updated 12/28/2007 10:23:35 AM ET 2007-12-28T15:23:35

Guests: Betsy Pisik, Ed Schultz, Cliff May, Ron Paul

DAVID SHUSTER, MSNBC ANCHOR:  Assassination in Pakistan, fears around the world, and a scramble in Washington and on the campaign trail. 

Good evening.  I‘m David Shuster in for Tucker Carlson. 

For years, foreign policy analysts have warned that the most dangerous nation in the world was not Iraq or Iran, but rather Pakistan.  The developing nation has nuclear weapons, faces huge pressures from Islamic extremists, and is struggling with democracy. 

This past fall, former Primer Minister Benazir Bhutto, who was the first woman ever to run an Islamic country, returned to Pakistan following a ten-year exile.  She was leading the opposition to Pakistani dictator Pervez Musharraf and she was pledging to hit al-Qaida much harder. 

Today, just days before parliamentary elections and moments after this campaign speech, Benazir Bhutto was assassinated.  If the shock and grief in Pakistan now turns to chaos and political instability, experts fear several frightening scenarios, including a threat to U.S. national security. 

Tonight, we will piece together the latest on Bhutto‘s assassination and take you live to Pakistan where there are reports of violence in a dozen cities.  You will hear from an expert on what it all means for the United States.  We will show you what President Bush said today.  And we will also bring you statements made by the presidential candidates, one of them, John Edwards, spoke to Musharraf over the phone today.  Why did Edwards get the phone call?  We will explain. 

And with just a week until the 2008 voting begins, there has been plenty of other campaign news today that I promise we will cover. 

But we begin with this report from NBC‘s Jim Maceda. 

(BEGIN VIDEOTAPE)

JIM MACEDA, NBC NEWS CORRESPONDENT (voice over):  The government of Pervez Musharraf has put the police and paramilitary forces on red alert as the anger and violence that began after word of Benazir Bhutto‘s death spread from Rawalpindi outside the hospital where she died of chest and neck wounds to all the provinces of Pakistan.  Musharraf spoke on Pakistani TV earlier calling for three days of mourning and for the nation to unite.  Meanwhile, President Bush echoed that sentiment. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  We urge them to honor Benazir Bhutto‘s memory by continuing with the democratic process for which she so bravely gave her life. 

MACEDA:  But Pakistan affairs analysts say today that it‘s difficult to see how that process can, in fact, continue.  Not only has Pakistan‘s main opposition or pro-democracy party been now made leaderless and with no one in sight to replace the very charismatic Bhutto, but now the leader of the second largest opposition party, Nawaz Sharif ,says his party will boycott the upcoming elections. 

NAWAZ SHARIF, OPPOSITION LEADER:  It is not a sad day, (INAUDIBLE), the longest day in the history of this country. 

MACEDA (on camera):  Meanwhile, no one has claimed responsibility for today‘s suicide gun and bomb attack, which did kill Bhutto, and by the way, at least 15 others.  But U.S. officials say it had all the hallmarks of extremist Islamic groups, including al-Qaida. 

I‘m Jim Maceda, NBC News reporting from London.  Now back to you. 

(END VIDEOTAPE)

SHUSTER:  According to witnesses in Pakistan, Bhutto was killed by a lone gunman who apparently stuck his gun at the vehicle that she was in when she essentially got out to wave at the crowd and then moments later after shooting her in the neck, the gunman set off a suicide bomb.  The details, they are still coming out.  But this has all gripped the nation of Pakistan.  There is some reporting of violence tonight. 

And joining us on the phone from Pakistan is Betsy Pisik, the U.N.  bureau chief for “Washington Times.”  And Betsy, we‘re getting reports of violence in half a dozen cities.  We‘ve seen the video of fires in cities all over the nation of Pakistan.  What are you seeing on the local television broadcasts?  What are you seeing with your own eyes this evening? 

BETSY PISIK, “THE WASHINGTON TIMES” U.N. BUREAU CHIEF:  Well, it sounds a lot here like it does out there.  This country is absolutely shocked by the assassination today.  And the way politics plays out here, it‘s often very personal and kind of like a personality in some ways.  But the unexpected death of Mrs. Bhutto is just—it‘s knocking people down.  There‘s fires and riots in Karachi, which is very close to her home city and her seat of power.  In—excuse me, Rawalpindi where her speech was today, just outside the capital, there are riots at the hospital.  People tried to break into the operating theater.  It‘s just been pandemonium. 

SHUSTER:  Betsy, we saw that President Musharraf spoke to the nation.  He urged calm.  He called for unity and support and he blamed the attack on terrorists.  How is that speech going over with the Pakistani people? 

PISIK:  It‘s kind of expected.  A three-day mourning period is probably about the least they can come up with.  Mrs. Bhutto‘s own Pakistani People‘s Party is called for a 40-day period of mourning.  That‘s a bit excessive and it takes them over the elections. 

I think that‘s the big question here, whether the elections will be postponed.  How on earth they can possibly have them?  And what kind of role the government will play in investigating this assassination?  They have not gotten very far on previous assassination attempts. 

SHUSTER:  And Betsy, as we see the pictures of the mourners touching the coffin that was carrying Benazir Bhutto today, you get the sense of just utter chaos and pandemonium.  Are you getting any indications that Musharraf‘s government is in danger of collapsing because of the outrage that the opposition parties are expressing tonight? 

PISIK:  There is a lot of outrage in the opposition here.  Whether that can take down the government, I think we have to wait until daylight to see.  Musharraf has in his power as the president the ability to impose martial law or an emergency rule.  He has done that already.  As you know, a couple—he imposed that in early November and lifted it only about a week and a half ago.  It could be necessary by his opinion to do that.  But I don‘t think anything is going to come of that tonight.  I think right now it‘s more about stabilizing and holding than it is trying to figure out the next steps. 

SHUSTER:  Betsy Pisik is the U.N. bureau chief with “The Washington Times” reporting from Islamabad.  Betsy, thank you very much.  We appreciate it. 

The assassination of Benazir Bhutto and the trouble for Pakistan‘s fragile government, as you just heard, led by President Musharraf could carry huge implications for the United States.  Here to help us sort that out is Cliff May, president of the Foundation for the Defense of Democracies. 

And Cliff, give us based on what you‘ve heard a best-case scenario for the United States and a worst-case scenario over the next 48 hours. 

CLIFF MAY, FDN. FOR THE DEFENSE OF DEMOCRACIES:  The best-case scenario is that you get some kind of stabilization in Pakistan as quickly as possible and that President Musharraf sees a necessity to very vehemently go after al-Qaida and do something about its reconstitution in parts of his country. 

The worst-case scenario, of course, is the country falls apart, collapses into a failed state, is taken over by al-Qaida and its allies, and that means that nuclear weapons fall into the hands of terrorists sworn to our destruction. 

SHUSTER:  And, Cliff, how worried should we be about this nuclear weapon?  What sort of safeguards, if any, what sort of plan might the United States have for this sort of scenario? 

MAY:  We don‘t know at all.  There are plans, there are safeguards.  They can all fall apart, I‘m afraid, rather quickly if the country gets into the hands of people who see us as their enemies and want to destroy us.  It can happen and we‘ll know it or it can happen and we don‘t know it.  In a way, Pakistan has long been a powder keg waiting to go up.  The government there is—been fragile. 

And the reconstitution of al-Qaida in parts of the country where the government has little authority, that has been something of great, great concern.  And we haven‘t known what to do about it.  We haven‘t been able to do what we‘ve even done in Iraq in response to al-Qaida—a kind of the Petraeus strategy.  At most, we have covertly had teams of commandos, essentially, that are working with the Pakistanis not to particularly good effect, it appears, against al-Qaida. 

SHUSTER:  Cliff, what was going through your mind?  I‘m so curious as we saw those pictures again of Benazir Bhutto‘s casket, essentially, being touched and sort of the mob and the chaos and people wanting to reach out and express their anger.  What was going through your mind as somebody who has studied Pakistan and sort of worries about these scenarios, essentially, playing out? 

MAY:  That none of this was unexpected.  As tragic as it is, don‘t forget, al-Qaida said, “We‘re going to kill Benazir Bhutto.”  And in October, they tried and a suicide bomber killed about 132 innocent people.  Muslims, almost every one of them, and that is fine with other militant Islamists around the world.  They feel that these people will be treated as martyrs after their death, I suppose.  We knew they were coming after them. 

One thing we have to understand, and it‘s a difficult thing, is when you have a democratic process like this, when you have candidates going out and stumping and making speeches, the Islamists say that‘s great.  That puts them in our—in our crosshairs better than ever.  The Islamists want to win elections.  They don‘t want to do it with op-eds and TV commercials.  They want to do it by assassinating those they oppose.  They‘ve done it here.  They have done it, of course, in Lebanon, and they have done it in the Palestinian territories. 

Hamas, Hezbollah, al-Qaida, all have the same approach.  If we can win an election, fine, but if we can kill an opponent, that‘s much cheaper than opposing them any other way. 

SHUSTER:  And clearly al-Qaida benefits by creating this sort of instability and possibly undermining the government of Musharraf because of the anger of these opposition groups.  What should the United States be doing with all of this? 

MAY:  We don‘t have a lot of choice, I‘m afraid, at this moment.  I think Musharraf is the only card we have to play.  There‘s nowhere else to go.  And I think we have to try to fortify him and especially say to him, “You need to get rid of al-Qaida once and for all.  We have to help you do it.  Let‘s figure out a way that we can defeat al-Qaida on your territory now.” 

That‘s not a wonderful scenario.  I know there‘s dissatisfaction with Musharraf for plenty of good reason.  His government, particularly his intelligence services and to an extent, I‘m afraid, his military as well, is riddled with al-Qaida sympathizers, with others who are militant Islamists.  It‘s a—and he is afraid of that, too.  Look, al-Qaida has tried to assassinate him.  At the same time, Benazir Bhutto was killed in Rawalpindi.  This is - that is a garrison city.  That is a place where the military is very strong.  That makes one very, very worried. 

This has been a powder keg.  It‘s burning now and whether or not it will explode depends a lot on what we do and what Musharraf is able to do over the days and weeks ahead. 

SHUSTER:  Well, it is a frightening situation, indeed, not only for the Pakistanis but also for policy makers here in the United States. 

But Cliff May, thank you very much, president of the Foundation for the Defense of Democracy.  We appreciate you‘re coming in. 

MAY:  Thank you, David. 

SHUSTER:  Thank you. 

Just ahead, the Bush White House is trying to show solidarity with Bhutto supporters, but doesn‘t want Pakistan‘s government to collapse as you just heard.  You will hear what the president said coming up. 

And later, the U.S. presidential candidates weighed in today.  We‘ll show you what they said. 

You‘re watching MSNBC. 

(COMMERCIAL BREAK)

SHUSTER:  President Bush condemns the assassination of former Pakistani Prime Minister Benazir Bhutto and he also calls Pakistan‘s President Musharraf.  How is President Bush handling the situation so far?  That‘s coming up. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  The United States strongly condemns this cowardly act by murderous extremists who are trying to undermine Pakistan‘s democracy.  Those who committed this crime must be brought to justice. 

(END VIDEO CLIP)

SHUSTER:  That was President Bush today at the western White House in Crawford, Texas.  The assassination of Benazir Bhutto offers incredibly complex challenges to the United States. 

Joining me now our MSNBC political analyst Patrick Buchanan and host of the nationally syndicated “Ed Schultz Show” Ed Schultz. 

And Pat, I want to start with you.  We heard the president there.  There aren‘t a lot of options for the Bush administration.  How is the president handling this so far? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think he‘s doing what he has to do.  I think that President Musharraf is really the only horse in the race right now for the United States.  Benazir Bhutto would have won the elections, but I think Sharif is out of the elections.  I don‘t know how meaningful they will be even if they are held.  I would not, if I were the president at the White House, start putting pressures of any hard kind on Musharraf right now.  I think you‘ve got to bolster him up. 

SHUSTER:  Ed, is that your take? 

ED SCHULTZ, “THE ED SCHULTZ SHOW”:  Well, not quite.  You know, we‘re throwing tens of billions of dollars at Pakistan and we can‘t even get good protection for the best democratic option in that country if we want to move democracy forward?  We‘re in the corner right now.  The United States is not going to be able to get democracy and security at the same time.  It looked like it had a chance, but that was taken away today.  What we need to do is be very tough on Musharraf across the board as a country, a united front, saying, “Buddy, look.  Either you‘re going to go after these terrorist camps, you‘re going to make sure you secure these nukes, or you‘re going to lose your position.” 

I think the United States has got to really step in and play a tough hand with Musharraf right now.  Now the language that—the language that Pat is using about only horse in the race right now and all that kind of stuff, how long is that going to go on, Pat?  When is Musharraf going to be held accountable?  After Joe Biden wrote a letter and said, “You know what?  We‘ve got to give her security.”  After they tried to kill her once, I don‘t think Musharraf has got the kind of control he thinks he has. 

BUCHANAN:  Ed, Ed, Ed, Ed, you‘re talking nonsense.  You‘ve got a nation of 170 million. 

SCHULTZ:  No, I‘m not, Pat.

BUCHANAN:  Let me finish.  You‘re talking nonsense.  You got a nation of 170 million.  .  It‘s not up to the United States of America to dictate who is going to run that country.  How would we like it after John F.  Kennedy was shot if people around the world were telling us who we had to investigate and who really ought to be looked at closely?  Look, we‘ve got to support that country and people stand. 

SCHULTZ:  So once again, Musharraf gets off the hook. 

BUCHANAN:  .stand with him. 

SCHULTZ:  He takes tens of billions of tax dollars, goes and runs the country the way he wants to, doesn‘t protect anybody.  How do we know he can protect the nukes at this point?  How do we know that? 

BUCHANAN:  When Ed Schultz dumps him over, who do you put in his place? 

SHUSTER:  Well, Ed, I‘ve got to point out. 

SCHULTZ:  Well, I think what you‘ve got to do is you got to put the people in place.  You got to come up with a candidate and move forward with the elections. 

SHUSTER:  One of the things that was so striking today, I mean, if our worst fear is that this Musharraf government falls apart and that the nukes are loose, that is our worst nightmare, and I was struck by the president didn‘t really saying anything to that when he made his speech today.  Watch this.  This is as close as he got. 

(BEGIN VIDEO CLIP)

BUSH:  We stand with the people of Pakistan in their struggle against the forces of terror and extremism.  We urge them to honor Benazir Bhutto‘s memory by continuing with the democratic process for which she so bravely gave her life. 

(END VIDEO CLIP)

SHUSTER:  Now, Pat, some of those are honoring Benazir Bhutto‘s memory in a way that she wouldn‘t like.  They‘re burning buildings down.  There are riots, there‘s chaos.  What should the president be doing?  Or should he just be ignoring that? 

BUCHANAN:  Look, when Martin Luther King was assassinated in this country in April of 1968, the whole city of D.C. and cities all over America burned.  What the president should be doing is looking out, first, for the vital interest of the United States, which means securing all of those nuclear weapons, making sure they‘re under army control and friendly army control. 

Secondly, making sure there‘s stability in Pakistan and you won‘t have stability if you‘re trying to undermine the president who‘s the last guy standing right now.  Third, we should try to push Musharraf, I agree with that, to move against the Taliban and al-Qaida and tell him, “Look, President Musharraf, you saw what happened here.  They‘ve tried to kill you twice.  They‘re deadly serious.  Now we got to go after them seriously.” 

That is the immediate strategy for the United States.  And I think we‘re going to have to wait and see what happens after that. 

SHUSTER:  Pat Buchanan and Ed Schultz are staying with us. 

SCHULTZ:  David. 

SHUSTER:  Go ahead, Ed, real quickly. 

SCHULTZ:  Well, you‘ve got a country that‘s had 40 suicide bombings and 770 deaths this year and now all of a sudden we‘re going to start pay attention to security in Pakistan because this happened?  Musharraf has lost control.  The United States has got to play a heavier hand in all of this right now.  It‘s at that point.  If we‘re really concerned about loose nukes, we‘ve got to have a bigger presence there. 

SHUSTER:  And this could be a presence—this could be an issue that‘s going to affect the presidential candidates, whoever is in office a year and a half from now. 

Coming up, the presidential candidates offer their thoughts on Bhutto‘s assassination and two of the candidates used the sad news today to promote themselves.  Was it inappropriate or smart politics?  We will play the tapes. 

And later, as the Democratic race for president boils over in Iowa, Barack Obama uses the word “madness” in an apparent reference to Hillary Clinton.  The Clinton campaign is firing back. 

ANNOUNCER:  TUCKER is brought to you by. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ‘08 PRESIDENTIAL HOPEFUL:  Our thoughts and prayers are with her family and her supporters.  And we want to make clear that we stand with the people of Pakistan in their quest for democracy. 

MITT ROMNEY ®, ‘08 PRESIDENTIAL HOPEFUL:  We must come together in an effort, in great haste and with great earnestness to help overcome the threat of the spread of radical violent jihad. 

(END VIDEO CLIP)

SHUSTER:  One week until the Iowa caucuses and that‘s just a slice of the campaign trail reaction today to the assassination of Pakistan‘s opposition leader Benazir Bhutto. 

Back with us our MSNBC political analyst Patrick Buchanan and the host of nationally syndicated “Ed Schultz Show” Ed Schultz. 

Pat and Ed, most of the candidates today expressed their sorrow over the news and stated their solidarity with the efforts of democracy that Benazir Bhutto represented.  However, I want to get your reaction to two candidates today who used the news to promote themselves.  Watch. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), ‘08 PRESIDENTIAL HOPEFUL:  I have known Benazir Bhutto for more than 12 years.  She‘s someone whom I was honored to visit as first lady when she was prime minister.  It was a trip that Chelsea accompanied me on.  We spent time with then Prime Minister Bhutto and her family.  I met her young children, her husband, her mother, a lot of her family members. 

SEN. JOHN MCCAIN ®, ‘08 PRESIDENTIAL HOPEFUL:  I‘ve been to Waziristan.  I know Benazir Bhutto.  I know Musharraf very well.  If I were president of the United States, I would be on the phone right now and I would be meeting with the national security council.  I know the players.  I know the individuals and I know how—the best way to address this situation. 

(END VIDEO CLIP)

SHUSTER:  Pat and Ed, it may seem a little crass on a day like today to essentially draw attention to yourself and your presidential candidate.  And yet, is it smart politics?  Pat, you start. 

BUCHANAN:  Well, clearly, McCain is going to benefit from this by the very fact that he is steeped in foreign policy and his main rivals, Huckabee and Romney, clearly are at sea in this—on an issue like this.  I think he overdid the I, I, I there.  I thought Hillary Clinton got it just about right.  She talked on a very personal note, that she‘d known her.  And I think she did in a more indirect way, David, indicated that she‘s very knowledgeable in this and she‘s experienced and she knows this lady and she‘s empathetic. 

So I think she was more effective.  I think the big winner out of

this, and I hate to use that kind of term, is Hillary Rodham Clinton,

though, because she‘s running against a pure novice who is two years out of

or a year out of the Illinois legislature, and I think he looked like he did not have his sea legs today.  That‘s Barack Obama when he was talking about this. 

SHUSTER:  And, yet, it was apparently John Edwards who got a phone call today from President Musharraf.  Edwards at an event late this afternoon said that, “He called me because I told the Pakistan ambassador would like to speak to him.  I met him, Musharraf, a few years ago.  I urged him to continue the democratization process.” 

So does Edwards, essentially, throw down the trump card because he‘s the one that got the phone call today? 

SCHULTZ:  Well, I think that this is always an opportunity.  How you play it is going to have to be done right or it could backfire on you.  I don‘t think this is going to inspire people to change candidates.  I think this is going to change the subject.  It‘s going to give all of these candidates on both sides an opportunity to tell the American people how they would handle it.  And I think you got to expect that on the campaign trail.  To throw in a personal touch, I don‘t think hurts at all.  I think that in this world that we live, that, you know, these leaders do get together and they do get to know one another, and I think it‘s important that a candidate does show that there‘s a personal side to all of this.  But. 

SHUSTER:  Well, there was also. 

BUCHANAN:  To use, of course, any. 

SHUSTER:  I want to put this really in here real quick.  There was a personal side that was offered by Rudy Giuliani, but it stuck with his 9/11 theme.  He said, “For me this is a particularly personal experience because I lived through September 11th, 2001, and then I lived through the attack in London a few years later.” 

Hey, Pat, how is September the 11th at all similar to the assassination today on Bhutto? 

BUCHANAN:  It‘s not.  It‘s got nothing to do with it, David. 

SCHULTZ:  No. 

BUCHANAN:  And I think that‘s a stretch by Rudy.  And the truth is, if we‘d had a horrible tragedy, a couple of bombings in the United States, Rudy would be credible on that issue.  But let me say this.  I think this is important for this reason.  We are one week out, basically, from the Iowa caucuses.  And when people go into those caucuses, what are they go to think of?  If they are thinking of we need radical and dramatic change, they‘re going to think Obama.  But if they‘re thinking we live in a dangerous world, where people are blown up and countries with nuclear weapons, we don‘t know who‘s going to be running them, they think stability.  Who do you want handling the tiller here?  Who do you want in them? 

SHUSTER:  Pat, we got to go to a break.  We‘re going to continue at the other side of this break. 

Coming up, though, Republican presidential candidate Ron Paul said today that Pakistan‘s instability is the fault of the United States.  We will get into that debate with Ron Paul. 

(COMMERCIAL BREAK)

SHUSTER:  Still to come, Senator Joe Biden says he, not Hillary, not Obama, not Edwards, will win in Iowa.  What are the chances he‘ll actually pull off an upset?  We‘ll get to that in just a moment. 

But first, here‘s a look at your headlines. 

(NEWSBREAK)

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), ‘08 PRESIDENTIAL HOPEFUL:  Presidents make wise decisions informed not by a vacuum in which they operate, by the situation they find themselves in the world.  I will do all in my power to stop Iran from getting nuclear weapons, but I will never take my eye off the ball.  What is the greatest threat to the United States of America?  2.6 kilograms of highly enriched uranium in Tehran or an out of control Pakistan?  It‘s not close. 

(END VIDEO CLIP)

SHUSTER:  That was Democrat Joe Biden this fall at a presidential debate.  He has been warning the political world about Pakistan for months.  And today‘s news underscores that Biden understands the complex challenges as well as if not better than anybody running for president today. 

Back with us again our MSNBC political analyst Pat Buchanan and the host of the nationally syndicated “Ed Schultz Show” Ed Schultz. 

Hey, Ed, does Joe Biden have a chance now given the kind of news that struck the campaign trail today? 

SCHULTZ:  No, he doesn‘t.  He‘s not going to win in Iowa.  He‘s going to get some more attention because of his experience on foreign relations, but, you know, the whole thing about this, David, is that all of the Democrats have said all along, all of the candidates, it‘s about Pakistan, it‘s about Afghanistan.  It‘s not about Iraq.  We‘ve been disfocused for a long time on al-Qaida and where the number one problem is. 

And now that this horrific event has taken place, it‘s an opportunity for all these candidates to come back and say, “Well, I told you so.  We know it‘s about loose nukes.  We know it‘s about security and that‘s what Musharraf is not providing in that country after we have forked over billions of dollars to make sure that he can protect democracy.” 

He‘s got a full deck of cards right now and he needs even more help.  So Biden‘s got it right.  But I don‘t think it‘s going to get people to shift their vote in support of him.  It‘s one issue. 

SHUSTER:  Hey, Pat, I love Joe Biden.  I think he‘s brilliant, but occasionally he says things that just makes you scratch your head.  He told Roger Simon of “The Politico” that he would not trade places with Obama or Clinton or Edwards and then he expects to beat them as far as the expectations game is considered in Iowa.  What‘s he talking about? 

BUCHANAN:  Well, if he‘s expecting—or if we expect him to get 7 percent and he gets 10, I guess he‘s going to say he won.  But look, Joe Biden is not going to win this race.  And I don‘t think he‘s going to be helped much by this.  I think when you get an event like this, David, which is a country which is unstable with nuclear weapons and an assassination, people—Americans tend to move to the party of security and strength.  And for the last, excuse me, 40 years, that‘s been the Republican Party. 

You will watch the Clinton-Barack.

SCHULTZ:  Oh, Pat, please. 

BUCHANAN:  Hold it a second, Ed.  You will watch the president go up, McCain go up, and the conservative candidate in the Democratic race, Hillary Rodham Clinton, go up, because, folks, people will focus on that and you‘re not going to go if you‘ve got a problem in—in Pakistan, they‘ve got nuclear weapons, nobody‘s going to get on the phone and say, for heaven‘s sakes, get me Barack Obama. 

SHUSTER:  You know, one of the things that. 

SCHULTZ:  I believe it was Barack Obama who went after Musharraf first.  It was Obama who called into question the operation of Musharraf for not going after Osama bin Laden and not taking out those terrorist training camps. 

Pat, you‘re putting a bad rap on Obama.  How do you know he‘s not going to be tough on the terrorists?  And how do you know he‘s not going to be tough on Musharraf. 

BUCHANAN:  Because. 

SCHULTZ:  After he‘s already called him out which. 

SHUSTER:  Go ahead. 

SCHULTZ:  I just think you‘re selling him short.  And the Democrats, what do you mean, we got here (INAUDIBLE) why. 

BUCHANAN:  What I‘m saying is, look, look, everyone in analysis here.  Look, I know you may like Obama and I think he may be about a fine fellow, but the country when they look at inexperienced fellow out of this Illinois state legislature one year or two years, and they‘re not going to turn to him when you‘ve got a country of 170 million that they may have nuclear weapons where the most popular leader in the nation‘s been assassinated. 

People naturally gravitate to those they go know, those they trust and those with experience, those who are good on foreign policy or defense policy.  And that‘s. 

SHUSTER:  I want to move to the Republicans just for a sec. 

SCHULTZ:  And you won‘t find anybody in the Republican Party that offers that right now. 

BUCHANAN:  Well, I think McCain does. 

SHUSTER:  But the Republican side. 

SCHULTZ:  (INAUDIBLE) anybody on the Republican camp that can offer any of those things that you just mentioned. 

BUCHANAN:  McCain? 

SHUSTER:  Well, let‘s talk about the Republicans just for second. 

There was a. 

SCHULTZ:  McCain‘s washed up, Pat.  He‘s got about as much chance as Biden‘s got.  Come on. 

SHUSTER:  Hey, Pat, there was some news about the surging Mike Huckabee in Iowa today.  We found out today that Mike Huckabee is continuing to get paid for speeches at the tune of 25,000 bucks a shot.  He said he gave two or three in November, two or three coming in January.  Huckabee said, “I‘d like some more speeches.  If you want to give me some publicity, tell them to call the Speakers Bureau.” 

Will this hurt Mike Huckabee? 

BUCHANAN:  Yes, it will.  Yes, it will for this reason.  What he has is authenticity.  He‘s a Baptist preacher, down to earth fellow.  I mean, who knows out there in Iowa $25,000, probably a lot of them make in a year.  And here he is talking about each speech for a pop 25 grand, and he‘s out there in Iowa talking to these—in touch with the average folks?  It‘s like John Edwards, you know, joining the hedge funds and so he can understand poverty a little bit. 

SHUSTER:  Well, speaking of John Edwards, he took a shot today in “The New York Times,” Ed.  “The New York Times” reported that despite his complaints about outside independent organizations spending money on ads, the so-called 527s, one particular group that is run by his former campaign manager actually had some e-mails that were exchanged with the Edwards campaign which you‘re not really supposed to do. 

And according to the e-mails, there was some coordination about what kind of specific support Edwards would like to see.  A spokesman for John Edwards said it was a discussion about permissible cooperation like endorsements, but doesn‘t sort of think factor hurt John Edwards at a critical time? 

SCHULTZ:  I don‘t think it does.  I think Edwards is going to be able to distance himself from this.  You can‘t control everything in a campaign.  I think he‘s been very consistent on where he gets his money, how he gets his money, what his message is.  I think that this isn‘t going to hurt Edwards at all.  There‘s e-mails exchanges, thousands of e-mails.  But I think Edwards has been very clear on 527s and dirty campaign money and the intent of it all.  I think he‘s clean. 

SHUSTER:  And Pat. 

BUCHANAN:  He probably should have used semaphores rather than e-mails. 

SHUSTER:  Pat is. 

SCHULTZ:  I do want to say this that—one more thing here. 

BUCHANAN:  You go a single event. 

SCHULTZ:  (INAUDIBLE) speeches that Huckabee is getting, you have to understand that the hunting rights fees are going up in Iowa.  And he—land access is going through the roof, you know.  And then. 

BUCHANAN:  Look, that cost today a $25,000 speech to go out and kill a couple of birds. 

SHUSTER:  Well, and just to be clear, Mike Huckabee said that unlike people who are. 

SCHULTZ:  Well, what he‘s just trying to do is get some land access. 

SHUSTER:  “Unlike people who are independently wealthy, if I don‘t work, I don‘t eat.” 

BUCHANAN:  Well, come on. 

SHUSTER:  I think you could eat a lot for 25 grand, could you? 

BUCHANAN:  Twenty-five grand a pop?  Look, I mean, this is one thing if the boy is on minimum wage or something like that, but for heaven‘s sakes, I think it will hurt him because it will make him an object of laughter and that‘s where you‘d really get a problem when they start needling you and laughing at you.  And that‘s when a candidate has problems.  I think Huckabee has peaked.  He may be far enough ahead to win this thing, but I think he‘s peaked, David. 

SHUSTER:  I think candidates have some problems when they get the nod of Bob Novak, and that‘s what John McCain got today. 

Ed, Bob Novak said that despite all the problems the Republicans have with John McCain, that if Huckabee wins in Iowa, John McCain will likely be the best bet to win the GOP nomination.  Do you really think—I mean, as a Democrat, can you really see your rivals on the Republican side going for somebody who supported Ted Kennedy on illegal immigration, somebody who opposed the Bush tax cuts? 

SCHULTZ:  No, I can‘t.  I don‘t think McCain is going to go well with young voters.  I don‘t think he‘s inspiring anybody.  You know, the last week we‘ve seen a lot of stories in the media about how all the candidates on both sides are trying to out-veteran one another.  This is why McCain is getting a little bit of a bump and a little bit of feel-good in the media because of what he went through in his personal experience.  Nobody can speak to the veterans issue better than McCain. 

But when you come down to it, he‘s still with Bush on the budget.  He‘s still with Bush on the tax cuts.  He‘s still into all of this, getting into people‘s private lives and—and all of the shenanigans that‘s been going on in the Justice Department and illegal immigration.  I think he‘s off on a lot of issues.  And I think the candidate that can inspire young people to show up is going to be the candidate that‘s going to win this thing in Iowa and in New Hampshire. 

BUCHANAN:  All right.  But let me talk Republicans, David.  David, let me talk Republicans. 

SHUSTER:  Sure. 

BUCHANAN:  I think if Huckabee wins Iowa and McCain does win New Hampshire, I think Romney—I don‘t see how he comes back.  But I had to bet then, I would disagree with my friend Novak.  I would think that Huckabee would win South Carolina and Florida and then I think it would be impossible to stop him and McCain‘s got too many problems with conservatives, especially on the immigration issue, to be a real stopper. 

SHUSTER:  And I think that Bob Novak is the kiss of death.  So I rather (INAUDIBLE) John McCain that. 

BUCHANAN:  Novak is my friend. 

SHUSTER:  But I got to ask you, Pat, before we get to this break real quickly. 

BUCHANAN:  Sure. 

SHUSTER:  Mitt Romney got slammed by “The Concord” newspaper.  They essentially called Mitt Romney a phony.  How much does that hit—hurt Mitt Romney in New Hampshire?  What should we make of that kind of editorial? 

BUCHANAN:  I don‘t think “The Concord Monitor” doing that is going to hurt that much.  You think the Union Leader and the “Boston Globe” to a degree helped McCain.  McCain‘s getting a number of endorsements.  He‘s clearly moving up in New Hampshire, but I think if Romney wins Iowa, I think he wins New Hampshire, and I think he wins the nomination.  If he loses Iowa, he could lose New Hampshire to McCain. 

SHUSTER:  Pat Buchanan and Ed Schultz are staying with us.  There‘s some great news on the Democrats.  It is coming up.  Barack Obama uses the word “madness” in apparent reference to the Clintons and then denies it.  So what exactly did he mean? 

And did Ron Paul mean today when he said the instability in Pakistan is a result of American foreign policy?  We‘ll ask Mr. Paul.  Coming up. 

(COMMERCIAL BREAK)

SHUSTER:  The war of words continues between Hillary Clinton and Barack Obama.  He says the votes for Hillary amounts to madness.  Now Hillary is firing back. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  What Washington is really telling you is that you should keep on doing the same things with the same people over and over again and somehow expect a different outcome.  And that‘s the definition of madness.  Doing the same things over and over again and expecting something different. 

(END VIDEO CLIP)

SHUSTER:  That was Barack Obama yesterday in Iowa, appearing to suggest, although he later denied it, that a vote for a Clinton would be madness or crazy.  Hillary Clinton‘s campaign today fired back.  Spokesman Phil Singer issued this statement, quote, “Now is not the time for political attacks.  It‘s time to pick a president who can give us a new beginning in a time of war and a troubled economy.” 

To that end, the Clinton campaign announced it has purchased two minutes of commercial airtime during all of Iowa‘s 6:00 p.m. local newscast on January the 2nd, the night before the caucuses.  Meanwhile, the Clinton campaign is running this. 

(BEGIN VIDEO CLIP, HILLARY CLINTON CAMPAIGN AD)

CLINTON:  I‘m Hillary Clinton, and I approve this message. 

(END VIDEO CLIP)

SHUSTER:  Pat, with the soaring music you don‘t really hear Hillary‘s words.  I wonder if this is sort of like those football penalties where it‘s the last guy who essentially does the haul, who gets the flag.  Is that what is going on here in Iowa?  There is Obama essentially, even though he‘s pushing back, getting flagged perhaps, for using the word madness, when you don‘t even hear Hillary on the air in these ads right now. 

BUCHANAN:  I think that‘s right.  It was—I mean, we all know the cliche that, you know, continue to do the same thing, expect a different result is a mark of fanaticism.  And that‘s what he was trying to say.  But in the context right now, a week out, it really—it‘s a bad day and you get the word up there and it sounds over the top and Hillary comes back and so it‘s a waste today.  That is 14 percent of the rest of the campaign in the last seven days.  So it was a gaff and a mistake by Obama. 

SHUSTER:  Ed? 

SCHULTZ:  I don‘t think so and I‘ll tell you why.  Core Democrats are very frustrated with the Clinton camp.  And this word that they have pounded home in the Obama camp about change, if you hire Hillary Clinton to be the nominee and the next president, there‘s not going to be much change in operation in Washington.  That‘s what he‘s saying and that‘s what a lot of core Democrats in this country want to hear.  They don‘t think that the Clintons have been tough enough on foreign policy the way Obama has been.  And also when it comes to the working folks and when it comes to the down-trodden and when it comes to opportunities for minorities, I think change and, of course, the lobbying efforts that take place and the corporate structure of the influence of money and politics, that‘s what Barack Obama is talking about. 

BUCHANAN:  Well, you know, Ed, Ed, Ed. 

SCHULTZ:  And it is madness.  You have to change the system if we‘re going to have true representation in this country. 

BUCHANAN:  Ed, you know—Ed, that‘s a nice campaign speech, but you better get used to the Clintons, fella. 

SCHULTZ:  It‘s a fact. 

BUCHANAN:  Because that‘s going to be—your nominee is going to be, I‘m afraid. 

SHUSTER:  Hey, Pat, you‘ve been through this before.  You‘ve run for president. 

SCHULTZ:  I will (INAUDIBLE). 

BUCHANAN:  Sure. 

SHUSTER:  Pat, tell us a little bit, purely on tactical grounds, what is the best way, what is the smart way to end a presidential campaign, the last week before the Iowa caucuses and then just days before the New Hampshire primaries?  What‘s the goal? 

BUCHANAN:  The best way is for the candidate to get clear of any kind of attacks.  If you‘ve got to do that, have it done by someone else, surrogates, and go up high because the attack people are cutting each other up and dragging them down.  And if you‘ve got a positive message and you‘re going out rallying your troops and that people have found you, you‘ve got the enthusiasm, that‘s the time to go positive toward the end of the campaign. 

At least for the candidate, David, if you‘ve got to—if your campaign has to go negative, get it away from the candidate.  I think Mrs.  Clinton—I didn‘t see the film of that.  I heard the music and the music sounded good.  And I think that‘s the way to go out. 

SHUSTER:  Ed, you know, I have to tell you that when I was in Iowa the last two weeks, I was struck, of course, by the passions by both the Clinton supporters and the Obama supporters, but I was even more struck by the fact that when you talk to caucus-goers who have been there before, who are not intimidated by the system, two of every three of the Edwards supporters have been through the caucus system.  They‘re organized.  They‘ve got the unions.  They‘ve got a sort of ground game that I think a lot of times you need. 

And I‘m wondering, do you see—well, what do you see with John Edwards?  Do you see him possibly winning Iowa and do you think that Edwards has the juice with Democratic faithful to carry it beyond Iowa into New Hampshire and South Carolina? 

SCHULTZ:  Well, David, we took the “Ed Schultz Show” down to Iowa a few weeks ago and we were really surprised that the Edwards infrastructure, especially in the rural areas.  We broadcast out of Burlington, Iowa, a town of 28,000 that‘s been hit hard by manufacturing jobs and, of all things, illegal immigration and all kinds of things.  And he is very strong in the rural areas. 

The way this is going to shake down, if Barack Obama can get young people out the way they‘ve been following him on the campaign trail, he‘s going to be a major player.  If Edwards can stay true to his support in the rural area, it‘s going to be a dogfight.  You‘ll notice it right now, if Hillary Clinton is pushing hard on the backend. 

SHUSTER:  Ed, we‘ve got to run.  We‘ve got to run.  We‘re going to have you back on.  Ed, we‘re going to have you back on. 

SCHULTZ:  Yes.  You bet. 

SHUSTER:  We appreciate it as always.  Ed Schultz, the host of the syndicated—nationally syndicated radio talk show “Ed Schultz Show,” and Pat Buchanan, the MSNBC political analyst who also happens to be my officemate in D.C. 

Pat, always a pleasure to see you both. 

BUCHANAN:  Well, thank you. 

SHUSTER:  Thank you. 

Up next, back to tonight‘s story in Pakistan.  No U.S. presidential candidate has spoken about it today in as controversial term as Ron Paul.  We will talk to the Republican presidential candidate after this. 

(COMMERCIAL BREAK)

SHUSTER:  Without a typical political machine, Republican presidential candidate Ron Paul of Texas has seen his campaign raise millions of dollars from tens of thousands of Americans inspired by his self-described devotion to the U.S. constitution.  Among the tenants of his beliefs is a non-interventionist foreign policy. 

Joining us now with his reaction to the assassination of Benazir Bhutto in Pakistan is Republican congressman and presidential candidate from Texas, Dr. Ron Paul. 

Mr. Paul, what is your reaction? 

REP. RON PAUL ®, ‘08 PRESIDENTIAL HOPEFUL:  Well, it‘s utter tragedy.  I mean what a mess over there for the people of Pakistan to have to suffer through.  But my reaction is hopefully they‘ll sort it out quickly and hopefully we will know what kind of a stable government they have there so that we can deal with the government.  But I‘m not surprised that these kinds of problems happen because, you know, we have been on the side of supporting Musharraf who is a military dictator.  He‘s not an elected leader.  He was receiving only 8 percent of the support of the people.  So it‘s not too surprising that this happened.  I‘m just so disappointed. 

SHUSTER:  Well, on the very point—on that very point, you said earlier today that, you just said again, civil unrest is partly the result of United States policies.  I wonder if would quantify that for us.  To what degree would you hold the United States foreign policy responsible for what happened today? 

PAUL:  Well, zero.  I mean, the people who commit the—the murder are 100 percent responsible.  But we—we create an environment that becomes anti-American and anti-Musharraf because he was our puppet government.  And this means the radicals have an excuse for saying, “Well, we have to deal with him.”  And then our CIA goes in and we, behind the scene, encouraged Bhutto to come in to the country and our CIA is always involved in picking the government because we always want to have our friends there. 

And it just cost us $10 billion to prop up Musharraf and it didn‘t work very well.  He was supposed to help us get Osama bin Laden.  And Osama bin Laden‘s been in Pakistan.  I think it‘s a bad investment.  So I hate to see us get further mired down in another civil war.  We‘re already in Iraq.  We‘re in Afghanistan.  We threatened Iran.  And the Turks are attacking northern Iraq.  And now I‘m worried that we‘re going to get involved in another civil war in Pakistan.  We don‘t need another civil war involvement in that region. 

SHUSTER:  Mr. Paul, one of the great fears that I‘m sure you share is that somehow the nuclear weapons that Pakistan‘s government has somehow get out of their hands because the government collapses.  If you were president in January of 2009, what would you do to try to safeguard Pakistan‘s nuclear weapons? 

PAUL:  Well, it‘s too bad we didn‘t do a lot less a lot sooner because that is where the problem is.  But we should be worried about the nuclear weapons floating around the old Soviet System in Central Asian.  There‘s a lot of those weapons that haven‘t been accounted for.  So it‘s a serious problem.  But. 

SHUSTER:  Right, but regarding Pakistan—I appreciate your point on the loose nukes that the Russians had. 

PAUL:  OK. 

SHUSTER:  But regarding Pakistan and the situation today, what would you, President Ron Paul, do about Pakistan‘s nukes? 

PAUL:  A lot less a lot sooner.  We don‘t need that as an excuse to march in and say that we‘re going to claim those weapons right now.  They‘re under the control of Musharraf.  We shouldn‘t be undermining his government, as bad as they are, but we shouldn‘t be supporting them.  We only have two choices so frequently.  It‘s either subsidize somebody in a militant dictator that this stirs up the fires of the civil unrest or then, if not, then we try to get rid of these guys and we start bombing these countries.  I‘m arguing the case for non-intervention, minding our own business and not get the American taxpayers and the American soldiers endlessly involved in these conflicts.  We‘ve have too many.  Enough is enough. 

SHUSTER:  So just to be clear real quickly.  We‘re running out of time.  I just want to give you an opportunity to clarify.  What—specifically, is there anything specific you would do and you would just say, “You know what?  Leave it to Pakistan.  Let them sort it at themselves.  Let‘s not worry about it.”  Clarify it for us. 

PAUL:  I think that is what we did with the Soviets and they had 40,000.  We didn‘t invade them.  We didn‘t try to go in and save ourselves by trying to get control of the 40,000 weapons that the Soviets had.  So I would say the less involved we are the better off we are.  We don‘t need another excuse to intervene and go into nation building and controlling another nation. 

SHUSTER:  Ron Paul, Republican presidential candidate, thanks for coming on.  We appreciate it. 

That does it for us.  Thanks for watching.  I‘ll see you back here tomorrow night. 

Up next, “HARDBALL WITH CHRIS MATTHEWS.”

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

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