updated 9/13/2007 1:21:29 PM ET 2007-09-13T17:21:29

Guest: Dana Milbank, Jerry Della Femina, Jon Soltz, Dante Zappala, Laura

Ingraham, Anne Kornblut, Joe Klein, Matt Bai

CHRIS MATTHEWS, HOST:  Propaganda time.  Petraeus, Petraeus, Petraeus, Petraeus, Petraeus.  But General Petraeus doesn't know if the war is making us any safer.

Let's play HARDBALL.

Good evening.  I'm Chris Matthews.  The big story tonight, public relations, President Bush couldn't sell his war any more.  Ask anybody you know.  Does anybody think we're winning this thing?  So what we see this week is a new product launch, and timing is everything.  Why is all this, the Petraeus hearings, the big primetime speech from the Oval Office Thursday night, all happening in the first full week of September?  I wonder why.

Well, first there's the anniversary of 9/11.  Bush loves to imply what General Petraeus openly and clearly and without hesitation denied the other day, that there was any Iraqi involvement in what happened six years ago in New York and the Pentagon.  But this administration loves like hell to imply there was some connection and won't quit trying to sell it.

Second, there's the Bush White House's seasonal marketing pattern.  As former chief of staff Andy Card put it, you don't introduce new products in August, you hold them for September.  Third, there's the president's money plan.  He wants the money for the war paid now for the rest of his term.  As he put it in that new book that just came out, he's setting things up to close the deal in October, November.

Fourth, everything we heard this week from Petraeus and Crocker, this whole dog and pony show, is aimed at selling Bush's policy without having to sell Bush.  The sad, tragic fact, as we learned yesterday, is that even his top general doesn't buy the Bush policy.  Is the Iraq war making us safer, General?

(BEGIN VIDEO CLIP)

SEN. JOHN WARNER ®, VIRGINIA:  Are you able to say at this time, if we continue what you have laid before the Congress here as a strategy, do you feel that that is making America safer?

GEN. DAVID PETRAEUS, CMDR., MULTI-NATIONAL FORCE, IRAQ:  Sir, I believe that this is, indeed, the best course of action to achieve our objectives in Iraq.

WARNER:  Does that make America safer?

PETRAEUS:  Sir, I don't know, actually.  I have not sat down and sorted out in my own mind.  What I have focused on and been riveted on is how to accomplish the mission of the multi-national force Iraq.

(END VIDEO CLIP)

MATTHEWS:  Well, that non-answer from General Petraeus is our second story tonight.  And later, in the HARDBALL debate tonight, Republican senators David Vitter and Larry Craig are both accused of sex scandals, one straight and one gay.  Yet senators applaud Vitter and shun Craig.  Why the double standard?  Laura Ingraham will be here to fight that one out, and it's a hot one.

But we begin tonight with the selling of the Iraq war and this report from HARDBALL correspondent David Shuster.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Hours after General Petraeus, who has a Ph.D. from Princeton, testified he did not know if the Iraq war is making America safer, today the Bush administration was in full damage control mode.  White House aides urged reporters to consider another part of the Petraeus Tuesday testimony that officials insisted was a clarification.

PETRAEUS:  We have very, very clear and very serious national interests in Iraq.  Trying to achieve those interests, achieving those interests, has very serious implications for our safety...

UNIDENTIFIED MALE:  Well, let me ask about those interests...

PETRAEUS:  ... and for our security.  So I think the answer, really, to come back to it, is yes.

SHUSTER:  But saying America has national security interests in Iraq is different from saying the war right now is making America safer.  And today at the National Press Club, Petraeus again dragged his feet.  First, he referred to the strains of the Iraq war on the U.S. military.

PETRAEUS:  And it was in that context that I was answering that question.

SHUSTER:  Then the general gave a lengthy discourse on America's national interests in Iraq.

PETRAEUS:  Those national interests do, obviously, link to the overall strategy for our country, are an important component in it, and therefore do, yes, make our country safer.

SHUSTER:  But that's the long, drawn-out equation on something President Bush has insisted is simple and straightforward.

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  It's better to fight them there than here.

SHUSTER:  Even if White House officials felt like they were facing a brushfire today, their overall dog and pony show on the Iraq war seems to have produced the desired headlines.  Despite testimony yesterday about a dysfunctional Iraqi government and a U.S. troop death toll that continues at a pace of 60 a month, “The Washington Post” headline said this morning, “Bush to endorse Petraeus plan.”  In other words, the president will announce the immediate departure in Iraq of 2,000 Marines and a plan to pull out another 30,000 U.S. troops next summer.

Never mind, of course, that the Marines were scheduled to leave Iraq this month anyway and that pulling out an additional 30,000 troops next summer would still leave over 130,000, as many U.S. troops as were in Iraq a year ago.  The White House is protected, though, from criticism because the plan sounds like it is coming from a U.S. general, and that was a point the president's spokesman today tried to reinforce.

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  General Petraeus was asked to give his honest opinions about what he thought, and that's what he did.

What General Petraeus is saying is that you are able to move forces out as a result of success.

Well, I answer the charge by pointing to General Petraeus's testimony.

General Petraeus has made it clear that he—by the way, this is not a guy who's certainly going to try to fake it.

SHUSTER:  Democrats today expressed frustration.

Sen. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  We can't continue on the same course that we're on and expect a different outcome.  This has now has been five years in which the president has pursued a course in Iraq that is not working.

SHUSTER:  A few Senate Republicans did express skepticism this week about keeping the troop levels high.  And even Senator Richard Lugar, the ranking Republican on the powerful Foreign Relations Committee, suggested the administration should make dramatic changes.  But few Republicans seem willing to join Democrats in forcing the larger troop withdrawal down the president's throat and that of his general.

OBAMA:  The fact is, is that in the Senate, we need 60 votes to override the president's decision, and we have not seen the kind of movement that I think we need.

SHUSTER:  In the meantime, an anti-war veterans group is having a field day with General Petraeus and has released this new ad.

WARNER:  If we continue what you have laid before the Congress here as a strategy, do you feel that that is making America safer?

PETRAEUS:  Sir, I don't know, actually.

SHUSTER (on camera):  Right now, however, answers and security are not the point.  The Bush administration has a war it continues to sell hard, and the PR effort is so comprehensive that bumps in the road from Petraeus or anybody else to this White House are of little concern.

I'm David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David.

Jerry Della Femina is a veteran advertising executive up in New York, and Dana Milbank is one of the great reporters and columnists for “The Washington Post.”  He tells you the truth in color.

Anyway, let me go to Jerry Della Femina.  I'm watching this dog and pony show this week.  And I use that term advisedly.  It's a term used for these shows out in the Wild West in the late 19th century and early 20th, where they went around and they put on a show to sell some sort of product.  They're selling a product here.  It's called the war in Iraq.  Nothing's changed except the launch, it seems to me.

JERRY DELLA FEMINA, ADVERTISING EXECUTIVE:  Well, they're doing a good job of it this week.  Let me tell you, they couldn't find anyone better than Petraeus.  I mean, you just can't beat a man in full uniform speaking to—well, I'll give you Ollie North facing the Congress.  You know, you stand up there, and he's wearing a uniform.  And boy, you can't take a guy in uniform versus six overweight senators.

MATTHEWS:  Yes, except that Eisenhower could have defended the Second World War, and this fellow thought that was beyond his ken to explain whether what we're doing over there is making us safer or not.  I mean, Ike would have said beating the Nazis makes us safer.  I think Westmoreland would have said something like that in Vietnam.  And this guy couldn't answer the fundamental question, Are the loss of lives worth it?

DELLA FEMINA:  Well, I think that he's a soft—you know, a soft-sell guy.  Forget about what we believe, get out of Iraq, go into Iraq with more soldiers.  He's a soft-sell guy.  What better answer than, I'm sorry, I don't know?  It was the right answer for him.  He didn't know.  If he would have said something...

MATTHEWS:  I agree with that, he didn't know.  But if he believed that this war was making America safer, wouldn't he have said so?

DELLA FEMINA:  I think that he just won people over by saying, I haven't got an answer.  Sometimes coming up with a fast answer will—there are people who are looking at him and saying, I know we should get out, the surge isn't working.  They now believe that they're right and the surge isn't working.  There are other people saying, I'm telling you, the surge seems to be working.  They believe—so he didn't change anyone.

What they wanted was status quo.  They wanted everyone to say, Well, gee, this guy is—he's very impressive.  He's a war hero.

I think the biggest mistake that was made was the anti—the “Petraeus Betray us” that ran just before that.  I mean, what a setup that was.  Snow could get up and say, Gee, this is a hero.  How could we treat this man this way?

So if I was—you know, if this was a dirty tricks game, someone would say, Let's put an ad in making fun of this war hero, and then let's knock him down and show—so it was a terrible mistake...

MATTHEWS:  Yes.

DELLA FEMINA:  ... and it really set the week off on the wrong note for people who were against the surge.

MATTHEWS:  Yes, well, the ad didn't kill anybody.  Let me ask you, Dana Milbank, about this strategy.  Number one, it's in September.  It's simulcast with all the pictures from New York and 9/11 -- the marking of 9/11, that horror up there, once again suggesting, Do you remember how you felt?  Country Western music, Do you remember how you felt?  We got to get even with these people.  We've got to stop them from doing it again.

DANA MILBANK, “WASHINGTON POST”:  It's the same show over and over again each year.  This is when the Iraq war was sold, and Andy Card said that right from the start.  They weren't making any apologies at it.

MATTHEWS:  We're rolling out a product in the fall.

MILBANK:  Bush had a terrible August down on the ranch and then has explosive Septembers.  And I think he's won this battle already.

MATTHEWS:  How so?

MILBANK:  Petraeus—it's no accident he had a Latin name.  It looked like he was the Roman general returning to the republic in his gold and purple toga, and they were celebrating him and slaying white bulls.  They could not get enough of this man.  And anybody's who's even critical of the war wouldn't dare criticize...

MATTHEWS:  Right.

MILBANK:  ... except in the most polite way, General Petraeus because then you appear to be criticizing the troops.  I think it's game, set and match here.  He's...

MATTHEWS:  OK, so...

(CROSSTALK)

MATTHEWS:  This is the old ad campaign from the '50s, which was, Four out of five doctors recommend.  In other words, we've heard from the expert, Jerry, and even though the product itself, Gerald—President—why did I say Gerald Ford?  President Bush is extremely unpopular—he got a 5 percent credibility rating in the new CBS poll.  The general can sell him.  Is that the way you look at it?  In other words, Thursday night, he just comes out and says, I back the general.

DELLA FEMINA:  I think he's backing the general.  If the general says, I back Bush, it might be a different story.  I think he was the perfect spokesperson.  I think that they—you know, look, let's face it, it was set up.  They looked at it, and they scored.

MATTHEWS:  Do you think that General Petraeus made a case for our being in Iraq or the tactics of the surge, or what do you think he sold to the American people, this “stay the course”?  Do you think he sold the whole blue plate special, We stay over there for the time being?

DELLA FEMINA:  I'm a war hero.  I'm a general.  I speak very softly.  And I am—and I want you to listen to me.  We continue.  We stay the course.

MATTHEWS:  What do you make of the pony?  You're speaking well of the dog.  What about the pony?  How about the cookie (ph) pusher (ph) from the State Department?  What do you think of him?

DELLA FEMINA:  Well, again...

MATTHEWS:  He seemed a little (INAUDIBLE) soft-spoken.  I'd say he was incredibly soft-spoken.

DELLA FEMINA:  Well, that's—that's part of winning these people over.  I think he was the opening act.  I mean, wherever he appeared, the story is Petraeus and...

MATTHEWS:  OK, let me ask you why.  I want to challenge you, Jerry.  The goal of that war is to create an independent Iraq that can stand on its own feet and not be a danger to the region.  That's the only reason guys are getting killed over there and women are getting killed over there, to make it a safer country and the region safer, and therefore us safer.

But the whole idea was to allow Iraq to create its own government.  We're not talking about being an occupying force for years to come, like the Brits or the French or even the Russians.  We're not going to stay there for a long period of time.  No evidence from this guy Crocker—and I just love the name, Crocker—no evidence from him that we're building a government over there that can stand on its own two feet.  You don't think that's a problem?

DELLA FEMINA:  I think it's a problem for the next administration.

MATTHEWS:  Oh!

DELLA FEMINA:  And I think that that's where they're going.  You know...

MATTHEWS:  A holding operation.

DELLA FEMINA:  It's a holding operation, and let the next administration sort it out.

MATTHEWS:  Wow.  You think it's that bad?  Is it that cynical.

MILBANK:  Well, as a tactical matter, Bush has won this round.  But this actually, purely politically, makes it much more difficult for him and his party next year.  This means there won't be a massive reduction of troops before the election.  This is going to be going on next summer now.  So they've kicked the can down the road.  They'll be able to do that until March.  But this is exactly what the Republicans didn't want.

MATTHEWS:  So they're now officially the war party.

MILBANK:  They've got to—I mean, there's no way we're going to be below, what is it, 100,000, 130,000 troops next summer.

MATTHEWS:  Well, I value you, Jerry.  You're an expert.  I guess he is selling this campaign.  He's selling it through another gentleman, General Petraeus, an excellent soldier being asked to defend a policy.  It's the president who created the policy and the president who will have to defend it.  And it's his party that will pay the price if this war continues the way it's been going.

Thank you.  Dana, I wish I gave you more time, but Jerry Della Femina

I mean, we have the guy here!

Anyway coming up: General Petraeus can't answer that question whether the war in Iraq is making us safer here at home.  Well, if the top commander in Iraq can't give us that answer, who's going to give it to us?

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The political group of Iraq and Afghanistan veterans, Votevets.org, today posted a new Internet ad on YouTube which captures that key moment in yesterday's testimony when General David Petraeus couldn't answer whether the war in Iraq is making us safer here.  Let's take a look once more.

(BEGIN VIDEO CLIP)

SEN. RICHARD LUGAR ®, INDIANA:  I frame the question this these stark terms.

SEN. CHUCK HAGEL ®, NEBRASKA:  Are we going to continue to invest American blood and treasure at the same rate we're doing now?  For what?

WARNER:  If we continue what have you laid before the Congress here as a strategy, do you feel that that is making America safer?

PETRAEUS:  Sir, I don't know, actually.

(END VIDEO CLIP)

MATTHEWS:  Jon Soltz is an Iraq war veteran and chairman of Votevets.org.  And Dante Zappala—is it Zappala, sir, or Zappala?

DANTE ZAPPALA, GOLD STAR FAMILIES SPEAK OUT:  Zappala.

MATTHEWS:  Zappala—lost his brother, Sergeant Sherwood Baker (ph), during the Iraq war.  He's now a member of Gold Star Families Speak Out.

Let me ask you, Dante, when you watched General Petraeus yesterday find a problem with that question, Is the war over there and all the hell that's going on, all the suffering and death—is it making us safer here at home, and he said, I haven't been able to figure that out, in fact, I haven't had my head around that question—what did you make of that?

ZAPPALA:  Well, I found it very disappointing.  I think we've been reduced to the level where we starred, and that is that this war is being sold on people's fear.  That's why we went into war.  They tried to give us a bunch of different reasons about building democracy and other things, but we've really come full circle now and we're back to the fear factor.  And if he can't tell Americans point blank that, somehow, the sacrifice of our finest in Iraq is making people here safer, then I can't understand why we're still in Iraq.

MATTHEWS:  You know, Jon, I keep thinking about what he said.  He was very impressive during his testimony until that fundamental question came up.  And when he was talking about how there's a—I thought he was very honest.  He said there's 169,000 troops over there, men and women serving in various forces, and they each have their own view of the war.  And you've heard that—you've fought in wars.  You always read that Ernie Pyle stuff.  Everybody's war is different than everybody else's.

But I think it would be stunning, if you're one of those 169,000 people over there, facing harm every night and every day, to hear your general say you're not sure it's really worth it to your country.

JON SOLTZ, VOTEVETS.ORG:  Well, a lot of them already feel that way. 

If you look at the polls...

MATTHEWS:  Yes, but aren't you—let's talk about this general.  when you hear the general say it...

SOLTZ:  I think what's interesting about him is that he's been sort of

politicized.  I mean, Admiral Fallon wasn't there, the central commander

who controls the war in Afghanistan, who controls the war against al Qaeda

and bin Laden.  The secretary of defense wasn't there, who can deploy these

troops.  So I think it is shocking for General Petraeus because he's been -

you know, he's who the president is hiding behind.  And so that is staggering, for him, who they are using as the complete credibility for the war in Iraq, to say something that the war on terror is basically not focused on—on a security element.  And that's telling us we're not in the right direction.

MATTHEWS:  Dante, you lost your brother. 

Let me ask you about this sales pitch we're watching this week.  It really is a dog-and-pony show, very elaborate hearings.  We're seeing a rollout of the new sales pitch.  We're seeing the president coming on television Thursday night, all in coordination with the marking of 9/11, very impressive creation of an attitude. 

Is it working with you? 

ZAPPALA:  No.  I—I feel like I'm back in 2003 and Colin Powell is in front of the U.N. trying to spin this war. 

As you may know, my brother was sent to Iraq to work with the Iraq Survey Group.  So, he was actually looking for weapons of mass destruction when he was killed.  And it was long after we—we knew that they did not exist. 

So, I think about, what did he die for?  And, if he died for anything, it's so this never happens again, that they don't trump evidence and reason for ideology and some negligent policy. 

MATTHEWS:  Let me ask you about General Petraeus himself.  He is—I remember, years ago, watching “All in the Family.”  And Edith Bunker kept saying:  Proxmire, Proxmire.  All I ever hear is Proxmire. 

He, of course, was the senator from Wisconsin. 

All I ever heard for the last three months is Petraeus, Petraeus, Petraeus, Petraeus.

SOLTZ:  That's right.  

MATTHEWS:  And Petraeus is an officer serving in the field.  He's a field-rank officer, but he is serving in the field and carrying out the orders of this commander in chief. 

Why does this president keep saying, I'm waiting to hear the Petraeus plan, when the Petraeus plan has to be the orders he was cut by the president? 

SOLTZ:  It's because this is a political strategy, sir.  This is all this is.  This is about the president handing this war off to the next commander in chief. 

This is why we are going to draw down troops next April, because we don't have enough troops, and because that's the way he insures, as we all know from the book that came out last week, that he wants to hand this to the next president.  He's punted the football and he wants to hand the hot potato to the Democrats. 

And then they want to lower 30,000 troops, so Republican members of Congress and the Republican nominee can show that they're making progress towards leaving Iraq.  This is a political strategy driven by domestic politics here at home, and not by the situation on the ground in Iraq. 

MATTHEWS:  OK.  Let's talk about the politics here at home. 

Dante, you have friends who are probably pro-war.  What do they say? 

ZAPPALA:  I don't have many friends that are pro-war.  It's hard to find folks that are pro-war. 

But I think that, really, fundamentally—and it's—it's a very, very real feeling that people do have, are afraid, and they want to know that they're safe.  And I think that our guys, our—our men and women in uniform, will lay down their life, sacrifice their—their own families to protect ours. 

And, if that was truly what was happening here, I think we would all be—be right behind him.  In fact, many of us would probably be in Iraq right now, taking up arms.  But you see that that's not happening.  And—and that's not the objective out there. 

And, so, you know, when—I think that—that the people that are pro-war, that—that—that their arguments are falling faster than I can say. 

MATTHEWS:  Do you hear that, Jon? 

SOLTZ:  I—I agree... 

(CROSSTALK)

MATTHEWS:  I wonder, because we got NBC poll data that shows, you know, a modest uptick.  We're going to have more on that later tonight. 

I wonder whether this P.R. campaign—we had Jerry Della Femina, one of the top ad men in the country, thinking that the president's wholesales rollout this week is working.  Putting the men in uniform out there, putting out the State Department guy, having the president go on television is pushing this war effectively, that this is working, like it or not. 

What do you think?

SOLTZ:  It's—it's working because he's not playing to win.  He's only playing not to lose.  All he has to do is hold his line politically.  He has to hold the Republicans.  He has to hold Norm Coleman.  He has to hold Susan Collins. 

We lobby in Congress all the time, every day.  We're going to have 40 Iraq vets...

MATTHEWS:  Right. 

SOLTZ:  ... from VoteVets.org down here next week knocking on doors. 

But the question is, is, how much time do they give them—give him?  And, you know, this is about election and it's about voting politics.  And they're going to hold that line just enough.  They put $15 million in there, and we're going to fight it hard and try to break them. 

But, listen, it's very difficult.  They're trying to hide behind a man who has got medals on his chest, a man who has served this country honorably.

MATTHEWS:  Well, he's doing it.

SOLTZ:  And he is, and successfully.  It's—it's—it's wrong. 

It's unethical. 

MATTHEWS:  This is like “The Court-Martial of Billy Mitchell.”  

SOLTZ:  This is the spin.  This is the spin.  This is the...

(CROSSTALK)

MATTHEWS:  Beyond Ollie North.  This is very impressive stagecraft. 

SOLTZ:  This is—this is another spin, just like...

MATTHEWS:  Well, you know, stagecraft is not going to make this war any easier to fight or less bloody. 

Anyway, thank you, Jon Soltz. 

Thank you for your family's sacrifice, Dante. 

Still ahead, the HARDBALL debate: two sex scandals concerning two Republican senators, David Vitter and Larry Craig.  One is applauded by his fellow senators, lots of back-slapping on that guy.  And the other guy gets shunned.  Is there a double standard at work here? 

And up next:  New poll numbers show big interest in this presidential dog, big interest.

And Jon Soltz rips down the Petraeus dog-and-pony show. 

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Time now for more some politics.

In just a few minutes, we will be talking to Laura Ingraham, who has got one of the hottest shows on radio, about Larry Craig's comeback and David Vitter's latest call-out from a prostitute. 

So, here's some good news.  Tonight's new NBC/”Wall Street Journal” poll shows that two-thirds of the country is closely watching this 2008 presidential campaign.  That's two-thirds.  It's a lot of interest.  And it's a good sign that people give a darn about the power of the next president. 

Barack Obama is being whacked for blowing his chance to question General Petraeus on yesterday's Senate hearings.  He used up his time giving campaign remarks he could have given anywhere. 

As Lynn Sweet of “The Chicago Sun-Times” nailed it—quote—“Obama complained about the time constraint, but it was his choice not to figure out how to ask even one thoughtful question, and leave time for an answer.”

And look out, Hillary.  The toughest investigator in Congress, the great Henry Waxman of L.A., has told the National Archives to give him million pages of Clinton White House records that have been previously sealed off from the public. 

Let's see, the cattle futures deal that got Hillary a $100,000 windfall, her missing billing records from that Arkansas law firm, Vince Foster, lots of stuff for Waxman's staffers and the Republican staffers on his subcommittee to feast their eyes on. 

As I have said before, there's nothing like the power of the subpoena. 

Finally, take a look at Jon Soltz last night exposing the hypocrisy and the dog-and-pony show that was yesterday's Petraeus hearing. 

(BEGIN VIDEO CLIP, “THE DAILY SHOW WITH JON STEWART”)

JON STEWART, HOST, “THE DAILY SHOW”:  Still, the general had a cautionary word for those who are impatient with the surge. 

GENERAL DAVID PETRAEUS, COMMANDING GENERAL OF THE MULTI-NATIONAL

FORCE-IRAQ:  But our experience in Iraq has repeatedly shown that projecting too far into the future is not just difficult; it can be misleading and even hazardous. 

STEWART:  Don't criticize the surge, because no one can know what's going to happen, unless you're talking about not sticking with the surge. 

PETRAEUS:  A rapid withdrawal would result in disintegration of the Iraqi security forces, rapid deterioration of local security initiatives, al Qaeda-Iraq regaining lost ground, a marked increase in violence, further ethnosectarian displacement, and exacerbation of already challenging regional dynamics, especially with respect to Iran. 

(END VIDEO CLIP)             

MATTHEWS:  Up next:  A second prostitute says Senator David Vitter of Louisiana was one of her clients.  Why does the Republican Party shun Larry Craig, but embrace David Vitter? 

Laura Ingraham joins us about her new book and about those topics—next in the HARDBALL debate. 

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

REBECCA JARVIS, CNBC CORRESPONDENT:  I am Rebecca Jarvis with your CNBC “Market Wrap.”

Stocks closed little changed.  The Dow Jones industrial average lost 16 points.  The S&P was up a fraction.  And the Nasdaq lost five points. 

Oil briefly traded above $80 a barrel for the first time ever.  Crude closed in New York at $71.91 a barrel, up $1.68 for the day.  The gain was driven by a surprisingly large drop in oil and gasoline inventories.  Refinery activity also feel.  And Tropical Storm Humberto formed in the Gulf of Mexico. 

“The Wall Street Journal” reports builders are putting up fewer supersized homes.  They're now offering smaller floor plans, hoping to lure buyers by keeping prices low. 

And U.S. toymakers headed to Capitol Hill today.  The CEO of Mattel admitted his company made mistakes by failing to properly monitor Chinese subcontractors.  The company has recalled 21 million Chinese-made toys because of lead paint.

That's it from CNBC, America's business channel—back to HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Well, there's been an inordinate amount of sex talk on Capitol Hill in recent days, mostly generated by two fellows, Senator David Vitter and Senator Larry Craig.  Both involve sex.  Both involve senators who advocate what's often called a family-values agenda. 

But the response from their Republican colleagues couldn't be more different.  In fact, earlier this week, one of my guests told us that David Vitter got a standing O. from the Republican Caucus when he reappeared after being charged with consorting with prostitutes.  Senator Clinton was generally treated like a pariah.

Is there a double standard?

Radio talk show host Laura Ingraham is author of the great new book “Power to the People.”

Laura, I'm holding your book in the air, so that everybody can see this book.  You are—I'm not allowed to say this, but I will say it.  You're beautiful and you're smart.  And you have got a huge radio audience. 

OK? 

LAURA INGRAHAM, RADIO TALK SHOW HOST:  Well, thank you.  I'm in your home base here, Philadelphia...

MATTHEWS:  I know.  It's my...

rMD+IT_rMD-IT_INGRAHAM: ... birthplace of freedom...

MATTHEWS:  And birthplace...

INGRAHAM:  ... ready to do a big event, yes.

MATTHEWS:  Nazareth Hospital on Roosevelt Boulevard, birthplace of me, too, and all my brothers. 

Let me—let me go to this point here. 

First of all, let's take a look what “The New Yorker” Rick Hertzberg said here on Monday on HARDBALL. 

(BEGIN VIDEO CLIP)

HENDRIK HERTZBERG, “THE NEW YORKER”:  They should give him a standing ovation, just like they did Senator Vitter of Louisiana. 

MATTHEWS:  Did they really?

(LAUGHTER)

HERTZBERG:  Yes, they did.  The Republican Caucus gave him a standing ovation when he reappeared, after being charged with consorting with prostitutes, yes. 

(END VIDEO CLIP)

MATTHEWS:  Are we still in the era where the only way you get in trouble is with—in bed with a dead boy or a live girl—I'm sorry—dead girl, live boy?

INGRAHAM:  I thought you said dead goose, live goat.

(LAUGHTER)

MATTHEWS:  No. 

INGRAHAM:  That's the only thing...

(CROSSTALK)

MATTHEWS:  I'm trying to stay with human beings here.  It gets too complicated otherwise.

INGRAHAM:  That's the only thing that hasn't happened yet, Chris. 

MATTHEWS:  Yes, I know.

INGRAHAM:  Look, what—what—what's going on in Washington is symptomatic of what's going on in the culture at large. 

I mean, these people we elect come from the population.  And—and, as I write about in this book, look, we're—we're all trying to navigate through this crazy world of politics and the culture.  And, whether it's Vitter, or Larry Craig, or—or, you know, Bill Jefferson, cash in the freezer, or Bill Clinton for, you know, the late-night pizza deliveries, I mean, we elect people because they want them—we want them to represent our values. 

And, when they fall short, you know, we have to take that under consideration.  We have to learn all the facts.  We have to, you know, hope that an investigation delivers us from this—this nonsense and this craziness. 

And I think it—it's—it's not Republicans or Democrats.  They're all immune—none—none of us are immune to this.  And—and we're all flawed individuals.  But we have to—we have to hold people accountable.  And I think it's important. 

MATTHEWS:  Well, suppose you're a gay Republican.  There's a lot of them out there.  I have met them.  I mean, they're—the Log Cabin is an organization of gay Republicans. 

INGRAHAM:  Sure.

MATTHEWS:  And I'm sure the Kinsey numbers apply to both parties, the percentages of being born...

INGRAHAM:  Yes. 

MATTHEWS:  ... gay or whatever. 

What do they feel when they see the party pass bill after bill against gay marriage, against gays serving in the military openly, and then they find out that one of the staunchest, most right-wing people, who has voted for every one of those measures, is engaged in this sort of secret sex life?

INGRAHAM:  Well, I don't know what's been concluded about Larry Craig. 

I know he pled guilty to disorderly conduct. 

And I—I find these stories sickening and—and nauseating, because they—they take us to a level in this country that it's really sad when we think about how—how low we have gone to this point.  So, I don't...

MATTHEWS:  But you don't find that—but there's no hypocrisy problem for—the special hypocrisy problem?

INGRAHAM:  Well, I think—I think there's a hypocrisy problem across the board in politics.  And that's why people are giving Congress the lowest ratings they have ever gotten in the history of poll-taking. 

And it's—it's why both parties are getting hammered from their constituents.  So, I mean, you—you can take the Larry Craig prism, Chris, and look through that for the day, and that might make you feel better.  It doesn't make me feel better. 

MATTHEWS:  No.  Well, I—don't—don't—don't work with me on that.

INGRAHAM:  No.

MATTHEWS:  It doesn't help with me...

INGRAHAM:  No.

MATTHEWS:  ... because I don't have that position on this.  I'm—I'm trying to become more tolerant of the way people are born and how they have to live in their own mind. 

But let me ask you about something I loved in your book. 

INGRAHAM:  Sure.

MATTHEWS:  You know, I'm one of—you're one of four.  I'm one of five.

INGRAHAM:  Yes. 

MATTHEWS:  My wife's one of five.  We grew up in families which are generally—our Catholic families tend to have a large number of kids.  I had a cousin with eight in the family.  The Kennedys, of course, Bobby Kennedy's family, what were you telling me, 10 kids or something? 

INGRAHAM:  Ten. 

MATTHEWS:  OK. 

INGRAHAM:  Or 11.

MATTHEWS:  Nowadays, you're pointing out that parents don't seem to want to have kids.  There's a cultural stirring against having more than one or two kids.  Even zero population growth doesn't seem to happen in a lot of places. 

And I found that interesting.  Why do you think that's going on? 

INGRAHAM:  Well, I think a lot of things have happened.  For—for—for some reason, having a lot of kids in some circles has become a selfish act.

And, to me, I think, of all my friends—my friends the Sipolonis (ph) have nine kids.  And I'm—I'm around them a lot.  And it's a house that's filled with love and laugher and craziness and chaos. 

But, since when is that selfish, to have a lot of children? 

MATTHEWS:  Right. 

INGRAHAM:  And it used to be everybody had a lot of kids. 

And I think, if you want to have two kids, three kids, it doesn't—you know, whatever works for you.  But I just don't like it when I'm in a line for “Shrek 2” with six of the Sipoloni (ph) kids, and I hear people whispering behind me, saying, oh, my God, I hope those aren't all hers. 

I just—I just laugh.  I said, how did we get to this place, where having more little ones running around is a bad thing?

MATTHEWS:  Well, it used to be you got your kids.  You liked to have boys, so you had somebody to cut the lawn. 

INGRAHAM:  Well, yes.

(LAUGHTER)

INGRAHAM:  Well, we—I mean, that's—my mother was, like, glad she had me when she was, what, 45, 46, because she had someone when my brothers left town to—to collect the leaves and do all those—that hard work. 

MATTHEWS:  Yes. 

INGRAHAM:  So, I was...

(CROSSTALK)

MATTHEWS:  The irony here—and I want to be careful, without offending anybody—but immigration is great for this country.  You and I are all products of immigration. 

But...

INGRAHAM:  Yes. 

MATTHEWS:  ... it seems like people who are defending illegal immigration right now, a lot of liberals, don't like big families. 

So, the irony is, we have this big labor shortage.  We have a population shortage.  People aren't—we aren't growing in our own numbers, so we need to bring in people, even illegally, or guest workers, or all these gambits that are being talked about, because we don't have an adequate labor supply. 

At the same time, let's not have kids. 

INGRAHAM:  Well...

MATTHEWS:  It is an interesting sociometric overlay you have hit here. 

INGRAHAM:  Yes. 

Well, power to the people.  That means, you have got to have people to have power.  And we're seeing, in Russia, Chris, they are actually paying people to have children.  In Europe, the birth rate is so low that Europe is not going to reproduce itself.  Europe is ever dependent on immigrant labor and an immigrant workforce, and they're having trouble with assimilation in some quarters.  I know you've talked about it.  I think it's something to celebrate children. 

MATTHEWS:  People want to import labor and love sex.  But they don't like kids.  That doesn't surprise me.  But it is interesting; all day long on this network and others, I'm seeing pictures of Britney Spears.  She's showing no talent.  She's showing her body.  She's obviously a good-looking young woman, wearing very little.  There it is.  We have an excuse to play it again. 

INGRAHAM:  We're not showing it. 

MATTHEWS:  Please kill that.  I did not do that as an excuse to show that again. 

INGRAHAM:  I don't want the B roll.  They did that to me on “The Today Show.”

MATTHEWS:  I know they did it on “The Today Show.”  It's seems like everybody decries the coarseness of our culture and then they show Britney one more time. 

INGRAHAM:  Isn't this awful.  Let's show the poll dancing one more time.  I mean, look, Chris, NBC has made millions off of a show which was an amazing show and is an amazing show, called “To Catch A Predator.”  Why not to catch a pornographer, because all the predators are the ones who are consuming all of this now instantly excessive porn, 12 billion dollars a year adult entertainment. 

MATTHEWS:  Can I sing your praises?  I get in trouble for this.  You're great looking.  You're one of the god's gifts to men in this country.  But also, you are a hell of a writer.  Your books always do well.  Your radio show—I just looked at the numbers—you are you up there, one of the top most listened to radio shows. 

INGRAHAM:  Thanks you. 

MATTHEWS:  I think you're great, especially when have you me on.  You're fabulous, Laura Ingraham.  The name of the book, although it is a bit to my right politically, “Power To the People.”  Good value, the name of the book, “Power To the People,” Laura Ingraham.  Buy the book.  Up next, the HARDBALL round table on those Senate sex scandals.  We'll also show some more pictures, too.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Our round table tonight, big-time, one Anne Kornblut of the “Washington Post.”  She's in the news room.  Matt Bai of the “New York Times” wrote a huge piece about Rudy Giuliani this week.  His book is called “The Argument, Billionaires, Bloggers and Battle to Remake Democratic Politics.”  Also with us it “Time Magazine's” Joe Klein. 

Joe, I have to have you right out front.  Is this big roll out, this sales pitch, this relaunch of the war in Iraq working? 

JOE KLEIN, “TIME MAGAZINE”:  Yes, I think it's working.  But it's not working on the ground in Iraq.  I mean, even on the ground in Iraq, we really need to have a strategy change.  And neither Petraeus nor Crocker would talk where we go next.  The big question that people on Petraeus' staff is asking, is can you replicate what they've done successfully with the Sunnis in the north with the Shiites in the south.  That didn't really play this week. 

MATTHEWS:  Let me go to Anne Kornblut.  Anne, is it working?  I noticed the “Washington Post” gave the headline that the administration wanted; he's going to cut troops by 30,000, exactly what they wanted.  I'm not sure that was news.  Your paper thought it was. 

ANNE KORNBLUT, “THE WASHINGTON POST”:  Well, it's news whenever he says he's going to do anything in Iraq, frankly. I think also it's news even if they were going to rotate out—and we have known what was coming in the report for a few days now—it's now official.  So I do think it's news. 

On the question of whether it's working, what's interesting, I think, politically, is that it's working for the Republican candidates.  I think the Democrats certainly have taken a whack at it.  They've said it doesn't mean anything.  But I think for candidates like John McCain, for example, who suffered so much, I think this helps him a little bit. 

MATTHEWS:  I think you're right, because our polling, which I can't really come out with the numbers until later tonight—but our polling does show—what I've looked at—that it's working among Republicans.  That's where the uptick is.  that your view, Matt?  Democrats are not changing their minds.  Independents aren't changing their minds.  The Republicans are becoming more solid around the president. 

MATT BAI, “NEW YORK TIMES MAGAZINE”:  I think that's right.  It helps with the base of the Republican party, that's been wavering.  Frankly, it helps us get a real debate going in 2008, because the Republicans have been running around saying, we can win this thing.  Everything is going great.  We can get our troops out after we win. 

Democrats have been running around saying nothing's going well.  It's all a disaster.  Now we can have a real debate.  We know what the terms are.  Do you want a long open-ended commitment?  Are you willing to take this on?  Or, like the Democrats, are you willing to take the consequences of a broken Iraq and get the troops out now?  I think that's the debate we need to have for 2008. 

MATTHEWS:  Unfortunately, it leaves out the possibility that somewhere between now and never, we leave. 

BAI:  Sure. 

MATTHEWS:  Which is a logical conversation that, Anne, we don't seem to be having it.  Like how about we decide as a country two or three more years of full-time effort and then we start to reduce our commitment over there, something like that as a deal, tell the Iraqis that's what we're doing.  Tell them you'd better get your act together. 

KORNBLUT:  Well, that's essentially what the Democrats are proposing, except a moved up time table.  Instead of two or three years, it would be a year, a year and a half.  I think you're right.  What we're see now is a whole sort of scale of time tables in which we begin to get out. 

MATTHEWS:  Let me ask you, Joe, what's your estimate of the statement by General Petraeus yesterday, some people call it honesty, candor, whatever you call it, when he was asked is this war and this blood and treasure we're losing over in Iraq making us safer here at home.  He said I don't know.  I can't imagine Ike having said that at D-Day. 

KLEIN:  Well, you know what?  It was the truth.  It's what he really believed.  Then a really funny thing happened.  I was in the room.  They went into recess and clearly someone from the White House called him up and said, are you kidding me!  And when he came back, he was asked another question by a senator, and he went back to that statement.  And he corrected himself, and said he hadn't thought it through or whatever.  I think both Crocker and—

MATTHEWS:  That's sort of like Charlie McCarthyism, isn't it?  Are they using this guy as their puppet.  They said he's speaking independently, and the minute he gets off the talking points, they fix him. 

KLEIN:  I think it's too strong to call him a puppet.  I think that he really believes what he testified to. 

MATTHEWS:  You know him better. 

KLEIN:  He's trained -- 

MATTHEWS:  Interpret what he said.  Was he saying, I don't want to say that I have real doubts about this policy?  Is that what he's really saying? 

KLEIN:  Yes, I think that's part of it.  I think that he is absolutely trained to see the glass as being half full.  And what you got a lot of was half full without seeing the other side of it.  And a lot of what he said, especially when he talked about Basra, disingenuous.  But he really believes in the mission. 

MATTHEWS:  Don't you have to?  Doesn't a soldier have to believe in the mission. 

KLEIN:  How can you survive in the battlefield if you don't, even if you're leading men and not directly involved in battle. 

MATTHEWS:  I hate to see a policy maker like the president hide behind a guy who is taking orders and serving his country. 

KLEIN:  It is disgraceful. 

MATTHEWS:  These are public servants of our country.  They're patriots and we're using them as political tackling dummies. 

KLEIN:  I've got to say, this general is as good as we've got. 

MATTHEWS:  You know better.  You've been over there so many times.  Let me ask you, Joe, about the double standard.  I know you live in New York.  You have a very liberal attitude about life as a journalist.  Do you think we have a double standard in this—I know you this well.  David Vitter gets tagged by this second prostitute as having had a twice a week deal with her for 300 bucks a pop for four months.  People are still back slapping him. 

The other guy gets run out of town on a pole, Larry Craig.  Is there a double standard between gay and straight in the U.S. Senate. 

KLEIN:  Well, I think in the Republican party, there certainly is.  The Republicans have a real problem.  They still believe that homosexuality is a matter of morality and not a matter of nature.  And therefore, what Craig did or might have done or wanted to do was immoral, not just you know, a sadness. 

MATTHEWS:  Whereas Vitter was what? 

KLEIN:  Vitter was, it's what the boys do. 

KORNBLUT:  I think there's actually a big difference too, between Larry Craig having been arrested, having pleaded guilty and Vitter, who admitted that he had had marital problems months ago when the DC Madame's list came out.  But they are not addressing these questions now.  There's less sort of overtly for the Republican party—

MATTHEWS:  do you think GLAAD and the other organized gay and lesbian groups are going to say wait a minute, you're pushing one guy out the door, but you're letting the other guy stay there. 

KORNBLUT:  I don't think it's going to take those kinds of groups.  I think the bigger concern for Vitter is fellow Republicans who want to see the bleeding stop.  I mean, another sex scandal within weeks in the Republican party?  It's terrible news for them. 

MATTHEWS:  By the way, they have a Democratic governor in Louisiana.  That's a problem though, isn't it.  You can't have the guy quit.  Let me go to Matt.  Great piece on Rudy Giuliani the other day. 

BAI:  Thank you.  I appreciate that.

MATTHEWS:  Have you heard from him or his people yet?  Has he called you up and threatened you or anything? 

BAI:  He has personally not called me.  I have talked to some people associated with the campaign who felt it was fair.  They don't like everything in it, but they felt it was fair. 

MATTHEWS:  Why is it that Rudy—the liberals I work with, a lot of the journalists from Democratic families, have said this many times, all think Rudy's going to get down eventually because he's pro-choice, pro-gay rights in conservative party, and yet, it never seems to happen.  He's still riding high in the polls. 

BAI:  He's still riding high and there's still, as you know, an awful long way to go.  I do believe --  it's like I said in the piece, I think the war and terrorism becomes a social issue for a lot of social conservatives.  They may come off of that eventually.  They may revert back to traditional issues, but I think right now, that's playing very well. 

MATTHEWS:  Were you impressed that 92 percent of the people, almost everybody, thinks he was totally within his rights to celebrate 9/11, and be a main celebrant of it, that he owns that horror?  He was there. 

BAI:  I think he earn that in the public mind.  I think they associate him with September 11th.  That is the whole of his image? 

MATTHEWS:  Joe, will he hold up?  Will Rudy hang in there as the leader on the Republican side for months to come? 

KLEIN:  First of all, I'm just shocked.  Matt's piece may be the first piece that Rudy didn't find totally objectionable.  I've written favorable fawning pieces about Rudy Giuliani, because he was a great mayor of New York.  And he called my editor to complain about them.  So, I mean—

MATTHEWS:  Anne Kornblut, have you ever been called by Rudy and yelled at by Sonny or any of his other friends. 

KORNBLUT:  When I worked at the “New York Daily News,” we heard from him quite a bit. 

MATTHEWS:  Did he ever throw a bouquet at you. 

KORNBLUT:  Not at me personally, no. 

MATTHEWS:  Let me go back to this.  I want to now talk about the president tomorrow night, gentlemen and lady.  I want to start with you, Matt.  The president of the United States will get prime time tomorrow.  He'll get what we call in our business of television a roadblock.  In other words, it will be very hard—you have to turn the dial three or four times to get away from him.  He'll be on for 20 minutes.  How can he convince the American people that a war that's been so bloody, so frustrating, so unending and open-ended, is a good thing for the country? 

BAI:  Well, it's interesting.  I don't know that he can.  I'd have to be an image strategist to know that.  I think perhaps the case can be made.  I'm not sure he can make it any more.  I'm not sure that he hasn't used up all his credibility on the issue.  I mean the mindset here reminds me very much—I don't know if you're a poker player, Chris.  But anyone who plays poker knows that you get a card and you think, this card, my hand's looking a little up.  If I get one more card that looks right, you want to throw in for another hand. 

At some point, you've thrown all your money away. 

MATTHEWS:  Then he goes for an inside straight.  Let me go to Joe on the hard play.  Do you think the president can play the right card tomorrow night and say to the people something that won't just get automatically in the headlines, but will grab people emotionally and say damn it, let's give it another year? 

KLEIN:  Matt's right.  That's what bad poker players do, by the way. 

BAI:  I'm one of them, Joe. 

KLEIN:  Me too.  But no, I think that if there was a case to be made this week, it could only be made by Petraeus, because the president has absolutely no credibility on this war any more.  I think that—

MATTHEWS:  What about Crocker?  What did you make of Crocker?  I mean, they asked him in the House hearing, why don't you get these guys like Maliki together and threaten them.  If they don't get their act together, and form a country—which is what they're supposed to do—we're leaving.  He said well, if you do that, they might go to the Iranians.  Well, then let them go. 

KLEIN:  Crocker was a mystery to me.  I mean, really a mystery to me because he claims that things that he said to me, he didn't recall saying when Carl Levin questioned him.  Crocker really seem to be on a very tight leash to me, and really emphasizing the Iranian business in ways that he normally would not.  There was an Ahmadinejad quote the other day about Iran filling the vacuum in Iraq if we left.  And Crocker knows that Ahmadinejad has absolutely nothing to do with Iranian foreign policy. 

He's a figure head president who has to do with domestic stuff.  So—but he hyped it.  And so, I really was quite disappointed in what Crocker had to say. 

MATTHEWS:  Anne, is it a big news event tomorrow night?  Would you put the president on television if you were running one of these networks like NBC?  Do you think he has something new to say. 

KORNBLUT:  When the president asks for time, it's hard for any of the networks to turn him down especially in prime time. 

MATTHEWS:  Maybe they should learn.

KORNBLUT:  Rarely do they or we, for that matter.  I'm sure we're going to be covering it pretty significantly.  That said—

MATTHEWS:  I know I'll read the “Washington Post,” president calls for 30,000 -- but you won't be as bad as the “Washington Times,” which completely laid down for him today.  Anyway, thank you, Anne Kornblut.  Thank you, Matt Bai, great piece.  I'm going to finish it.  Joe Klein. 

Tonight, before we leave, happy Rosh Hashanah to everybody out there. 

By the way, we're having what my friend Larry King calls Rosh Hashanah weather here in Washington, sunny but a little nip in the air.  So shanah tovah.  HARDBALL returns tomorrow at 5:00 and 7:00 Eastern.  See you then. 

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