updated 8/20/2007 11:16:49 AM ET 2007-08-20T15:16:49

Guests: Armstrong Williams, Michael Eric Dyson, Michael Isikoff, Mark Green, Melanie Morgan, Naomi Wolf

CHRIS MATTHEWS, HOST:  OK, your daughter‘s getting married, your lawyer‘s been caught lying again, the war you started is horrible, the economy you brag about is going bananas, and now you‘re heading off for vacation.

Mr. President, let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  And welcome to HARDBALL.  The big story tonight: “feeble,” “barely articulate, “clearly stressed”—those were the words FBI director Robert Mueller used to describe a gravely ill Attorney General John Ashcroft just moments after he was pressured—strong-armed, if you will—by Attorney General Gonzales and Andy Card to approve the president‘s secret wireless wiretap program.  It‘s a scene straight out of “The Godfather,” and it directly contradicts Gonzales‘s testimony before the U.S. Congress.  Could this be the final evidence that proves the attorney general is not telling the truth under oath—in other words, a perjurer?

The second story tonight:  Is Jim Cramer finally getting what he wants?


JIM CRAMER, HOST, CNBC “MAD MONEY”:  This Federal Reserve has been an academic exercise in torture for the American home owner.  Hey, you know what?   They want to punish people who are rich in New York City and Wall Street, that‘s fine.  Fourteen million people bought homes.  I estimate that half of those people are squatting in their homes, or will be.  It‘s “Tom Jones (ph),” it‘s “Grapes of Wrath,” and these guys are running an academic exercise in Washington?


MATTHEWS:  Well, the Fed did take action today and lowered its discount rate, but is it too late?  CNBC‘s Erin Burnett‘s going to be our stock market watcher tonight.

In the political news, meet “Rudy in the jungle.”


UNIDENTIFIED MALE:  Look at you, lying there like that.  You should be ashamed of yourself.  Don‘t you have any dignity?


MATTHEWS:  And on the American front: Should race be a factor in where the government makes us go to school?  That‘s our HARDBALL debate tonight.

Later, pictures of the lost, the faces of war.

We begin with HARDBALL‘s David Shuster with a report on the evidence damning Attorney General Alberto Gonzales.


DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  The notes by FBI director Robert Mueller raise more even more questions about the judgment of Attorney General Alberto Gonzales.  Three years ago, while Gonzales was White House counsel, the Bush administration was engaged in a secret program to tap phone calls without court approval.  But Attorney General John Ashcroft and his top deputy, James Comey, both decided the program was illegal and should not be reauthorized.  A few hours later, Ashcroft became violently ill with pancreatitis.

JAMES COMEY, FORMER DEPUTY U.S. ATTORNEY GENERAL:  The attorney general was taken that very afternoon to George Washington Hospital, where he went into intensive care and remained there for over a week.  And I became the acting attorney general.

SHUSTER:  During that week, and while Ashcroft was lying in intensive care following surgery, White House chief of staff Andy Card and White House counsel Alberto Gonzales made a sudden visit.

COMEY:  They came over and stood by the bed, greeted the attorney general very briefly.  And then Mr. Gonzales began to discuss why they were there, to seek his approval for a matter.

SHUSTER:  Ashcroft refused to sign the documents.  James Comey also refused.  And last month, Gonzales‘s strong-arm tactics were the subject of a Senate hearing.

SEN. ARLEN SPECTER ®, PENNSYLVANIA:  How can you get approval from Ashcroft for anything when he‘s under sedation and incapacitated—for anything.

ALBERTO GONZALES, ATTORNEY GENERAL OF THE UNITED STATES:  May I continue the story, Mr.—Congressman—Senator...

SPECTER:  No, I want you to answer my question.

GONZALES:  There are no rules governing whether or not General Ashcroft can decide, I‘m feeling well enough to make this decision.

SPECTER:  But Attorney General Gonzales, he‘d already given up his authority as attorney general.

GONZALES:  And he could always...

SPECTER:  Ashcroft was no longer attorney general.

GONZALES:  And he could always reclaim that.  There are no rules about...

SPECTER:  While he‘s in the hospital under sedation?

SHUSTER:  Gonzales went on to describe Ashcroft as “lucid,” but FBI director Mueller, who visited Ashcroft minutes after Gonzales stormed out of the hospital, described Ashcroft as “feeble,” “barely articulate” and “stressed.”  And Mueller‘s notes support James Comey‘s testimony that Ashcroft was in no condition to decide issues.

Mueller‘s notes also contradict Gonzales on another issue.  Gonzales testified last month that the object of dispute was not the terrorist surveillance program.

GONZALES:  The disagreement which Mr. Comey testified about was about other intelligence activities.

SHUSTER:  But Mueller‘s notes refer to a single program.  And Mueller‘s notes are consistent with his testimony last month, when he was asked directly if the argument was over the TSP.

ROBERT MUELLER, FBI DIRECTOR:  The discussion was on a national—an NSA program that has been much discussed, yes.

SHUSTER:  Huge parts of the Mueller notes are blacked out, including a section related to Vice President Cheney.  But the notes do reveal that the vice president attended a series of meetings during the time of the White House dispute with the Justice Department.  Gonzales testified about going to the hospital at the behest of the president.  And earlier this summer, President Bush was asked...


GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  As I said, I—this program is a necessary program that was constantly reviewed and constantly briefed to the Congress.

SHUSTER (on camera):  But Congress is not satisfied.  Lawmakers want a better explanation from the White House as to why officials signed off on trying to steamroll John Ashcroft.  And most Democrats and several Republicans in the Senate maintain that Attorney General Gonzales should be fired.

I‘m David Shuster for HARDBALL in Washington.


MATTHEWS:  Nasty stuff.  Thank you, David Shuster.

Michael Isikoff is an investigative reporter for “Newsweek,” and Mark Green‘s president of Air America Radio.

Gentlemen—you start, Michael.  You‘re one of the best investigative reporters, if not the best in town, next to, say, Bob Woodward.  What do you make of these documents?  You got them in your hand now.  They seem to be heavily redacted.  What is the administration hiding here about the role played by the current attorney general?

MICHAEL ISIKOFF, “NEWSWEEK”:  Well, frankly, that‘s what‘s so amazing about this.  It underscores how little we know about one of the most significant and fiercest internal disputes in the entire Bush administration.  This is an episode where, according to Comey‘s testimony and supported by our reporting and others, there was—the entire upper echelon of the Justice Department was prepared to resign.  John Ashcroft was prepared to resign.  James Comey, the deputy...

MATTHEWS:  Because?

ISIKOFF:  ... FBI director Mueller.  Because they felt that the president was moving ahead on the program that was not authorized by the law.  He was doing something that was essentially illegal.  And we to this day do not understand the full contours of that debate and what it was about and why so many people at the upper levels of the Justice Department felt so strongly that they were prepared to take the most dramatic step possible.

And you know, these notes, when you look at them, I mean, it‘s amazing because...


MATTHEWS:  Put them up to the camera.

ISIKOFF:  All right, here it is, the meeting of March 12, 2004.  Mueller is at the White House.  “President called me into the side office of the Oval Office after we concluded our morning brief of him.”  Everything else is blacked out, everything else that they—everything they talked about.  So here you have the president and the FBI director sort of duking it out...


MATTHEWS:  OK.  Looking through these documents—and I want to bring Mark in on this—what grabbed me, as a student of the vice president, Dick Cheney, is the fact that he called these folks, including the FBI director, into his office for a secret meeting.  What‘s the vice president doing here, with no exclusive authority—apparently, he‘s not a member of the legislative—or the executive branch at all—dictating how we surveil people, how we go past the Constitution, if it‘s necessary?

There it is.  Look at it right now.  You know, you get called into the VP‘s office for what?  What are they doing in there?  And now we find out that the FBI directors own documents, his own diary, basically, say that these guys went in and strong-armed and rubber-hosed, practically, Ashcroft to get him to agree to this surveillance program, which the other guys felt was totally unconstitutional.  Mark?

MARK GREEN, AIR AMERICA RADIO:  Chris, are you asking me?  You said it better than I could, so let me pass.  Look, we have covert agents in this government, you know, for 200 years.  We now have a covert administration.  They leak little, disclose less.  And while Congress was effectively an extension of the West Wing, we found out nothing, until the 110th Congress.  And now, honorable, conservative Bushies are contradicting the attorney general of the United States, people like John Negroponte, who‘s the national intelligence director, and Michael Hayden, who went on to the CIA, of course, FBI director Mueller and Deputy Attorney General Comey.

These four people all have, in effect, said that Attorney General Gonzales has lied, not about one event—and you can always split hairs—four or five times, and you and Mr. Shuster indicated them.  There is an aspect of serial perjury that any normal president acting on the merits, rather than just pure loyalty, would have fired him, which is why one congressman with several others are trying to consider impeachment, which is an extraordinary remedy but a necessary safety valve if the president won‘t do his job.

MATTHEWS:  You know, you got James Comey, as Mark did point out, James

Comey, the former deputy attorney general, you‘ve got the current attorney

the past attorney general, John Ashcroft, you‘ve got the FBI director, all pointing out what‘s apparently the strong-arm tactics of this crowd, Gonzales and Andy Card, and their perjury.  What are you hearing from the White House, Michael?  Are they going to do anything, or is this just—they‘re never going to change on this guy Gonzales?

ISIKOFF:  No, they‘ve got the ultimate trump on this.  As far as they‘re concerned, this is all a classified intelligence program and it can‘t be discussed publicly.



MATTHEWS:  ... censoring of documents...

ISIKOFF:  Well, interesting enough, in the letter that the Justice Department sent accompanying these notes, it did not cite national security classification as the reasons for redacting, it cited the fact that the FBI director needed to have confidential advice with the attorney general and the president in order to do his job, and therefore on the privilege ground that they were redacting it.

But look, it clearly—my main point is it‘s really hard to have an intelligent debate about what is going on, what was going on then and what is going on now, when so much is blacked out, when so much is classified.  To form hard and fast conclusions about whether what they‘re doing is within the orbit of the law or not, we don‘t know.

We know that a FISA judge, a federal intelligence judge, found that the program, even as reconstituted earlier this year, did—was—the judge shot it down.  That was a pretty major step.  That ruling was classified, and nobody knew about it until “Newsweek” reported it...

MATTHEWS:  Mark, you‘re a lawyer...


MATTHEWS:  ... you go into court and you say I remember and recall something, and you have the distinguishing important characteristic of being the FBI director, who‘s seen as somewhat non-partisan, that‘s one thing.  But when several days later, you discover you have notes, contemporary notes, which completely identify what happened at a session—here he is, saying that that “Godfather” scene, it‘s been called, at the hospital, wherein Gonzales and card basically strong-armed a man who was basically under sedation into agreeing to something he wouldn‘t agree to, and now the guy‘s got his diary saying that‘s exactly what happened, it sounds to me like a jury would buy that in a perjury case.

GREEN:  I agree.  By the way, your “Godfather” reference, which you‘ve made before, is invited by Bush, who actually calls Gonzales “Fredo.”


GREEN:  One has a hard time believing he‘s ever seen “Godfather II” that he would go ahead.

MATTHEWS:  Well, because—because Michael I think referred to Fredo as, He‘s my brother but he is weak.  I mean, that‘s not exactly what you want to call your...

GREEN:  That‘s the character.

MATTHEWS:  ... attorney general.

GREEN:  Look, Michael and “Newsweek “ get credit for breaking so much of this story.  But let me, if I could, disagree with him in one respect.  He said it‘s hard to have a debate or indictment about intelligence when you can‘t go public.  Here‘s what we know, however.  Attorney General Gonzales said, I didn‘t attend meetings and I had no role in firing nine U.S. attorneys.  His own staff, Mr. Sampson and Monica Goodling, testified under oath he was at the meeting.

He said that there was no serious dispute about wireless wiretapping.  Under oath, Justice Department officials have said there was a tremendous disagreement.  Attorney General Gonzales said he knows of no instance where the FBI violated or abused the Patriot Act.  “The Washington Post” reported there were six reports to him before he said that, of the FBI and Mueller, honorably, admitting they had done it.  Time after time.

Look, we‘re dealing with something we haven‘t seen before.  Remember when Richard Nixon told David Frost if the president does it, it‘s legal, even if it...


GREEN:  ... goes against a statutory law...

MATTHEWS:  I saw the play.

GREEN:  What?  So did I.  And what‘s happened is George Bush and Alberto Gonzales now are taking the Nixon ethic and applying it not just to a president, which is untenable, but to a whole administration.  So if Gonzales violates the law, A, it‘s not illegal, and B, last week—I‘m sorry, earlier this week, President Bush said at his press conference, Gee, what do you mean that—when has Congress criticized the attorney general.  In other words, that is such an explicit lie that I—it‘s hard to even debate a president who won‘t stipulate what the Congress has done.


GREEN:  It was Specter and Colburn, not only Leahy and Schumer...


GREEN:  ... all of whom implied or said that it‘s—what Gonzales has done is legally actionable.

MATTHEWS:  Well, I think the president‘s found a way to unite the country, keep Alberto Gonzales in office.  That unites the country against that decision.

Anyway, thank you, Michael Isikoff, and thank you, Mark Green.

Coming up, more yo-yo-nomics.  CNBC‘s Erin Burnett will be here.

You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Last night on HARDBALL, CNBC‘s “Mad Money” guy, Jim Cramer, went brilliantly ballistic over the Fed‘s lack of action, as of yesterday, in dealing with the turmoil in the financial markets.  Let‘s once again experience what he had to say.


JIM CRAMER, HOST, CNBC “MAD MONEY”:  This Federal Reserve has been an academic exercise in torture for the American home owner.  Hey, you know what?  They want to punish people who are rich in New York City and Wall Street?  That‘s fine.  Fourteen million people bought homes.  I estimate that half of those people are squatting in their homes, or will be.  It‘s “Tom Jones,” it‘s “Grapes of Wrath,” and these guys are running an academic exercise in Washington?


MATTHEWS:  Well, apparently, the Fed heard Jim Cramer‘s loud talk.  This morning, Ben Bernanke and company cut the discount rate by a half a point, and that‘s helping the market rebound today.  So what else does this signal?

Erin Burnett of CNBC‘s “Street Signs” is here to explain.  Erin, was today just a bounce-back day, or are we on a road to a better time?

ERIN BURNETT, ANCHOR, CNBC “STREET SIGNS”:  Well, you know, I guess it‘s all up to you, Chris.  I mean, look, it‘s up to the American home owner.  You know, now the Fed has come out and said, Look, we‘re here, everyone.  We don‘t want this economy to go into a recession.  We don‘t want this economy to slow down.  And so they‘re saying, OK, banks, you know what?  We‘re going to make it a little bit easier for you to get money.

Now, whether the banks actually go out and say, Now it‘s easier to get a mortgage, again, well, that‘s the big question and that‘s what it comes down to.  So for today everyone knows the Fed is there, the Fed‘s got our back.  But for next week, for the week after, it‘s not going to be quite so simple.

MATTHEWS:  Let‘s go past the investment class to the people out there who don‘t have big portfolios.  Housing—is anything the Fed‘s doing now or tends to be looking toward doing suggest we‘re going to get a break if you‘re trying to sell a house or finance a house?

BURNETT:  Sell a house is still going to be difficult.  Look, we‘re still seeing a lot of downward pressure on housing prices in this country, particularly in certain areas where there‘s been a lot of job loss, Chris.  You know, I mean, you certainly see that around Detroit.  You see it down in Miami, Florida, in some condo markets, and you certainly are seeing it in the state of California.  So prices, that is still likely going to be an issue.

But in terms of financing, getting a mortgage or refinancing your mortgage, that‘s what the Fed is hoping today that it‘s going to try to make a little bit easier.  You know, yesterday we were talking about Countrywide.  The nation‘s largest mortgage lender was literally struggling to stay alive.  A lot of the mortgages Countrywide made are great mortgages.  These are people who are going to pay their mortgages back.


BURNETT:  But the market had really seized up, so it was becoming very difficult for anyone to get a mortgage.  All right, that‘s what the Fed is trying to alleviate.  But we‘re not going to know tomorrow.  It‘s going to take a couple of weeks until we get more clarity on that front.

MATTHEWS:  We keep hearing about the sub-prime problem of people who have gotten mortgages and can‘t afford to pay them off, didn‘t have the credit...


MATTHEWS:  ... history that suggests they would have been able to pay it off.  I think Jim Cramer rather ungraciously referred to them as squatters the other day on this show, meaning people are sitting in homes...

BURNETT:  Right.

MATTHEWS:  ... where they haven‘t been able to make the payments.  They‘re just waiting for somebody to evict them, basically.  What‘s happening with them?  What‘s going to be done with these poor folks who are in real trouble economically?

BURNETT:  Here—here is what is going to happen, Chris. 

The banks don‘t want people to foreclose on their mortgages.  That‘s not good for the banks.  I mean, do you think the banks really want to say, oh, guess what, we have this giant real estate portfolio in Des Moines and in Kansas City and in San Diego?  They don‘t want to take possession of these homes. 

The banks have every incentive in the entire world to try to work it out with each individual borrower.  So, you know, you go to your bank and say, look, I can‘t make the payment, they are going to try to find some sort of a payment scenario that you can meet your payment.  I mean, that‘s the truth.  Banks don‘t want a big portfolio of empty homes with weeds growing in the yards.

MATTHEWS:  Well...

BURNETT:  And that‘s the truth.

MATTHEWS:  ... let me ask you—no, I mean, that‘s a benign assessment.  And I like to hear that the banks don‘t want to foreclose.

Let me ask you about this.  You know, it used to be, during the Cold War, every time there was a foreclosure in Washington, every time there was an eviction, the Eastern communists from Czechoslovakia or wherever else, East Germany, would show up with their cameras, just so they could show poor people being kicked out of their houses in this country.  So, the commies loved it.  I don‘t know who else like evictions.

Let me ask you this. 


MATTHEWS:  China, our new trading...


MATTHEWS:  ... partner, our new trading rival, whatever, strategic rival...

BURNETT:  Mm-hmm. 

MATTHEWS:  ... what is going on over there?  What do you have to report on the whole question of whether we are getting dangerous toys from over there or not?

BURNETT:  All right, Chris, I know a lot of people got very excited when you and I spoke about this last week.  We got—we got more news from Toys ‘R‘ Us today.  They are saying, look, we are pulling those vinal bibs made by Hamco that are made by China off their shelves.

And a lot of know these brands that are watching, Chris, Koala Baby, especially for baby—Disney Baby.  They had some bibs that had a higher level of lead than Toys ‘R‘ Us says is acceptable. 

You know, this follows what you and I were talking about.  It has happened to Mattel a couple of times.  Toys made in China, there are some safety questions, all right?  That‘s the fact. 

And you and I were talking about—this is what people got upset about.  I had said that, look, if people want to start making toys, and, by a extension, a lot of other things guaranteed to be safe, and make them in China, then the costs of production are going to go up in China, and that means prices at Wal-Mart may go up, too. 

China has kept prices low in this country.  And that‘s why I called China our friend the other night on HARDBALL.  But, you know, Chris, nobody wants children to play with toys that are not safe.  Nobody wants that.  I don‘t want that.  You don‘t want that.  But safety and quality come with a price. 

MATTHEWS:  You know, I was stunned the other day, studying about China and realizing that—I always thought that they were getting rich beyond our means, our means.  They are buying resources around the world. 

I hear they are like buying, like, half the timber in the world.  They‘re buying all the oil they want.  At what point do we just have to realize we can‘t set the price of anything anymore?

BURNETT:  That‘s a great point. 

You know, China, Chris, is now the largest consumer of so many commodities, of cooper, of coal.  They have a vociferous appetite for all sorts of commodities, because they have 1.3 billion people, all of whom aspire to be wealthier, and, frankly, many of whom aspire to be wealthy like they see Americans.  They all want a car in their driveway.

MATTHEWS:  Right. 

BURNETT:  They all want a washing machine.  You know, that‘s their dream, too.  And, right now, not very many of them have that. 

So, to get those dreams to come true, they need a lot of commodities.  They are trying to buy oil reserves up around the world, because—I mean, it‘s amazing, the growth in car use in China alone.  It would astound you. 

MATTHEWS:  I know.  I hear the biggest business over there a while ago was driver training. 

BURNETT:  Yes, that‘s probably true. 

MATTHEWS:  Anyway...

BURNETT:  It would not surprise me. 

MATTHEWS:  OK.  Thank you very much, Erin Burnett.  Have a nice weekend. 

BURNETT:  All right.  You, too, Chris. 

MATTHEWS:  Up next:  Barack Obama lumps Hillary in with the Cheney-Rumsfeld crowd, wedding bells at the White House, and Rudy Giuliani dresses up like a lion.  We will have all that political stuff for you in just a moment.

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL. 

Here‘s the latest political scuttle.

First, Barack Obama continues to face questions out in Iowa about whether he has the experience to be president.  I love his response.   


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Nobody had more experience in Washington than Dick Cheney and Don Rumsfeld.  And what they lacked was good judgment.  I am running on my judgment.  And I will tell the American people where I stand. 


MATTHEWS:  Hear, hear.

To make Barack‘s point, think of the mess Cheney has been as President Bush‘s number-one adviser on Iraq, you know:  We will be met as liberators; the insurgency is in its last throes. 

Then listen to this much wiser fellow back a decade-and-a-half ago. 

In the case of Dick Cheney, experience counts, backwards. 


RICHARD B. CHENEY, FORMER U.S. SECRETARY OF DEFENSE:  If we had gone to Baghdad, we would have been all alone.  There wouldn‘t have been anybody else with us.  There would have been a U.S. occupation of Iraq.  None of the Arab forces that were willing to fight with us in Kuwait were willing to invade Iraq.

Once you got to Iraq and took it over, and took down Saddam Hussein‘s government, then what are you going to put in its place? 


MATTHEWS:  What is this, “Manchurian Candidate”?  Who got in that guy‘s head and twisted 180 degrees everything he knew better about?  He could have protected us from going into this mess.

Anyway, more on the Rudy Giuliani front.  Take a look at the mayor—he was mayor at the time—in “Lion King” garb on a video that was shown at a press dinner back then. 


RUDOLPH GIULIANI ®, MAYOR OF NEW YORK:  Look at you, lying there like that.  You should be ashamed of yourself.  Don‘t you have any dignity, lying on your butt all day, collecting welfare?  You are the king of the jungle.  You should set an example of work ethic for everyone. 

UNIDENTIFIED MALE:  Can I help you, sir? 

GIULIANI:  Release this lion immediately. 

UNIDENTIFIED MALE:  Release it?  That‘s crazy, sir.  This is a tough town.  He would become homeless. 

GIULIANI:  So, send him to a job center. 


MATTHEWS:  There is something eerie about Rudy when he does this stuff.  I have got to admire his guts, but, boy, did he know he was going to be running for president?

Next, Jenna Bush—she‘s the blonde daughter of the president—is getting married to 29-year-old Henry Hager.  There they are.  He is a former White House aide who worked for Karl Rove and met Jenna on the job.  Is this another inside job, like you remember how Cheney got to pick the vice president for the president, and picked himself?  I don‘t blame him. 

And now this is too important to be called news.  Today‘s “Washington Post,” I read it this morning.  I couldn‘t believe it.  This is what they showed.  These are the recent fellows that were killed in Iraq, and women as well. 

The number of our killed, by the way, in Iraq in this war, which many people said, like Dick Cheney, was going to be a short war, is almost 4,000 now. 

Let‘s look at these pictures. 



MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And stocks skyrocketed after the Federal Reserve announced a surprise cut in the discount rate today.  That‘s the rate it charges banks for loans.  The Dow Jones industrial average soared 233 points, its first gain in seven trading sessions, but the Dow still down more than 6 percent below its record close on July 19.  The S&P 500 gained 34 points.  The Nasdaq was up almost 54 points. 

The cut in the discount rate frees up banks struggling under the credit crunch to borrow more freely.  And, in a statement, the Fed also seemed to lean toward eventually cutting the federal funds rate.  That‘s its main tool for managing monetary policy.  That‘s the cut that many on Wall Street have been hoping for. 

Meantime, several oil companies evacuating workers from facilities in the Gulf of Mexico, as Hurricane Dean approaches.  And that pushed oil prices up 98 cents in New York today to $71.98 a barrel. 

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


MATTHEWS:  Welcome back to HARDBALL. 

A new Quinnipiac University national poll shows some Democratic presidential candidates out of the mainstream in their opposition to the latest Supreme Court decision to limit how race can be used in public school assignments.  The poll shows that 71 percent of registered voters agreed with the ruling.  Only 24 percent disagreed with it, that race should be a factor in where you go to school.  People don‘t think it should be a factor. 

But that‘s our HARDBALL debate tonight. 

Radio talk show host and conservative columnist Armstrong Williams says race should not be a factor in how a kid is assigned to a different public school, while Georgetown University professor Michael Eric Dyson says it should.  He‘s the author of “Know What I Mean?”

Let me ask you.  First of all, Michael, I think you have a harder case here with most Americans, based upon these numbers.  Why should a school board, when deciding where to send Johnny or Jerry or Janey, look at their race, and say, well, depending on that, you go here? 

MICHAEL ERIC DYSON, PROFESSOR, GEORGETOWN UNIVERSITY:  Well, it‘s not the exclusive factor.  It‘s a crucial one, it‘s a critical one, but it‘s not the only one, proximity to the school, the needs of the kids, the curriculum, and so on.

But race has to be a factor, Chris, and, as I think Armstrong would have to admit at some point, because race was a factor in distributing the goods that kept them outside of it.  Many white students were segregated for years in this country, centuries, we would argue, who had the extraordinary benefit of having same-race education.  And predicated upon that same-race education, they accrued enormous benefit and stock in the American educational system. 

Look at the resegregation of black and brown kids over the last 20 years.  It begins to approximate the numbers of Brown vs. Board of Education.

MATTHEWS:  How can—how does a 6-year-old kid owe anything to anybody in terms of history? 


MATTHEWS:  A 6-year-old white kid, a 6-year-old black kid or Hispanic kid, why does he have to pay a price because, two or three generations ago, there was a different shake in this country? 

DYSON:  You and I were not here when the democrat—when the Declaration of Independence was written.  We weren‘t here when the Constitution was written.  And, yet, we benefit from those words etched a couple centuries ago. 

Same—so, you have got to deal with the good and the bad. 


DYSON:  And the bad here is the fact that—let me say, the bad is the fact that it‘s not that they to be responsible to history.  They have benefited as a result of those racial distribution of factors, and now we have to make account of those in our public school system. 

ARMSTRONG WILLIAMS, RADIO TALK SHOW HOST:  You know, we are all familiar with the stain of America from human slavery, to desegregation, and the civil rights movement. 

You know, what Professor Dyson speaks of has been tried, putting these kids next to white kids and black kids.  And these kids are no more—no farther advanced in their education than they were 20 or 30 years ago.  It has not worked.

I mean, even when you think about school busing, if our government was very serious about black kids really learning, they would not have bussed the black kids into the suburbs.  They would have taken those white kids out of the suburb, and made them go to the inner city, to make those inner-city schools better.  I don‘t think a black kid...

MATTHEWS:  Because people would have spent more money on them? 

WILLIAMS:  That‘s exactly right. 


WILLIAMS:  I don‘t think a black kid, in today‘s America, needs to sit next to a white kid in order to learn. 


MATTHEWS:  Well, take a kid out of a tough neighborhood and put him in a fancy neighborhood, does that help his education?  Forget race for a minute.

WILLIAMS:  You know what?  We are finding out, when it comes to education, I think the one thing that people don‘t talk about a lot, it‘s not even about the money anymore.  People say it‘s about the tax base.  It‘s not about that.

It‘s the desire of a kid to learn and how much influence that parent has on that child in terms of their education, because we know the intellectual gap in education with kids takes place before the child ever enters kindergarten. 


DYSON:  Well, you know, no doubt.  But here‘s the point...

WILLIAMS:  It‘s critical.

DYSON:  ... that if—it‘s not only about the tax base, but it‘s about the fact that, of course, the parent would have more leisure time if they had a higher tax base, because that would mean they would make more money and live in a more affluent neighborhood.  And, therefore, their kids would not have to be latchkey kids.  They would have somebody to pay attention to them. 

The problem with the tremendous argument that Mr. Williams makes is the fact that, yes, we—if parents had enough leisure time to be able to take care of their children, they would already be in a good place educationally. 

These are kids who are, by and large, vulnerable economically and politically.  And, as a result of that, the schooling that they get is horrible. 

Look, the kids in the suburbs get twice as much money spent on them per pupil as the kid out in the suburb.  But I will tell you to go to store and have $100 vs. $1,000.

MATTHEWS:  That‘s true, because there‘s more of a tax base out there, because the way we pay for education in this country is by geography and property taxes.


WILLIAMS:  But that is no guarantee, Dr. Dyson, that these kids learn. 

DYSON:  Well, I agree with...


WILLIAMS:  We are in New York every day on radio.  Let me tell you, it‘s showing finally that it‘s not about the money.  It‘s about the parents‘ involvement.  The more the parent is involved with their child‘s education, the more that child learns. 


MATTHEWS:  Let‘s take a look at Hillary Clinton, who is leading in the polls right now for the Democratic fight for the nomination for president.  Let‘s take a look at what she said about this court decision. 


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  You can look at this decision today, which turned the clock back on the promise of Brown v. Board of Education, that was resting on the fact that children are better off if they are part of a diverse, integrated society.  So, yes, we have come a long way.  But, yes, we have a long way to go. 


MATTHEWS:  She is condemning a court decision that said you can‘t use race to decide where to send kids to school. 

What do you say?

WILLIAMS:  She doesn‘t believe that.  Senator Barack and others don‘t believe that.  They were pandering to an audience.

Let‘s remember where this debate took place, at Howard University.  Had that debate taken place any other place other than Howard University, where that audience was not predominantly American black...


WILLIAMS:  ... her statement would have been different. 


DYSON:  I was there. 


DYSON:  Look, I was there.  And, so, if you are pandering, pandering would say, 70 percent of the people agree with what Mr. Williams is saying.  That might be pandering.

I‘m saying that let‘s go against the grain.  Martin Luther King Jr.  wasn‘t exactly in the poll numbers.  Oh, yes, let‘s have a bus boycott.  I bet it was about 1 percent.


DYSON:  So, we can‘t use poll numbers to determine as a litmus test for the reality of a particular position or its legitimacy. 




MATTHEWS:  What do you say to the—let‘s just try it.  There‘s a parent of a kid, and the kid has just got a note.  And it‘s August.  It‘s right at this time of year.  It says, this year, you are going to go to public school 28, which is 10 miles from here.  You are not going to the one that is right next to you, even though you like that school and you have always gone there.

DYSON:  Sure.

MATTHEWS:  What do you say to that parent when that parent says, the Constitution ought to protect me to send my kid to the local school and not be used as an experimental tool in some sort of a social experiment? 


DYSON:  Well, you know what?

MATTHEWS:  Because it is an experiment. 

DYSON:  American democracy is an experiment.  It continues to expand. 

And we have to be part of that experiment.    

I‘m saying that, look, we have got the...


DYSON:  ... of democracy.

MATTHEWS:  Not everybody, just the people that send their kids to public school. 

DYSON:  Well, the people who send their kids to public school.  And the ones who send their kids to public school, more than likely, don‘t have the choice to withdrawal them and put them in a parochial school or a private school. 

So, my point is that the public school education, unless—and—but Armstrong raised a very good point.  If—if metropolitan busing had not been struck down, where white kids could go into these black inner city schools and Latin inner city schools, we would see a lot more resource base.  We would have a lot more resource base.

MATTHEWS:  OK.  Let me ask you—answer his question.  Does it help -

do you have any evidence—any documentary evidence or any research material that says that mixing up kids racially on purpose has helped anybody? 

DYSON:  Sure.  I think that first of all, white people would have a much more attention paid to those schools, number one.  Number two.

MATTHEWS:  You‘re saying that.  What evidence do you have? 

DYSON:  I‘m saying, the evidence is that many people don‘t want their kids mixed up in those kind of schools withdraw them.  I‘m saying, the evidence is, let‘s go even anecdotally, beyond the empirical.  The point is that if white people have an investment in schooling that black people have an investment in, there is a greater likelihood that they will be invested than otherwise.

WILLIAMS:  It‘s not about black and white anymore.  These kids could care less about race.  These kids, their circle of influence looks like America.  It looks like a flower guardian.  These kids are in this school to learn.  Parents could care less about race, the way they cared about it 20 or 30 years ago.

MATTHEWS:  So you think there is enough diversity already? 

WILLIAMS:  Diversity.  Let me just tell you, just because.


WILLIAMS:  Wait a minute, but just because you have 100 black kids in a school does not mean you have diversity.  Diversity has to do with ideas, not what someone looks like.  That is the mistake that they make. 

DYSON:  But here‘s my point.  You are mixing up racism and bigotry.  Bigotry is a particular predilection to believe something negative about another group.  Racism, I‘m talking about.

WILLIAMS:  But there‘s far less of.


DYSON:  Absolutely.  But I am talking about structure.  We are talking about benefiting.  If it doesn‘t make a difference how much money you have, why don‘t white kids—why don‘t white parents who are rich send their kids to poorer inner city schools?  Of course it makes a difference.

WILLIAMS:  But white parents don‘t it.

DYSON:  Absolutely.


WILLIAMS:  . has no way to get the best education.

DYSON:  There are far fewer black people who are capable and Latino people who are capable.  And I‘m saying to you that the schools.


MATTHEWS:  You‘re right.  By the way, your distinction is right. 

Racism is the repression by minority by another, historically.

DYSON:  Systematically.

MATTHEWS:  It‘s not whether you don‘t like somebody.  Anyway, thank you, Armstrong, because I understand your argument and 71 percent of the people watching agree with you.  Anyway, Michael Dyson, you are a great man, fighting for the rights to think in this country. 

Up next, the HARDBALL roundtable on all of today‘s big stories.  Could the FBI boss‘ notes be the knockout for Alberto Gonzales?  Or can‘t you knock this guy out?  This is HARDBALL, only on MSNBC. 


MATTHEWS:  We are back and we are joined by the roundtable tonight.  My favorite part of the show.  Congressional Quarterly‘s Craig Crawford who knows many things.  He is an MSNBC political analyst.  And Melanie Morgan is a radio talk show host from out West, and also chair of Move America Forward and author of “American Mourning.” And Naomi Wolf is a founder of the American Freedom Campaign and author of “The End of America.” God, that‘s fun.

First up, Mueller‘s notes, more news today on the now-infamous hotel -

or rather, hospital visit back in 2004, the one  that looked like a scene from “The Godfather.” FBI Director Robert Mueller‘s notes say that then-Attorney General John Ashcroft was feeble, barely articulate, and stressed shortly after a visit by Andy Card and Alberto Gonzales who wanted Ashcroft to approve a warrantless wiretapping program. 

FBI Director Mueller also said the dispute was over a singular program, which also contradicts Gonzales‘ testimony that it was just various activities.  Is this it for him, Melanie Morgan?  Is Gonzales in trouble because the FBI director not only has a memory, but notes that contradict his testimony? 

MELANIE MORGAN, RADIO TALK SHOW HOST:  Look, Chris, this is just such an inside game from Washington, D.C., I can‘t believe how much fascination is enjoyed by you guys watching this story.  It‘s a Democrat gotcha game of Alberto Gonzales.  And frankly, I don‘t care one way or the other whether he goes or stays. 

I don‘t have any emotional investment in him.  I had disagreements with him for a lot of different reasons.  But what I would like to say is that anybody, anybody who truly does not get what a dangerous world that we live in should just take a look at this wireless wiretapping program. 

It was a valuable and important one and it still is.  And if there was pressure applied by Gonzales, then good, we need it.  And it kept Americans safe. 

MATTHEWS:  Even if it was on a sick man in a bed?  Even if it was over a sick attorney general in his bed. 

MORGAN:  You know, that‘s just the reporting on it.  I will believe that.

MATTHEWS:  Whoa, whoa, no, that‘s the memory of James Comey, the former deputy attorney general, the testimony of the FBI director.  I mean, it‘s pretty mounting, this evidence of what actually happened.  You are saying it didn‘t happen. 

MORGAN:  Come on!  I am not saying that it did or did not.  I was not there and I don‘t know.  But what I do know is that we needed that program and I am really glad that if there was pressure applied, that it kept it in place because otherwise Americans could die. 

MATTHEWS:  Naomi Wolf, the end justifies the means or not here?

NAOMI WOLF, AMERICA FREEDOM CAMPAIGN:  What is scary to me about listening to Melanie and various people at the White House is how Orwell described that people who want to close down an open society don‘t just lie, they make lies the ground of the discourse.  There is this extraordinary fudging of reality, not just to change the record, but to disorient us. 

I think that we have to get it that what they are up to is not just about abuses of democratic process.  It‘s about an end run around the democratic process.  Why is it so scary, what they are going to get away?  Gonzales is not going anywhere.  And we keep saying, oh my goodness, how can this be?  How can this be?  How can he still be there?  It‘s an outrage.  Because we still think they are playing democracy‘s game by democracy‘s game rules. 

MORGAN:  What kind of Orwellian discussion are you having? 

WOLF:  Can I finish?

MORGAN:  What is it you are referring to, Naomi?  What is it exactly that happened that all of these big bad people in the Bush White House did that was wrong about the wireless wiretapping program? 

WOLF:  Just to finish about Gonzales‘ stonewalling Congress, I think that what is really scary is that if you go back and look at what was suggested in those e-mails that they are not producing, one of the things that was possibly suggested is that there would be a mass purge of the u.s.  attorneys. 

And we really need to think forward what kind of scandal, what kind of terror that would be for the United States in the event of a close election if there had indeed been a general purge of the attorneys.  And so I think we need to get it that they are not playing by the rules that we have come to believe over 200 years you have to play by in the United States.  We have to get it that it‘s a different ball game and act accordingly.  It‘s a crisis. 

MORGAN:  Yes, the people that were fired were political appointees.  There was no law broken.  So all of this is a stupid little gotcha game that you Democrats are playing in order to keep Washington tied up in little knots.  Well, congratulations, you have been very successful at that. 

But you know what, we are in the middle of a war in which we are facing very serious consequences—long-term consequences if we don‘t win it.  So I suggest you get your mind focused around something important for a change. 


MATTHEWS:  OK.  Let me go to Craig for a second.  Just a second, excuse me.  Let me ask you, Craig, about this thing.  I agree with Melanie.  This thing doesn‘t seem the grab the attention of regular people.  This is of primary interest to people on the Democratic side, the leadership, like Chuck Schumer, of people trying to get Democrats elected. 

They have found an issue that unites their party.  They can‘t find unity over the war in Iraq.  So they got unity over this baby.  Is this really going to cut anybody?  Are we going to lose Gonzales?  Are we going to see the Democrats gain on this?  What is going to happen?

CRAIG CRAWFORD, MSNBC ANALYST:  I don‘t think that the public is not hugely interested in this discounts the story.

MATTHEWS:  But don‘t they think U.S. attorneys are political appointments period? 

CRAWFORD:  Sure, and I don‘t think many Americans are riled up about the story.  But that does not mean it shouldn‘t be pursued.  I mean, we have got an attorney general who probably lied to Congress, and an FBI director who is, unwittingly perhaps, providing supporting material for that claim.  The question is, do we care?  The president obviously does not care.  He is going to keep the attorney general. 

MATTHEWS:  He keeps looking at the camera, the president, and saying, what did he do?  What crime did he commit?  He does it like—and maybe it is Alfred E. Neuman, but the president does not seem to know what crime he committed.  Will somebody tell him?  What would you say he committed, perjury? 

CRAWFORD:  Certainly.  I mean, he lied to Congress.  I think that is a fair charge that needed to be proven beyond a shadow of a doubt.  But the preponderance of evidence shows that. 

MATTHEWS:  We are going to come right back and talk about this issue of—what happened to Dick Cheney?  We showed a tape of what a he said way back in ‘94.  To me it is astounding, he is better back then at describing what has happened in Iraq than anybody criticizing his policy today.  We are going to take another look at that.  This is, to me, anthropology.  We will be right back with the roundtable.  You are watching HARDBALL on MSNBC. 


MATTHEWS:  We‘re back with the roundtable.  Next up, Cheney versus Cheney.  A new YouTube golden oldie has Dick Cheney explaining back in ‘94 why going into Baghdad is a bad idea.  Let‘s watch.  I‘m overwhelmed by how smart this was. 


UNIDENTIFIED MALE:  So you think the U.S.—or U.N. forces should have moved into Baghdad? 



CHENEY:  Because if we had gone to Baghdad we would have been all alone.  There wouldn‘t have been anybody else with us.  It would have been a U.S. occupation of Iraq.  And under the Arab forces that were willing to fight with us in Kuwait were willing to invade Iraq.  Once you got to Iraq and took it over, and took down Saddam Hussein‘s government, then what are you going to put in its place? 

That‘s a very volatile part of the world.  And if you take down the central government in Iraq, you can easily end up seeing pieces of Iraq fly off.  Part of it the Syrians would like to have for the west.  Part of eastern Iraq the Iranians would like to claim, fought over for eight years.  In the north, you have got the Kurds.  If the Kurds spin loose and join with the Kurds in Turkey, then you threaten the territorial integrity of Turkey.  It‘s a quagmire if you go that far and try to take over Iraq. 

The other thing was casualties.  Everyone was impressed with the fact that we were able to do our job with as few casualties as we had.  But for the 146 Americans killed in action and for their families, it wasn‘t a cheap war. 

And the question for the president in terms of whether or not we went on to Baghdad and took additional casualties in an effort to get Saddam Hussein, was how many additional dead Americans is Saddam worth?  And our judgment was, not very many, (INAUDIBLE).


MATTHEWS:  OK.  Now we know we had 9/11 subsequent to that.  But the points that he made had to do not with the world situation the United States faces, Melanie, but with the situation in Iraq as it‘s likely to take place, as it has taken place once we attempted to occupy. 

First of all, the failure to—our difficulty in finding someone to run the place, secondly, the inevitable coming apart of the country by confessional (ph) group.  And third, the number of casualties.  Dick Cheney had it nailed and yet he was apparently the number one proponent of the war.  How do you put this together?

MORGAN:  OK.  Well, let me just first of all say that Dick Cheney of September 10th was different one that of September 11th.  And you glossed over that very quickly. 

MATTHEWS:  But Iraq was Iraq. 

MORGAN:  We have had 3,000 American lives lost as a result of.


MATTHEWS:  Yes, but how does change the prediction of what is going to happen in Iraq?

MORGAN:  . Islamic terrorists who attacked us in this country. 

MATTHEWS:  I knew you would say that.  How does that relate to how the outlook in Iraq was the same then as it has turned out to be now?  He had it right about Iraq.  Iraq didn‘t have anything to do with 9/11. 

MORGAN:  No, he didn‘t.  Saddam Hussein was killed.  He was taken out.  His two murderous thugs—he was absolutely killed by United States military forces.  We have vital American interests to be represented in the region, and it is as important for us to be in Iraq today as it was 10 years ago. 

MATTHEWS:  But his predictions were absolutely accurate.  He was prescient as hell about the difficulty of finding a government to replace Saddam, the difficulty of holding the together Iraq post-Saddam Hussein.  And the inevitable large number of casualties.  He was right about everything.  And yet we went into Iraq thanks to him.  I don‘t get it.  I don‘t get it.

MORGAN:  You know what?  I can see a gleam in your eye, Chris.  You are thrilled. 

MATTHEWS:  No, you can‘t, because you can‘t see me. 

MORGAN:  I can see it in the monitor.

MATTHEWS:  Can you see me right now? 

MORGAN:  Yes, I can see you in the monitor right now.

MATTHEWS:  And there is a gleam?  Let me tell you, it‘s profound confusion about how a man.

MORGAN:  What I can tell is you are having a great time trying to make Dick Cheney look like a hypocrite.  That‘s what you‘re trying to do.

MATTHEWS:  No, no.  That‘s not what I‘m saying. 

MORGAN:  Yes.  That‘s exactly what.


MORGAN:  We have had some very serious things take place.  We are in Iraq for the right reasons.  We are trying to stop the spread of the Islamic terrorism.

MATTHEWS:  Melanie, I am trying to figure out why a man who was so brilliant in seeing the future didn‘t act on his brilliance.  Let me go to Naomi on that. 

WOLF:  Yes.  I mean, it goes back to what I was saying earlier about the nature of lying.  Let‘s not forget that they got us into this war on the basis of a series of lies.  Lies to the U.N., lies about aluminum tubes, lies about the involvement of Iraq with 9/11, which Melanie just underscored again, to befuddle the American people. 

Frank Rich showed that 53 percent of the American people think Iraq had everything to do with 9/11.  They had nothing to do with 9/11.  And this weaving out of lies was a pretext for an invasion that served their own political purposes. 

In the wake of the invasion, they were able to terrify the American people, subjugate the American people, drive through a series of laws that dismantled key checks and balances, allowed overreaching executive power, and completely eviscerated what the founders set in place, thus weakening America.


MORGAN:  . Naomi, because you‘re going to look great in burka.  You‘re going to look super in a burka. 

MATTHEWS:  Craig, your sense of figuring this out? 

CRAWFORD:  Well, I do think there‘s an 9/11 component.  Let me just attempt this explanation, is one I‘ve heard from sympathizers to Cheney, is that he really came to believe after 9/11 that our more pacifist policies, not going after Hussein, pulling out of Lebanon in the Reagan administration, had led to emboldening terrorists and led to 9/11.  Therefore he was.


MATTHEWS:  Right.  But how did going back into Iraq lessen the emboldenment? 

CRAWFORD:  I think he—what has been explained to me is he believed that it was time to show great strength, and preemptive doctrine meant a lot to him, that going into Iraq would send a signal knot rest of the world, other countries harboring terrorists, and how tough we would be. 

MATTHEWS:  And by the way, Melanie, I hate this war.  It has made me very sad.  I feel disaffected from the foreign policy of my government right now for the first time.  I don‘t like what we are doing.  I don‘t like it.  To say it is a glint in my eye is to miss the point.   So, great, thank you.  Tucker is up next.



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