMER:  I think they are going to preface the rate changes.  I don‘t think they are going to move on a dime like that.  The last few times they said, we are still worried about inflation. 

MATTHEWS:  Right.

CRAMER:  But all they need to do is say, you know what, that is really not the risk anymore, it is a slowdown.  And then people realize that we are going to have a couple of cuts, which is why you can have an explosive rally like we saw today. 

MATTHEWS:  Who is responsible for giving bad mortgages to people who can‘t make a monthly payment and have a record of not making a monthly payment? 

CRAMER:  I think that the federal government—first Alan Greenspan encouraged people to take these teaser rates.  The federal government has virtually no restrictions whatsoever on mortgage brokers.  You know, the FTC.

MATTHEWS:  How did Alan Greenspan get people to take these loans where the mortgages are very low for the first couple of years, it was deceptively low, and then when the reality bit them, they couldn‘t handle the nut they were carrying? 

CRAMER:  Yes, look, I think it is outrageous.  I don‘t know anyone who ever slammed sainted Greenspan.  I will do it for you.  I will tell you that we encouraged a lot of people to take what turned out to be dynamite.  And there was no government involved. 

We care more about whether Sirius Satellite is able to merge with XM than we care, at least from a consumer point of view, with what happens to these 7 million homeowners that bought homes between 2005 and 2007 using this kind of product.  I think it is kind of disgraceful, frankly. 

MATTHEWS:  So who wins here?  When somebody can‘t make their payments and there is foreclosure, who gets the—who ends up being the bad guy, the villain of the piece who walks away ahead? 

CRAMER:  You know, honestly, the only people who will walk out ahead will be the people who take advantage of those who were booted from their homes and buy the homes cheaply.  This is really—this is not a zero sum.  There are just a lot of losers, frankly. 

The banks are losers, the people who own the mortgages are losers.  But most importantly, Chris, those guys are all rich.  It is the poor that I‘m worried about.  And people—a lot of these people didn‘t know what they were getting into. 

But the president—I mean, I have not heard a single word from Treasury or the president about this issue. 

MATTHEWS:  Yes, because they made all those payments and they end up with nothing.  Let me ask you about politics.  I just looked at The Wall Street Journal/NBC poll.  And I have been watching these polls for years.  And I have never seen numbers like this.  And I don‘t think it is fair but it is public opinion right now.  The people now think the Democrats are better at balancing the budget. 

The Democrats are better at reducing government spending.  The Democrats are better at lowering taxes.  Give me a break.  I mean, the best Democrat could be sitting right here now and he would say, what we have got to do is get back some of that revenue from the rich people so we could have some decent social programs in health, for example, and education. 

They will admit they want to spend more money, the best of the Democrats.  And yet the public is so down on this war and the Republicans, they are willing to give the Democrats advantages politically they wouldn‘t even claim themselves. 

CRAMER:  It is nuts.  And of course, if it were not for the war—and you can‘t asterisk a war, but we would have a balanced budget.  We would be able to spend more on social programs.  But, you know, frankly, the Democrats can‘t be trusted any more than the Republicans on this. 

What I think does—we think that both Congress and the president are very out of touch with what is going on across the board.  And look, anybody who bought a home in the last three years, Chris, is liable to be evicted.  Do you hear either side talking about that? 

MATTHEWS:  No. 

CRAMER:  Isn‘t that incredible? 

MATTHEWS:  Well, just like Hillary said the other day, it doesn‘t affect me, all the money I take from lobbyists.  Well, common sense tells you that the one who pays the piper calls the tune. 

CRAMER:  Yes.  And I have got to tell you, the fact that they backed off from the hedge funds just shows you what it was like when.

MATTHEWS:  Oh, Schumer. 

CRAMER:  Schumer came in.

MATTHEWS:  You got it.

CRAMER:  When I was running my hedge fund, Schumer came in and he basically said, hey, what are you guys going to do for me?  Now fortunately, I actually agree with him politically, so it wasn‘t a shakedown.  But—I actually liked him.

MATTHEWS:  It‘s so ludicrous to say that money doesn‘t count.  I remember Ozzie Myers that went to can.  He had a problem.  He said, money talks, B.S. walks.  Remember that guy? 

CRAMER:  Yes, absolutely.

MATTHEWS:  Well, everybody laughed at it because they knew he was right.  Anyway, thank you, Jim Cramer.

CRAMER:  Absolutely.

MATTHEWS:  My buddy.  “Mad Money,” it airs on CNBC weeknights at 6:00 and 11:00 Eastern. 

Up next, a HARDBALL debate.  President Bush signs a bill allowing expanded wiretapping of us.  Did the Democrats in Congress roll over again? 

And tomorrow on MSNBC, the Democratic presidential candidates meet in Chi‘town at the AFL-CIO forum.  Keith Olbermann moderates and I‘m going to be talking about what really happened at 8:30 tomorrow night.  You are watching it, HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Well, that is good news.  Welcome back to HARDBALL.  President Bush signed into law legislation that broadly expands the government‘s authority to eavesdrop on international telephone calls and e-mails of American citizens without the use of a warrant. 

This after both Congress and the Senate approved the bill.  And while no Republicans voted against the bill, 16 Democrats did vote for the bill.  Did Democrats fold on privacy rights?  That‘s our HARDBALL debate tonight.  Mark Green is president of Air America and a public interest lawyer.  And Ron Christie is a former aide to Vice President Dick Cheney. 

Let me go to you, Mark.  Because I‘m not sure what you are going to say.  The Democrats should have fought this one?  They didn‘t .

MARK GREEN, AIR AMERICA RADIO:  They should have fought it and overwhelmingly they did, 80 percent of House Democrats, Chris, voted against this stampede and unwarranted intrusion into the privacy of Americans.  Two-thirds of Senate Republicans—I‘m sorry, Senate Democrats opposed it.  But enough Blue Dog Democrats in each chamber gave Bush a narrow majority. 

I don‘t think this law helps protect our country.  It helps protect Bush-Cheney‘s declining popularity.  We have seen this movie before.  They said you are un-American, unpatriotic unless you vote for the war resolution in the fall elections of ‘02.  And then it‘s unpatriotic if you don‘t hurry and within a month vote for the Patriot Act.  It‘s unpatriotic that you to allow Homeland Security Agency employees to unionize, as if that helps terrorists. 

RON CHRISTIE, FORMER AIDE TO DICK CHENEY:  Mark, that doesn‘t have anything to do with this debate.

GREEN:  This is the fourth time we have seen this, and it worked narrowly.

CHRISTIE:  Mark, you are starting to filibuster here.  This—let me just cut you right off there and say this, Mark.  I am so glad that George Bush is sitting in the Oval Office and he is in a position to protect the American people.  The FISA statute, the Foreign Intelligence Surveillance Act, has not been modified since 1978 when Chris‘ old boss, Jimmy Carter, was president of the United States. 

We are not talking about warrantless eavesdropping on American citizens.  We are talking about terrorists, people in foreign lands, foreign intelligence gathering operations by the United States government to protect this country against attack by foreigners. 

For you and some of the other moveon.org people who are trying to demonize the president and demonize the vice president, the fact of the matter is 41 House Democrats joined a bipartisan majority to pass this bill to protect the American people.  And this demagoguery to the contrary is unsafe, unnecessary, and unproductive in trying to protect the American people. 

GREEN:  May I respond? 

CHRISTIE:  Oh, please.

MATTHEWS:  Give us an example if you can, Mark.  I know you are good at the anecdotal way of doing this.  Tell us an example how this affects the average Americans‘ privacy rights, this bill. 

GREEN:  Look, Democrats agreed with National Intelligence Director Mike McConnell on a bill that would have responded to what Bush wanted.  Because of a secret court decision, it was hard for Americans to listen in on foreigner-to-foreigner conversations that could have been terrorist related. 

And so Democrats said, OK, let‘s listen more to them, but let‘s have a report to the inspector general of Justice because we don‘t want to trust this, I think, serial perjurer and confidant, Alberto Gonzales to do it alone.

CHRISTIE:  Oh, now wait a second.

GREEN:  Excuse me.  Let me finish. 

(CROSSTALK)

GREEN:  I didn‘t interrupt you. 

CHRISTIE:  You didn‘t answer his question.

GREEN:  My source is Senator Specter and the head of the FBI.  Anyway, so the Democrats did agree to do that.  Bush said, no good.  I want to now politically exploit the situation.  You say it is demagoguery.  How did George Bush and Dick Cheney go from 70 percent favorable when the whole country united behind that, to 25 percent?

CHRISTIE:  OK.  See, Mark, this is where we have to stop. 

GREEN:  Because they are running roughshod over the rule of law.  Be my guest.

CHRISTIE:  Mark, here is the rule of law here.  The fact of the matter is, Chris just asked you to give one specific example in where a civil right or civil liberty of an American was infringed with this legislation. 

GREEN:  Here is how.

CHRISTIE:  You couldn‘t do it. 

GREEN:  I can.  I can.

CHRISTIE:  The fact of the matter—no, you couldn‘t do it. 

GREEN:  Foreigner-to-foreigner, fine.  But an American citizen.

(CROSSTALK)

GREEN:  Here is the answer. 

CHRISTIE:  The fact of the matter is, Mark.

GREEN:  An American citizen now.

CHRISTIE:  The fact of the matter is that we.

GREEN:  An American citizen now can wiretapped without warrant.

CHRISTIE:  OK.  Here we are going to go.     

MATTHEWS:  Only got a minute left, 30 seconds each.  You first, Mark.  Answer the question.  Give me an example of somebody‘s whose civil liberties are infringed by this new by the president. 

CHRISTIE:  He can‘t do it.

GREEN:  An American speaking to a foreigner now can be wiretapped secretly by Alberto Gonzales without a court approving it and in six of 20,000 instances.  The FISA court since 1978 has disapproved of a warrant.  That‘s why William Safire and Bob Barr joined the ACLU and Ted Kennedy. 

This is not left/right, this is right/wrong.

CHRISTIE:  And you are so wrong here.  The fact of the matter.

MATTHEWS:  Well, he answered the question.  He said Americans are going to tapped.

CHRISTIE:  Well, no, look—no, but his answer to the question was wrong.  The fact of the matter having—you know, Mark, you are a lawyer.  I‘m a little disappointed.  You must not have had time to read the statute.  The statute actually says that the attorney general of the United States as well as the director of national intelligence has to certify. 

And in fact, if you go specifically to the statute, Mark, it goes in specific detail about how, if Americans in the course of this foreign surveillance are listened to that they are expunged from the record, their names are expunged, and there is a reasonable expectation of privacy. 

So again, you have done a fantastic job of demagoguing the issue, a poor job of reading up on the statute.  And again, I‘m so glad that this president is in the Oval Office.

MATTHEWS:  OK.  Ad hominems don‘t work here.  But your response, Mark. 

GREEN:  Look, apparently you haven‘t been reading the newspapers.  I understand your loyalty to Dick Cheney.

CHRISTIE:  I don‘t read the newspaper.  I actually read the law. 

GREEN:  Apparently you look at—I‘m sorry, I didn‘t interrupt you. 

CHRISTIE:  I‘m not interesting in what.

(CROSSTALK)

MATTHEWS:  Let him finish.  He has to respond to your attack. 

GREEN:  Why in the world after an administration that went from 70 percent to 25 percent favorable?  Because Americans thought they misled us into war and haven‘t been telling the truth about warrantless wiretapping.  Why should any of us trust Alberto Gonzales when the Democrats said, all right, we‘ll allow wiretapping foreigner-to-foreigner, but how about reporting it to the Department of Justice. 

CHRISTIE:  Because—listen, you aren‘t listening to me because.

GREEN:  You have blind faith in people who have misled us already.

CHRISTIE:  Mark, Mark, again, you weren‘t listening to me. 

GREEN:  You are being na‹ve, Ron. 

CHRISTIE:  Oh, please, don‘t even start personal attacks with me. 

GREEN:  Personal attacks, that is all you have done so far.

CHRISTIE:  It‘s the attorney general of the United States and the director of national intelligence. 

(LAUGHTER)

CHRISTIE:  Hey, Mark, read your statute now before coming on HARDBALL and run (ph) the play (ph). 

MATTHEWS:  OK.  Guys, you went over the side here.  Anyway, thank you very much, Mark Green.  Thank you, Ron Christie, for a vigorous debate, which did include some ad hominem. 

Up next, our panel breaks down the latest news from the campaign trail.  Lots of stuff tonight.  Hillary Clinton getting jeered by the liberal bloggers but standing tough.  And Mitt Romney, well, he‘s changed.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now to dig into the hottest political stories and the freshest campaign video from around the country.  Here to do it is our panel, “Newsweek‘s” Michael Isikoff, one of our heroes around here, and “Congressional Quarterly‘s” Jonathan Allen and TownHall.com‘s Amanda Carpenter. 

First up, Hillary gets cheers and jeers.  Despite her refusal to admit error in voting for the war, Hillary Clinton reportedly received a warm reception this weekend at the annual Kos Convention, the big Chicago meeting of the nation‘s most tenacious liberal blogger.  She did get booed on one particular issue, not the war but campaign contributions from lobbyists.  Let‘s look and listen. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK:  I don‘t think, based on my 35 years of fighting for what I believe in, anybody seriously believes I am going to be influenced by a lobbyist or a particular interest group.  Now, you know, I have been waiting for this.  Just give this a real sense of reality with my being here.  But look, the important thing—

(END VIDEO CLIP

MATTHEWS:  Well, prepared, Amanda.  Is that a sister soldier moment?  She goes about it with the left to make herself look centrist.  Was that connived? 

AMANDA CARPENTER, TOWNHALL.COM:  I don‘t think so.  I think she

legitimately wants to keep taking lobbyists‘ money.  The best comeback was

that got a standing ovation—was what Barack Obama said to her after that, a little bit longer.  Because I was at the Yearly Kos convention.  He said to here, well Hillary, what happened in 1993?  Don‘t tell me that health care money didn‘t change your mind then. 

That got a standing ovation from the crowd. 

MATTHEWS:  Because that‘s in “Sicko.”  It is in the movie, right?  Her policy was changed.  I hear she is very angry at Michael Moore because of it.  Jonathan, who wins this fight with Hillary when she takes on the left wing—I hate to use the phrase, but they are leftish bloggers?  Who wins that fight? 

JONATHAN ALLEN, “CONGRESSIONAL QUARTERLY”:  I think in the primary it helps Barack Obama.  In the general election it helps Hillary Clinton.  I think with the lobbyist issue, there are a lot of people at that convention who wouldn‘t have problem with Clinton, Barack Obama taking money from Oxfam lobbyists, or the American Civil Liberties Union lobbyists, or even the college of Holy Cross lobbyists. 

MATTHEWS:  I think the word special interest is depending on who is watching.  Mike Isikoff, I have a sneaking suspicion this woman knows what she is doing, that she wants to be seen as consistent, centrist, and tough, even if it means getting some boos from the left. 

MICHAEL ISIKOFF, “NEWSWEEK”:  Exactly.  I don‘t think she at all minded the reaction she got.  I think the most interesting development there was Obama taking her on, being more aggressive.  That‘s something he is going to have to do if he wants to gain in this race.  She is clearly the front runner.  She has been so for quite some time.  There is an aura of inevitability about her.  And Obama has to shake that up. 

He‘s ultimately only going to be able to shake it up by taking her on and going after her on issues like this, where she is potentially vulnerable with the sort of liberal faction of Democratic primary voters. 

MATTHEWS:  Can he open up her eye on this?  Can he open up a scar tissue on something like the fact that she says openly that taking money from people doesn‘t influence me?  In other words, of all the U.S. senators and Congressmen, all the politicians throughout thousands of years of political history, she is the only one for whom money doesn‘t influence.  It‘s an incredible statement. 

In other words, it affects everybody.  That‘s why we have this town—how many high-rise buildings in this town are packed with lobbyists making a fortune because they can influence Congress effectively, and she says they can‘t affect me?  What‘s she got, Kryptonite?  What stops her from being affected? 

ISIKOFF:  Well, first of all, she is saying what every member of Congress says.  Whenever a member is confronted with the fact that they voted against what some people might perceive to be the public interest in favor of a special interest then point to campaign contributions, they say the campaign contributions didn‘t affect them.  The lobbyists didn‘t affect me.  That‘s the standard rote response of every senator of every member.  Nothing is surprising there. 

But I think Obama has got to be a little sharper if he really wants to make this stick.  He‘s got to point to specifics with Hillary and show just enough of a scenario that suggests that she was influenced.  Certainly Michael Moore, as you pointed out, did it in “Sicko.”  It will be interesting to see whether Obama follows up and tries to make this charge stick. 

MATTHEWS:  OK, speaking of political BS—and not passing the smell test—if I mix my metaphors there.  Let me ask you, Amanda, this question; Mitt Romney twice ran for statewide office in the commonwealth of Massachusetts as a devout pro-choicer, spoke it well, made the case well, won in both cases, got himself that title governor, which allows him to run for president under our Peter Principle system in this country.  Now he says he made a mistake. 

A mistake is when you make the wrong turn but you‘re going in the right direction.  He admitted he was going in the wrong direction but that‘s not a mistake.  That‘s doing something wrong.  How can he get away with telling the good values-oriented people of Iowa, that was just a mistake?  Remember how Ted Kennedy used to say mistakes were made in the passive voice?  Can he get away with that, a mistake, when it got him elected government? 

CARPENTER:  Well, you know, the direction he‘s going now he has staked out a clear position that he is pro-life.  People are allowed to change their minds. 

MATTHEWS:  On the eve of an election?  Do you believe it? 

CARPENTER:  The issue is they doubt his sincerity. 

MATTHEWS:  Do you doubt it if somebody told you that they decided they wanted to win your love as a human being and you decided all they were doing is sort of grooming themselves for your attention?  This happens in life, by the way.  But when politicians do it, it is extremely obvious, isn‘t it? 

CARPENTER:  The thing that troubled me with what Romney followed up with in the debate is that when he said he kind of criticizing Brownback and said that came from Youtube; that‘s a credible source. 

MATTHEWS:  It‘s hard to argue with because it‘s an actual replica of reality.  Let‘s take a look, by the way, at that debate.  It was an ABC debate yesterday with George Stephanopoulos moderating.  Let‘s watch it. 

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  I changed my position.  When I was governor and I faced an issue of life or death, when the first time a bill came to my desk that related to the life of an unborn child, I came down on the side of life.  I put that in the “Boston Globe” and explained why.  I get tired of people who are holier than thou because they have been pro-life longer than I have. 

(END VIDEO CLIP)

MATTHEWS:  Now let‘s look at the same contentiousness, by the way, with an Iowa radio host, over his Mormon religion.  Here is a hot one. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  You made a big mistake when you distance yourself from your faith. 

ROMNEY:  I‘m not distancing myself from my faith.  I‘m proud of my faith.  There is nothing I distanced myself from.  My church says I can‘t drink alcohol, right?  That‘s what my church says.  Mitt, you can‘t drink alcohol.  Should I say as governor of Massachusetts, we‘re stopping alcohol sales.  If you‘re not going to separate your religion, you better make everybody not drink alcohol. 

No, my religion is for me and how I live my life.  I understand my faith better than you do.  You don‘t believe that, do you? 

UNIDENTIFIED MALE:  I‘m not sure. 

ROMNEY:  Then it‘s hardly worth having a discussion on. 

(END VIDEO CLIP)

MATTHEWS:  I‘m with him.  I have a worse temper than that.  That guy seems to be a credible character in that instance, fighting with that radio jock. 

ALLEN:  That was a John Kerry answer.  I have a personal position on something that isn‘t my public policy position.  That‘s where Kerry was on abortion. 

MATTHEWS:  But he‘s not saying that.  He is saying he is pro-life not because of his religion.  He is pro-life as a public man. 

ALLEN:  But where he was just talking on that radio show, he was talking about alcohol.  He says Mitt Romney doesn‘t have alcohol but I‘m not going to make a law like that.  It‘s a similar argument.  The one thing I would not is that this is the time for Romney where he has to explain things like this.  He is now really in the spotlight.  He is going to continue to be that way. 

You notice, no one is asking Dennis Kucinich about his flip-flop on abortion. 

MATTHEWS:  Because Dennis is so far back.  Romney is the front runner in Iowa.  Mike, does Romney look like the kind of guy that could handle this stuff, handle the heat, handle the religious issues, handle the abortions flip-flop and go on to victory because he is a damn good businessman and economics guy? 

ISIKOFF:  Look, it‘s hard to say.  He does have this vulnerability of being perceived as a flip-flopper on a number of issues.  It‘s not just this one.  It‘s guns.  There are several others where he has tacked right, having tacked left when he was running for governor of Massachusetts.  I think that‘s the vulnerability he has.  On this particular one, on the abortion issue; look, the front runner in the race is Giuliani, who is openly pro-choice.  So running in a conservative Republican primary, I don‘t think this is, in and of itself, big baggage for him. 

MATTHEWS:  OK, let‘s talk about the Republican fight.  You mentioned Giuliani.  I was impressed with the fact that Giuliani answering that question by George Stephanopoulos about give me 30 seconds of your worst mistake and he said, that‘s going to take a long confession with your father, who is a Greek Orthodox priest.  I thought it was a way of dealing with what everybody knows; three marriages, messy divorces, public divorces, problems with his kids, problems with his life, sinning, I suppose, if we‘re allowed to say that word on television.  And he just said look, I‘m not perfect.  I found that refreshing for a pol, any pol. 

ISIKOFF:  I thought it was a good answer.  It has the perception of being a little self deprecating.  It doesn‘t hurt in a field like this.  Since he didn‘t refer to anything specific, he doesn‘t have to worry about how it‘s going to—how it‘s going to play.  I thought it was a near-perfect answer for him.  But, of course, there are going to be follow-ups from many people.  Let‘s itemize them.  You have more than 30 seconds now.  Let‘s list them.  We have all the time you want. 

MATTHEWS:  It‘s always better to admit it first.  Here he is, Rudy Giuliani in public confession. 

(BEGIN VIDEO CLIP)

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE:  To have a description of my mistakes in 30 seconds? 

George, your father is a priest.  I‘m going to explain it to your father, not to you, OK? 

(END VIDEO CLIP

MATTHEWS:  One of his great predecessors as mayor of New York was Fiorello Laguardia, the little flower.  He said when I make a mistake, it‘s a beauty.  We‘ll be right back with the panel.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with “Newsweek‘s” Michael Isikoff, “Congressional Quarterly‘s” Jonathan Allen and TownHall.com‘s Amanda Carpenter.  I find it ironic that the values party, the Republican party, has a number of candidates at the very high level of this debate who have had many wives, several wives, two or three wives, except for the Mormon, ironically.  He‘s had one wife. 

On the Democratic side, all the top contenders basically are stuck with—how do I say that?  Stuck with their first marriage.  They‘re still married to the woman they married at first.  That certainly includes John Edwards and—who else is running—and Hillary and—who‘s the other one?  -- and Obama.  So all three of them are in pretty good shape.  Richardson is still married to his first wife. 

It‘s kind of interesting.  What do you make of this?  Isn‘t ironic that the value‘s party, that believes in family values, has this mixed record?  Not unusual, but more uneven than the Democratic candidates, who tend to be more regular in that way? 

CARPENTER:  Yes, it is an issue of concern. 

MATTHEWS:  Do you feel embarrassed by the conservative movement that it has produced these rocky marriages?  

CARPENTER:  I‘m not sure if I‘m so much embarrassed by the conservative movement, but I do think that people who live their entire lives in politics, obviously their marriages have a lot of things to face and confront, and a lot of times that does break a marriages, like probably happened to Newt Gingrich and other people. 

MATTHEWS:  What do you think about the fact that Caroline Giuliani, the teenage daughter of Giuliani, has just been discovered on the Facebook of Obama‘s campaign?  She at least was seen backing an opponent of daddy.  What do you make of that?  This is rotten to talk about.  What is going on here?  I have never heard of this, a kid working for somebody else. 

CARPENTER:  I‘m not sure if she‘s working—

(CROSS TALK)

CARPENTER:  You know what Facebook means.  Explain it.  It‘s a network of young people, generally, who connect in that way. 

(CROSS TALK)  

CARPENTER:  And Giuliani‘s daughter apparently said she is supporting Obama. 

MATTHEWS:  Jonathan, what do you make of this?

ALLEN:  I think there are weeks when any teenager would sign up for the Facebook opponent of their parents. 

MATTHEWS:  Michael Isikoff, is this enough embarrassment for us to discuss this or what?  It seems like it‘s a complicated matter on the Republican side this time, in terms of these wives, Jerry and Rudy and Judy. 

ISIKOFF:  I don‘t know that I have much for you  on that. 

MATTHEWS:  OK, good night then Michael Isikoff, Jonathan Allen, Amanda Carpenter.  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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