updated 8/13/2007 1:13:12 PM ET 2007-08-13T17:13:12

Guests: Amy Argetsinger, Roxanne Roberts, Hilary Rosen, Ed Schultz

TUCKER CARLSON, MSNBC ANCHOR, TUCKER:  Welcome to the show. Politics and post-modern cringe inducing TV entertainment collided with one another last night in L.A. at the Human Rights Campaign, when the major Democratic candidates for president fielded questions about gay rights.

Every Democrat, from Hillary Clinton to Mike Revel, pledged to end workplace discrimination against gay and lesbians, bisexuals and transgendered people.  And they all vowed to end the military‘s don‘t ask, don‘t tell policy, a creation of one Bill Clinton.

But the Democrats , who remained the default party for gay American voters mostly oppose gay marriage.  Last night‘s panel, which included folk rocker Melissa Ethridge, seemed bent on determining just how comfortable the Democrats  really are with gay people. Here are a few highlights.

(BEGIN VIDEO CLIP) 

BARACK OBAMA (D), PRESIDENTIAL CANDIDATE:  If we have a situation in which civil unions are fully enforced, are widely recognized, people have civil rights under the law, then my sense is that—

CARLSON:  Well, for a group obstensively gay friendly, the leading Democrats , Clinton, Obama, and Edwards seem profoundly conflicted over the one issue that mattered most, gay marriage. Why is that?

Well, here to tell us, we welcome from Washington D.C., Democratic strategist and MSNBC Political Analyst Hilary Rosen; as well as the host of radio‘s nationally syndicated Ed Schultz show, Ed Schultz, himself.

Welcome to you both. 

HILARY ROSEN, MSNBC POLITICAL ANALYST:  Hi, Tucker.

ED SCHULTZ, ED SCHULTZ SHOW:  Good to be back with you, Tucker.

CARLSON:  Well, thank you.

Hilary, I cannot resist playing—

ROSEN:  Cringe politics?  That‘s low.

CARLSON:  Cringe—oh, no. I loved it. I thought last night‘s—I though last night‘s forum was the most interesting one so far, because it was so revealing of who the candidates are—and aren‘t.

ROSEN:  Neither cringe, nor fringe. 

CARLSON:  Oh, no, I didn‘t call anybody fringe. I will say I cringed over the following clip. This is the Governor of New Mexico, Bill Richardson, being asked by Melissa Ethridge, whether being gay is something you are born with or something you decide.  Here is how he responded.

(BEGIN VIDEO CLIP) 

MELISSA ETHRIDGE, MODERATOR:  Do you think homosexuality is a choice, or is it biological?

GOV. BILL RICHARDSON, (D), PRESIDENTIAL CANDIDATE:  It is a choice.

ETHERIDGE:  I don‘t know if you understand the question. Do you think a homosexual is born that way, or do you think that around 7th grade we go, oh, I want to be gay?

RICHARDSON:  You know, I am not a scientist. I don‘t see this as an issue of science or definition. I see gays and lesbians as people, as a matter of human decency. I see it as a matter of love and companionship, and people loving each other. I don‘t like to categorize people. I don‘t like to answer definitions like that that perhaps are grounded in science, or something else that I don‘t understand.

(END VIDEO CLIP) 

CARLSON:  That was Bill. I am not a scientist. That cracks me up so completely. But Hilary, is this just like a P.C. mind field out there.

What he should have said, How the hell do I know, I am not gay. It doesn‘t matter to me. I support gay rights and that‘s what matters. He can‘t because those are things you can‘t say.

ROSEN:  I think Richardson tried to recover. His campaign last night was in full gear spin mode, trying to talk about his support for equal rights. It was kind of a shockingly sad moment because people do think, and I know Bill Richardson—he is a good guy on these issues. This is why that question, though, in particular is important.

Because if you believe that homosexuality is a choice, or if you believe that people are just born that way, what you are saying is—if people are just born who they are, there is absolutely no reason to deny them the exact same equal rights of every other person.

If you believe people are choosing to live differently, well then they make a choice that can justify being denied certain things. That‘s why it is an important question. It is not intended as a trip up or a P.C.  question. It is saying, fundamentally, gays and lesbians do not feel like we are making a choice. There is no rationale for denying full, equal benefits.

RICHARDSON:  It‘s just that there‘s so many—the speech codes are just so complicated on the Democratic side. I felt for Bill Richardson. But he acted—

ROSEN:  I felt for him, too.

CARLSON:  -- like a buffoon, and he deserves everything he gets.

Ed Schultz, I thought the most telling moment really of all came not during the debate but in, personally, my reading about the debate. It was Barack Obama saying that he is against gay marriage on religious grounds.  It is just personal for him. He‘s against gay marriage.  It turns out the church he belongs to is for gay marriage. So what exactly is Barack Obama‘s justification could there be other than pandering to the poll numbers?  

SCHULTZ:  Well, Tucker, you are framing that as if people have to be absolutely exclusive and in lock step with every church they go to or every faith that they are connected to.  

CARLSON:  Come on.

SCHULTZ:  I think you have got to give Barack a little slack there.

As far as Richardson is concerned, I think it is a classic example of how not every candidate is completely comfortable with this issue. You can look back to ‘04 and see that John Kerry‘s position on gay marriage was the exact same position as George W. Bush. And that‘s where the Democrats are going to be in ‘08. I don‘t think many of them are going to be changing their positions from here on out.

CARLSON:  No, they‘re not.

SCHUTLZ:  As far as Obama is concerned, Obama is talking about equal protection under the laws and Obama is talking about civil rights. If the Democrats are truly going to be the party of civil rights, they are really going to have to walk the walk and walk the talk—

CARLSON:  Yes, but they‘re not.

SCHUTLZ:  -- throughout this debate.

CARLSON:  And Hilary, as you know, you just said it yourself, if you believe that homosexuality is not a choice—or even if it is, I mean, don‘t need to believe that to believe gay marriage is a good idea.  But I don‘t understand why Democrats allow the front-runner, Hillary Clinton to get away with the layman‘s explanation of all, which is she‘s against gay marriage, because, quote, “it‘s personal”, her position, for “personal” reasons. What does that mean?

SCHULTZ:  Where does it say that the Democratic Party has to embrace gay marriage?  I mean that‘s  --

CARLSON:  Because they

(CROSS TALK) 

SCHULTZ:  I mean, that‘s being forced on them. 

CARLSON:  I will tell you exactly why, for two reasons.  One, they are pandering to the gay vote. And, two, because they have come out for civil unions. and for all the legal benefits of marriage. Why not gay marriage?  It‘s a simple question. Hillary, what‘s the answer?

ROSEN: I think the answer is that just like multiple other constituencies, gays and lesbians are particularly important voting block in a Democratic primary. but also in a general election. And an American constituency that has issues that need government attention. I think the issue on marriage, there was a lot of discussion at the forum last night.  There was actually some movement. Barack Obama admitting that religion has no place in the discussion of civil marriage. The benefits that the state confers upon a person.

Hillary Clinton went back to, well, I think it is a state‘s right issue but maybe it is not as ripe as some of the other civil rights issues.  Clearly these candidates know that they don‘t want to be coming out for same sex marriage. On the other hand, they don‘t want to come across as somebody that doesn‘t understand why it matters to the community.

SCHULTZ:  No, they‘re not cowards, Tucker.

CARLSON:  The line is indefensible.  They don‘t have—Jerry Falwell would get up and say, I am against gay marriage because God tells me it is wrong. You know that‘s a consistent position. They don‘t have that position.

ROSEN:  I don‘t like that they are not there, but I will tell you what is cowardly is that not a single one of the Republican candidates would show up for a forum that set up the issue (UNINTELLIGIBLE)  That‘s cowardly.

CARLSON:  No, but hold on.

ROSEN:  The fact that Democratic candidates say, you know what, I‘m not all the way there. That‘s just progress.

CARLSON:  Hold on, I think you are letting them off too easily. The Republican Party is not the party of gay voters. They are not for gay rights, most of them, OK?  The Democrats don‘t have an explanation.

ROSEN:  They‘re trying.  The Democrats are not—

SCHULTZ:  You can make the case that the Republicans are discriminatory toward gay people with their hard-line attitude. I think Jerry Falwell was not compassionate to the gay community. He softened  up later on.

What options does the gay and lesbian community have?  The party that keeps throwing out the federal marriage amendment?  This is not going to be a huge election issue for the Democrats if they stay consistent from the start where they are right now.

CARLSON:  They‘re just totally principle, is what bothers me.

ROSEN:  If it is not a huge election issue, I think, on some level I think we have made a significant amount of progress, because gay and lesbian Americans were complete bated last election, with scare tactics and the like, put upon them by the Republican Party.

CARLSON:  Bill Clinton who passed the Defense of Marriage Act. So, let‘s be honest here.

ROSEN:  Yeah, but in this last election it was the Republicans doing it. No question.

CARLSON:  That‘s right. You‘re absolutely right.

We‘re going to take a quick break.

(COMMERCIAL BREAK) 

(COMMERCIAL BREAK) 

CARLSON:  At the very least, Hillary Clinton is attempting the improbable in her quest for the presidency. Being all things to all people.  She is a hawk, but she wants out of Iraq yesterday. She has graced the cover of “Fortune” magazine and yet she tells organized labor she is on their side. The one quarter of the political world that is dismissive as out of her reach is the right. But Hillary Clinton could actually be more popular among conservatives than you would think.

Joining us now is Bruce Bartlett, nationally syndicated columnist, and economist, who worked for the Treasury Department under both Reagan and George H.W. Bush.

Mr. Bartlett, thanks for coming on.

BRUCE BARTLETT, NATL. SYNDICATED COLUMNIST:  Happy to be here.

CARLSON:  So, you have a column today, in which you argue that actually she is more popular among conservatives than you would think. Why is that?

BARTLET:  Well, what I was saying is that there are some early signs that a few conservative opinion makers, such as Rich Lowery, the editor of “The National Review” and Bill Kristol of “The Weekly Standard” are perhaps not coming to be in favor of her but coming to accept that they can live with her, if she should happen to become our next president.

CARLSON:  It almost seems like the inclusion of John Edwards in the race is designed to make Mrs. Clinton seem more moderate. Edwards, you have got to give him credit for saying what he thinks and being a kind of an honest guy. He is running on the Hugo Chavez ticket and not making any apologies for it. When you look at the two of them together, you look at her and say she is kind of a right-winger by comparison. Is that why?

BARTLETT:  I think that certainly is a factor. She is clearly the most conservative among all the Democrats possibly with the exception of Bill Richardson. She is certainly more conservative than Obama on a wide variety of issues. I think she is positioning herself very wisely looking ahead to the general election and trying to avoid getting stuck in to extreme positions, that she can‘t wiggle out of, that could be very detrimental to the general election.

CARLSON:  But you get the feeling with Mrs. Clinton that she has contempt for people who disagree with her. If that‘s so, that would be a problem if she became president for conservatives?

BARTLETT:  I think it would be a problem for anybody. That goes more to attitude. I think we are talking about issues, whether she has the temperament to be president, I think is an important question. I think it is one for the Republicans as well.

It is really a different question from the question of, is she adopting the kinds of positions that are inside the mainstream that a conservative would feel that, I don‘t need to go to the mattress to fight to keep her out of the White House. Maybe I can just vote for the other guy.

CARLSON:  She is, I mean, very quickly on social issues she has taken the most extreme position on abortion. She is in favor of it in all circumstances, etc cetera. She is never going to win anti-abortion people on that.  On economics, she is pro corporate. She is willing to suck up to big business, like the current president. I don‘t see any evidence she is in love with the idea have o I free market. I heard her say if she were president, she would take oil money private profits and invest them in something better. 

I mean, do you have any idea if she‘s a pro-market person?

BARTLETT:  She did give a speech on May 29th that was pretty strongly pro-free market. I think you always have to try to figure out what is the rhetoric and what is the reality here. I have perhaps gone a little overboard in this area of assuming she would be pretty much of a rerun of her husband‘s administration.

She has many of the same economic advisors. I think she would be pro free trade and fairly fiscally conservative and pragmatic on economic issues. We are all waiting for more meat on those bones.

CARLSON:  Unfortunately, we may get a chance to find out whether we want to or not. Bruce Bartlett, thanks for helping some of us feel a tiny bit better, anyway. Maybe we don‘t need to buy that house in Barbados.  Thanks a lot.

Cindy Sheehan made a name for herself by taking on President Bush.  Now, she has a new target in her cites from another party, Nancy Pelosi, speaker of the House, Democrat. I will tell you more in a minute.

Plus, Mitt Romney will dominate Saturday‘s Iowa straw poll. Will his experience in that state expose his biggest political weakness? We are back with analysis. This is MSNBC, the place for politics.

(COMMERCIAL BREAK) 

(BEGIN VIDEO CLIP) 

CINDY SHEEHAN,   I think it‘s gonna be a campaign that will energize not only the people of this district, but people all around the country who are hungry for a change and hungry for the truth.

I am dedicating my candidacy—to the people of Iraq and Afghanistan that have been tragically harmed by the Bush regime.

(END VIDEO CLIP) 

CARLSON:  An emotionally fragile Cindy Sheehan. Sheehan became famous when she spent the summer of 2004 camping out outside President Bush‘s ranch, outside President Bush‘s ranch in Crawford, Texas.  Since then she has been a face of the anti-war movement. After saying she was retiring from public life earlier this summer, she  changed her mind yesterday.  She now says she‘ll run as an independent, against House Speaker Nancy Pelosi of San Francisco. 

According to Cindy Sheehan, Pelosi is, quote, “protecting the status quo of the corporate elite and lost touch with the people who voted for her. Can Sheehan win and make one Democrat pay the price for not doing what they were elected to do, end the war in Iraq?

Well, Democratic strategist and MSNBC Political Analyst Hilary Rosen joins us, as does the host of the Ed Schultz Show, Ed Schultz.

Ed, I think, you know, poor Cindy Sheehan. I don‘t think the doctors ought to allow her to run, because it‘s clearly not good for her.  However, she makes a point that is completely fair. The Speaker of the House, Nancy Pelosi, has protected the status quo. She signed off on the farm bill, she hasn‘t gotten us out of Iraq. I think it‘s fair to say, if you remember the Democratic base, you have good reason to disappointed with her.

SCHULTZ:  The farm bill is great because it has a lot of energy clauses in it. So, let‘s put that aside.  It will be interesting, Tucker, to see if this is going to be a serious candidacy. I think that there is just enough frustration in this country where I think Cindy Sheehan might get support from all over the country. I will not discard her candidacy early on. It might be a fight Nancy Pelosi doesn‘t want. The mood of the country right now it is certainly a fight that Nancy Pelosi does not need.

Because this is going to force her hand to be more vocal on where she stands on the war. The timing might be right, but there is still a lot of time between now and November of ‘08. Is this going to be a candidacy of symbolism or is this going to be a  serious candidacy? Only time will tell.

CARLSON:  I think, either way, it matters, Hilary, because it points up what are real and legitimate frustrations from the anti-war people. What have they gotten?

SCHULTZ:  Well, that‘s a fair question.  Why did they vote Democratic?

CARLSON:  Yeah, Hilary, why?

ROSEN:  First of all, I don‘t think there is any way at all that if Republicans were still in control of Congress, you would have the White House feeling the pressure they are feeling right now for the next four weeks and General Petraeus‘ report coming out of Iraq, knowing this is their last shot as trying to prove themselves as having a strategy.

I think Congress is waiting with bated breath. There are a number of Republicans and Nancy Pelosi has helped to build that coalition with Republicans. It is clearly a candidacy of symbolism for Cindy Sheehan. She has kind of taken on the wrong person. She has a lot to offer this country, as a mother who has lost a soldier.

I don‘t think that being in San Francisco is the place to do it. I think Nancy Pelosi has been as strong and aggressive and forceful an anti-war advocate that you can find.

SCHULTZ:  I disagree with that.

(CROSS TALK) 

CARLSON:  Let me ask this question. Can she be strong and forceful and aggressive in her response to Cindy Sheehan, who is this kind of secular saint on the whacko left?  She can‘t attack Cindy Sheehan.

ROSEN:  She is not going to take on Cindy Sheehan.

CARLSON:  Right.

ROSEN  There‘s no reason why she should.  But what she will take on, and has taken on, is the responsibility to lead this to have the courage to do what they want to do, which is to defund this war, to bring the troops home.

I do think you are seeing them do that. Ed, it‘s one thing to say, she hasn‘t done it. First of all, they allowed votes on the floor that the Democrats were willing to lose. Mind you, they lost them, about undermining the current war effort. So she has done what she can do. I think the other thing she has done is brought the sentiment along.

SCHULTZ:  Hilary, I think you are giving them a pass. I don‘t think the Democratic leadership is in the eyes of the American people that they have done enough.

First of all, there will be no change in course, only to accelerate.

This isn‘t the last surge. There will be more. Most Americans believe that.  The president of the United States is not going to take a report from General Petraeus and say, Oh, let‘s redeploy now, because things aren‘t going well.

ROSEN:  This report isn‘t for the president. This is for the Congress and you know that.

(CROSS TALK)  

SCHULTZ:  That‘s the whole point about her candidacy and she thinks the Democratic leadership has allowed them to go and have at it.

CARLSON:  We have a hard break here, so we‘re going to cut you off.

(CROSS TALK) 

CARLSON:  We‘re going to take a quick break and we‘ll be back in mere moments.

John McCain says his campaign is in good shape. What does it mean when a poll by a Republican shows Barack Obama is beating John McCain among Republicans.

Plus, Congress is on recess. Politicians have fled D.C. In their place this week the most famous Britain there is.  How did David Beckham find steamy Washington?  And how did Washington find steamy Beckham? We will tell you next.

(COMMERCIAL BREAK) 

(MARKET REPORT)

CARLSON:  This Saturday marks the Iowa straw poll in Ames, Iowa, the first actual measuring event of the Republican race for the nomination.  How important is it? 

Well, Rudy Giuliani and John McCain are basically blowing it off.  However, Mitt Romney does care enough to have spent hundreds of thousands of dollars to ensure victory.  That aggressiveness has led less powerful, but more conservative rivals, like Sam Brownback, Mike Huckabee and Tom Tancredo to take direct shots at Romney‘s view on abortion.  Their claim about the Iowa front runner; they say he‘s a phony. 

Maybe, but he‘s likely to fake and spend his way to win in the Iowa straw poll anyway.  Does that matter?  Are the true conservatives making a point that will eventually undo Romney and prevent him from getting the nomination? 

Here to tell us, Democratic strategist Hillary Rosen and host of the “Ed Schultz Show,” Ed Schultz.  Welcome back to you both.

If you look at the polls, Hillary, and I know you have, Mitt Romney is on the ascent in Iowa.  It doesn‘t seem to be hurting him. 

ROSEN:  I think actually Sam Brownback and Tom Tancredo are doing Mitt Romney a huge favor.  There is something in politics called the inoculation effect, which is the earlier in the campaign season you can take on a big hit for what may be perceived as your weakest vulnerability and get it out of the way, the better off you will be later on. 

So if he can take this hit on his previously pro-choice views and convince people he has truly had a change of heart, a change of god or whatever reason he‘s given for flip flopping here, then he will come out stronger for it.  It will all have been a waste of their time, but a benefit for him. 

CARLSON:  It seems to have been that way so far.  He is, as I said, ascending in Iowa.  John McCain really is in led balloon mode at this point.  A new University of Iowa poll indicates that no only is John McCain losing in Iowa among Republicans to Tom Tancredo, a candidate I personally love, but who has just advocated potentially bombing Mecca—OK?  So, he is far out. 

McCain is losing to Barack Obama among Republicans.  I can‘t imagine a more insulting poll result for John McCain. 

SCHULTZ:  Well, Barack Obama stands for a lot of things when it comes to the middle class.  That poll doesn‘t surprise me at all. 

CARLSON:  Really? 

SCHULTZ:  Iowa folks are talking about health care.  They‘re talking about job security. 

CARLSON:  These are Iowa Republican voters.

SCHULTZ:  -- education.  Now, as far as Romney is concerned, he is possibly going to get a victory that nobody else is going to get.  What is wrong with early momentum?  It‘s momentum that nobody else is going to have.  What‘s surprising here is that Giuliani is not that bad in this poll.  Why is he not investing in this?  Don‘t you play to win.  It would seem to me that Giuliani, who has the money to compete—I think he is missing the boat here.  I think he is leaving it open for Romney to get some momentum that he might not deserve. 

CARLSON:  I think you are probably right.  If you are going to build a candidacy based on the appearance of inevitability, you should go all the way. 

SCHULTZ:  Nothing like winning. 

CARLSON:  That‘s right.  That‘s Hillary Clinton‘s strategy.  It‘s George Bush 2000 redux.  Hillary Clinton was sort of stopped in her tracks, Hillary Rosen, yesterday at the Association of Black Journalists meeting.  Suzanne Malveaux of CNN asked her the question that really, I think , is on the tip of everybody‘s tongue.  We‘ve all been talking about it.  Nobody has had the brass to say it in public.  She asked, are you black enough? 

ROSEN:  I loved Suzanne‘s question.  I thought it was brilliant.  What it points out though is what Americans really want from their leaders is to know that they can walk in our shoes, whatever they may be, whatever size, whatever color, whatever shape.  I think that‘s what that question embodies.  I think Hillary stumbled a bit on the answer, but ultimately came around to that very point, which is how do we be a president for everyone. 

Clearly, that‘s something that George Bush has miserably failed at.  He started out in his race in 2000 as sort of this compassionate conservative model.  He just has not shown anybody that he understands anybody other than his own kind.  I think that‘s where Democrats are really resonating.  As Ed said earlier, in Iowa with the middle class across the country and across party line. 

CARLSON:  Here is the problem—I actually thought its was a very clever and a very funny question.  I enjoyed it.  I think Hillary Clinton, to her credit, enjoyed it too.  It was funny.  But there is something, I think, repulsive but worse than that, divisive, about this kind of what are you going to do for my race line of questions that you often see in the Democratic primaries.  What are you going to do for my people, people who look like me?  That is not good for America to think in those terms. 

ROSEN:  I think it is do you understand me.  Those are two different things. 

CARLSON:  The question is, are you identified by your racial or ethnic group first or by your nationality?  No.  You are an American first.  The question is, what are you going to do for Americans, not for Samoan Americans or disabled Filipino Americans, for Americans.  Do you see what I mean? 

ROSEN:  As a handsome white man of privilege, you can‘t possibly understand this response, Tucker. 

CARLSON:  I can as someone who knows more about world history than most people, I suppose, who get into this.  That breaks countries apart and it‘s bad for countries. 

ROSEN:  It has never broken America apart. 

CARLSON:  It is moving in that direction. 

ROSEN:  It brings America together—is embracing all of us and all of the diversity in everybody.  And the leaders who have done that most successfully, from Ronald Reagan to Bill Clinton, who have understood that, have been the most successful leaders. 

CARLSON:  Hold on, you are making exactly the opposite point.  I am saying leaders who bring us together are the leaders that we want.  I am saying when racial groups—and it could be, as you said, white men of privilege—it doesn‘t matter.  Get up and say, what are you going to do for my group and my group alone, it is those groups that destroy America?  That‘s not bringing us together.  It‘s dividing us along racial lines.

ROSEN:  I don‘t think that‘s what the question did.  I don‘t think that‘s what she meant by the question.  I don‘t think that‘s what constituencies are meaning.  I think it saying we have a multitude of problems, whether it was from poor people who have still not recovered from Hurricane Katrina, to gays and lesbians, who don‘t get Social Security benefits, to a middle class guy, who is laid off from his factory and his company has lost his pension benefits. 

It is, do you understand the breadth of the community you are asking to serve?  That‘s not a divisive question.  That‘s a uniting question. 

CARLSON:  Ed, the wrap on Bush from the beginning—and I think sometimes it has been justified—from the left, has been, he has said about alienating our allies.  He hasn‘t done enough to involve the nations around Iraqi in rebuilding Iraq.  All the Democratic candidates have made that point and I don‘t necessarily disagree with them. 

The White House said today it is asking the U.N. to help convene Iraq‘s neighbor to help bolster the government of Iraq and make that country‘s future brighter.  Why haven‘t Democrats applauded this move? 

SCHULTZ:  Well, because every effort that the Bush administration has made to mop up Iraq just hasn‘t worked.  Now, it seems like the country is just waiting this thing out. 

CARLSON:  Isn‘t he doing what the Democrats want him to do?  I am kind of confused. 

SCHULTZ:  No, he is not doing what the Democrats want him to do.  He hasn‘t called for a regional summit.  He hasn‘t gone face to face with the Iranians and the Syrians.  He hasn‘t taken a broader view of what is needed to get everybody involved to get conclusion in Iraq for the safety of the region.  I think the Bush administration has been inept in that regard.  The Democrats have been pounding on the table about this all along. 

CARLSON:  I think he is calling for, in effect, a regional summit. I think he is calling for the U.N. to get the country as—

(CROSS TALK)

SCHULTZ:  I heard him talk about corporate tax cuts the other day.  I didn‘t hear him say anything about getting together with everybody in the region to straighten this thing out. 

CARLSON:  I just think if somebody does something right, even if you don‘t like it, even if you‘re running against them for president, you ought to admit it.  Otherwise, you‘re dishonest. 

SCHULTZ:  I don‘t think he has done anything right, especially in the

last few years.  It has been one deception after another.  So the Democrats

you would go right back to the leadership.  The American people expect them to be aggressive on Iraq and aggressive on the peace negotiations throughout the region.  That‘s something this outfit and the cabal in the White House has not done. 

CARLSON:  All right.  We are out of time.  I want to thank you, the cabal today.  Thank you very much, Hillary, Ed.  I appreciate it. 

It is Friday afternoon.  It‘s August.  That means thirst, not the kind that some phony bottled water can quench, the thirst for gossip.  To quench that, we are joined by the icy cool queens of inside dirt, Amy Argetsinger and Roxanne Roberts of the “Washington Post‘s” universally read gossip column the “Reliable Source.” 

ROXANNE ROBERTS, “THE WASHINGTON POST”:  That‘s the best laugh I have had all day. 

CARLSON:  Yes, that was pretty good.  I will concede, I did not write that script, but I‘m impressed by it myself.  Ladies, what‘s going on?

AMY ARGETSINGER, “THE WASHINGTON POST”:  Lots of stuff going on. 

ROBERTS:  Can we talk about the Edwards? 

CARLSON:  Hit me with it.

ROBERTS: OK, so they renewed their vows a week ago last Monday—

ARGETSINGER:  -- on their 30th anniversary. 

ROBERTS:  It was very romantic, very private.  Then, John went back on the campaign trail and Elizabeth disappeared.  It turns out that the second honey moon turned out to be a girls trip with Elizabeth and her two daughters, Kate and Anne.  They went to romantic Italy, while John went to, I think, San Francisco to go stump for votes. 

CARLSON:  That‘s so sad.  so he didn‘t go on his own anniversary trip. 

ARGETSINGER:  No, but this is not about him.  This is about Italy. 

ROBERTS:  Elizabeth is half Italian.  She really wanted to have a trip with the girls, to sort of give them a sense of that part of their heritage.  Also, their late son, Wade, really loved Greek and Roman history.  And it was a way to show a little bit of something he loved and now Emma Claire has picked up on that. 

CARLSON:  That is very sweet. 

ROBERTS:  We like that.  It is romantic and sweet. 

CARLSON:  Rising above the pettiness of the campaign for a little bit, good for them and good for Elizabeth Edwards for getting out.  So what—apparently there is a guy from England who plays soccer and has a weird hair style—

ARGETSINGER:  A famous wife. 

ROBERTS:  And a fabulous body. 

ARGETSINGER:  David Beckham. 

ROBERTS:  Washington has been bezerk this week because David Beckham‘s new team, L.A. Galaxy, was coming to play a game against our own D.C.  United.  This is soccer, apparently.  And I don‘t think anyone in Washington—

ARGETSINGER:  Apparently. 

ROBERTS:  Yes. 

ARGETSINGER:  It has been a very good week to be a soccer player in Washington.  The presence of David Beckham had people going just nuts trying to get a look at him, trying to get a look at his wife Posh Spice, who didn‘t even come to Washington.  She wasn‘t even in the equation when we had people calling in fake sightings of her.  But last night, after the game, David Beckham did make his Major League Soccer debut here in Washington.  Halfway through the game, he got in just in time to fail to help his team, the L.A. Galaxy, win. 

The next big event was all the after parties.  People were very revved up about the idea that they might get to meet David Beckham at a night club.  You had three different night clubs in D.C. all claiming to be hosting the more or less official post-game after party. 

ROBERTS:  Tucker is used to that.  They always go, Tucker is going to be here when they are promoting parties. 

ARGETSINGER:  Exactly, the big Tucker after party.  Any way, we had our spies out at all these places.  David Beckham did show up at one of these nightclubs.  He showed up around 1:00 a.m. 

ROBERTS:  With his teammates. 

ARGETSINGER:  With his teammates and his bodyguards.  He came in through a side door.  When he showed up, no one at first realized it was him.  He was, as they always say, he was shorter than you expect. 

ROBERTS:  He was very well behaved.  He shook hands with people when he was emerging from the velvet ropes on his way to the men‘s room. 

This is the most exciting thing that has happened to the other soccer players.  They are finally getting a taste of what it is like to be a superstar. 

ARGETSINGER:  It‘s like being a roady or something.  You get to pick up on all the action that is left in this guy‘s wake. 

CARLSON:  Nothing will ever convince me of soccer‘s glamour.  Maybe I better wait and let David Beckham work his magic on me.  Thank you ladies.  I appreciate it very much.  Happy Friday.

Investors on Wall Street are licking their wounds after a week of wild swings and sell offs.  How long will the volatility last?  What should the average person be doing to protect his money.  Maria Bartiromo of CNBC joins us in a moment. 

Plus, as if bull fighting isn‘t crazy enough, some bull fighters in Spain are taking it to a whole new level.  Our senior matador, Willie Geist, has details. 

(COMMERCIAL BREAK)

CARLSON:  Most Americans watch the stock market the same way they watch the weather in places they don‘t live, with vague awareness, occasional envy and the general feeling that the Dow Jones Average, like the temperature in Brussels, doesn‘t have a lot to do with them.  But a summer of wild swings in the market led to yesterday, when the Dow lost nearly 400 points. 

It spent some time off today another 200 before recovering to finish down a mere 30 points.  That was after the Federal Reserve pumped 38 billion new dollars into the market.  All the volatility had to do with credit and so-called sub prime lending.  Here to walk us through it and tell us what is to come, CNBC‘s Maria Bartiromo.  Maria, thanks for coming on. 

MARIA BARTIROMO, CNBC:  Hi Tucker.  Thanks so much for having me.  

CARLSON:  Is next week going to be scary or has the volatility passed?

BARTIROMO:  We are in for some volatile days at this point.  It‘s a nervous market.  People are not sure what to make of the sub prime fallout.  Of course, sub prime mortgages, those are the mortgages given to people with poor credit histories.  What happened is exactly what people expected to happen.  Those people who should not have taken out these mortgages are defaulting. 

We‘re seeing foreclosures.  People are worried that is going to spread to the rest of this economy.  So that is really causing this volatility.  It is anybody‘s guess how it ends and how it begins the trading day.  I think you have to look the at the fundamentals long-term.  When you look at those things, things are pretty solid.  I‘m not worried.  But certainly I think the volatility is here to stay. 

CARLSON:  I mean, this is an election year, so before long, somebody running for president, if he hasn‘t already, is going to say the federal government ought to step in and prevent these lenders from going under, prevent these people from losing their houses.  If that happens, would the market calm down? 

BARTIROMO:  Part of the problem is over the housing boom that—we all remember when we were saying to each other, how come my house is worth 40 percent more than it was a year ago?  How come prices are up in this part of the country and everywhere else?  Nobody could believe it.  For some reason, the housing market kept going higher and higher and higher. 

What happened in that time frame is that non-banks, financial institutions that were not regulated by the government, came on the scene and started offering all this easy money to people.  You remember the commercials; they were on your show.  They were on my show.  You don‘t have to give us documents that say that you actually have a job.  You know, no interest down.  No interest for months. 

Of course, people were lured in.  They took out mortgages that they should not have.  They wanted the American dream.  They did it.  They went over their heads. 

CARLSON:  That‘s frightening.  Could this—Are we being, you know, alarmists when we say this could have an effect not only on those people and not just on their lenders, but on industries that have nothing to do with this?  Could this really be a big problem?

BARTIROMO:  Bottom line is things have gotten tighter.  Today, it is tougher to get a mortgage.  Financial services companies are tightening the screws a little.  They are not going to be left holding the bag again the way they are right now.  Definitely, we are seeing a tighter situation and it is impacting other industries. 

I spoke with the CEO of Time Warner the other day, Dick Parsons.  He said, cable boxes are slowing down because people are not buying new homes.  They are not taking out the mortgages.  This does have ripple effects throughout a number of different industries, industries that initially don‘t really come to mind. 

Frankly, in my heart, I‘m really not worried.  I think that things had gotten so out of control, they were so overheated—and this is a period where things are coming back down to earth.  That is positive.  Yes, it is going to be scary.  We are going to have days like we had, 400 points lower, 200 points lower. 

At the end of the day, the fundamentals are solid.  You have got 4.6 percent of the country unemployed.  That‘s virtually full employment.  You have inflation under control, and a very, very strong global economic expansion going on.  American companies benefit from that, because they have operations around the world.  So you have to be long-term. 

You have to decide, are you a trader or are you an investor.  Investing is long-term.  You don‘t want to trading in and out of this market.  That‘s when you get impacted by these wild swings.

CARLSON:  Well, I‘m not either win.  But if you‘re not worried.  I‘m not worried.  Thank you Maria.  CNBC‘s Maria Bartiromo, thanks a lot. 

BARTIROMO:  Thank you.

CARLSON:  The Reverend Billy Graham is on the cover of the new issue of “Time Magazine.”  Did Time play a devilish practical joke at him.  Look closely.  Willie Geist finds the poorly hidden meaning when we come back.  You‘re watching MSNBC.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Here to get your weekend off on the best possible note, a man who sprinted here from his apartment on the Upper West Side, Willie Geist. 

WILLIE GEIST, MSNBC CORRESPONDENT:  Tucker, that‘s what I get for being a man of the people and taking the subway.  I‘m trapped under ground.  It‘s back to stretch limousines for me from here on out. 

Enough is enough.  Tucker, get this story.  I think you will appreciate it.  A Texas man was caught by his wife recently in a relationship with another woman.  So he did what any man in his position would do.  He blamed 1-800-Flowers. 

Long story short, the guy sent flowers to the other woman with a note that read, I love you and you mean the world to me.  Well, 1-800-Flowers sent a little thanks for your business card to the man‘s house.  His wife saw it and couldn‘t remember receiving any flowers, so she called the company and they promptly sent her the receipt, which included the man‘s love note to other woman. 

The wife has now filed for divorce, and she is asking for so much money—here‘s where it gets good—the man wants 1-800-Flowers held responsible and he is suing that company for a million bucks, because he said the florist broke its privacy policy.  1-800-Flowers said it is not responsible for the personal conduct of its customers. 

I don‘t know, Tucker.  Maybe a little bit of a reach at a million bucks.  The story goes that they were getting divorced anyway, but now it became so acrimonious because she found this note that she wants all this money and he is blaming the florist. 

CARLSON:  They‘re shouldn‘t have sent her that.  On the other hand—

GEIST:  Don‘t do it and you won‘t be in that situation.  I guess that‘s the lesson.  Well, Tucker, old fashioned bull fighting, where the goal is to get out of the way of the animal, just is not quite dangerous enough for some people.  Tucker, this is catch bull fighting.  Look at this now. 

One matador actually jumps on the face of the charging bull and then waits for his friend to jump on and wrestle it to the ground this face catch bull fight took place in Lisbon, Portugal today.  It may look terrible, but it‘s considered more humane than traditional bull fighting because no blood is drawn from the animal. 

Considered even more humane is not stabbing or jumping on the faces of bulls at all.  That‘s kind of how you solve that problem.  Humane bull fighting?  If you are going to bull fight, go for it.  Just fight the bull.

CARLSON:  I tend to agree with that.  I hate bull fighting because it‘s all these pompous arrogant losers in tight pants just murdering the bull.  This does seem braver.  At least it gives the bull a chance to gore them, which is what I‘m looking for anyway. 

GEIST:  It levels the playing field.  If the bulls can die, maybe the humans should have to die too. 

If you think you are bummed about going back to school, kids, just be glad you are not a senior at Cathedral High School in Indianapolis.  That school is the scene of perhaps the largest TP prank the world has ever seen.  Freshmen, Sophomores and Juniors turned the school grounds white with thousands of rolls of toilet paper, and following with tradition, the seniors have to clean it up.  How does that work?

School officials say no one will be punished.  After all, it‘s just a school tradition.  Two things here Tucker, why are the seniors on clean up duty.  It should work the other way.  Also, I like the school saying no one will be punished.  You figure in most other schools, they would say, we need to hold a summit on the behavior of the youth in America.  They just said it‘s a tradition.  Everyone relax.  I like that.

CARLSON:  I like that too.  That‘s right.  I don‘t know, I guess they are not particularly environmentally aware yet.  They will be though.  Next year they will probably get arrested for doing something like that. 

GEIST:  Al Gore will be speaking there next year and we‘ll clean that all up. 

Finally, Tucker, President Bush left yesterday for Kennebunkport, Maine to begin his annual August vacation.  He will then head to his ranch in Crawford, Texas for two more weeks of R and R.  Now people who keep track of such things say the president spent all or part of 418 days at the Crawford ranch during his presidency, and with 17 months still left in his term, Bush is on pace to shatter Ronald Reagan‘s presidential record of 436 vacation days. 

Now, we reported last week that French President Sarkozy is spending his vacation right next door in New Hampshire.  Here is that shot of him shouting at the photographer Sean Penstyle (ph) from his boat the other day.  The White House now says Sarkozy will drop by tomorrow for lunch with the Bush family. 

Now, Tucker, before we go, I got to show you one more thing.  A guy who has advised President Bush, the Reverend Billy Graham, on the cover of “Time Magazine.”  I know the media is secular, but do they have to rub it in?  A nice picture there of the reverend praying, but look at the horns above his head.  A not so subtle message that maybe, well, he is Satan incarnate. 

CARLSON:  That is actually?  Have people complained about that? 

That‘s unbelievable. 

GEIST:  There is some chatter on the Internet right now and there is sure to be more. 

CARLSON:  Amazing, Willie Geist at headquarters.  Willie, have a great weekend. 

GEIST:  Tucker, you too. 

CARLSON:  Thanks for watching.  I‘m off next week, but I hope you keep watching nevertheless.  Have a terrific weekend.  See you Monday.

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

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