updated 10/1/2007 11:58:45 AM ET 2007-10-01T15:58:45

Guests: Jon Soltz, Buzz Patterson, Mario Cuomo, Peter Berg, Craig Crawford, Michelle Bernard

CHRIS MATTHEWS, HOST:  Are we being driven to war with Iran?  And is Hillary Clinton going along with it?  Also tonight, let‘s talk about why the Saudis hate us.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  Why didn‘t the Democratic candidates challenge the president on Iran at the debate at Dartmouth?  That‘s the big question of the hour.  And tonight, one of the stalwarts of the party, the Democratic Party, Mario Cuomo, plays HARDBALL with the 2008 line-up.

In our second story tonight: Why do Saudis hate Americans?  A new movie inspired by true events tackles that issue.  Meet the director of “The Kingdom,” a film 10 years in the making.

Plus, radio talk show host Rush Limbaugh says veterans who support withdrawing the troops are “phony soldiers.”  Those were his words.  In our HARDBALL debate tonight, we‘ll talk to two soldiers about whether a patriotic veteran could criticize this war.

But we kick off tonight with HARDBALL‘s David Shuster.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  In the wake of the Democratic-led U.S. Senate voting this week to give President Bush more authority to punish Iran, former New York governor Mario Cuomo, one of the most respected Democrats in the country, is now calling the action chilling and foolish.

Quote, “Shouldn‘t the Democratic leadership in Congress assert their strength by announcing immediately there will be no new war without Congress‘s solemn deliberation and declaration of war?”

On Wednesday, the Senate passed a resolution by hawkish independent Joe Lieberman and Republican Jon Kyl.  Their measure said it should be the policy of the United States to combat, contain and roll back the violent activities and influence of Iran inside Iraq.  The vote was 76 to 22.

Democratic presidential frontrunner Hillary Clinton voted aye.  Democrats Joe Biden and Chris Dodd voted nay.  Illinois Democrat Barack Obama and Republican senator John McCain were absent.

Anti-war Democrats fear the measure will give the Bush administration pretext to gin up a war.

MIKE GRAVEL (D-AK), FORMER SENATOR, PRESIDENTIAL CANDIDATE:  I want to congratulate Biden for voting against it, Dodd for voting against it.  And I‘m ashamed of you, Hillary, for voting for it.  You‘re not going to get another shot at this.

SHUSTER:  John Edwards, who is no longer in the Senate, also nailed Clinton‘s vote.

JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE:  I have no intention of giving George Bush the authority to take the first step on a road to war with Iran.

SHUSTER:  Last night, Barack Obama came to Hillary Clinton‘s home turf and threw some veiled jabs.  But in front of 15,000 people in New York, Obama didn‘t talk about Iran.  Instead, he spoke in broad terms about the issue of experience.

Sen. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  There are those who say what you should be looking for is somebody who knows how to play the game (INAUDIBLE).  But the problem is, is the game is rigged.

SHUSTER:  Meanwhile, in Baltimore Thursday night, Republican presidential candidates held a debate at historically black Morgan State University.  Rudy Giuliani, Fred Thompson, John McCain and Mitt Romney, the four top Republicans, did not attend.  The candidates who did attend had harsh words about the no-shows.

MIKE HUCKABEE (R-AR), FORMER GOV., PRESIDENTIAL CANDIDATE:  I‘m embarrassed for our party and I‘m embarrassed for those who did not come.

(END VIDEOTAPE)

SHUSTER:  But now it‘s a quiet vote in Congress that is dominating the political landscape, at least in terms of foreign policy.  Most Americans believe it was a huge mistake for Congress to give the Bush administration authority to take action against Iraq, and yet Congress has given authority to the Bush White House again, this time for Iran—Chris.

MATTHEWS:  Thank you, David Shuster.

Mario Cuomo was a three-term governor of New York.  Governor Cuomo, thank you for joining us.  What concerns you about the Democratic field right now and what they‘re doing in terms of Iran?

MARIO CUOMO (D), FORMER NEW YORK GOVERNOR:  Well, it‘s what they‘re not doing that concerns me most.  What they‘re not doing is learning from the terrible mistake we made in allowing the president to seize the war power and take us to war all alone.  It was his war.  And we sent a few resolutions which were ambiguous and which didn‘t mean a whole lot, tagging along with him.

The Founding Fathers addressed the question of who and how you declare war and said it was the most important question that would face the country.  And they were given two choices: give it to the president or give it to the Congress.  Washington, who led the convention, said under no circumstances should a president have the power to declare war by himself, basically.  And so it should go to the Congress.  There was only one vote for the president.

And in the Constitution today is something we ignored in Iraq.  It says, Article 1, Section 8, the power to declare war belongs to the Congress.  The difference is—and this is what was said at the convention and it‘s common sense—you give it to one man, he may be mad.  He may be an egotist.  He may be misguided.  Or he might be stupid.  And instead, you should give it to the Congress.  They represent everybody.  The whole country will have an opportunity town participate in the deliberations.  That‘s what should have happened.

And what should happen now is that the Democrats, who have the

responsibility because they lead the Congress—we have the majority vote

they should say this: There may come a time to go to war, but before you go to war, you should come back, read that Constitution, come to the Congress and let us all deliberate so all the people with congressmen can speak to their congressmen and can discuss this issue.  Let‘s not do what we did before and wind up apologizing for our resolutions and saying we‘re sorry.

Now, remember, the Founding Fathers gave the power to declare war to the Congress.  That power cannot be delegated to the president.  You can‘t adopt a resolution and say, Well, the Founding Fathers wanted us to do it, but it‘s too heavy a lift for us, so we empower you, Mr. President, if you feel like doing it, to do it.

And my goodness, the president you‘re talking about is the president who started a war with a mistaken context.  Assuming he was telling the truth, and I will, he was wrong about the reason for it.  He was wrong about complicity.  He was wrong about how many troops we needed.  He was wrong about how we would be greeted when we got there.  He was wrong about the civil war, wrong about how much it would cost, wrong about how long it would last, and now you‘re saying maybe he can start another war.  It‘s a mistake.

This is an opportunity for the Democrats to show real leadership, and the presidential candidates should lead the way.  And if they don‘t, then the question is going to be, Well, when it comes to improvident war making, why are you any better than Bush?

MATTHEWS:  OK, let me ask you about—Governor, about this resolution this week.  It declares the Iraqi—or rather, the Iranian Revolutionary Guard to be a terrorist organization.  What do you think—what use could the president make of that resolution by the Senate and now by the House, as well?

CUOMO:  Well, if you judge by history, he would say something like this, and this kind of lawyer‘s trick—but he has some lawyers around him.  He would say, Well, they‘re terrorists—they‘re a terrorist group and they‘re associated with other terrorists, al Qaeda.  And therefore, they are complicit with al Qaeda, and the authority you gave me to fight al Qaeda and to fight in Iraq, that covers these people.  So you‘ve already given me permission for this.  I don‘t need to go to the Congress.  I‘m going to do it on my own.

That would be a terribly stupid and unconstitutional thing to do, and that should be dealt with now.  Look, the practical part of it is, even if you don‘t agree with the constitutional argument—and I don‘t know how you can disagree, it‘s clear in the Constitution, all you have to do is read it.  But even if you disagreed that he had to go back to it as a matter of constitutional law, as a matter of practicality, he should.

MATTHEWS:  Right.

CUOMO:  At the very least, that language gives you an option.  And the Democrats should say, Come back to the Congress, let‘s do it more thoroughly.  Maybe the Congress will say there should be a war.  I doubt it, but maybe they will.  But it should be Congress and not the president.

MATTHEWS:  You know, Governor, you are so far ahead—you are so far

ahead of some of the other Democrats because I hear people on this program

I say to them, Do you believe the president of the United States, this president or any other, has to come to Congress before he launches a military action against Iran?  And they won‘t say he has to.  They won‘t even insist on their constitutional role anymore.

CUOMO:  You know why, Chris?  Here‘s what‘s happened.  And it‘s

unfortunate, but this is what‘s happened.  Ever since the Second World War,

I‘m not going to say gutless, but timid Congress people and eager

presidents went to war and committed acts of war, ignoring the

Constitution.  And they did it in Vietnam.  And they did it in Korea.  And

the Congress never spoke out against it.  As a matter of fact, the Congress

to use the word again—was complicit with the president.  In effect, they tried to hand their power over to the president.

And the Supreme Court never intervened because they have a very cute doctrine called “political question.”  If it‘s an argument between you politicians, we‘re going to get out of the way.  Incidentally, they didn‘t do that in Bush against Gore, the most political of all questions.

MATTHEWS:  Sure.

CUOMO:  They grabbed that opportunity.  So there‘s something hypocritical about that power.  But that‘s what happened.  And so you got in the habit of ignoring the Constitution.  And let me say this about that.  You cannot amend the Constitution with persistent evasion.  You can‘t say, Well, we didn‘t do it right for a long time.  Therefore, it doesn‘t count anymore.  The Constitution is unchanged.  Article one, section 8, if you want to declare war—and that‘s what dropping the bomb on the head of anybody is, it‘s war—you have to come to the Congress.  And Nancy Pelosi, Harry Reid, the leaders of the Democrats—wonderful opportunity to step forward and say, That‘s right, and if there‘s going to be a war here, you‘re going to have to come back to us to talk about it.

MATTHEWS:  Let me ask you about the last war, the war, unfortunately, that continues and may continue for another decade, the way people are talking right now.  And I‘m including the Democrats.  I‘m not just pointing to Hillary Clinton here because I have other people I know in Congress who voted to authorize the war back in 2002.  But when you challenge them at a party or somewhere, you say, Why did you guys vote for this war, they all say the same thing—Oh, we didn‘t vote to authorize the war.  We just gave the president the authority to make a decision, and we thought he was going to continue with inspections.  What‘s your response?

CUOMO:  Here‘s my response.  You‘re right, you didn‘t authorize him.  You‘re right, you did try to delegate him, to take your power that the Founding Fathers said only you should have, and to deliver it to the president if he wished to use it.  You can‘t do that.  The power was given to you.  It‘s not delegable.  You can‘t turn around and give it to the secretary of state or give it even to the president.

They had a chance to make the president the person who declares war, and they said no, the Founding Fathers, and they said it very, very decisively.  And my goodness, have you ever had a better set of facts to instruct you in how right they were?  Look at what happened when you did leave it to this president and left it just to him and his advisers to decide on war.  The whole United States of America now, you let them vote on whether or not they want a president all by himself, especially this president, to declare war again.  God forbid!

MATTHEWS:  Thank you, Governor.  You‘re the first person since this war began to remind us of the Constitution.  Thank you for coming on, Governor Mario Cuomo of New York.

In the new movie “The Kingdom,” an FBI team trying to find a terrorist is stonewalled by the Saudi Arabians.  Coming up, we‘re going to talk to the man who made that movie, Peter Berg, and why is America—he‘s going to answer this question because it‘s all through the movie—why do these Saudi Arabians hate us so much—hate us?

And later: Is it unpatriotic for a veteran of the Iraq war to criticize the war?  Rush Limbaugh thinks it is.  That‘s the HARDBALL debate tonight.

You‘re watching it, HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  In a new movie that‘s just coming out, “The Kingdom,” FBI agents head to Saudi Arabia on a secret mission to investigate a terrorist bombing of a U.S. compound there.  The movie opens with a narration of the American history with Saudi Arabia over the years and explains why the Saudis don‘t like us at all.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Iraq‘s battle-trained army swept across Kuwait‘s borders at first light.

UNIDENTIFIED MALE:  As a Saudi national, Osama bin Laden offered his services to the royals.

UNIDENTIFIED MALE:  He told them he could bring his armies to Afghanistan to repel Iraqi invaders from Kuwait.

UNIDENTIFIED MALE:  But the Saudis had a better offer, a half million troops from the United States.  His offer rejected, Osama took to the streets and mosques to denounce the U.S., the royal family and their unholy alliance.

UNIDENTIFIED FEMALE:  Osama bin Laden this week again lashed out at the Saudi royal family.

UNIDENTIFIED MALE:  We were tracking bin Laden since the early ‘90s. 

We stripped him of his citizenship.

UNIDENTIFIED MALE:  When it became clear that the 15 out of the 19 were Saudis, that was a disaster, a total disaster, because bin Laden at that moment had made, in the minds of Americans, Saudi Arabia (INAUDIBLE)

UNIDENTIFIED MALE:  We are with you. (INAUDIBLE) cowardly attack.

UNIDENTIFIED MALE:  How dare they say they are Muslim?

UNIDENTIFIED MALE:  This is a nation where tradition and modernity are in violent collision.

UNIDENTIFIED MALE:  Al Qaeda forces have been behind the bombing.  A team of agents prepares to investigate the attack in Saudi Arabia.

UNIDENTIFIED FEMALE:  The latest terrorist attacks showcase the great division between the pro-U.S. monarchy and the extremist Wahhabi militants within the kingdom.

(END VIDEO CLIP)

MATTHEWS:  Peter Berg directed the film, and he joins us now from Los Angeles.  Peter, thank you for joining us.  If you had an election in Saudi Arabia today—I know that‘s unimaginable, but if you had a real election, who would win, George Bush or bin Laden?

PETER BERG, DIRECTOR, “THE KINGDOM”:  Wow.  That would probably come down to hanging chads in Florida.  It would be close.

MATTHEWS:  Really?

BERG:  You know, I think that certainly within members of the royal family and certainly the folks who are controlling the petroleum in that country, George Bush is quite popular.  And there‘s clearly a large, more fundamental group in Saudi Arabia who are not as enamored with us or the royal family who would probably cast their vote for Osama.

MATTHEWS:  I hear it‘s worse than that from a U.S. diplomat I met a few weeks ago.  He said—he‘s very familiar with the situation over there, as familiar as you can get.  And he said once you get below the crust of the royal family and its retainers and those who benefit from the spoils of the oil industry, everybody hates us in Saudi Arabia.  Is that too rough, or is that about right?

BERG:  I think that‘s probably a bit too rough.  I was, as far as I know, the first American filmmaker to ever be granted a visa to go to Saudi Arabia as a filmmaker.  Prince Turkei al Faisal, who replaced Bandar as the ambassador to the U.S., gave me one after a bunch of meetings.  And I did go there.  I went there for three weeks.

And I have to say that, you know, I was very impressed with the intense amount of security everywhere in Saudi Arabia.  Every school, every government building, every hospital, every hotel is surrounded by very heavy security, tanks and soldiers.  So it‘s quite clear that there is a very real threat to the Saudis, to the establishment, to the royal family from within.

That being said, I have to admit that I was treated with nothing other than kindness and respect by every—every Arab that I met while I was in Saudi Arabia.  I kept waiting for the other shoe to drop.  It never did.  So it‘s an interesting place right now, and it clearly is a country that is potentially on the brink of some sort of disaster from within.

MATTHEWS:  They like to call us, our enemies over there, the crusaders.  And they lob us in with what they call the Zionists, the Israelis.  They say the Zionist crusaders are the enemy.  If it weren‘t for the state of Israel, would they still hate us?  I mean that as an open question.  I think they would, but...

(CROSSTALK)

BERG:  I have to say that—you know, not only did we spend time in

Saudi Arabia, we filmed in the United Arab Emirates, in Dubai, and Dubai‘s

sister city, Abu Dhabi.  And I was impressed and surprised by the level of

rage—and this isn‘t sort of unarticulated, uneducated rage.  These are -

the level of intelligent, well-articulated rage expressed to me at our country‘s policies towards Israel—we don‘t quite get it, living in the U.S.  I‘m not an—I‘m not an expert to the point where I can truly understand the complexity of the emotion, but it‘s very real.  I think that my experience was that what‘s driving the anti-American anger is our relationship with Israel.  And by the way, not—not anti-Jewish feeling.  It‘s quite clearly anti-Israeli.

MATTHEWS:  Do they want to get rid of Israel, or do they just want Israel to be nicer to the—or pull back from the Palestinian war?  Or is it just the existence they—they want to erase? 

BERG:  I—you know, I can‘t answer that. 

But I just will say, I have never met that level of intense, consistent rage. 

MATTHEWS:  Yes. 

BERG:  So, I‘m not—I‘m not quite sure what the end goal is.  But...

MATTHEWS:  Has our invasion and occupation of Iraq helped our relations with that part of the world or hurt them? 

BERG:  As far as I can tell, it‘s helped them. 

I mean, I have met very few Saudis that have anything nice to say about any Iraqis.  I haven‘t met anyone—there‘s so much competition in the Middle East.

MATTHEWS:  Yes. 

BERG:  The Kuwaitis don‘t like the Iraqis.  The Saudis don‘t like the Iraqis.  The UAE doesn‘t like anyone.  Everyone hates Iran. 

(CROSSTALK)

BERG:  It was hard to find any sort of common alliance. 

MATTHEWS:  So, even though we‘re in there pushing the Shia majority to win, because we obviously support democracy—that means the most—the group with the most people wins all the time—we have supported the Shia overthrow of the Sunnis, basically, since 2003 -- the Shias are not too popular among the royal family in Saudi. 

I just wonder why they would be happy to have a Shia-ruled Iraq next to a Shia-ruled Iran now threatening them. 

BERG:  I—I don‘t know.  I mean, I really don‘t know. 

I mean, you know, people—people ask me, coming back from the Middle East, what—you know, what I observed and what—what my takeaway is, in terms of what—what can help.  And—and the only thing that I consistently go back to is, by far, the—the country in the Middle East that seems to be functioning as peacefully as—as possible is the UAE. 

It‘s cities like Dubai and Abu Dhabi, where capitalism has taken ahold, and there‘s such investment and growth going on in those cities, that they police themselves.  And I had dinner with Sheikh Mohammed of—of Dubai.  And I asked him, you know, why there had been no attacks in his country, a country which has alcohol, which has a—women are allowed to wear bikinis, and there‘s a much more Western lifestyle. 

And he just, quite simply, pointed to the Burj Hotel and said, we won‘t let it happen. 

And I think that—that the bottom line, for me, is, unless some sort of capitalistic growth occurs, you‘re going to—you‘re going to you‘re going to continue to see this chaos. 

MATTHEWS:  OK.  Well, that movie—everybody is talking about this movie.  And I‘m not just selling it, because I hear it‘s really good.  “The Kingdom,” it‘s opening tonight around the country. 

Peter Berg, you put the movie together.  I hear it‘s got a lot of education in it for what we‘re facing over there in Saudi Arabia and throughout the Arab world.  And thank you for your being so candid tonight.

Up next:  Is Barack Obama finally taking shots at Hillary Clinton? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to part...

(LAUGHTER)

MATTHEWS:  HARDBALL. 

Time for some more politics. 

Last night, the leading quartet of Republican candidates—call them the four tops, if you want to—dissed an African-American debate in Baltimore.  They shouldn‘t have been surprised to hear cries of complaint from the host.  As the song goes, it‘s my party; I will cry if I want to. 

Fred Thompson needs to brush up on what‘s happening in the country he lives in.  A few weeks ago, he pled ignorant about the Terri Schiavo case, even though it was the most high-profile social debate of the last several years. 

Well, this week, Thompson didn‘t know that a federal judge had just blocked the use of lethal injections in his home state of Tennessee, even though he won election to the U.S. Senate as a major supporter of capital punishment.  What newspapers does this guy read? 

Anyway, two new interesting campaigns out right now, one from the Edwards camp, the other from the McCain camp. 

Take a look at this Edwards ads—ad—which I think hints at Elizabeth Edwards‘ health. 

(BEGIN VIDEO CLIP, EDWARDS CAMPAIGN AD)

ELIZABETH EDWARDS, WIFE OF SENATOR JOHN EDWARDS:  Sometimes, we put things off, don‘t we?  We think we have all the time in the world. 

Well, we don‘t.  And when you say you‘re going to volunteer at a food bank, but maybe I will do that next week, or my elderly neighbor could use some help, and I will do that tomorrow, sometimes, we can‘t wait.  Don‘t wait. 

You can join us in this campaign.  We have a lot of time to make the difference.  The truth is, we don‘t have all the time in the world. 

(END VIDEO CLIP)

MATTHEWS:  Great person. 

Now, here‘s an ad, by the way, from the John McCain camp which uses footage from his days as a POW in Vietnam.  McCain didn‘t emphasize his biography, especially his war exploits, back in the 2000 race, but he is certainly making up for lost time. 

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

UNIDENTIFIED MALE:  How old are you?

LIEUTENANT COMMANDER JOHN MCCAIN, U.S. NAVY:  Thirty-one.

UNIDENTIFIED MALE:  What is your rank in the Army? 

MCCAIN:  Lieutenant commander in the Navy.  Hit by either missile or anti-aircraft fire.  I‘m not sure which.  And I ejected and broke my leg and both arms. 

UNIDENTIFIED MALE:  And your officer number? 

MCCAIN:  Six-two-four-seven-eight-seven. 

NARRATOR:  One man sacrificed for his country.  One man opposed a flawed strategy in Iraq.  One man had the courage to call for change.  One man didn‘t play politics with the truth.  One man stands up to the special interests. 

MCCAIN:  Stand up.  We‘re Americans.  We‘re Americans.  And we will never surrender.  They will. 

(CHEERING AND APPLAUSE) 

NARRATOR:  One man does what‘s right, not what‘s easy, John McCain. 

MCCAIN:  I‘m John McCain, and I approve this message. 

(END VIDEO CLIP)

MATTHEWS:  Boy, that‘s a strong ad, isn‘t it?  I think anybody who sees that is going to be impressed by it.  The question is, does he have the money to put that on the air across the country? 

He‘s still, by the way—I‘m talking about Barack Obama—the only man that can draw a big crowd in this country.  Yesterday, Barack Obama drew 15,000 people to hear him in New York‘s Washington Square. 

Here he is getting a tad bit tough with the local senator.  And you know who she is. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  There are those in this race for the presidency who are touting their experience working the system.

(CHEERING AND APPLAUSE) 

OBAMA:  The problem is, the system is not working for us. 

(CHEERING AND APPLAUSE) 

OBAMA:  There are those who say that what you should be looking for is somebody who knows how to play the game better.  But the problem is, is, the game is rigged.  And what we need is somebody that‘s going to put an end to the game-playing. 

(CHEERING AND APPLAUSE) 

OBAMA:  The times are too serious, the stakes are too high, to say, play the same political games over and over and over again. 

(END VIDEO CLIP)

MATTHEWS:  And here‘s Barack hitting Hillary Clinton for her bogus baseball fannery.

(BEGIN VIDEO CLIP)

OBAMA:  And I have to say one last thing.  You know, even your senator in New York wasn‘t clear about the Yankees. 

(LAUGHTER)

OBAMA:  I know who I‘m rooting for, except they‘re not in the pennant this year, the White Sox. 

(CHEERING AND APPLAUSE) 

OBAMA:  But I know my team. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  They‘re in the basement this year. 

Anyway, more news today about the Clintons‘ strong-arming of that magazine “Gentleman‘s Quarterly,” their killing of a Hillary story that they didn‘t like the look of. 

Here‘s what the reporter of that story has to say—quote—“‘GQ‘ told me it was a great story and a hell of a reporting job, but they didn‘t want to jeopardize a piece they were doing on Bill Clinton‘s trip to Africa.”

Apparently, the Clinton people said, if you want a seat on that plane, you would better kill this story, and the magazine did.  I don‘t know if the Clintons can keep getting away with this.  It‘s kind of rough treatment, you might even say a little fascistic treatment, of the journalistic world. 

Anyway, that‘s all the news tonight. 

And the big question is, finally, good fences, by the way, make good neighbors.  This is a hilarious story.  Out in Minnesota, at that Minneapolis Airport you‘re looking at, where all the trouble was caused by Larry Craig, the airport officials are installing new dividers between the toilet stalls that are just barely above the floor—no more anonymous liaisons between flushes.

Up next:  Is it unpatriotic for a veteran of the Iraq War to criticize the mission?  That‘s the HARDBALL debate.  There‘s a hot one.

And you‘re watching it, HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

BRIAN SHACTMAN, CNBC CORRESPONDENT:  I‘m Brian Shactman with your CNBC “Market Wrap.” 

Stocks closing lower on this final trading day of the third quarter, the Dow Jones industrials losing about 17 points.  The S&P 500 fell about 4.5, and the Nasdaq dropping eight points. 

Consumer spending rose by a better-than-expected six-tenths-of-a-percent in August.  That‘s the best showing in four months. 

Also, other good news: personal income up as well.  Meantime, a key inflation gauge showed price pressures, outside of food and energy, eased further last month.  As for construction spending, also posting a surprising gain last month., that as commercial building offset a plunge in new home construction. 

Oil prices easing today, as well, crude falling $1.22 in New York, closing at $81.66 a barrel. 

And to the auto industry.  UAW, the local leaders approved the new four-year contract that, of course, ended a strike against General Motors.  Union rank-and-file will vote on the pact next week. 

And that is it from CNBC, America‘s business channel—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Rush Limbaugh used his nationally syndicated radio show the other day to criticize veterans who speak out against the Iraq war.  Rush was criticizing the anti-war movement generally, and then had this exchange with a caller. 

(BEGIN AUDIO CLIP, “THE RUSH LIMBAUGH SHOW”) 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  It‘s not possible intellectually to follow these people. 

CALLER:  No, it‘s not.

And what is really funny is, they never talk to real soldiers.  They like to pull these soldiers that come up out of the blue and spout to the media.

LIMBAUGH:  The phony soldiers. 

(END AUDIO CLIP)

MATTHEWS:  Well, is it unpatriotic for Iraq veterans to come back and criticize the war they fought in?  That‘s the HARDBALL debate tonight.

Jon Soltz an Iraq war veteran, now an anti-war activist with VoteVets.org.  And Buzz Patterson is the vice chairman of the MoveOn.org—or, actually, the Move America Forward group...

(LAUGHTER)

MATTHEWS:  ... big mistake there—and a former military aide to President Clinton. 

(LAUGHTER)

MATTHEWS:  Let me go right now to Jon. 

Obviously, you believe you‘re within your rights, as a citizen—in fact, you‘re being patriotic, I assume, in your thinking—to oppose this war. 

JON SOLTZ, CO-FOUNDER, VOTEVETS.ORG:  Yes.

Look, opposing this war right now in Iraq is central to defeating bin Laden and al Qaeda.  I mean, basically, George Bush has let bin Laden and al Qaeda get away.  And even Mr. Zawahri wants what a lot of the far-right want in this country, which is America‘s military bogged down in Iraq. 

And we have a duty and an obligation, when people like us soldiers and Marines are killing and being killed in Iraq, when the battle basically or the president‘s policy is nothing more than his political strategy, so he doesn‘t have to lose.  And that‘s not good enough, when we have enemies out there like al Qaeda and bin Laden that we have to deal with.

And we have an obligation, when we‘re done with our military service and we get off active duty, to speak up.  And, for Rush to say that, I mean, hey, I just want to know—invite me on the show, brother, because I want to have a one-on-one discussion about how our service is—is phony, when this is a guy that, you know, didn‘t go to Vietnam because he had a bump on his butt. 

So, I mean, this guy is a draft dodger.  We need to have this debate, so let‘s have it. 

MATTHEWS:  Well, let me talk about the general question, not my colleague Rush Limbaugh. 

Phony soldiers, however, is a word, a phrase worthy of discussion. 

Buzz, do you buy that, that a person who comes back and opposes the war is a phony? 

BUZZ PATTERSON, VICE CHAIRMAN, MOVE AMERICA FORWARD:  Well, in some cases, yes, Chris. 

I will tell you, first off, for Jon‘s edification, we are in fact fighting al Qaeda in Iraq.  So, I think he‘s got, again—he‘s missed that point on several occasions so far.  We are fighting al Qaeda in Iraq. 

Secondly, I think what Jon is missing also—I‘m sure Jon is a great guy, but what Jon is missing also is that, not only is it unpatriotic, as a soldier, to voice your opinion while still in uniform; it‘s also illegal. 

MATTHEWS:  Well, what about veterans?

(CROSSTALK)

MATTHEWS:  What about veterans, to come back and say they thought the war was wrong, having fought in it?

PATTERSON:  It depends, Chris, on whether they‘re still in the service or not.  I‘m retired, for example, so I can say things that I believe.

Jon is still in the Reserves.  And, for example, you cannot be an active-duty member or be in reserve in training or doing your drills in uniform, and be contemptuous of the U.S. government or the president.  That‘s a violation of Article 88 of the UCMJ. 

MATTHEWS:  Jon, is that true?

SOLTZ:  Yes, that‘s actually—that‘s—no, it‘s not true. 

MATTHEWS:  Are you out of order?

SOLTZ:  I have right here the—the actual memorandum from the secretary of defense, and from the 1344-10, which is very clear in its guidance. 

And, obviously, I—I don‘t speak as a member of the military whatsoever.  I speak as the chairman of VoteVets.org, as a private citizen. 

PATTERSON:  Well, if that‘s true, Jon...

(CROSSTALK)

MATTHEWS:  What‘s the operative language of that memorandum, Jon? 

SOLTZ:  The policy is that—the policy is very clear.  The policy—if you are on active duty, you cannot participate in partisan American politics.

PATTERSON:  And—or if you‘re a commissioned officer, you‘re a commissioned officer, Jon.

SOLTZ:  As it says here, if you are a member of the National Guard—if you are a member of the National Guard or Reserves, not on active duty, you are not subject to most of these restrictions. 

PATTERSON:  We can yell at each other or we can have a conversation here. 

(CROSSTALK)

SOLTZ:  It‘s very clear that, if you‘re a member of the National Guard or Reserves, much like the head of...

(CROSSTALK)

PATTERSON:  Jon, are you still in the Reserves?

(CROSSTALK)

MATTHEWS:  Buzz, wait a minute. 

SOLTZ:  Let me finish this, please. 

Chris, you have myself on all the time with Pete Hegseth from Vets For Freedom, correct?

Pete Hegseth, if you go on the Vets For Freedom Web site, is a member of the Army National Guard with a picture of himself in the military. 

(CROSSTALK)

SOLTZ:  So, if—when he comes onto the show, like I do, we come on as private citizens. 

(CROSSTALK)

MATTHEWS:  Buzz, just a second.

SOLTZ:  So, if you are not on active duty, much like Congressman Buyer or Lindsey Graham, then you can participate in politics, as long as you don‘t, in any formal capacity, represent the military. 

PATTERSON:  That‘s right.  But you‘re—but you‘re crossing...

(CROSSTALK)

MATTHEWS:  Just a minute, Buzz.

Buzz, now explain, what regulation are you citing that says that a veteran...

PATTERSON:  Well...

MATTHEWS:  ... who has come back is not permitted to participate in politics?  What are you citing?  Just cite something. 

PATTERSON:  Well, Jon—Jon...

MATTHEWS:  Let me know what we‘re talking about here. 

PATTERSON:  Jon‘s cherry picking 1344.  What it says is, if you are active duty, which reservists are when they do training and do their drills, they are not allowed to be contemptuous of the president. 

SOLTZ:  So when you‘re on two weeks duty—every year a reservist does two weeks of active duty.  When you are on those -- 

(CROSS TALK)

MATTHEWS:  OK, one at a time, damn it.  Jon, quiet.  This is ridiculous.  Show some courtesy, you gentlemen.  First of all, it‘s your turn.  Take 30 seconds and say something clearly, and then you respond to it, Jon.  Stop this. 

PATTERSON:  What Jon is doing here is he‘s playing both sides of the coin.  He wants to be considered a commissioned officer when he shouts down a young sergeant at the convention in Chicago.  He wants to be a captain then.  But he doesn‘t want to be held accountable for it. 

MATTHEWS:  Let‘s talk about the rules.  Can you cite rules, sir, that say you cannot participate in politics once you return from the military service? 

PATTERSON:  Article 88 of the UCMJ, Uniform Code of Military Justice, regulation 370-1 in the DOD 1344, which Jon has pointed to—but he‘s also cherry picking the facts.  What he‘s missing is the fact that he is still in the reserves.  He does get a DOD pay check.  He does drills, in which he‘s active duty when he does those drills.  And he‘s using his uniform as an anti-government, anti-President Bush message.  That is across the line. 

MATTHEWS:  Let‘s go back to Jon.  It seems to me we have members of Congress, who vote on the floor, express political positions all the time, who are on reserves.  Barry Goldwater was a reserve general for years and he was an outspoken conservative in this country.  I‘ve never heard that being in the reserves stops you from being a politician.  Clarify. 

SOLTZ:  Yes, sir.  That‘s exactly true.  What he‘s saying is technically—part of that is accurate.  I‘ll explain.  When you‘re on active duty for those two weeks—when you come active duty for two weeks, then you don‘t do any politics for those two weeks, like when Lindsay Graham goes to Iraq and does his duty, he doesn‘t do politics. 

But once you come back off of active duty status and you become a

reserve status, you‘re not getting a full DOD pay check.  So what you do is

you don‘t do politics during that time period.  It says right here in this

from this memorandum from the undersecretary of defense from 2004 that reserve component members not on active duty may make speeches at partisan political events, but may not do so in their uniform, and must comply with general rules. 

So it‘s very clear that members of Congresses and activists on the both sides of the debate, on the right and the left, that are reservists are important to this debate. 

MATTHEWS:  Buzz, your view. 

PATTERSON:  Important point here, again, Jon is technically correct in that aspect.  But does he pull off his website when he does his drill every year?  Does he pull his picture of himself in his uniform off the website. 

SOLTZ:  I don‘t know—There‘s no picture on my website of me in uniform. 

PATTERSON:  You pulled it off recently. 

SOLTZ:  There‘s no picture of me in my uniform on the website. 

PATTERSON:  When did you pull it off? 

SOLTZ:  There‘s no pictures of me on my website.  No pictures on the website. 

MATTHEWS:  That might be a technical point.  But we agree you can‘t be marching around on reserve duty—when you‘ve been activated for the summer for your responsibility, you can‘t be pamphleteering among your fellow soldiers.  We agree on that point. 

Anyway, up next, the HARDBALL round table and this big week in the ‘08 race.  Lots of debates this week.  Some attended, some not.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for our Friday round table.  It‘s always tricky on Friday around her.  Chuck Todd is NBC‘s chief political director, in fact, only political director.  Michelle Bernard is president and CEO of the Independent Women‘s Forum.  Are you on the right or left. 

MICHELLE BERNARD, INDEPENDENT WOMEN‘S FORUM:  I‘m in the center. 

MATTHEWS:  And, of course, Craig Crawford is chuckling away up there.  Happy Friday, a columnist for the “Congressional Quarterly.”  And he knows quite a bit about politics. 

Let me start with you, Michelle.  Are we finding a situation where the Democrats and Republicans will fight a little bit about Iraq, but everybody agrees we‘ve got to stand up to Ahmadinejad, so everybody wants to look tough. 

BERNARD:  Everybody wants to look tough.  Ahmadinejad is the easiest person to pick on right now, because there‘s nobody to pick on in Iraq.  The whole country is a complete mess. 

MATTHEWS:  Yes, I think that—Have you noticed that, Craig, the Democrats all sort of elbow each other aside to show who‘s going to be tougher with this guy from Tehran? 

CRAIG CRAWFORD, “CONGRESSIONAL QUARTERLY”:  Just like they were with Saddam Hussein.  I mean, here we go all over again. 

MATTHEWS:  What, are they always hawks in the first round and then they think later?  Is that the way the Democrats do business? 

CRAWFORD:  The Democrats have been insecure about this stuff ever since Vietnam.  They are constantly hit as the wimps on national security, still stung by that.  Here we will go again, for real. 

MATTHEWS:  So we have a hawk party and a pretend hawk party.  Or do we have two hawk parties. 

CHUCK TODD, MSNBC CHIEF POLITICAL DIRECTOR:  Well -- 

MATTHEWS:  Do we get a choice anymore?  Is that un-American to have a choice? 

TODD:  I‘ll say this: I do think this is one of those—if the Republican party loses the presidency in 2008, it will be the first election they‘ve ever lost on foreign policy.  That will be—it was just like what happened to the Democrats in ‘68.  It was their first election in a generation that they lost on foreign policy.  When you lose on foreign policy like that, it could actually shift the paradigm on what we assume on national security, assuming if a Democratic administration actually fixes the Iraq problem. 

If they don‘t fix it, then the short term trust on the Democrats will be just that short. 

MATTHEWS:  Michelle—

CRAWFORD:  Hang on a second.  It‘s just such an irony that in the week the Democrats pretty much officially gave up the fight on the Iraq war. 

MATTHEWS:  Thank you. 

CRAWFORD:  They started the saber rattling on Iran. 

MATTHEWS:  What is it now, 2013 -- these are biblical numbers. 

TODD:  Ten years. 

MATTHEWS:  We‘re going to be in a ten year war.  Now they‘re arguing should it be 2023.  I think they weren‘t willing to say at any point we‘re going to come home, would they?  I really think they don‘t want to put any date? 

CRAWFORD:  They‘re changing the subject on Capitol Hill.  They‘re giving up on the Iraq war.  They‘re talking about children‘s health.  These are all important programs.  But they‘re trying to get base voters excited about some other liberal domestic causes in order to distract. 

MATTHEWS:  Is there a complaint counter in politics?  Guys, can you go back to the complaint counter, like you could in the old days of wanamakers (ph)?  You bought the dress, you didn‘t like it, the toy didn‘t work.  They‘ve elected the Democrats to end the war.  Can‘t they take them back to the return counter and say we bought this guy—gave Pelosi the speakership to end the war.  We gave Harry Reid the leadership to end the war.  They‘re not even doing it. 

BERNARD:  That‘s what they‘re going to do in November of 2008.  People sort of jokingly say -- 

MATTHEWS:  Which way they going to go? 

BERNARD:  They‘re not going to take both parties back.  It really depends.  You‘ve got a whole group of Republicans that say we‘ve got two options.  You either accept the fact that Iran is going to have nukes or you go to war with Iran.  What I‘m thinking is going to happen is there‘s a small wing that‘s asking for a third option.  Let‘s engage in dialogue with Iran.  It might happen.  If it does happen, I think the votes will go to the Republicans and not Democrats. 

MATTHEWS:  This problem of nuclear proliferation began in 1945, when we first used the weapons against Japan.  Nobody took it seriously.  There should have been a world agreement on this, including Israel and everybody else, and Pakistan and India and now we decide there‘s one country we don‘t want to get the weapons.  We have good reason not to have them.  But all of a sudden, we‘re doing this ad hoc-ism.  It has the sound of war drums, instead of having an international agreement on whether we even need weapons. 

Maybe we should get rid of our nuclear weapons.  That‘s what Reagan wanted to do.  Reagan said let‘s get rid of all of them. 

CRAWFORD:  This resolution—the sense of the Senate resolution they passed on Iran, I can see this White House saying that‘s authorization to do anything they want. 

BERNARD:  I don‘t think that‘s going to happen.  For all of his faults, I don‘t think George Bush wants to go to war with Iran. 

MATTHEWS:  It declares them a terrorist organization.  And if you look at the other language, the president‘s got all kinds of language saying he can go to war with anybody who‘s a terrorist with global reach.  He can say this language says they are a terrorist group.  I can hit them. 

BERNARD:  They are terrorists.  But I don‘t think George Bush is going to go to war with Iran.  For all of his faults, there‘s too much at stake. 

MATTHEWS:  I have a memory, it‘s called the Iraqi Liberation Act of 1998.  That was a precursor to going after Saddam Hussein.  Everybody signed on to this thing that seemed meaningless, this little resolution, non-binding.  And then it‘s quoted over and over again by the people supporting the war. 

But you signed onto this back in 1998.  You agreed for regime change.  You did it.  All of a sudden, we‘re backing up the policy.  These resolutions mean something. 

BERNARD:  They do. 

MATTHEWS:  They‘re not just paper.  The fact that Joe Lieberman is pushing it, whose a big hawk, and Kyl‘s a big hawk—they‘re not pushing these resolutions for nothing.  They‘re pushing it for—

CRAWFORD:  The Revolutionary Guard is part of a government.  That‘s what was so unprecedented.  This was unprecedented.  They declared a terrorists group that is part of an existing government.  That is almost a declaration of war. 

MATTHEWS:  Are we stumbling into war, Craig, with Iran? 

CRAWFORD:  That‘s exactly what it looked like.  With such big numbers for this resolution as well, I mean.  I just can‘t believe that so many Democrats were—and also that at the debate the other night, that the Democratic candidates weren‘t all over this. 

TODD:  It was interesting that it was just Gravel and then I think—and Edwards who jumped on it last night.  I saw Jim Webb is upset about it and he jumped on it and he criticized Democrats for supporting this, saying it, in the way you put it.  So it will be interesting. 

She has to be.  If she‘s going to face Giuliani and if she‘s on the wrong side of this issue, it could cost her swing votes in Florida, swing votes in New Jersey.  This is about Jewish voters. 

MATTHEWS:  Do you want to have a dime‘s worth of difference between these candidates?  Or do you want them to be the same?

TODD:  On this issue, I think she made a general election decision. 

She doesn‘t want to have it. 

MATTHEWS:  I just want to know whether it‘s posturing or reality. 

What do you think it is?

BERNARD:  It‘s a little bit of both. 

(CROSS TALK)

MATTHEWS:  I wrote a book about the ‘60 election and Kennedy seemed to be posturing as tough as Nixon, and then we went into Cuba.  We went into Vietnam.  He ended up doing what he promised to do. 

We‘ll be right back with the round table.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table, NBC‘s Chuck Todd, our political director here, Michelle Bernard of the Independent Women‘s Forum, which she says is a centrist organization—we‘ll check out her voting record—and the “Congressional Quarterly‘s” Craig. 

Let me ask you about this fact that the Republicans—I‘m calling them the four tops—the four top Republicans candidates last night—let me ask you, Michelle—skipped the Morgan State debate. 

BERNARD:  I was there.  Let me tell you. 

MATTHEWS:  What were the atmospherics like? 

BERNARD:  It was amazing.  I was so absolutely glad I was there.  It was very dramatic to see the empty podiums where they should have been. 

MATTHEWS:  I think it‘s podia. 

BERNARD:  Podia.  It was interesting to see the podia, as you say.  The crowd was dynamic.  Here‘s what shocked me.  I had no idea so many African-Americans were libertarians.  People were in love with Ron Paul.  I mean, it was absolutely amazing, kids with the t-shirt.

MATTHEWS:  He‘s anti-war too. 

BERNARD:  He‘s anti-war.  He‘s anti-the prohibition on drugs.  And he‘s entertaining.  Huckabee did very well.  There was—no one has reported about the fact at least visually, 30 percent, 40 percent of the people there were white.  It was not just the African-American debate.  And the candidates were excellent. 

MATTHEWS:  Who did you like, can you say?  Did you like Huckabee? 

People tell me he was pretty good.

BERNARD:  I liked all of them.  I thought Huckabee was outstanding.  I thought Ron Paul was good and Tancredo, he was really good. 

MATTHEWS:  Huh?  What did he talk about?  He‘s talking about illegal immigration, right? 

BERNARD:  He talked about immigration, but he put things in a way where you would think the traditional Democratic voting base that are African-Americans would absolutely oppose him. 

MATTHEWS:  This is what we want to do.  We have got to do this, Chuck.  I have said take the second-tier candidates, so-called, and get them on the road debating each other.  It‘s like middle weights put on a better fight than heavy weights. 

TODD:  That‘s right. 

MATTHEWS:  I think this is great.  It‘s an irony that happened because of the no-shows. 

BERNARD:  Tancredo, at one point—

(CROSS TALK) 

MATTHEWS:  You‘re right, Craig, they get so cautious and careful and they move around the ring like Sumi (ph) wrestlers.  I‘m mixing my sports. 

BERNARD:  This is the first time we got an opportunity to really start seeing some personality. 

MATTHEWS:  Would you end up voting for Huckabee? 

BERNARD:  Yes, I could.  I could see myself voting for a couple of them.  I could see myself voting for Huckabee.  Huckabee got 48 percent of the black vote in Arkansas as a Republican and I did not know that.  I learned something more.  Yes, 48 percent of the black vote. 

TODD:  Could be the one time he wasn‘t really opposed. 

BERNARD:  No!

MATTHEWS:  You‘re spoiling an interesting story here.  Michelle, thank you very much.  Craig, do you think this is going to hurt the party with the majority, the white voters, to be seen as having a problem with black voters? 

CRAWFORD:  That would be the only concern, I would imagine.  This party does not show much concern for—

MATTHEWS:  No. 

(CROSS TALK)

MATTHEWS:  We got to go.  Chuck Todd, Michelle Bernard—I‘ve got to go—Craig Crawford, it‘s great.  Thank you.  It‘s time for “TUCKER.”

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

END   

Copy: Content and programming copyright 2007 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2007 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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