updated 8/10/2007 10:24:33 AM ET 2007-08-10T14:24:33

Guests: Joan Walsh, Chris Cilizza, Michael Fletcher, Ron Christie, Karen Hanretty, Ezra Klein, Marcia Dyson, Michael Eric Dyson

CHRIS MATTHEWS, HOST:  Bush said we are sticking in Iraq, no matter what Petraeus says, no matter what Maliki does or doesn‘t.  We‘re there for the long haul, until Iraq‘s a democracy and the Mideast is heading that way.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  And welcome to HARDBALL.  This morning, President Bush held a powerful press conference, and it was a rare opportunity to hear the president really get to the heart of his philosophy of why we‘re in Iraq.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  Recognize there‘s a debate here in America as to whether or not failure in Iraq would cause there to be more danger here in America.  I strongly believe that‘s the case.  It matters if the United States does not believe in the universality of freedom.  It matters to the security of people here at home if we don‘t work to change the conditions that caused 19 kids to be lured onto airplanes to come and murder our citizens.

(END VIDEO CLIP)

MATTHEWS:  Wow.  The president left Washington today for the family compound up in Kennebunkport, Maine, where he‘s boating and meeting with France‘s new president, Sarkozy, this weekend.  He‘ll return Sunday, then head to the ranch in Texas for the rest of August.

And could this Christmas season collide with the first votes of the primary season?  South Carolina‘s Republican Party will move its primary forward, which has a domino effect on the calendars in Iowa and New Hampshire.  So will some voters be shopping for candidates before Christmas?  I think they will be.

And in our HARDBALL debate, she‘s for Hillary and he‘s for Obama and they‘re married.

But first, HARDBALL‘s David Shuster has this report on the president‘s big press conference this morning.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  In his last news conference before vacation, the president made it clear today that when he returns in September, he is not going to budge on keeping the Iraq war going.

BUSH:  But for those of us who believe it‘s worth it, we‘ll see progress.  For those who believe it‘s not worth it, there is no progress.  And that‘s going to be the interesting debate.  And what it‘s going to come down to is whether or not the United States should be in Iraq and in the region.

SHUSTER:  The news conference underscored that the president remains firm in his principles and is not going to bend, whether it‘s the approach to the Mideast, a hardline against Congress for infrastructure problems, like the bridge collapse in Minneapolis, or his belief that Attorney General Gonzales has done absolutely nothing wrong.

On the war, the president declared that freedom and liberty in Iraq will protect the U.S. homeland.

BUSH:  It matters to the security of people here at home if we don‘t work to change the conditions that caused 19 kids to be lured onto airplanes to come and murder our citizens.

SHUSTER:  None of the 19 9/11 hijackers, however, were Iraqi.  All were from either Saudi Arabia, Egypt, United Arab Emirates or Lebanon.

On Iraq‘s government, which hasn‘t passed a single law that would help with reconciliation between warring factions...

BUSH:  From my perspective, we‘re watching leaders learn how to be leaders.

SHUSTER:  The president spoke instead about progress in distributing money to local Iraqi politicians.

BUSH:  There is revenue sharing—in other words, a central government revenue sharing—to provincial governments.  In 2006, the central government allocated $2.3 billion to the provinces.

SHUSTER:  But to put that in perspective, the U.S.-led security effort in Iraq is costing the U.S. treasury over $2 billion a week.

On the bridge collapse in Minneapolis, experts say there 500 bridges across the U.S. with similar problems that need to be fixed immediately.  And some Republicans like influential congressman Don Young are suggesting a raise in the gasoline tax to pay for the repairs.  President Bush said no today and accused Congress of misusing money it already spends.

BUSH:  I would strongly urge the Congress to examine how they set priorities, and the bridges are a priority.  Let‘s make sure we set that priority first and foremost before we raise taxes.

SHUSTER:  But cutting taxes may be on the table if it will help American corporations compete overseas.  And the president says discussions with his economic advisers are under way.

BUSH:  There‘s a lot of folks who really believe the tax code creates a competitive disadvantage, and therefore, it‘s certainly worth looking at.

SHUSTER:  On Attorney General Alberto Gonzales, a long-time Texas friend, President Bush was asked about accountability.  Democrats want the administration to name a special counsel to consider perjury charges base on the attorney general‘s testimony to Congress.

BUSH:  Implicit in your question is that Al Gonzales did something wrong.  I haven‘t seen Congress say he‘s done anything wrong.

SHUSTER:  Except when they did.

SEN. ARLEN SPECTER ®, PENNSYLVANIA:  I do not find your testimony credible, candidly.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA:  I have never seen an attorney general so contemptuous of Congress and his role as the chief law enforcement officer of the United States.

REP. JAY INSLEE (D), WASHINGTON:  If you count the number of times this attorney general has refused to shoot straight with the U.S. Congress, it has to set a congressional record.

BUSH:  There is no proof of wrong.  Why would I hold somebody accountable who has done nothing wrong?  I mean...

SHUSTER:  The president did show an open mind on one issue today—

Iran.  Vice President Cheney is reportedly pushing for military action, but Secretary of State Rice is pushing diplomacy.  And when asked about Iranian arms shipments into Iraq, the president gave a warning that was confined.

BUSH:  There will be consequences for people transporting, delivering EFPs—highly sophisticated IEDs—that kill Americans in Iraq.

SHUSTER:  In other words, for now, the focus is not on Iran‘s leadership, but rather on equipment transporters.

(on camera):  Still, on issues like the Iraq war, taxes and even administration scandals, the president is remaining firm and defiant, and his approach signals that huge clashes are coming when Congress and the president return in September.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.

Chuck Todd, political director for NBC News, and Ron Christie, who was an aide to Vice President Cheney and a special assistant to President Bush from 2002 to 2004.

Chuck, let‘s take a look—oh, let‘s take a look right now at what the president had to say today about his long-term goal in Iraq.

(BEGIN VIDEO CLIP)

BUSH:  What it‘s going to come down to is whether or not the United States should be in Iraq and in the region in a position to enable societies to begin to, you know, embrace liberty for the long term.  This is an ideological struggle.  And I recognize some don‘t view it as an ideological struggle, but I firmly believe it is an ideological struggle.  And I believe it‘s a struggle between the forces of moderation and reasonableness and good, and the forces of murder and intolerance.  And what has made the stakes so high is that those forces of murder and intolerance have shown they have the capacity to murder innocent people in our own country.

(END VIDEO CLIP)

MATTHEWS:  But let me ask you, are you surprised by that, the dramatic nature of the president‘s commitment?  It‘s not about how well Petraeus is doing or how well Maliki‘s doing politically...

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Right.

MATTHEWS:  ... it‘s his basic commitment to stay in that country long enough to develop an enduring democracy.  That‘s a heck of a commitment.

TODD:  It is, and it shows that, you know, politics isn‘t playing a role at all in this.  I mean, if he were at all thinking about his political party, at all, he would be leaning more on Petraeus or he‘d be leaning—lecturing the Iraqi government a little.  He‘d be setting up a way out...

MATTHEWS:  Yes.

TODD:  ... or another path or a third way.  And instead, you know, it seems like he‘s sort of—he moved the goal posts, but in a different direction, basically saying, Look, this is—you know, I believe it has to go this way and this is what it‘s going to be, almost—it‘s as if he‘s daring Congress to say, Stop funding my war and that‘s the only way that you‘re going get me to stop doing this.

Ron, I‘ve never heard him more dramatic in laying out what we‘ve always called the neoconservative philosophy, which is the only way to stop terrorism is to go into those Arab countries, change their governments, create democracy so that the young people of those countries are not so frustrated at their governments and at the West that they commit suicide to get  at us, like they did on 9/11.

RON CHRISTIE, FORMER SPECIAL ASST. TO PRESIDENT BUSH:  That‘s right.

MATTHEWS:  That‘s a pretty profound argument.

CHRISTIE:  I think it‘s a pretty profound argument, but I think, as Chuck just pointed  out, this is not about politics, Chris.  The president of the United States is very firm in recognizing that, like it or not, the battle—the battlefield of the war on terrorism is being waged in Iraq right now, and he understands...

MATTHEWS:  No, that‘s not what he said!

CHRISTIE:  No, no...

(CROSSTALK)

MATTHEWS:  No, Ron, I‘m not going to let you say it because that‘s not what he said.  Go back to what he said.

CHRISTIE:  I‘m—I...

MATTHEWS:  We have to remove the conditions...

CHRISTIE:  That‘s exactly right.

MATTHEWS:  ... that lead people to become terrorists.

CHRISTIE:  That‘s exactly right.

MATTHEWS:  We‘re not there to kill terrorists...

(CROSSTALK)

MATTHEWS:  No, listen.  This is important.  We‘re not over there to kill terrorists because they‘ll gets us here, rather than there, that old argument.

CHRISTIE:  Right.

MATTHEWS:  We‘re over there to erase the conditions that cause young women or young men to be so desperate that...

CHRISTIE:  That they want to kill us.

MATTHEWS:  ... they get on airplanes and bomb us.

CHRISTIE:  Yes.  But this is part of my broader point, Chris.

MATTHEWS:  Right.

CHRISTIE:  We are waging this war on terrorism over in Iraq right now.  But look at Iran.  The president has repeatedly and consistently said that we do not have a problem with the people of Iran...

MATTHEWS:  Yes, I know.

CHRISTIE:  ... we have a problem with the government of Iran.  Again, these conditions that these young individuals, these Islamic...

MATTHEWS:  Right.

CHRISTIE:  ... fanatics who want to come over here and kill us. 

Again...

MATTHEWS:  Well, the problem is, guys—let me go back to both of you on this, starting with Chuck.  The people that came and got us on 9/11 are from the Saudi Arabia, they came from the United Arab Emirates, they came from Lebanon, they came from Egypt, all friendly countries.  So if he says, I‘m going to...

CHRISTIE:  Well, the governments are friendly.

MATTHEWS:  ... remedy the conditions—yes.  That‘s right.

(CROSSTALK)

MATTHEWS:  But he says, I‘m going to get rid of those conditions over there that lead people to be assassins and suicide bombers and 9/11 attackers.  But it seems to me, then, we are we going to Iraq?  Why don‘t we go to all those countries we do business with?

TODD:  Well, and I was jut going to say the way President Bush said that, it actually almost opens up that avenue of saying, OK, after Iraq, it is on to Saudi Arabia because you could make the argument, you know, it‘s Saudi Arabia that  is producing the most terrorists at this point and...

MATTHEWS:  Yes. Well, how about this...

TODD:  ... and it‘s because, frankly, because they‘re angry, supposedly, at the U.S. because they think the U.S. props up the Saudi royal family.  So...

MATTHEWS:  Well, we do.

(CROSSTALK)

MATTHEWS:  We buy their stuff at market rates.  Well, here‘s the question.  You got to get to this question, which is—we‘ve held democracy elections over there.  We held them on the—in Gaza, they—you know, they elected (INAUDIBLE) like Hamas over there, winning elections.  They had them in Algeria (INAUDIBLE) most Islamic crowd coming in power over there.  Every time you have an open and free election in the Middle East, the Islamists win.

TODD:  I was just going to say...

MATTHEWS:  The secular people lose.

TODD:  You don‘t want that.  I mean, the irony is, what is it that—what country is the friendliest to the U.S. and whose people seem the least likely to become terrorists?  Jordan.  Well, that‘s a benevolent dictatorship, if you want to...

MATTHEWS:  Right.

TODD:  ... if you want to put it in very blunt terms.  Yes, it has a royal family, but you know, it‘s a nice dictatorship.  They‘re developing a middle class.  You know, they‘re on their way to democracy, but it‘s going to take maybe 50 years, maybe 100 years.  And so the idea of opening free elections, you know, it may have to be in steps.

CHRISTIE:  Chris, I have to challenge your point.  So would you prefer that we not have open elections?  For goodness sakes.  I would rather that we have...

(CROSSTALK)

MATTHEWS:   We don‘t attack countries, kill the people who get in our way, take over their government, erase the leadership and then call elections.  I think that‘s a question mark.

CHRISTIE:  But then again, if you look at exactly what happened...

MATTHEWS:  Because I don‘t think it makes friends.

CHRISTIE:  If you look at what happened with Iraq—again, you‘re making it sound like the United States took unilateral action.  The United States went repeatedly to the United Nations Security Council.  We made the case for weapons of mass destruction...

MATTHEWS:  That was our argument.  The world didn‘t buy it.

CHRISTIE:  Oh, no, that wasn‘t our argument.  We had...

MATTHEWS:  But the world didn‘t buy it.

CHRISTIE:  We had Spain.  We had Italy.  We had a lot of the developed nations—

MATTHEWS:  “Coalition of the willing.”

CHRISTIE:  No, it‘s—of course that‘s a coalition of the willing.

MATTHEWS:  You know why?

CHRISTIE:  You‘re trying to change the terrain...

MATTHEWS:  You know why?  You know why?

CHRISTIE:  ... Chris.

MATTHEWS:  We went into a country, we didn‘t like the way they were running their government.  We took it over.  We killed the people who got in the way.  And then we said, Let‘s held elections.  Well, it hasn‘t worked out the way we wanted because we have a weak government over there that the president has a hard time even mentioning the guy‘s name.  Maliki is not his best friend, and you know it.

CHRISTIE:  Yes, and I‘d rather have a weak government over there now than a brutal dictator such as Saddam Hussein who murdered millions of his own people.   He gassed the Kurds...

(CROSSTALK)

MATTHEWS:  ... we have 160,000 people over there fighting in Iraq, and they‘re not coming home.  The president‘s message could not have been more clear.

CHRISTIE:  Yes, but at the same time, the men and women in uniform recognize why we‘re over there.  The people who understand what this war on terrorism is all about, Chris, recognize that free and fair elections in the Middle East is the only way to find stability over there.

MATTHEWS:  Well, it hasn‘t become clear yet.  Anyway, thank you, Chuck Todd.  Thank you, Ron Christie.  If it was so clear, we wouldn‘t be arguing about it.

Up next, much more on President Bush‘s remarks today with former Schwarzenegger spokeswoman Karen Hanretty and “The American Prospect‘s” Ezra Klein.

And later, tonight‘s HARDBALL debate.  This is going to be fun, a domestic dispute over who would be a better Democratic nominee for president.  The Reverend Marcia Dyson and her husband, author Michael Eric Dyson.  They‘re both pretty smart people, and they totally disagree.  One wants Hillary, one wants Obama.  They‘re going to be sitting right here.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  No question they haven‘t passed some of the law we expected them to pass up to now.  That‘s where a lot of people focus their attention.  On the other hand, there is a presidency council with people from different political parties trying to work through some of these difficult issues, trying to work through the distrust that has caused them not to be able to pass some of the law we expect.

(END VIDEO CLIP)

MATTHEWS:  Well, let‘s get to the interesting political stuff in today‘s press conference.  I was impressed by the president‘s commitment to a real change in the Arab world, the Islamic world towards democracy, even at the price of these wars we‘ve been fighting, and his clear determination to stick it out right to the end, until we have democracy in Iraq, whatever Petraeus has to say come next month or what Maliki manages to achieve or not to achieve.  But his main goal hasn‘t changed since the days he sat and chatted with his advisers back in 2002 and came up with the idea of attacking Iraq.  He hasn‘t changed a bit.

Welcome back to HARDBALL.  More on that wide-ranging news conference held by the president today.  Karen Hanretty writes for “The Hill”—that‘s the newspaper they read on Capitol Hill—and Ezra Klein writes for “The American Prospect.”

A couple of interesting things today.  First of all, the president was asked about Scooter Libby.  He called him Lewis Libby.  We all know him as Scooter Libby, his former assistant, former chief assistant to the vice president, convicted of perjury and obstruction of justice.  He gave him clemency.  The president said—he denied having given the guy a break.  He said he‘s already been punished.  What does he mean by that, Karen?  I don‘t get it.  If you get off scot-free—people go to jail for, you know, traffic violations longer than this guy went.

KAREN HANRETTY, “THE HILL,” FORMER SCHWARZENEGGER SPOKESWOMAN:  Well,

look, Scooter Libby isn‘t off completely scot-free.  No, he‘s not going to serve any time, but he...

MATTHEWS:  Well, what is he going to do?

HANRETTY:  He will be disbarred.  If he hasn‘t been disbarred...

MATTHEWS:  What‘s his punishment?

HANRETTY:  Well, he‘s lost a career, public humiliation.

EZRA KLEIN, “AMERICAN PROSPECT”:  You don‘t think he‘ll be on a think tank in two—in three days?

(CROSSTALK)

MATTHEWS:  ... skippity doo-dah (ph) over to the American Enterprise Institute and become a senior fellow immediately?

HANRETTY:  You don‘t think that...

MATTHEWS:  I‘m asking!  You think he got off?

HANRETTY:  Well, I‘m answering!

MATTHEWS:  If I go to Lorton prison across the river, I go to Sing-Sing and I say, You‘re out the door, everybody would say you gave me a break.

KLEIN:  Karen, I don‘t believe that you believe...

HANRETTY:  He‘s been disbarred.  He‘s been publicly humiliated.  And he has this—he has this on his record for the rest of his life.  He is...

(CROSSTALK)

KLEIN:  ... hero to the conservative movement, to the conservative press.

HANRETTY:  He‘s not a hero...

KLEIN:  There‘s nobody who believes...

HANRETTY:  Are you part of the conservative movement?

KLEIN:  I‘ve read it.  I‘ve read “The National Review.”

HANRETTY:  He‘s not...

KLEIN:  They adore him.  You really don‘t think he will be...

HANRETTY:  “The National Review” is not...

KLEIN:  ... he will be hard up for a job...

HANRETTY:  ... the entire conservative movement, first of all.

(CROSSTALK)

MATTHEWS:  ... Karen.  Should the president use his last few hours in office to pardon him, to make a complete clean break for the guy?

HANRETTY:  I—I don‘t...

MATTHEWS:  Well, should he or shouldn‘t he?

HANRETTY:  I don‘t—I don‘t really—he can or he can‘t.  I don‘t think...

MATTHEWS:  Well, what do you think he should do?  You‘re a citizen.  What do you think he should do, let the guy go, erases all his problems, let him back to be a bar—a reporter—a lawyer again?

HANRETTY:  I tell you what.  You have to look at the president‘s words.  And here‘s why I don‘t think he will...

MATTHEWS:  Should this guy practice law again?

HANRETTY:  If he‘s pardoned, absolutely.

MATTHEWS:  Well, should he be pardoned?

HANRETTY:  I don‘t think he will be pardoned.  And here‘s why...

MATTHEWS:  Should he be?

HANRETTY:  I—I...

MATTHEWS:  Why are you guys incapable of an answer?

HANRETTY:  Because I...

MATTHEWS:  You‘re a pundit!

HANRETTY:  Well, here‘s the—I—I...

MATTHEWS:  If you were advising the president, would you advise him to pardon him or not?

HANRETTY:  At the end of the term?

MATTHEWS:  Yes, when nobody‘s watching.

HANRETTY:  Yes, probably.  Yes, probably.

MATTHEWS:  So you don‘t think he should pay any price?

HANRETTY:  I—I...

MATTHEWS:  He‘ll be back practicing law and he‘ll be clean as a whistle and they‘ll be making him a hero over at the American Enterprise Institute.  He‘ll be one of the neoconservatives heroes of the year.  In other words, you want to completely let him go.

HANRETTY:  He can go, he cannot go.  It doesn‘t matter to the conservative movement.  Scooter Libby doesn‘t—you think he does, you think he does.

MATTHEWS:  No, I‘m just asking.

HANRETTY:  ... because you inside-the-Beltway people, I‘m telling you...

MATTHEWS:  He was chief of staff to the vice president.

HANRETTY:  Did President Bush‘s numbers go up one iota when he pardoned him?  Or when he gave him clemency?

KLEIN:  But the issue is not whether or not what happens to him puts Bush‘s numbers up.  The is the actual crime.

HANRETTY:  No, but it gives you another reason to hate George Bush, and that is really what it is all about.

(CROSSTALK)

KLEIN:  What he did was wrong.  This is why we don‘t like George W.

Bush.

(CROSSTALK)

MATTHEWS:  The reason he is getting clemency is he was a good soldier.  He covered for a problem.  He took the hit.  That looks to me from the outside that‘s what he did.  He took the hit.  He did all this stuff.  He took all the hit for it.  He never called the vice president in to testify.  He never testified on his own behalf, which would have opened him up to pointing the finger above.  He was a good soldier. 

You know, in a certain way, I might, I might in theory respect that, although I don‘t respect a lot of the shenanigans that went on.  But clearly he took the bullet.  Ezra, your turn. 

KLEIN:  If I were.

MATTHEWS:  The president said he has suffered enough.  It is over. 

KLEIN:  Let Bush pardon him and make it honest.  Let Bush say quite clearly, don‘t let him do this.  He will have it both ways.  Oh, Scooter Libby is paying a price, Bush doesn‘t think he should pay that much a price.  He will second guess the legal system.  Let Bush say, he protected me, he protected Vice President Cheney, he was a good soldier, as you said, let him off. 

MATTHEWS:  He never asked him to testify.  He could have called in the vice president to testify for him. 

KLEIN:  He could have done anything.  He could have done anything.

MATTHEWS:  He could have said, the boss made me do it.

KLEIN:  He could have put out a.

MATTHEWS:  Let me ask you about this more tricky question of Albert Gonzales.  The president said the guy has done nothing wrong.  Point to something he has done, Ezra.  Because either that or the president is right completely.  Point to something he did wrong. 

KLEIN:  Aside from the firing of the prosecutors?

MATTHEWS:  No, what did he do wrong? 

HANRETTY:  That wasn‘t wrong.

KLEIN:  Well, there you go.

MATTHEWS:  What crime did he commit? 

(CROSSTALK)

KLEIN:  I‘m not going to speak on whether or not he committed a crime, I‘m not a lawyer.  But what he did wrong was fire prosecutors for political reasons.  I think we can agree on whether that is an ethical violation. 

MATTHEWS:  And that has never been done before?

HANRETTY:  That is not illegal. 

KLEIN:  But a lot of things—I mean, people have murdered before. 

It is wrong the next time they do it too. 

MATTHEWS:  Do you believe presidents hire U.S. attorneys because they are pals and they deserve a little political favor or do you think they hire them because they are the best lawyer in town? 

KLEIN:  I think that whatever reason they hire them, you can‘t fire them mid-term for political reasons. 

HANRETTY:  Yes, you absolutely can fire someone midterm for political reasons.  It is not against the law. 

KLEIN:  That is a wonderful way to run a government. 

HANRETTY:  How old are you and how naive are you that you honestly think that this town is not built on political patronage?  Give me a break.

KLEIN:  And how cynical are you that you believe you should support that political patronage and excuse anything they do?

HANRETTY:  It has nothing to do with the party (ph).  That is not part of the question (ph). 

KLEIN:  Scooter Libby should pay no price, the prosecutors should get fired, this is how we are doing it now?

HANRETTY:  No, Gonzales—no.

KLEIN:  This is bad.

HANRETTY:  What has Gonzales—if Gonzales has done.

KLEIN:  How far have we fallen?

HANRETTY:  . something illegal, then why is it that the Democrats haven‘t.

MATTHEWS:  Because they are still fishing. 

HANRETTY:  Right, because they are still fishing.  Because they can‘t find anything. 

MATTHEWS:  They are trying to get something on him.  Don‘t you agree he hasn‘t committed a crime.

KLEIN:  And they don‘t have 60 votes.

MATTHEWS:  Don‘t you agree he hasn‘t committed a crime yet, by all evidence? 

KLEIN:  I have no idea if he has committed a crime, I‘m not a lawyer. 

Genuinely, I don‘t know what the legal code is here. 

MATTHEWS:  How about the presumption of innocence?  If you don‘t know he has committed a crime, if you can‘t prove it, then he is innocent. 

KLEIN:  But I haven‘t said he has committed a crime.  I genuinely don‘t know.  So I‘m just not the person to ask. 

MATTHEWS:  Do you think he is.

KLEIN:  I think he has done much that is wrong. 

MATTHEWS:  . smart enough to be attorney general?

HANRETTY:  I don‘t think he should be attorney general, and everybody should be attorney general. 

MATTHEWS:  Now you are getting some bona fides here right now. 

HANRETTY:  Because I care. 

MATTHEWS:  (INAUDIBLE) I know you care.  Let me ask you about this thing.  You know, I was amazed to having studied politics forever that the Democrats now are seen as the best party to deal with taxes.  I have grown up with a country that knows the Democrats, whatever you think of them, like bigger government and they spend more money and they raise more taxes.  Republicans, whatever you think of them, like to lower taxes. 

Now the public, according to our new—latest Wall Street Journal/NBC poll, gives the edge to the Democrats on taxes.  Is that why the president made his move today and is talking about cutting corporate taxes, knowing that the Democrats have to fight him on it and therefore he could be the tax cutter going into the next election?  Is he trying to recover the Republican advantage on taxes? 

HANRETTY:  Well, if the Republicans have lost the advantage on taxes, it is not—I think it is part of a much bigger story that they have lost.

MATTHEWS:  It sure is.

HANRETTY:  They have lost the advantage.

MATTHEWS:  Lost the edge on everything.

HANRETTY:  They have lost the advantage on fiscal conservatism.  That is the real story.  And I think as a byproduct, they have lost the... 

(CROSSTALK)

MATTHEWS:  Yes, but your party of the conservatives have always been the party that cuts taxes. 

HANRETTY:  Yes, but what are they now?  But now they are the party that are the big spenders.  They are the party that has been corrupted by political spending. 

(CROSSTALK)

KLEIN:  Well, this is a worrying conflation you made.  You said that it had been always the case—the poll said, who is the best party to deal with taxes?  And you just conflated “best” with “cutting.”

MATTHEWS:  Yes, I have.  I made that assumption because most people like to pay lower taxes. 

KLEIN:  That may be true.  But I think people are beginning to realize that you actually to pay for things, the government, say, infrastructure spending so your bridges don‘t crumble.

MATTHEWS:  You really mean to believe that people, when they say they want something done better with taxes, they want the taxes raised?

KLEIN:  I think they believe.

HANRETTY:  On someone else.

KLEIN:  . the Democrats are going to be a much more fiscally responsible party.  And they realize you can‘t run.

MATTHEWS:  But the question—no, they asked about fiscal responsibility.  That was a separate question, but they ask about taxes... 

KLEIN:  And Democrats won there too, right?  It is all intertwined.  I mean, these aren‘t budget experts out there.

MATTHEWS:  But do you honestly believe that the Democrats will give the average person tax relief if they get in office?

KLEIN:  I think Democrats—I hope, I hope, Chris, that Democrats raise taxes.  We need a high—more revenue coming in.

(CROSSTALK)

KLEIN:  But you have said that makes them worse on taxes.

MATTHEWS:  Everybody listening?  Everybody listening?  Democrats are going to raise taxes.  That is one reason why people still hesitate to vote Democrat. 

KLEIN:  So you think we should never raise taxes in this country? 

MATTHEWS:  No, (INAUDIBLE) I‘m talking about voters.  I‘m a student.

KLEIN:  But you didn‘t just talk about voters.  You just said that—we just talked about “best” again. 

MATTHEWS:  No.

KLEIN:  So why am I wrong to say that we should have higher taxes? 

MATTHEWS:  . in poll after poll, when people are asked about taxes, their innate response is, I would rather pay lower taxes.  That is why people hire accountants and bookkeepers and lawyers, to reduce their tax loads. 

KLEIN:  But who is best to—who is best to govern on taxes is.

MATTHEWS:  People want to pay lower taxes. 

KLEIN:  . who will do a better job sticking up for the government. 

And the Republicans have failed on that. 

(CROSSTALK)

MATTHEWS:  . but I think people want to pay lower taxes, and it is one reason why half of them vote Republican half the time.

HANRETTY:  Of course people want to pay lower taxes.

MATTHEWS:  Anyway, thank you, Karen Hanretty.  And thank you, Ezra Klein. 

Up next, more on today‘s top headlines and how early the voting for 2008 could start.  It looks like we are going to have an election in Iowa in 2007 so we haven‘t started covering this campaign too early.  This campaign is starting early. 

And don‘t forget the HARDBALL ad challenge.  Make up your own campaign ad and send it us and we will play it on the air, as we are going to play this one.  This is the Ryan Fenton Strauss from Whittier, California, the home of Richard M. Nixon. 

(VIDEO CLIP)

MATTHEWS:  Boy, that is spectral.  Anyway, keep you ads coming.  Joe Biden may like that or not like it.  But definitely it is tougher than he is.  That is our Web site.  Go to our Web site with your best ads that you have cooked up, hardball.msnbc.com.  You are watching it, HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  The Christmas primary.  Will the voting for 2008 start in 2007?  The South Carolina Republican Party wants to move its primary to January 19th.  In Iowa, the state law requires its caucuses be held at least eight days before the other voting—any other voting.  And New Hampshire is compelled to set the date of its primary at least a week before any other primary.  So do the math yourself at home. 

If South Carolina gets what they want and forces the other states to follow, you could see the first votes cast this December, a few months from now, making this campaign the earliest in American history.  So for all the folk who like to complain about the early coverage of the 2008 race, let me remind you now, the coverage is following the facts.  The states are moving on up. 

Tonight most Democratic presidential candidates will talk about gay rights at a forum sponsored by the Human Rights Campaign.  That is a good organization, by the way, and Logo, a gay and lesbian cable channel, that is where it is going to appear. 

The Republican contenders were invited to appear at the Human Rights Campaign debate tonight, but declined to attend.  This is the first televised appeal to gay voters in a presidential race.  It is the third time, by the way, in just six days that the Democrats have appeared in a forum or a debate. 

The gay community, by the way, if you haven‘t paid attention, has a lot of clout.  It is a politically active community with big bucks and polls show that up to 9 percent of the voters in big cities are gay. 

And Washington‘s mayor-for-life, Marion Barry, who was once arrested for smoking crack cocaine, they caught him on video says he will be among the greats of the world when he stands with former presidents George Washington, Thomas Jefferson and Abe Lincoln.  He is being immortalized in the new Madame Tussauds Wax Museum here in town.  The museum picked Barry after he came out, catch this, on top of all of the major figures they mentioned in the polling, of 600 people they went through. 

Anyway, up next, tonight‘s HARDBALL debate: Clinton versus Obama, who is the better candidate.  Marcia Dyson versus her husband, author Michael Eric Dyson of Georgetown.  She likes Hillary.  He likes Obama.  Let‘s see who wins in this family tussle.  You are watching HARDBALL, only on MSNBC.    

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to HARDBALL.  As Democrats debate who will win the nomination for president next year, that same debate is going on in the very household of Michael Eric Dyson, author of “Know What I Mean?”.  He is for Obama.  And his wife Marcia is for Hillary.  And they are tonight‘s HARDBALL debate. 

And I don‘t usually do this, but I am throwing the puck out here and you get it first.  Why do you feel it has to be Hillary? 

REV. MARCIA DYSON, HILLARY CLINTON SUPPORTER:  I feel that she is the best qualified presidential candidate.  I think that her track record as senator and even prior to her track record as senator for New York City, but when she was a young Republican in the state of Illinois, that she was true to her party.  But she also saw that she had to be true to the people unto whom she thought her party served. 

And I think that when she saw that that did not hold true, that she crossed over into the Democratic Party line, has been a staunch Democratic candidate since then.  And I think that all of her efforts as a first lady and then as—currently as senator—currently, then I think that she is doing a great job and has done a great job. 

MATTHEWS:  So the Goldwater Girl is now your girl? 

MARCIA DYSON:  No.  It has nothing to do gender.

MATTHEWS:  That is what she said, she said, I‘m your girl. 

MARCIA DYSON:  Well, she is your girl, but really she is all of our—she is our woman, just like some people might hear Obama say... 

MATTHEWS:  Don‘t like that word girl, huh?

MARCIA DYSON:  Well, if she wants to be our girl.  But I see her in the presidential candidate, she is our woman for the job.  She is the person for the job.  I think that this job really shouldn‘t be based upon gender or race, it should be based upon one‘s qualifications.  And I think that she is qualified based upon her track record.

No matter how critical people might be of about it, she has had a proven record that she can run this country.  And also the fact that she is just not a person who can be an American president, but she is a person who can suture our relationships internationally.  That should be considered also. 

MATTHEWS:  OK.  Michael? 

MICHAEL ERIC DYSON, BARACK OBAMA SUPPORTER:  Well, I think Obama is the man.  First of all, Hillary Clinton voted for the war.  Ouch. 

(LAUGHTER)

MICHAEL DYSON:  We understand that—what her track is there, spinelessness, an inability to stand up against the war machinery Mr. Bush put forward.  Secondly, Obama, as a candidate of course restored health care for 150,000 people in Illinois and then gave $100 million in tax cuts for working families. 

Number three, unlike Hillary Clinton, Mr. Obama has not sided with President Bush who signed into office, into a bill a—legislation, a crime bill that has disproportionately hurt African-American people.  Now we know Mr. Obama is not running for president of black America.  He is a black man running for president of America. 

He has proved his mettle.  Look, he says, what, we want to go into Waziristan in western Pakistan and we want find Osama bin Laden and we want to get rid of him.  Here is a man who has not only shown foreign policy diplomacy, but he has shown the spine that we need as Americans. 

MATTHEWS:  What is he, a hawk or a dove?  He is a dove on the war in Iraq, but he wants to go attack bin Laden in Pakistan.  What is this guy? 

MICHAEL DYSON:  Well, you know what, first of all, he is playing the game—you know, don‘t hate the player, hate the game.  The game is, if we are going to to deal with terror, we have to deal with terror in a serious way.  Mr. Obama is saying, look, if we are going to deal with specificity of origins of terror, let‘s go right where it is.  Let‘s go.

(CROSSTALK)

MATTHEWS:  Would you put the American Army into Pakistan? 

MICHAEL DYSON:  Well, I mean, we have to ask, would he?  And not me. 

I think that.

MATTHEWS:  Well, you are selling him.

MICHAEL DYSON:  Well, I think that Mr. Obama is saying this.  If we are going to have a war that is targeting people who are creating, you just had a vigorous conversation about let‘s talk about the conditions that lead to the propagation of terror.  Mr. Obama is saying, look, if you know that he is hiding out in Waziristan, let‘s at least target that and get the person at the source of the problem.  And that is the Mr. Obama. 

MATTHEWS:  Marcia, what do you think of this call by the more dovish candidate, Barack Obama, to go into Pakistan, whether Musharraf likes it or not?  What do you make of that call? 

MARCIA DYSON:  I think that—well, I wouldn‘t want to talk about Obama—spend my time talking about him and what I would think about him.  I just think about what I think about Hillary Clinton.

MATTHEWS:  Do you think she was shooter (ph) in this debate?

MARCIA DYSON:  I think that was shooter (ph) in the debates.  I know people were trying to talk about her pulling back and not being concise, but I think that she is a presidential candidate, unlike the present Bush administration, who would take—consult and see from her cabinet and from the other executive branch, and will. 

MATTHEWS:  What do you make of the fact that she got booed out there in Chicago, at Soldier Field, because she said, it is one thing to have big ideas, but you shouldn‘t be expressing them in public?  People didn‘t like the sound of that.  It sounded like elitism.  It sounded like, oh, we are going to have meetings here in Washington, but nobody is going to know what we are talking about?

MARCIA DYSON:  I don‘t know that that‘s true.  I think she took her boos very well.  If anything it would strengthen her, because if anybody is critical about Hillary Clinton, she is self critical and she would take the reflection of that particular situation back to heart.  And so for them to boo her should not be a barometer as to whether or not she is still the proper candidate. 

MATTHEWS:  I got to cut to the quick here.  Are we ready in this country—big we—to make a decision for an African-American to lead the country? 

MICHAEL DYSON:  Absolutely.  I think we have to push it.  I think we have to say Barack Obama is pushing the envelope.  Jesse Jackson made it possible as the lineman.  Barack Obama is the running back coming through the hole.  I think he is going to represent a very powerful way. 

MATTHEWS:  But there is a hole?

MICHAEL DYSON:  Oh, there is a hole there, because he wouldn‘t be getting the kind of numbers.  He has the greatest amount of people in the history of America supporting him economically.  And unlike being booed there, he doesn‘t have a condescending attitude towards big ideas.  He‘s a big idea person. 

MARCIA DYSON:  She was in the state of Illinois and in the city of Chicago. 

MATTHEWS:  Somewhere out in the Atlantic Ocean—somewhere near Atlantis maybe, there is a big green horned monster maybe.  It‘s called male chauvinist pig.  Is that monster out there?  And in October of next year, when all is said and done, after all the nice polls are taking, is there a bunch of guys out there and conservative traditional woman, who will not put a woman in the commander in chief‘s hat? 

MARCIA DYSON:  I think you are absolutely right.  I‘m telling you, you are absolutely right.  If Hillary Clinton—

MATTHEWS:  I don‘t want to be right. 

MARCIA DYSON:  You happen to be right on this issue.  If Clinton was a man, she would have no contenders in this race.  I don‘t think the chauvinism is, because when I go through the airport—

MATTHEWS:  If she were a man married to Bill Clinton, she would have no problems? 

MARCIA DYSON:  Without Bill Clinton, she would still be the best candidate.  She would be the best candidate. 

MATTHEWS:  Give me a break. 

(CROSS TALK)

MATTHEWS:  You say she had her best proof of her greatness and her experience before she was a senator.  That means when she was the first lady.  She couldn‘t have been first lady. 

MARCIA DYSON:  She was a law student at Wellesly. 

MATTHEWS:  You would have taken her right out of Wellesly and made her president.  You are unbelievable. 

(CROSS TALK)

MARCIA DYSON:  She is not a hopeful presidential candidate.  She is a helpful presidential candidate.

MICHAEL DYSON:  She is a first lady. I think she belongs there.  I think she would make a great vice president for somebody.  But right now, aren‘t we tired of having Bushes and Clintons in the White House.  Can we give a black man a break.  A black man has never held the presidency of American society.  Let‘s give a good black man a break. 

MARCIA DYSON:  Let‘s put a woman in.  We have had centuries and centuries of men, so let‘s put a woman in. 

MICHAEL DYSON:  You tell your son, bring home a woman who looks like your mother.  I am saying to her, bring home a president who looks like your son. 

MARCIA DYSON:  Bring home a woman like your mother and strength and integrity. 

(CROSS TALK)

MATTHEWS:  I think you can save a lot of gas on election day.  You don‘t have to either show up.  Thank you Michael Eric Dyson of Georgetown and Marcia Dyson, his match. 

Up next, our HARDBALL panel on Bush in Iraq.  Tough questions for John McCain, by the way, from Matt Lauer this morning.  And the Romneys; the ever changing calendar for 2008 as well.  And why didn‘t those Romney boys ever join the military?  That is the question.  They are healthy.  They are ready, but they‘re not going. 

How early will the voting begin?  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL, time now to dig into the big political news of the day.  Chris Cilizza is author of “The Fix” for the “Washington Post.com.”  He‘s on the ground in Iowa right now.  And Salon.com editor in chief Joan Walsh also joins us tonight from San Francisco. 

Let‘s talk about this Romney thing here today.  I‘m astounded, by the way, about how the former governor of Massachusetts answered a question about why his five sons—I believe he‘s got five sons—why none of them is serving in the military.  Let‘s watch the Q and the A. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  How many of your five sons are currently serving in the U.S. military.  If none of them are, how do they plan to support this war on terrorism by enlisting in our U.S. military?  

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  The good news is that we have a volunteer army and that‘s the way we are going to keep it.  My sons are all adults and they have made their decisions about their careers.  And they have chosen not to serve in the military in active duty.  I respect their decision in that regard. 

I also respect and value very highly those who make a decision to serve in the military.  I think we ought to show an outpouring of support, just as I suggested; a surge of support for those families and those individuals who are serving. 

One of the ways my sons are showing support for the nation is helping to get me elected, because they think I would be a great president. 

(END VIDEO CLIP)

MATTHEWS:  Chris Cilizza, what do you make of that response? 

CHRIS CILIZZA, “WASHINGTONPOST.COM”:  I thought he had it until the very end.  I thought the first part of the response is right.  My sons didn‘t choose to serve.  It‘s a volunteer army.  OK, some people may have an issue.  He is right, in fact.  The problem I thought he got into is when he said, well, in fact, my sons are serving.  One of my sons is driving an RV around Iowa for me, and that‘s serving his country, because they want me to be elected.

Well, that‘s not the same thing as being in Basra or Sadr City or these places in Iraq.  There is a difference in political combat and real combat.  I think that‘s where he got himself into a little bit of trouble.  Because when you start saying your son‘s sacrifices of driving Iowa equal the sacrifices of men and women being killed in Iraq—equating those two things is dangerous ground. 

MATTHEWS:  But isn‘t this raising the serious question of equality in this country, Joan Walsh.  This is a war we are fighting.  It is a war of election.  The president chose to fight this war.  And it was his decision.  Few other presidents would have taken the American army into Arabia.  he chose to do it. 

If you are going to fight a war of election, a war that you decide to fight because of your ideological commitments or beliefs about democracy in the Middle East, shouldn‘t there be some shared responsibility among, especially, the elite for that kind of decision? 

JOAN WALSH, SALON.COM:  I do think there should be some, but, you know, Chris, it‘s an open secret that this is not a war fought by the elites.  Very few politicians‘ kids, maybe a dozen in Congress, actually serve in some capacity.  Few journalists‘ kids do.  Let‘s be honest.  So it‘s a war where the sacrifice is being felt. 

MATTHEWS:  Excuse me, Joan, if you are a big hawk and you are pushing these kinds of wars, which are elective wars, and you believe in this going around the Middle East, knocking off governments, executing people and taking over the governments, and saying we have to do this by force and take huge numbers of casualties, don‘t you have a special responsibility to commit, to pony up, to ante up? 

If you are an anti-war liberal, who doesn‘t believe in this war and thinks it‘s lousy foreign policy, why should you encourage your kids to fight in the war?  I think there is a special responsibility on the part of hawks not to be chicken hawks. 

WALSH:  I agree.  This entire Republican party has that responsibility and has not stepped up. 

MATTHEWS:  How many deferments did Cheney get?  He said he had different priorities.  Things get to the point of complete hypocrisy at some point. 

WALSH:  Absolutely.  So, it was a terrible answer.  I disagree with Chris a little.  I didn‘t even like the first part of the answer.  But the second part is going to haunt him.  Romney has the problem of looking like an entitled country club white guy, who just strolled off the golf course and then to say that his sons are serving the country by getting him elected, it feeds into this caricature of this entitled rich guy, who thinks the rest of us are here to serve him and serve his interests. 

MATTHEWS:  Chris, let‘s get back to you on this.  All the National Guards-people, men and women who are stuck over there for years in that war, you know, you can call it a volunteer commitment if you want, but really it‘s the result of a national policy, a political policy of one political party that took us into the war and supports the war even now.  Apparently, according to the president today, wants to keep us over there. 

That‘s a decision he made.  That‘s a political, ideological cause he put it today.  We‘re in a war of ideology.  Why shouldn‘t the ideologues, the American Enterprise Institute, and all the people that supported this war, why aren‘t they the ones fighting it?  I don‘t get it.  They get a free ride on this. 

CILIZZA:  I don‘t have an answer.  I don‘t think they get a free ride simply because we are having conversations like this. 

MATTHEWS:  These are rare, I‘ve got to tell you. 

CILIZZA:  I think that Romney has gotten a fair amount of negative publicity three or four days before the Ames Straw Poll, which he didn‘t want.  One other quick point, Chris, politicians saying one thing and doing another is not just a Republican thing. 

It‘s a different issue, but look at education.  There was a debate in New Hampshire, I believe.  Democrats are asked are your kids in public schools?  Most said them said yes, we believe very strongly in public schools.  But no, our kids don‘t go to them.  Well, the whole point is that we need kids like that to be going to public schools so that the schools get better. 

WALSH:  Chris, I really think there is no comparison.  I have had this argument with friends.  My daughter went first to public school for years.  She goes to Catholic school now.  I searched my soul about it.  But there is no comparison between sending people off to die while privately holding your five sons back, and then sending kids to private school. 

WALSH:  I don‘t want to get in a big argument with you and I don‘t want to be a Romney defender, because I‘m not.  But I think holding your five sons back is a rhetorical device that I don‘t think is accurate.  Because his five sons chose not to serve in the Army, that would be like saying my parents held me back from serving. 

WALSH:  It didn‘t sound like he encouraged them.  It didn‘t sound like he felt like they ought to have gone.  I don‘t think that‘s a Romney family value, if you ask me. 

MATTHEWS:  If the kids are hawks, what does that mean, Chris? 

CILIZZA:  If the kids support it—

MATTHEWS:  If they believe in the war. 

WALSH:  They‘re able bodied, go. 

MATTHEWS:  They are grown up people as well.  I went to school with guys like this.  They are as right wing as they come and when the question of the war comes along, they all say the same thing; I participated in the system.  In other words, they got out of it.  We will be right back with Joan Walsh and Chris Cilizza.  You are watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We are back with the “WashingtonPost.com‘s” Chris Cilizza, the Salon‘s Joan Walsh, and we‘re also joined right now by Michael Fletcher of the “Washington Post.”  Michael, thank you for joining us.  I know you were at that conference today.  But let me ask you about the big political news.  South Carolina Republicans announced today that they plan to bump their primary up to January 19th.  That could set up a domino effect, since New Hampshire, by law, keeps a week between themselves and the next primary. 

Iowa state law demands eight days between themselves and any other voting at all.  Is a Christmas caucus or primary in the works right now.  Are we moving it up to 2007, Michael? 

MICHAEL FLETCHER, “THE WASHINGTON POST”:  It just seems like we are on that road.  It‘s really crazy.  Everyone is trying to have this race to be first.  Everyone wants their primary to be the most significant one.  So thus, you get this race.  Who knows where this ends.  Like you say, Iowa has its rules and New Hampshire has its rules.  We seem to be in a race into the next calendar year. 

MATTHEWS:  I wonder, going into this, Joan, if we are going to get a more Democratic selection by either party, a choice that either does reflect a good national sampling any better under the new system. 

WALSH:  I don‘t really think so.  I know there have always been these worries that Iowa and New Hampshire are awfully white and not terribly diverse and there have been efforts to deal with that.  I appreciate that.  But this is not about that.  This is just about ego and people wanting to be first. 

I think what happens is it makes it almost impossible for somebody to jump in the game very late.  Even Al Gore has a hard time if you have an Iowa caucus in December.  So I think it really hurts the process.  I think it really speeds it up.  I used to enjoy having a little bit more time to watch people stumble, pick themselves up, go on. 

You are not going to have that this time around if they get away with doing this. 

MATTHEWS:  Chris, are we going to get a good look at these people when it gets heated up around Christmas time to really make a good judgment? 

CILIZZA:  Gosh, I don‘t know.  The hot rumor going around yesterday was we are looking at a December 17th Iowa caucuses. 

MATTHEWS:  That‘s my birthday.

CILIZZA:  Maybe they knew.  I think that the Iowa folks I talked to today dismissed that.  But the reality is, Chris, we are talking about the first couple days in January.  And then as Joan rightly points out, we are then, with a New Hampshire primary right after that, South Carolina, Florida and don‘t forget Nevada, which was moved up to break the strangle hold Iowa and New Hampshire had on the early days. 

We are talking about—I thought we would have a nominee by the beginning of February.  We may have a nominee by the middle of January at this point. 

MATTHEWS:  Michael, if we have a nominee that early from both parties, they are going to have to stand a lot of fire from then to November. 

FLETCHER:  To say the least.  Like you say, the bigger impact is that is skews the entire nomination process and doesn‘t give the candidates, as the other guys said, the time to stumble and recover.  And it really doesn‘t give a chance for voters to really hear the issues. 

I‘m not sure the voters are that engaged yet. 

MATTHEWS:  We are.  Thank you Joan.  Thank you Chris Cilizza.  Thank you Michael Fletcher.  Thank you Joan Walsh.  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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