updated 10/9/2007 1:07:46 PM ET 2007-10-09T17:07:46

Guests: Robert Reich, Perry Bacon, Holly Bailey, Jill Zuckman, Saul Anuzis

CHRIS MATTHEWS, HOST:  Republicans in meet in Motown.  Where did our love go?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  We‘re out on the campaign trail, broadcasting from Dearborn, Michigan, where tomorrow night I will co-moderate the Republican debate with CNBC‘s Maria Bartiromo.

Our big story tonight: Fred Thompson will make his debate debut tomorrow, and all eyes and ears will be focused on him.  There‘s a lot of buzz over a new Iowa poll putting Thompson up there in second place, right behind Romney, with Mike Huckabee placing third, narrowly edging out national frontrunner Rudy Giuliani.  And for first time, Democratic frontrunner Hillary Clinton scored the top spot in Iowa, followed by John Edwards and Barack Obama.  More on 2008 politics and Tuesday‘s big Republican debate in just a moment.

Our second story tonight will focus on the economy and what issues are most important to working Americans out there, especially in this part of the country, which has been so hard hit by major losses in the manufacturing industry.  And is free trade hurting America?  That‘s our HARDBALL debate, with MSNBC‘s own Pat Buchanan and former Clinton labor secretary Robert Reich.

We begin tonight with HARDBALL‘s David Shuster and this report on Fred Thompson‘s debate debut.


DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  As the Republican presidential field heads to Michigan and the preparations ratchet up in Dearborn, all eyes are turning to debate newcomer Fred Thompson.


I‘m running for president of the United States.

JAY LENO, HOST, “TONIGHT” SHOW:  All right!  There you have it!

SHUSTER:  It‘s been a month since Thompson entered the race.  Since then, the former senator and star of the TV show “Law & Order” has been caught unprepared on issues like Social Security, Terri Schiavo, and drilling for oil in Florida‘s Everglades.  His campaign events and speeches have been called uninspiring.

THOMPSON:  Moral issues are important.

SHUSTER:  And this weekend, Thompson‘s alleged laziness was lampooned by “Saturday Night Live.”

DARRELL HAMMOND, “SATURDAY NIGHT LIVE”:  How badly do I want to be your president?  On a scale of one to ten, I‘m about a six.

SHUSTER:  But despite it all, in Iowa, where the January caucuses will provide the first major test of the 2008 battle, the latest GOP poll shows Thompson in second place, trailing frontrunner Mitt Romney.  Mike Huckabee is in third, with Rudy Giuliani in fourth.

WHIT AYRES, INDEPENDENT REPUBLICAN POLLSTER:  There‘s an insider‘s frontrunner.  That‘s Mitt Romney.  There‘s a national frontrunner.  That‘s Rudy Giuliani.  And there‘s a giant wild card.  That‘s Fred Thompson.

SHUSTER:  Many social conservatives have been disappointed in Thompson, and that‘s helping Huckabee, who lacks name recognition but has been making an impact in speeches and debates.

MIKE HUCAKBEE ®, FORMER ARKANSAS GOV., PRESIDENTIAL CANDIDATE:  If someone is looking for a president who‘s going to have a mean spirit toward other human beings, I‘m not their guy.

SHUSTER:  Rudy Giuliani and Mitt Romney head into this debate following a string of tough attacks on each other by name.  This weekend in New Hampshire, Romney hammered Giuliani‘s budget policies.

MITT ROMNEY (R-MA), PRESIDENTIAL CANDIDATE:  Mayor Giuliani went all the way to the Supreme Court to eliminate the line-item veto.  Well, that‘s a place where he and I disagree.  That‘s the last thing I‘d have done.

SHUSTER:  Giuliani has been slamming Romney‘s record on taxes while boasting about his own.

RUDOLPH GIULIANI ®, FMR NYC MAYOR, PRESIDENTIAL CANDIDATE:  I cut the income tax in New York by 24 percent.

SHUSTER:  For Arizona senator John McCain, the debate offers another opportunity to try and recapture the old magic and show his strong will, as he did in the last debate when he jumped on Romney.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  Governor, the surge is working.  Sir, it is working.


MCCAIN:  It is working.  No, not apparently.  It‘s working.

SHUSTER:  Meanwhile, on the Democratic side, the campaign rhetoric is getting more heated, as well.  This weekend, John Edwards pounded Hillary Clinton, saying a recent vote to call Iran‘s army a terrorist organization could lead to war.

JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE:  If six months down the road, we‘re at war, Bush starts a war in Iran, is it going to be once again, If only I‘d known then what I know now?

SHUSTER:  Then on “Meet the Press,” Edwards hammered Clinton‘s national electability.

EDWARDS:  Democratic voters have a very clear choice between Senator Clinton, with both all the good and bad that comes with her, and John Edwards, who has actually won in a red state and who can compete every single place in America.

SHUSTER:  Clinton, for her part, is ignoring the attacks.  The latest poll of Iowa caucus goers shows her ahead of both Edwards and Barack Obama.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Let‘s start right here in Iowa and go all the way to the White House together!  Thank you, and God bless you!

SHUSTER:  But it‘s the Republican field that is about to take center stage.  Rudy Giuliani continues to face questions over his complicated personal life, moderate social views and past skirmishes with the gun lobby.

GIULIANI:  It really is absolutely astounding that the NRA continues to have influence in areas in which they make no sense at all.

SHUSTER:  Mitt Romney has a history of flip-flops on social issues, and some Republican caucus goers are concerned about his religion.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  There are some conservative Christians who may not under any circumstances vote for a Mormon.

SHUSTER (on camera):  As for Fred Thompson, his laid-back approach to this campaign has left the Republican race as wide open as it was when Thompson first jumped in, and that means even more is riding on Tuesday night‘s Republican debate.

I‘m David Shuster for HARDBALL in Washington.


MATTHEWS:  Thank you, David.

Chuck Todd is the political director for NBC News, Jill Zuckman is with “The Chicago Tribune” and Jim Cramer is the host of CNBC‘s “Mad Money.”  Jim, you‘re the maddest guy here, so you start here.  Has Fred Thompson got the juice to even put on a show here tomorrow night?

JIM CRAMER, HOST, CNBC “MAD MONEY”:  On, no, not at all.  Look, it‘s great to be—to play someone on TV that‘s got a lot of energy, but I think that when you get lampooned by “Saturday Night Live,” it‘s already too late.  You can‘t reverse that judgment.  We‘ve seen that over and over again.  That icon that is “Saturday Night Live” has basically said this guy‘s a yawner.  I don‘t see how he can change that.

MATTHEWS:  So he can‘t beat the cartoon now, you‘re saying?

CRAMER:  No, he can‘t.

MATTHEWS:  Darrell Hammond has that much clout that he imitates the guy, he creates him there in sort of a slow-mo machine, and that‘s the end of the guy?

CRAMER:  Yes!  Darrell Hammond is that powerful!  Look, you can laugh at him.  If I were Fred Thompson, I would do what Dick Cheney did.  The first thing Dick Cheney did when he was lampooned was to call Darrell Hammond, said, I want you down here for dinner with the wife.  I want to see that in person.  Now, that would be something that Fred could do.  That got people to realize that he had a sense of humor, at least.  Fred ought to call Hammond right now and say, Listen, get down to the debate.

MATTHEWS:  You know, that‘s what Arnold Schwarzenegger told me to do right after that debate with Zell Miller.  He said, That guy ought to come and have lunch with you to show that he‘s a normal guy and not that crazy man out there on television.


MATTHEWS:  ... dismiss this guy.

CRAMER:  You got to grin!

MATTHEWS:  I know.  I know, grin.

CRAMER:  See, Thompson—Thompson doesn‘t know how to grin.

MATTHEWS:  I don‘t know whether they grin in Tennessee.  What do you think?

JILL ZUCKMAN, “CHICAGO TRIBUNE”:  Well, I kind of agree with...

MATTHEWS:  Is this guy—do you buy the fact that you can lampoon a guy on Saturday night television, where the average age of the viewer is about 28, at the oldest, and that really kills you?

ZUCKMAN:  Well, who‘s watching these debates?  Are you getting 20-year-olds?

MATTHEWS:  (INAUDIBLE) watch the “SNL” crowd.

CRAMER:  I think more people are watching “Saturday Night Live.”  But what I think would be really interesting is if Fred Thompson comes to this debate and everybody ignores him, they don‘t try to attack him.  They go after each other.  And Giuliani and Romney...

MATTHEWS:  He‘s 6-foot-8 or something!  How are they...


MATTHEWS:  He‘s going to be right down in the middle of it. 

(INAUDIBLE) right in the middle down there, he‘s going to be there!

ZUCKMAN:  Well, he hasn‘t made—he hasn‘t made much of a splash so far, since he got in.  So what if he showed up at this debate and didn‘t make much of anything, either?

MATTHEWS:  Well, how‘d he get that young, good-looking wife?


MATTHEWS:  (INAUDIBLE) make a splash with somebody!  He has...


MATTHEWS:  Let‘s get in the real world here.  You guys are so tough!

CHUCK TODD, NBC POLITICAL DIRECTOR:  No, I‘ll say this.  Here‘s the good thing that “SNL” did...


TODD:  ... for Thompson is that the expectation bar is below the floor for him.  I mean, if he just shows up and doesn‘t drool, we‘re going to say, Well, you know, that‘s a better performance than I thought.

MATTHEWS:  You really think we‘re going to do that?  That‘ll be the day!

TODD:  No, but I think...

MATTHEWS:  You think standards are going to drop because the PR has dropped?

TODD:  Look, I think—this happens every time.  Bush did it with Gore.  Remember?  Bush said, Oh, Gore‘s going to clobber me.  He‘s—you know, he‘s the best debater that there‘s been in a generation.  And Bush won...


TODD:  ... won the spin war.  So I think Thompson is in a...


TODD:  It could be worse.


MATTHEWS:  Look at the numbers going up.  Let‘s look at the numbers.


MATTHEWS:  Here‘s the guy who‘s—can we look at facts instead of show business?  The guy‘s number two in the national polling right now.  He‘s now number two in Iowa, the first big test, having entered the race about three minutes ago, having done it in slow-mo, and look at how far he‘s gone.  If he shows any juice at all, he could sprint across the finish line.  I mean, look how far he‘s going with no gas in the tank.  What happens when he does something, Jim Cramer?

CRAMER:  Look...

MATTHEWS:  I mean, look at the guy!

CRAMER:  He‘s got those numbers...

MATTHEWS:  Look how far—look at the numbers here!  He‘s already ahead of Giuliani, and Giuliani‘s been around the block a hundred times!

CRAMER:  He‘s just a “Law & Order” marathon (ph) guy.  That‘s why he does well.  I‘m telling you, you can put up anybody on TV and they‘re going to get those kind of numbers initially.  And then once people start hearing him, once people realize he‘s not as exciting as Arthur (ph), once people realize that that‘s a TV personality, we are going to go for somebody else!

MATTHEWS:  That is the experience I have when I meet most actors, I must tell you.  Where‘s the script?  You know (INAUDIBLE)  I like you in the movies, what happened here?

ZUCKMAN:  Well, Chris, I also think those numbers are kind of meaningless.  Fred Thompson does not have a lot going on in Iowa.

MATTHEWS:  You guys...


ZUCKMAN:  He doesn‘t have organization.

TODD:  That‘s what makes those numbers so impressive.  Now, I‘ll say this.  If you‘re Romney, you‘re ecstatic that Thompson is in second for what you said.

ZUCKMAN:  Because he...


TODD:  He has no organization.

MATTHEWS:  Let‘s go...

TODD:  But now is he going to get sucked into playing in Iowa?  And if you‘re Thompson...


TODD:  ... that‘s what (INAUDIBLE)

MATTHEWS:  Let‘s go to some realities here, which will probably bug the campaign of Thompson right now.  (INAUDIBLE) over a couple things.  Now, Jim—Jim Cramer, let me ask you this.  Nobody touches the third rail of Social Security and Medicare, but this guy has.  He‘s talking with limited enthusiasm about the prescription drug bill that was passed a couple years ago.  It‘s almost as if he‘d like to eliminate it.  He‘s talked about jiggering around with the cost of living adjustments to Social Security.  No one else does this sort of thing.  Can he get away with it?

CRAMER:  No.  Well, first of all, the prescription drug—that‘s just a huge win.  It‘s been great for everybody.  That‘s one of the few health care decisions that were made that  is—the Democrats love it.  The public—there‘s no reason to focus on that at all!

MATTHEWS:  Well, he‘s doing it.  He‘s questioning...


CRAMER:  ... a big mistake!

MATTHEWS:  ... unfunded.

CRAMER:  In the wrong state, too...


CRAMER:  ... he‘s doing it.  I mean, in the end...

MATTHEWS:  I agree.  That is a problem in the end.  But let me ask you this other question.  You start messing around with the COLA—I can‘t quite figure out his plan.  Something about shifting it to consumer goods.  It is with the consumer goods.  Now, I‘m not sure what his plan is, but it‘s something to do with adjusting it downward, so it doesn‘t go up enough, as it has in the past , and people gradually lose real cost of living.

ZUCKMAN:  Well, I mean, there‘s a huge problem for that because people who vote tend to be older, and they‘re concerned about that this year.

MATTHEWS:  You know what they talk about?  The COLA.

ZUCKMAN:  That‘s right.  They talk about...


MATTHEWS:  ... go down to the diner and they talk about the COLA.

ZUCKMAN:  And those are the voters you need.

TODD:  Look, I‘ll say this.  I think Thompson...

MATTHEWS:  It‘s called a raise.


MATTHEWS:  When you‘re retired.

TODD:  I think Thompson has made—if he actually ever got this nomination, these—this Social Security thing, it would just be hung around his neck in Florida.  And let‘s just look at the electoral reality.  And that‘s what he‘s facing.  You talk about Iowa with all these old voters.  He‘s got Florida.  He‘s going to have the same problem when he faces Giuliani down there, if he gets—in the primary.  And then if he got the nomination—he‘s caught—look, he might get kudos from columnists for his talking about this...


TODD:  ... and you know, Bob Kerrey—we can talk about a whole bunch of...


TODD:  We can talk about a whole bunch of presidential candidates who never...

MATTHEWS:  I remember Paul Tsongas...

TODD:  ... who never got elected president...

MATTHEWS:  Every time you touch that baby, you got...

TODD:  ... who talk about this stuff.

MATTHEWS:  Let me ask you about Hillary Clinton, who is smart enough not to touch anything.  She won‘t even touch taxes for Social Security, benefits for Social Security, retirement age...

TODD:  She wouldn‘t take—she wouldn‘t answer the question.


MATTHEWS:  ... keep her fingers off it because her husband nailed

Tsongas with that stuff.  Why is Hillary sweeping ahead?  What do you sense

are you going go with cosmetics on this one, too, the fact that she‘s looking good, she‘s looking calm?  Why do you think she‘s zooming ahead in the polls out in Iowa, Jim Cramer?

CRAMER:  Well, first, I have to tell you that she may not want to touch Social Security, but she actually has the big issue in America right now and Thompson (INAUDIBLE) around his COLA problem is housing‘s coming down.  Real estate‘s going down.  Everybody owns a house in this country.  The only person who‘s addressed this coherently and actually very intelligently is Clinton.  Everyone else is just acting as if it‘s not an issue.  Real estate is the number one issue in this country for economics right now, Chris.  Only she has a plan.

MATTHEWS:  Well, let me ask you about that real estate.  You mean—my assessment from an anecdotal basis, a lot of people are watching the drop in their real estate values, but they‘re hanging onto the real estate because they don‘t want to let—they have a ratchet effect.  They‘re holding onto the price they heard about two or three years ago.  Is that what‘s going on?

CRAMER:  No.  Seven million people I think are in danger of losing their homes.  There are 14 million people...

MATTHEWS:  Oh, that end of it.  OK.

CRAMER:  Seven million people, and she‘s the only one who is coming up with concrete—President Bush.  He says that the—forget—don‘t worry about those people.  These are squatters.  These are potential squatters, and only Hillary Clinton has even thought about the issue.

MATTHEWS:  Well, where‘s the money coming from to bail them out?

CRAMER:  Well, I mean, she wants to have Fannie Mae be able be a little more creative, Freddie Mac.  She also wants to go after the predatory lenders.  I think that she would have a program that would allow some of these people to be able to refinance.  But you know, the idea that this has to happen is just oblivious to the Republicans.  I think they‘re just saying, Let them eat house.  You can‘t eat house!


ZUCKMAN:  You know, this is exactly Hillary Clinton‘s MO.  She‘s got a program or a proposal for everything when it comes to people who are at the lower rung of society...

MATTHEWS:  People with needs.

ZUCKMAN:  ... who need help.  People who need help.  And this is exactly where she is strongest, where she comes in and helps.  And she‘s got such a policy apparatus that she‘s able to churn these things out on a daily basis.

MATTHEWS:  Let me take a look at—here‘s John Edwards questioning Hillary‘s electability on “Meet the Press.”  He‘s coming at her.


EDWARDS:  Democratic voters have a very clear choice between Senator Clinton, with both all the good and bad that comes with her, and John Edwards, who has actually won in a red state and who can compete every single place in America.  And we cannot lose this election.


MATTHEWS:  You know, he‘s willing to go after her in a way Obama isn‘t.  If you could put those two guys together, she‘d be in trouble, it seems.

TODD:  Isn‘t it amazing, by the way, when a politician‘s back is against the wall and he‘s got nothing left to lose, then suddenly, they‘re willing to go after the frontrunner and they‘re willing to—immunity, you do see a little bit of that in Edwards, where you—you know, he‘s running out of money.  This is it.

MATTHEWS:  That‘s what happened to John Kerry last time, and he won.

TODD:  Well, that‘s right.  And maybe this is the way to win.  This is the only way Edwards is going to do it.  His answer on electability yesterday was the best answer I‘ve ad heard...

MATTHEWS:  That thing we just...

TODD:  That—that—and he kept going.  He said something about, he said, You know what?  This isn‘t about Clinton or me.  This is about—we‘re desperate...

MATTHEWS:  Joe Trippi strikes again!

TODD:  ... to elect a Democratic president.  A very strong message.


TODD:  Obama will copy it.  You watch, Obama will steal it.

MATTHEWS:  (INAUDIBLE) live here.  Let‘s watch this in the stretch here.  Chuck Todd, thank you for that assessment.  Jill Zuckman, as always.  Jim Cramer, you make me seem tame, friend.

Anyway, tomorrow‘s debate among the Republicans airs on CNBC at 4:00 PM Eastern time tomorrow afternoon, and then we‘re going to watch it in primetime at 9:00 o‘clock Eastern.

Coming up: How will Fred Thompson do in his debate debut tomorrow?

You‘re watching HARDBALL from Dearborn, Michigan.


MATTHEWS:  Welcome back to HARDBALL.  Tomorrow night on CNBC and MSNBC, I‘ll be co-moderating a Republican debate here in Dearborn, Michigan.  It will be Fred Thompson‘s first appearance as a presidential candidate.  So how will he stack up against the other experienced Republicans?

Here for a preview of what to expect is the chairman of the Michigan Republican Party, Saul Anuzis.  Saul, let  me ask you about this.  Give me a color picture of the st ate of Michigan.  What‘s it feel like?  What‘s it look like up here right now?

SAUL ANUZIS, MICHIGAN REPUBLICAN PARTY CHAIR:  Well, you know, look, we‘re an industrial state that‘s obviously is the home of the domestic auto industry.  We‘re the home of the Reagan Democrat, probably has more self-identified independents than any other state in the country.  People here tend to vote for the person and the policy, not necessarily the party.  And you know, I think if you take a look at where the Republicans ever won here under Ronald Reagan and other times, it was basically because of the God, guns and guts type of Republicans that came over or the independents that came over and voted our way.

MATTHEWS:  I‘ve been saying a long time anecdotally, because I love to do these things, that anybody with a gun and a boat, Hillary hasn‘t got their vote.  And I‘m trying to be like Jesse Jackson here with little rhyming here.  But that guy, that independent working guy, he‘s hard to get for a liberal Democrat, isn‘t he.

ANUZIS:  I think he is, especially here in Michigan.  And that‘s what makes it competitive.  If you take a look at the last two presidential elections, I mean, within the last 48 hours, all the campaigns were back here in Michigan, the Democrats shoring up their base and the Republicans playing here because the independent voter really does determine which way the race goes.  And whether...

MATTHEWS:  Right.  What about Rudy out here?

ANUZIS:  Rudy is doing very well.

MATTHEWS:  Rudy‘s got a gritty image.

ANUZIS:  Yes.  He‘s doing great out here. 

I mean, I think, if you take a look at him right now, he‘s leading in the polls in Michigan.  He—he draws huge crowds when he shows up.  And he‘s very well-received. 

MATTHEWS:  OK.  Let‘s put a picture up here, a gritty, big-city guy, with a long ethnic name from New York, tough on crime, great during 9/11, Giuliani, right?

ANUZIS:  Right. 

MATTHEWS:  And then this very Waspy guy, this Mormon guy, Romney, with the famous name out here.

ANUZIS:  Right. 

MATTHEWS:  Who wins? 

ANUZIS:  I think it‘s a toss-up.  I really do.

MATTHEWS:  Really?

ANUZIS:  I think it‘s going to be very competitive here in Michigan. 

You have to remember, I mean, first of all, this is the home for Mitt Romney.  He was born and raised here.

MATTHEWS:  Right. 

ANUZIS:  Anybody over 50 years old remembers his father. 

MATTHEWS:  And his mother was pretty popular. 

ANUZIS:  His mother was popular as well. 

MATTHEWS:  What was her name? 

ANUZIS:  Lenore. 

MATTHEWS:  Right.  Lenore, yes.

ANUZIS:  And, so, you know, you have got a very competitive state in that regard.  And, also, remember, McCain beat Bush here.  I mean, this is a very independent state. 

MATTHEWS:  I remember that.  I thought a lot of that was the Catholics voting for the mick. 

ANUZIS:  Well, I think it was more the Democrats voting to embarrass Bush and Governor... 


MATTHEWS:  Oh, really?  That became a crossover thing?

ANUZIS:  Oh, absolutely.  It was huge.


MATTHEWS:  So, let me—let‘s talk about the auto industry.  It seems to me that America was built by the big auto companies.  I don‘t want to overdo it, but what‘s good for General Motors was good for America.

ANUZIS:  That‘s right. 

MATTHEWS:  But, mostly, it was good for workers, all those men and women who had really solid jobs, working for the auto companies.  They had health insurance, because the UAW and the Reuther brothers.  Everything was working until when—when did it break?  When did that sense of solid advantage that the American auto industry held all those years die? 

ANUZIS:  Well, I‘m not sure exactly when it happened. 

But, I mean, I think a lot of things played into that.  And, obviously, the legacy costs, when we started competing with the foreign companies coming in here, when Toyota and Nissan and Honda...

MATTHEWS:  Who do you mean by legacy costs? 

ANUZIS:  Well, if you take a look at, for instance, a domestic car built by, you know, GM, Ford or Chrysler have probably $2,000 built into what we refer as legacy costs, which is health insurance and retirement for the retirees. 

MATTHEWS:  Who are already retired? 

ANUZIS:  Who are already retired. 

MATTHEWS:  So, in other words, every car is carrying this big bag called yesterday‘s employee...

ANUZIS:  Absolutely.

MATTHEWS:  ... whereas the new—if Toyota comes here and open up a plant in Kentucky, right, then they don‘t have any of those costs? 

ANUZIS:  Sure.  And they‘re also more flexible.  Our plants, they were built 20, 30, 40, 50 years ago in some cases, where Toyota and these guys are building brand-new plants, who—that‘s why CAFE is so important... 


MATTHEWS:  OK.  The thing that scares me is, we have always counted on these union contracts to provide for a person‘s retirement and their health care in retirement.  What happens when Chrysler sells their company to a Cerberus, to some kind of equity firm that doesn‘t have that paternal deal with people, that doesn‘t have that years and years of connection with families, and just says, the heck with you guys?

ANUZIS:  Well, I‘m not sure they are ever going to do that. 

I mean, look, I think the reality...


MATTHEWS:  You don‘t think they‘re going to sell to these companies?

ANUZIS:  Well, I think they‘re selling them, but I don‘t think anybody walks away from them. 

I think the strength of the auto industry, strength of the domestic auto industry, is the family.  These are family-based businesses. 


MATTHEWS:  So, you‘re confident that these corporations will stick to

and even if they‘re owned by new people, that they will stick to their commitments? 

ANUZIS:  I think so, because I think that‘s the strength of the companies. 

You know, my family is a General Motors family.  My father spent 32 years on the line at Fisher Body.

MATTHEWS:  It still works that way.

ANUZIS:  Yes.  And I think...


MATTHEWS:  Now, when you go to a buy, you guy a General Motors car? 

ANUZIS:  I normally do, yes, General Motors, Ford.  I happen to have a Chrysler.

MATTHEWS:  What do you think when you see a guy driving a Benz around here or a Toyota?  Does it bother people or not?


ANUZIS:  It bothers some.  It bothers some.  It doesn‘t bother me, because I think that‘s the market.

MATTHEWS:  Should we guys tomorrow night what kind of car you got? 


ANUZIS:  That would be interesting.  That would be interesting, wouldn‘t it? 


MATTHEWS:  I don‘t know.  That could be tricky. 

ANUZIS:  It could be tricky.

But, you know, you get the Democrats coming in complaining about CAFE standards, and they‘re all the ones driving the SUV, the gas guzzlers.


ANUZIS:  So, there‘s a bit of irony there and some hypocrisy.  But, look, the domestic auto industry built the middle class, if it didn‘t build America.  That‘s for sure.


So, the typical voter out here is a Reagan Democrat who drives an off-road vehicle.  He probably has a gun.  He thinks independently.  He—right? 

ANUZIS:  Right.  He‘s got a boat.  He‘s probably a snowmobile as well. 


ANUZIS:  And he‘s a hunter.  And he looks at the candidates and wants to see where they‘re going to take America.  They want leaders.

MATTHEWS:  My hunch was right.  Thank you very much.  Thank you very much, Saul Anuzis, who is head of the Republican Party in Michigan.

Up next, what kind of administration role might Bill Clinton have if his wife gets elected?  Plus, Fred Thompson gets the “Saturday Night Live” treatment. 

Isn‘t that great?  Look at Darrell Hammond.  He‘s done it again.  He‘s the guy that does me.  Don‘t look like me tonight.

Anyway, you‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL. 

Here‘s the political news starting this week.

Senator Larry Craig is joining the Idaho Hall of Fame.  The hall will honor his long career of public service and welcome him into its ranks at a ceremony this coming Saturday.  The group picked him back in March, before the recent unpleasantness.  It‘s not clear if he will get an asterisk. 

Over in Hillary land, they like to talk about how Bill Clinton, the former president, will travel the world, rebuilding relationships, spreading goodwill.  The term roving ambassador does seem to fit. 

Well, the editors of the London-based “Financial Times” have an interesting take on that prospective Bill Clinton assignment—quote—this is from “The London Times”—“Financial Times”—“Apart from fact that the law forbids her to give him the job, one could not imagine a better-qualified secretary of state: two for one, and how.  With the magnetic Mr Clinton as ambassador at large, the role of secretary of state would be diminished.  One wonders who would want the job on those terms.  If Mr Clinton ever became secretary of state, the role of president would be diminished in much the same way.  Spouses and ex-presidents are not well-cast as subordinates”—close quote.

Joe Biden, the chairman of the Senate Foreign Relations Committee, and Sam Brownback are serving up a first for this presidential campaign.  One is a Democrat.  One is a Republican.  But they‘re the cosponsors of that federalism plan for Iraq, you know, the one that got 75 votes in the Senate a couple weeks ago.

So, on this Friday, in Iowa, the two presidential candidates, one a Republican, one a Democrat, will hold a joint event to talk about it.  Give it to them both.  Biden and Brownback, at least we‘re getting something from all their campaigning. 

Fred Thompson has some new bold-print names working for his election.  Former Senator and Reagan chief of staff Howard Baker is his honorary chairman now.  He‘s the Tennessee titan who prodded old Fred into this race in the first place. 

Vice presidential daughter Liz Cheney is a campaign co-chair.  And guess who else?  Former Virginia Senator George Allen, the guy we not long ago thought might be winning this whole thing. 

And finally tonight, my buddy Darrell Hammond welcomed Fred Thompson to the race last Friday on “SNL” with the only form of flattery that matters, “Saturday Night” satire. 


DARRELL HAMMOND, ACTOR:  How badly do I want to be your president?  On a scale of one to 10, I‘m about a six. 


HAMMOND:  I‘m not saying I don‘t want to be your president, because I kind of do. 


HAMMOND:  A little bit. 


HAMMOND:  It‘s just, how do you came when you don‘t like hard work and people make you sick?




MATTHEWS:  He‘s unbelievable. 

We will be back with Michigan.  We‘re from Michigan for tomorrow‘s economic debate.

And up next, the HARDBALL debate tonight.  Coming up:  Has free trade been good for America?  Robert Reich says yes, Pat Buchanan a resounding no.  Wait until we hear the debate.   

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


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

Stocks closed mixed in relatively light trading this Columbus Day.  The Dow Jones industrials lost 22 points.  The S&P 500 fell five.  But the Nasdaq gained seven points. 

After the closing bell, Yum! Brands, the parent of KFC, Taco Bell and Pizza Hut, kicked off third-quarter earnings season, reporting earnings that beat analyst estimates. 

And Google shares hit a record high, crossing the $600 mark for the first time ever.  Some analysts the Internet giant hitting $700 in the next year. 

Meantime, oil prices took a big drop, falling $2.20 in New York, closing at $79.02 a barrel.

And just two weeks after a strike against General Motors, the United Auto Workers union gave Chrysler until 11:00 a.m. Wednesday to agree on a new contract.  Talks continue. 

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


MATTHEWS:  Welcome back to HARDBALL, reporting tonight from Dearborn, Michigan, ahead of tomorrow‘s Republican debate here focusing on economic issues. 

A new poll shows that most Republican voters believe free trade now is bad for the U.S. economy, about 2-1.  And most of them would support a candidate who favored tougher regulations to limit foreign imports.  Is free trade hurting or helping America?  That‘s the HARDBALL debate right now. 

Pat Buchanan is an MSNBC political analyst.  And Robert Reich is a former labor secretary under President Clinton.  And he‘s the author, by the way, of a new book, “The Supercapitalism”—“Supercapitalism,” rather.

Bob Reich, sir, Mr. Secretary, are you still a free trader? 

ROBERT REICH, FORMER LABOR SECRETARY:  Well, I‘m still a free trader, although I will tell you, Chris, it is becoming—there are fewer and fewer of us.  It‘s a very unpopular position. 

In Michigan, you can find almost as many free traders as you can chicken hawks.  There are not many.  The trouble is that most people blame free trade and blame free trade for the failure of American middle class to expand, the decline of middle-class wages, all of the problems, the economic problems, we have.

And I expect that Pat Buchanan is going to be one of those. 


MATTHEWS:  And here he comes to prove your point. 

Pat Buchanan, respond.



MATTHEWS:  Is free trade killing America? 

BUCHANAN:  Well, let me—Bob Reich and I debated NAFTA just before it passed back in 1994. 

And we were told wonderful things would happen.  I will tell you what happened.  Since then, we have run $500 billion worth of trade deficits with Mexico, $60 billion record trade deficit last year.  Mexico exports to the United States half again as many automobiles as we export to the world. 

China is now growing at 12 percent.  We have a $233 billion trade deficit with them, fastest growth in the world.  They have been growing at 10 percent.  We grew in the first half of this year at 2 percent.  We have lost three million manufacturing jobs since George Bush took office, one in every six. 

If that is a successful trade policy, Mr. Reich or Dr. Reich, give us the statistics on failed policy. 

REICH:  Well, Pat, I love to debate you from the right.  I so rarely have the occasion to debate somebody on the right.

BUCHANAN:  You‘re not on the right. 


REICH:  But let me—let me just tell you something. 

I mean, we assumed—and you—when you and I debated NAFTA, you said that all of the manufacturing jobs were going to go to Mexico.  Actually, we were both wrong.  They went to China.  And the fact is, the American economy is much larger today than it otherwise would have been without free trade. 

The problem is that a lot of the benefits of free trade have not gone to the people who had used to be manufacturing workers.  But those manufacturing workers might have lost their jobs anyway, Pat, because, if you look in a manufacturing plant today, the most modern, up-to-date plants, and you see how much automated equipment is in there, robots, numerically controlled machine tools, there are very few workers.  The assembly line is a thing of the past in most manufacturing facilities.

BUCHANAN:  But, look...

REICH:  So, even if we didn‘t trade, technology would be taking away most of those jobs anyway. 

BUCHANAN:  But, look, automation, there‘s no doubt about it, and technology do decrease the number of jobs.  But building robots and things like that, they could be done by American workers. 

Look, let me ask you, Bob.  Look, take the automobiles.  I think Japan and Korea export three and four times as many automobiles to us as we—or 16 to 20 times as many cars to us as we do them.  Why? 

Because there‘s an unfair trade situation going on.  They impose back taxes on our cars coming in, and they rebate them on their cars going out.  It has the same impact as a tariff. 


REICH:  Pat, you‘re talking...


REICH:  Wait a minute. 


MATTHEWS:  Who makes the better car right now?  Who makes the better car, the Japanese or the Americans, Bob?


REICH:  Pat is talking about—Pat is talking about taxes and about tariffs. 

Look it, I say let‘s level the playing field in terms of let‘s make sure that the tax rates don‘t bias against the United States.  Let‘s make sure China revalues its currency, so they don‘t have a built-in bias against the United States.


BUCHANAN:  Bob Reich...

REICH:  But if you look at the—wait a minute, Pat—look at the Japanese cars made in the United States by American workers...


REICH:  ... and you will find a lot of Americans will vote for those Japanese cars made in the United States, because a lot of Americans think that they‘re better quality. 

BUCHANAN:  Yes.  And you know why?  They‘re less expensive, because they don‘t costs of health care and pensions.

And General Motors and Chrysler are dumping them.  That‘s what happens when you kill American companies in the United States.  You dump their workers off health care and pensions, so they go to the federal government and they go back to the Democratic Party. 

Look, China...


REICH:  Wait a minute.

BUCHANAN:  Look, China, you say revalue their currency.  Why should they?  They‘re beating the daylights out of us. 

REICH:  But wait a minute. 


MATTHEWS:  Pat, do you think...


MATTHEWS:  ... quality check here.  I‘m sorry.  I have to ask it.

The American consumers are pretty picky.  They pick the car they want to buy.  Of course they look at price. 

But, Pat, are you saying that we‘re making a better car and yet people are buying Toyotas? 

BUCHANAN:  No.  They...


MATTHEWS:  Why do you think people are buying Toyotas? 

BUCHANAN:  They make an excellent car, there‘s no doubt about it, in Korea.  There‘s no question about it.  They export them here. 

And, look, they don‘t carry the burdens that an American car carry.  An American car, Chris, carries the burden of Social Security taxes, federal taxes, all these other taxes in its price, and the health care and benefits of American workers. 


BUCHANAN:  You let this stuff come in, you will kill these companies, and those workers will go to Wal-Mart, and they will not be paying those same taxes.  Free trade...


REICH:  Wait a minute.

Pat, you‘re talking—we‘re not talking about trade.  You‘re talking about an unfair advantage because a lot of big American companies have health care agreements with their unions. 

BUCHANAN:  And they have high wages. 

REICH:  I would say—I don‘t know if you agree with me, Pat. 


REICH:  I think we ought to decouple health care from employment.  We ought to have a national, affordable health care system.

BUCHANAN:  Sure, and have the federal government do it.

REICH:  And we shouldn‘t—employers should not be providing health care.

BUCHANAN:  Sure.  You have a federal health...


BUCHANAN:  Look...

MATTHEWS:  Mr. Secretary, let me ask you the one question, the same question to Pat.

What car do you drive?  What do you own? 

REICH:  I have a Mini Cooper. 

BUCHANAN:  What is that? 

MATTHEWS:  And that‘s a BMW, right? 


REICH:  A Mini Cooper is a little tiny car that only I can fit in. 


BUCHANAN:  I have got a Navigator.

MATTHEWS:  No, it‘s a BMW.  It‘s a German car.      

What do you own, Pat? 

BUCHANAN:  I own a Navigator.

REICH:  No, it‘s actually made—it‘s actually made in—in London.


REICH:  And parts are—parts are made in the United States. 

BUCHANAN:  I own a Navigator and I own a Cadillac.  That‘s what I own, two American-made cars.  I went to buy a great big TV set—

MATTHEWS:  When did you switch from the old sky-blue—


REICH:  Can I ask Pat a simple question?  Pat, what‘s your definition of American-made.  You have a lot of Toyotas and a lot of Nissans made in the United States today.  You have a lot of American cars that have foreign parts.  What‘s made in America?

BUCHANAN:  How do you defend free trade when it killed our TV industry, took away half of our auto industry, took away half of our airline industries and Boeings planes are now made, the best parts of them, in Japan.  Is that good for America? 

REICH:  Well, I want you to define what an American product is, Pat.  You said Boeing planes are now made in Japan.  A lot of American cars by Toyota are made here in the United States.  I don‘t know what you‘re talking about in terms of what American competitiveness is. 

BUCHANAN:  What is best for the big companies is not what is best for the country. 

REICH:  I agree with you on that. 

BUCHANAN:  The two have separated and all these trade deals are enabling acts for companies to get rid of their American workers, go over to China, make their products cheap, move them back in here free, and pocket the difference.  That‘s why the—

REICH:  Wait a minute.  Pat, I will agree with you on one thing and that is that big companies and the interests of Americans are different.  But I also disagree with you on the notion that Americans are not getting good deals from around the world.  You go to Wal-Mart—how do you suppose Wal-Mart keeps prices so close?  I‘m not defending Wal-Mart.  I don‘t like Wal-Mart.

But why is Wal-Mart able to keep prices so low?  Because Wal-Mart gets a lot of stuff from overseas or Wal-Mart‘s suppliers get a lot of stuff from overseas.

BUCHANAN:  I‘ll tell you why, because China has a devalued currency. 

But let me tell you this: why is the American dollar sinking like a stone?  Because we have 850 billion dollar merchandise trade deficit, year in, year out, year in, year out.  No country has ever survived that for a long period of time.  You wait—


BUCHANAN:  Those prices at Wal-Mart are going up and you know it. 

REICH:  Pat, you think our living standard would be higher if we stopped trading and we put a wall around the United States and said we won‘t trade with anybody?  What kind of economic illogic are you basing that on? 

BUCHANAN:  I‘m telling you, you can do this stuff for a couple of decades, but that Chinese goods—when you revalue the Chinese currency, which way do you think the price of those is going?  You know it‘s going up in Wal-Mart.  It‘s going up in all of those things. 

We are destroying our currency instead of putting tariffs on things. 

REICH:  Pat, your arguments are going at cross purposes. 

BUCHANAN:  What do you mean? 

MATTHEWS:  Let me jump in here, Pat.  What about the argument that even though the price of oil has gone up, and our dependence on oil from the Middle East and elsewhere has driven up the price of oil, and the amount of money we have to spend on it, that we‘re getting such a break on goods from the Far East that it‘s offsetting that. 

BUCHANAN:  Chris, there‘s no doubt about it.  When you start—the initial benefits of free trade come immediately in the first couple of decades.  You get rid of your American factories, your jobs, your technology, ship them over.  They make the stuff much more cheaply.  It comes in here.  We buy it cheaply. 

You keep doing it and doing it.  We have run five trillion in trade deficits, Chris, in the last 15 years, cumulative.  The dollar is sinking.  You can do this for a while.  But after a while, those folks—you know what they are going to say, we don‘t anymore more dollars. 

REICH:  Pat, the dollar is sinking because Americans and particularly wealthy Americans are living beyond our means, because we have a federal deficit, because corporations are deep in debt, because we live in debt. 

We have a credit card society and any IOU—and that‘s what the dollar is

that‘s laden with that much debt is going to sink. 

MATTHEWS:  My judgment here is that Pat Buchanan is absolutely sure of himself, and Robert Reich is using intellectual arguments.  But he‘s not so sure of himself on this issue anymore. 

REICH:  I‘m absolutely sure of myself.  I‘ll tell you, what I‘m also sure of though is that most Americans are shifting toward the Pat Buchanan view of trade.  I think that‘s dangerous, frankly. 

BUCHANAN:  It‘s not my eloquence.  It‘s because they see the consequences in town after town after town and community.  They see the jobs going.  They read the papers.  It wasn‘t because I was up here, me and Ross Perot making the case, like the “Wall Street Journal” said.  They have seen the consequences, Bob.  They don‘t want the Democratic party—they don‘t want—

MATTHEWS:  We have to go.  Gentlemen this is the debate—

REICH:  I was about to give you the reason.  This is very important. 

MATTHEWS:  OK, quick, Bob.  I‘m sorry.  Go ahead. 

REICH:  I think Americans are insecure and a lot of that insecurity comes from the fact that it‘s not just—it‘s not just globalization.  It‘s also technology.  It‘s the way corporations are treating a lot of workers.  Instead of treating them as assets, they‘re treating them as disposable units.  That‘s not trade.  That‘s not the problem of trade.  That‘s the problem of how Wall Street is now operating. 

BUCHANAN:  And their government doesn‘t care about them.  It cares about the Fortune 500. 

MATTHEWS:  This is the best debate we‘ve had so far.  But it has to end for tonight, at least.  This will continue, the great American debate right now, trade.  Pat Buchanan and Robert Reich.  Bob‘s new book is called “Super Capitalism.”   Up next, we‘ll preview tomorrow‘s Republican debate, and Fred Thompson‘s big debut.  It‘s the first time he‘ll be in the mix.  And there we are.  That‘s where we‘ll be tomorrow afternoon on cNBC and tomorrow night in prime time, right behind me, on MSNBC. 

We‘re going to see the Republicans with Fred Thompson aboard. 


MATTHEWS:  Welcome back to HARDBALL.  Now it‘s time for the HARDBALL round table.  John Harwood is cNBC‘s chief Washington correspondent.  Holly Bailey covers politics for “Newsweek.”  And Perry Bacon covers the campaign for the “Washington Post.”  let me go to John.  Let‘s take look, first of all, all of you, at this new Hillary Clinton thing.  According to the latest “Des Moines Register” poll. 

Let‘s look at Thompson first.  Republican voters in Iowa; Romney is in the lead, where he has been for a while.  But look at this, Thompson has moved up into second, above Huckabee and above Giuliani.  What‘s up, John Harwood?  What‘s going on with Thompson?  He seems to be doing slow-mo.  He came into the race late.  He doesn‘t say much.  What is he, Gary Cooper?  Why does he go up? 

JOHN HARWOOD, CNBC:  First of all, he‘s a new kid on the block.  We have three front runners in this race.  Giuliani is the national front-runner.  Mitt Romney is still the Iowa and New Hampshire front-runner.  And Fred Thompson is getting those very conservative Republican voters, a lot of social conservatives in Iowa.  That‘s a danger sign for Rudy Giuliani.  If Fred Thompson can consolidate that block, he can be a real threat. 

Isn‘t it striking that Mike Huckabee moved ahead in that poll of Rudy Giuliani in Iowa. 

MATTHEWS:  It would scare me if I were a Rudy Giuliani supporter, hoping to get at least a third in Iowa, and end up in first in South Carolina.  It looks like that‘s in trouble.  What do you say, Holly?  It looks like he‘s endangering Rudy first and then probably Romney when they get south. 

HOLLY BAILEY, “NEWSWEEK”:  Well, you know, one thing about this poll that I think is really interesting—I mean, frankly, Fred Thompson has been spending a lot of time in Iowa over the last month.  Rudy Giuliani has not.  Romney has been there, but not as much.  Mike Huckabee has invested a lot of time there as well.  He has a good grass roots organization, so I think that‘s showing up in the polls. 

MATTHEWS:  Let me go to Perry on the same question.  How do you explain that Thompson is doing at least well, if not great, without seemingly a whole lot of sweat? 

PERRY BACON, “THE WASHINGTON POST”:  He just got in.  He‘s a fresh face right now.  I think people are giving him a chance, and I think he had a good conservative message when he came into the race.  I think once the debates happens, we‘ll get more of a stronger sense of where he is.  Once the debates happen, once they see him on the stunt a few more times.  I think that will be key to watch as well. 

MATTHEWS:  Are you—

HARWOOD:  Definitely right about not breaking a sweat.  You saw that Darrell Hammond (ph) skit. 

MATTHEWS:  That was a wonderful skit.  Let me ask you, could it be regional and sort of tribal?  Let me go to Perry, it seems to me that southern Baptists have a strong identity, evangelicals.  They know they‘re not Mormons.  They know they‘re not three-time married guys of Italian backgrounds from New York.  They know who they are, they‘re southern Baptists.  Is it just because he‘s a southern Baptist that we‘re looking at this strength? 

BACON:  I suspect not.  I mean, he‘s actually in the first week talked of how he didn‘t attend church very often. 

MATTHEWS:  No, he attends church in Tennessee, but not in Washington. 

BACON:  He lives in Washington. 

MATTHEWS:  I love the honesty of the guy.  You have to love this guy.  He says I go to church in my hometown.  But I don‘t go—I don‘t do away games.  What do you think of this, John?  I think this is fascinating stuff. 

HARWOOD:  You know, you don‘t have to look all that hard to find churches in Mclean, Virginia.  There are a few of them out there.  I think what you have seen with Fred Thompson is that he hasn‘t shown the kind of want to that somebody like Mitt Romney has done, to reorganize his life, reorganize his approach to issues in order to prepare for a campaign.  Thompson is doing this his way.  Some people think it hasn‘t been the right way.  But he‘s going to get a shot on the stage tomorrow night. 

MATTHEWS:  You‘re an expert.  Do you need the bug to be president, what we call the bug, that obsession with getting there? 

HARWOOD:  Unless you‘re an accidental president like Gerald Ford, I think you do. 

MATTHEWS:  Do you think that‘s true, Holly, that you need the bug?  You‘ve got to be someone like Bill Clinton, who was born at 13, said I want to be JFK.  I‘m going to get there? 

BAILEY:  I think part of that is maybe why some people like Fred Thompson.  You look at him and he doesn‘t really outwardly want the job.  They‘ve tried to—his campaign has tried to play that as a positive.  But at the same time, you know, somebody has to look really excited when they‘re at these events.  Frankly that “New York Times” story last week, where it had Fred Thompson basically asking for applause, you know, that‘s not a good scene right now. 

MATTHEWS:  You know nobody naturally applauded.  He said, how about some applause.  I think the “Saturday Night Live” is maybe a ritual that you don‘t want to go through, where he basically pointed out that the guy doesn‘t really want the job.  We‘ll find out tomorrow night from the real Fred Thompson.  Let‘s come back and talk about Hillary, who‘s just leaped to the front of Iowa.  Show could run the table if she keeps it up.  It will confound some people.  She‘s definitely running an impressive campaign.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  OK, let‘s talk Hillary right now.  The “Des Moines Register” poll of Democratic voters in Iowa now shows Hillary surging with 29 percent of the vote, while Edwards and Obama are still basically tied at 23 to 22.  John Harwood, Hillary, god, if she wins in Iowa, based on her national numbers, she would be very hard to stop. 

HARWOOD:  If she wins in Iowa, the Democratic race ends that night.  That‘s why this is so important for the campaigns.  She‘s really getting the dividend from a mistake-free campaign, a successful rollout of her health care plan, and she‘s cashing in on the experience issue.  That‘s something that Obama has to address. 

MATTHEWS:  So being first lady and being a senator has now added up to experience. 

HARWOOD:  Being a senator, having Bill Clinton and that favorable brand behind her, all that‘s pretty powerful. 

MATTHEWS:  I keep seeing the numbers—I‘m always impressed when people say experience defined by the totality of everything she‘s been through, not just her Senate election.  Holly, same question, what do you make of Hillary‘s surge to the front?  These are low numbers, but all she has to do, it seems, according to most thinking, is win early and blow them out. 

BAILEY:  Well, I think, you know, you have to look at the time she spent in Iowa.  She has invested a lot of time this summer in Iowa and she‘s brought out her number one weapon, which is Bill Clinton.  They have been travelling all over Iowa this past summer.  I think that‘s showing up in the polls, frankly. 

But, you know, you have to look at what they‘re doing in terms of their schedule.  I don‘t think they‘re taking this lead for granted.  I mean, Terry McCauliffe last week was travelling in Iowa and speaking to groups of like 20 to 25 people.  so when they have someone out there like that trying to rally the troops, it shows they‘re not taking this for granted. 

MATTHEWS:  That‘s her campaign manager.  Let‘s go to Perry Bacon, Hillary‘s rise, explain it. 

BACON:  I think that they have done a good job of campaigning out there.  She spent a lot of time there personally.  They‘ve done a good job organizing there.  At the same time, I think those polls are very close.  We‘ve seen—“Newsweek” had one last week showing Obama ahead.  So I think it‘s close out there, and I think the ground games—I was out there last week, the ground games—Obama has a very strong ground game.  So I think we should watch carefully Iowa and where things are.  I think things will change there more than once before this process is over. 

MATTHEWS:  John, will he cut her off though?  Will John Edwards be able to cut Hillary down to size, the way that Kerry did to Howard Dean last time, by saying I‘m more electable than she is.  She‘s a she, that‘s what this implies.  She‘s the wife of Bill, with all that baggage.  He‘s implying all the negatives there.  Can he work against her popularity with that sort of sobering thought, we want to winner? 

HARDWOOD:  Well, he can.  He‘s trying.  And he‘s got to make that work for him in Iowa, because that‘s really where he‘s—

MATTHEWS:  He‘s got to go negative, basically?

HARWOOD:  No question about it.  A lot of people think Obama has to go negative too.  His campaign says he doesn‘t.  And, of course, Howard Dean can tell all of us what an October lead means when it comes to January.  So Barack Obama is still in this thing.  John Edwards still has a shot of winning Iowa.  They have to make up ground, prevent her from building that lead too big. 

MATTHEWS:  I just don‘t understand why Barack doesn‘t fight the way Edwards does.  He has got more inspiration behind him, more history, more excitement and yet you see Edwards really trying to win.  I think that—

I‘m not running this campaign, but Barack seems so ethereal.  What do you think Perry?  Doesn‘t he seem like he‘s sort of an arch-angel of the campaign, rather than a candidate?   

BACON:  His whole theme throughout has been that he‘s this unifying,

optimistic figure.  I think if he went out and blasted Hillary Clinton by

name every day

MATTHEWS:  Don‘t fight a straw man.  I mean run for office.  Anyway, thank you. 



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