updated 1/4/2008 12:39:20 PM ET 2008-01-04T17:39:20

Guests: Howard Fineman, Rachel Maddow, Eugene Robinson

CHRIS MATTHEWS, HOST:  Are we about to hear a shot heard around the world?  This time not from Lexington and Concord, but from Davenport and Des Moines, Iowa, not at King George of England, but at President George of America. 

Let‘s play HARDBALL. 

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL tonight from MSNBC‘s election night headquarters in New York. 

Tonight, we will know the numbers and the winners and the losers, as the first ballots are cast in the 2008 presidential election.  The winners will fly to New Hampshire, many of them convinced that they are the children of destiny.  The losers, many of them will cry themselves to sleep tonight. 

As Jim McKay used to say, this is the thrill of victory and the agony of defeat.  And it all comes down to tonight.  And we will deliver the results of their journey.  Some will continue on, as I said.  Some will be forced to drop out of the race and return to their regular lives.  And we will be here to report it all to you.

But there‘s a bigger matter at hand tonight.  This country is in a rut on everything from Iraq, to health care, to energy to climate change, to whatever.  Do the people, the voters in Iowa tonight, have the stuff to get us out of that rut?

The latest Reuters/C-SPAN/Zogby poll taken before tonight‘s caucus shows Obama in the lead with 31 percent, followed by Edwards at 27 percent, and Hillary Clinton at 24 percent.  Could Obama survive a loss to Hillary tonight? 

Let‘s go to Obama campaign headquarters and NBC‘s Lee Cowan. 

Lee, we are in a rut.  The man who is offering the most dramatic change is Barack Obama.  Whether the voters want that kind of change, we will know tonight.  Is it important for him to win tonight if he is to be the Democratic nominee for president? 

LEE COWAN, NBC CORRESPONDENT:  I think it is, Chris.  I mean, it would be hard to imagine him actually getting the nomination without having won Iowa.  Both Iowa and New Hampshire are really the two states where he has the best shot at winning against Hillary Clinton. 

So, if he does well here and in New Hampshire, he‘s certainly going to only add to the momentum that we have already seen in the last couple of days. 

MATTHEWS:  What is going on in the voters‘ minds when they vote for Obama?  What are they voting for, as you can tell, talking to people out there? 

COWAN:  I think they are going for this idea of—of change.  We have heard so much about this whole change vs. experience argument.  But the people that we talk to that come out to these rallies really say he‘s sort of embodies that argument better than any of the other candidates in their mind, that he has the policies, he has the youth. 

It‘s a generational thing for a lot of people, especially the young voters.  They think he bring that change better than anybody else. 

MATTHEWS:  Do you have a sense tonight, as we go into these caucuses, whether the young people will do what they say they will do?  The people in the T-shirts, the people that go to the rallies, that cheer, will they do the grownup thing of showing up at a caucus and voting tonight? 

COWAN:  You know, it‘s hard to tell. 

But there is a sense that they do seem to be not just there to see sort of the person that they have seen on TV.  There does seem to be a genuine engagement at these rallies, especially with the young people and Barack Obama.  They‘re not just there to pass out the buttons and T-shirts.  They do seem like they really are energized.  They‘re going out in the cold, knocking on doors.

They—they, the senator credits all the time for building one of the largest ground operations in Iowa of all the candidacies.  So, I think when you talk to them, they say, look, there are some of my friends who aren‘t going to caucus, but the ones that are there, that have been showing up in these bitter-cold temperatures at wee hours of the morning and late at night, they‘re the ones that they say are going to bring their buddies out and that they will in fact go tonight. 

MATTHEWS:  Well, history in the making. 

Let‘s go—thank you very much, Lee Cowan. 

Let‘s go right now to the Clinton campaign headquarters and to Andrea Mitchell, who has been covering the campaign.

Andrea, its are very hard to read the Hillary Clinton message in the last several weeks.  For a while, it was:  I‘m change, too. 

ANDREA MITCHELL, NBC CHIEF FOREIGN AFFAIRS CORRESPONDENT:  Exactly. 

MATTHEWS:  I‘m just like Obama.

Then it was, I‘m likable.  See, I brought my mother with me, my daughter with me.  See my new commercial where I‘m sort of like a Terry Gross, a wonderfully mellifluous speaking, wonderful person. 

Has she figured out whether she wants to be Margaret Thatcher, or what?  I can‘t figure out if she‘s got a clear message going into this. 

MITCHELL:  I guess a kinder, gentler Margaret Thatcher. 

Look, I think that, in the last week to 10 days, she‘s really resolved that the message that she has to project is what she is, that she is experienced.  She‘s not new.  She‘s not different, I mean, different in that she is the first woman running for president, but not different in comparison to Barack Obama. 

So, she has to run on experience.  But they have tried to meld those messages and say, it takes experience to produce change.  And look at my life.  Look at my 35 years of producing results.  Look at what I have done in the Senate. 

And she points to recent legislation for veterans benefits, taking back the really ridiculous legislation that meant that the veterans from Iraq would not get their sign-up bonus if they were wounded. 

MATTHEWS:  Right. 

MITCHELL:  They would return and lose that extra money.  So, those are the sort of productive things that she can point to. 

And she‘s got, look, a lot of support.  But she may not be able to match the support in this state that Barack Obama has generated, if these new caucus-goers, independents, the people “The Des Moines Register” polled, all come out tonight. 

MATTHEWS:  Where is Bill tonight and what is he doing?  Is he pulling strings?  Is he passing out the money?  Is he getting the street money out there?  What is he actually doing as we speak, Bill Clinton? 

MITCHELL:  I think—well, I think both of them have been talking to precinct captains, talking to their field operations. 

So, I think that they‘re both involved in that.  She was certainly doing that earlier today.  They took a break.  They went out, had some lunch with Chelsea and with Mrs. Rodham, Dorothy Rodham, Hillary Clinton‘s mother.  So, it‘s been a family, you know, unit. 

But, clearly, he is the best Democratic strategist around.  He‘s her husband.  He‘s her partner.  And you know that they‘re calling people in the field and saying, what‘s going on; what‘s going on in your caucus? 

MATTHEWS:  OK.  Thank you, Andrea Mitchell, who is with the Hillary Clinton campaign. 

John Edwards has spent more time in Iowa than any of the other candidates.  Many people believe he must win tonight to stay in this race.

We‘re going right now to Kevin Corke, who is with Edwards. 

Is that your surmise, reporting on this campaign, that they believe they have to win tonight? 

KEVIN CORKE, NBC CORRESPONDENT:  Chris, I think, if you ask them off the record, they will whisper, look, we have to win this thing or, at the very least, come in a very close second, because they recognize that, if they don‘t, what‘s the point?  They have been here longer than everyone else. 

And, despite the fact that both the Clinton and Obama camps have enormous amounts of money, an advantage in that respect, and even larger ground operations, the Edwards folks know that, if you don‘t get it done here tonight, there‘s not enough inertia moving forward into New Hampshire and forward into South Carolina, Nevada, and so on and so forth.

So, I think they know they have got to get it done with either a first place tonight or a very close second—Chris. 

MATTHEWS:  Well, let me ask you about Edwards, because it seems like he‘s not the interesting candidate in this race.  We have got the—perhaps the first-ever African-American president of the United States looming here in the form of Barack Obama. 

We have got the first woman, as—as Andrea Mitchell pointed out, who might well be president.  And here we have this guy from North Carolina.  He served one term in the United States Senate.  He‘s out of office now. 

Where is the pizzazz there?  What is the offering?  What is the unique selling point of John Edwards? 

CORKE:  Yes, that‘s the tough part. 

I mean, let‘s face it.  Any time an Obama or a Clinton walks into the room, I mean, they suck the energy right out of it.  They‘re the rock stars in politics right now. 

So, for Edwards, it‘s a double-edged sword.  On the one hand, you have to try to wedge your way into a room with a couple of major stars.  And, on the other hand, you have to somehow remain credible. 

MATTHEWS:  Right. 

CORKE:  You don‘t want to try and one-up these people. 

And let‘s face it.  Chris, it‘s tough.  Here‘s a guy who hasn‘t been in office for several years, but he‘s working the ground here well in the rural areas.  He‘s sort of spinning that down-home sort of, you know, I‘m one of you kind of guys. 

MATTHEWS:  Yes. 

CORKE:  And he‘s been beating that drum or strumming that banjo, if you will, since he‘s been here.  Maybe that will help him, but I‘m not sure, Chris.  

MATTHEWS:  Yes.  The musicians can only get you in the door, as you pointed out.

Thank you, Kevin Corke.

Let‘s go now to Chuck Todd, who‘s going to give us the wrap-up of all this. 

Let‘s talk about the top three, Chuck.  Is Hillary the only one that can survive tonight if she doesn‘t win? 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Well, I think, in terms of the future for the nomination, I guess that‘s correct. 

I mean, look, if Obama finishes second to Edwards, he‘s got the resources to keep going.  And he beats Clinton in New Hampshire, you know, you see how this whole scenario could play itself out. 

So—but, of all three, you know, she needs this victory the least.  I mean, look, this was the campaign that eight months ago thought about skipping this thing.  My guess is that some of them wish that they had skipped this thing.  This never was going to be an easy state for them. 

So, I think that, yes, I think they—they think that they can pivot from losing.  But I will tell you, this inevitability thing, what message is it going to send to the rank-and-file Clinton donor in California, in Florida who really, you know, hasn‘t really tuned in, doesn‘t know how tough Iowa really was, and they wake up and find out she lost?  Will they start...

(CROSSTALK)

MATTHEWS:  Yes.  What about them, who have been told by the higher-ups in the campaign, don‘t worry; the worst that will happen is that Edwards will win?

(CROSSTALK)

TODD:  Right. 

MATTHEWS:  Don‘t worry.  Obama can‘t win.

Obama wins tonight, if he does, how does that go across in Manhattan and in western—the western part of L.A.? 

TODD:  No, I think that that‘s—that‘s sort of this one issue.  I think that they‘re—that‘s something that would have to make them a little nervous. 

And then, of course, how do the national polls react?  She‘s always had this cushion in the national polls, and then—and which has created this cushion with the—the donor Democrats. 

And if she doesn‘t do well here in Iowa, that could be a wakeup call.  And there‘s worry that, you know, the rats leave the ship, that they run away from her. 

MATTHEWS:  Yes. 

TODD:  We will see.  I don‘t know if it‘s going to be that easy. 

MATTHEWS:  Well, let‘s talk about the math.  Let‘s...

TODD:  You know, Ted Kennedy lost big out here.

MATTHEWS:  Let‘s talk about the math.

TODD:  Ted Kennedy lost big out here, and he kept going.

MATTHEWS:  Right. 

TODD:  So...

MATTHEWS:  Let‘s talk about the math.

If Hillary gets about 30 percent tonight, that means that seven out of 10 Democrats who know her extremely well in Iowa, have watched for a generation, said no to her.  They chose someone else. 

How can you build a nomination on the prospect that people all know who you are, they have read all the books, they have watched you going back to when you ran for first lady back in ‘92, ‘91-‘92, way back then, and they say, no thank you?  How do you build a campaign out of that? 

TODD:  Well, to win by—with 40 percent in New Hampshire, and then to win with 50 percent in South Carolina. 

I mean, she—you know, she‘s not going to get away with just winning 30 percent the whole time, because, eventually, this thing narrows down to two candidates at some point.  So, look, I think she can survive finishing second...

MATTHEWS:  Right. 

TODD:  ... at 31, 32, if the winner is at 34, 35.  She moves on to New Hampshire and, at that point, figures out a way to win there. 

MATTHEWS:  How about down in the big states, like Florida, the condos down there, the older people, the retired people?  I have always thought that, no matter who won in Iowa, they would stick with Hillary. 

Does she still have that base of support from transplanted New Yorkers, from New Yorkers, from Connecticut, people from California, people -- does she still have that old Democratic base on her side? 

TODD:  Well, see, I don‘t buy—you know, that—it‘s funny you say that.

You know, I had a professor friend of mine e-mail me this morning, Phil Tronstein (ph), out in California.  And he reminded me, Chris, that the absentee ballots for California‘s February 5 primary get mailed out Monday. 

MATTHEWS:  Wow. 

TODD:  And had the caucuses—had the Iowa—listen to this calendar magic here.  Had the Iowa caucuses been on its original date of January 14th, well, then they could have had a week sort of run-up before the caucuses to get some of their—to bank some vote in California. 

Not anymore.  The caucuses are on the 3rd.  So, now before—even Californians, who many thought would start voting before the caucuses took place, are going to have the results of Iowa and then almost have the results of New Hampshire.  And that—that is going to affect the vote. 

And, so, I think this idea that she could have a—a big state firewall of the Northeastern states, New Jersey, New York, Connecticut, those...

MATTHEWS:  Right. 

TODD:  ... February 5 states, and then California and Arizona and those places, I think it—you know, you can‘t really count on that. 

MATTHEWS:  Yes, but there‘s the Freddy Krueger theory that they‘re never really dead. 

Anyway, thank you, Chuck Todd. 

(CROSSTALK)

MATTHEWS:  We will be checking back with you throughout the night. 

Coming up: the Republicans.  Our NBC reporters are with the candidates.  And Joe Scarborough has got the latest from New Hampshire.

Just under 20 minutes, by the way, until the caucuses open in Iowa.

You‘re watching HARDBALL, only on MSNBC.  

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  The polls show it‘s just neck and neck, down to razor wire.  Tensions are getting high.  And comments are being made that are really quite questionable. 

I saw just yesterday the chairman of Governor Huckabee‘s campaign said that he would like to knock my teeth out.  And my only comment on that is, don‘t touch the hair. 

(LAUGHTER)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  A lot of times, I‘m asked by the press why.  I told Jay Leno last night, I think, sometimes, that the reason that our campaign is catching fire is because people would rather elect a president who reminds them of the guy they work with, not the guy that laid them off. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

The latest Reuters/C-SPAN/Zogby polling has Huckabee leading Romney by six points out in Iowa.  It‘s quite a lead, actually. 

NBC‘s Kelly O‘Donnell is at Huckabee headquarters in Iowa. 

Kelly, that‘s the latest number we have.  And that six points looks like it‘s beyond the margin of error.  That‘s a healthy lead going into a caucus. 

KELLY O‘DONNELL, NBC CORRESPONDENT:  Well, that matches up, Chris, with what senior advisers to Huckabee say they have found in their own internal polling. 

And what‘s notable is that they had never done any polling until last night.  And that, of course, as you would understand, is because they didn‘t have the money, they didn‘t have the organization.  Any pennies that came in were focused on other things. 

So, it tells you where they are now.  They wanted to get a sense of where they were in the race.  Could they get their people out?  And they also really wanted a measure of how some of the negative stuff that‘s been happening would affect Mike Huckabee. 

And when I talk about the negative stuff, you know, Romney him pretty hard with some tough advertising.  It focused a lot on the pardons that he, Huckabee, had—had approved when he was governor of Arkansas.  Also, the candidate himself said some things that weren‘t quite right, and he had a few problems along those lines. 

And, of course, that new scrutiny from the news media brought some attention as well.  They were worried about that a week ago.  They say that they think Iowans has kind of settled through all of that, reviewed it.  Because of Huckabee‘s kind of warm, friendly style, they think they have been able to kind of ease some of that, stop the drift downward that he was seeing. 

And they think that his favorables, Mike Huckabee‘s, are still better than Romney‘s.  And that‘s what they‘re sort of hanging their hat on tonight.  So, they have done just sort of the first scientific stuff, which really just tells you how different this campaign has been, compared to all the others, in both parties. 

MATTHEWS:  Oh, I can‘t wait to see Huckabee campaigning in the

suburbs.  That will be interesting, because he has to go to sort of a

metropolitan audience, where half the Republicans are pro-choice.  They‘re

not anti-gay.  They‘re not big on guns.  I wonder how that transference is

how well he re-pots his own plant.  It should be interesting.

Anyway, thank you, Kelly O‘Donnell. 

NBC‘s Ron Allen is at the Romney headquarters in Iowa. 

Are these guys that Romney—these hot-shot professionals, with their Harvard MBAs, do they feel that their business plan hasn‘t worked out tonight or what? 

RON ALLEN, NBC CORRESPONDENT:  Well, their business plan is certainly going to be put to a test, Chris. 

And you‘re right.  That‘s exactly what the impression you get when you‘re around this campaign, as you put it, hotshot Harvard MBAs.  Yes, they‘re very bright people.  They‘re very methodical.  They‘re very businesslike. 

And they‘re counting on that, this organization that they have built here for the past year, with a lot of money, millions and millions of dollars, all kinds of paid professionals.  They‘re counting on that to really grind out a victory. 

We‘re hearing that some internal polling in the Romney camp thinks that they‘re going to be—they‘re behind by 2 to 4 percentage points to Huckabee.  They‘re not saying that publicly.  It‘s just some of the buzz that we‘re hearing. 

And, if that‘s true, it could be a really devastating defeat of some -

to—to Romney.  He‘s certainly going to go on.  You know, they have already been saying that—they have been spinning it, a loss, to say that, well, you have to look at where Romney was a year ago.  He was in single digits.  He was unknown to people like Giuliani and McCain.  Look how far he‘s come. 

But, of course, that doesn‘t say how far he‘s come against a guy who was unknown, Huckabee, just a couple of months ago.  So, they‘re saying that, you know, it‘s razor-thin.  They‘re hoping to pull out a victory.  But they‘re also already looking ahead to New Hampshire. 

Today, the campaign, the Romney campaign, launched a new ad targeting John McCain.  And, again, it‘s another negative ad, like they launched here against Huckabee.  But they‘re doing it—they‘re trying to do it gently.  They‘re trying to do it using ordinary citizens to, in the ad, first say kind things about—about McCain, that he‘s a patriot, that he‘s a fine man. 

And then you have other people who come along and zing him for raising

for not supporting the Bush tax cuts, for supporting illegal immigrants, and an amnesty program, as they call it.  So, Romney is fighting a war on two fronts here.  He hopes to win here, but I think they are already looking ahead down the road...

MATTHEWS:  OK. 

ALLEN:  ... to New Hampshire to try and—they‘re trying to live—fight—live to fight another day down there—Chris.

MATTHEWS:  I don‘t think those ads are going to work.  Anyway—I just don‘t think they‘re working.

Anyway, thank you, Ron Allen. 

Tucker Carlson is in New Hampshire covering the McCain campaign. 

The little engine that could, John McCain—Tucker.

TUCKER CARLSON, HOST, “THE SITUATION WITH TUCKER CARLSON”:  Well, we will see if he can. 

The McCain people are saying what happens in Iowa tonight doesn‘t matter.  They openly admit they‘re not tracking.  They don‘t have polls going in that state.  They don‘t know anything that we don‘t know.  Most of our information is anecdotal anyway. 

They‘re, I think, deep down, expecting to do as least as well as fourth, but they say it doesn‘t matter here in the state of New Hampshire.  And they‘re probably right.  McCain is poised to win this state, which is, no matter how you look at it, devastating to Mitt Romney, who was the governor of the contiguous state Massachusetts, who was the front-runner here for so long. 

It makes a kind of sense.  McCain, here‘s what he has going for him.  The Republican Party is an instinctively institutional party.  It‘s a party that respects its elders.  It‘s the party that nominated Bob Dole in 1996, if you know what I mean. 

By those standards, John McCain, the oldest guy in the field, the most experienced one, has a natural advantage.  The downside, the conservatives hate him, and they have for a long time.  Can he win them back?  I don‘t know.  I don‘t think, under any other circumstances, he would be able to, except that you have, in this season, a field that conservatives are instinctively, I think, suspicious of. 

Mitt Romney hasn‘t fully made the case.  Mike Huckabee could, but he just came out of nowhere.  I‘m not sure he has the time.  I think, under these circumstances, you could see conservatives looking at McCain and saying, you know what?  He‘s not as bad as I thought he was and he can beat Hillary. 

MATTHEWS:  OK.  Thank you, Tucker Carlson.

Now to MSNBC‘s Joe Scarborough, who is in Manchester, New Hampshire.

Wrap it all up for us, Joe.  You know—you know the Republican Party pretty darn well.  You know the rural party.  You know the big-city party.  What happens in Iowa, does it stay in Iowa? 

JOE SCARBOROUGH, HOST, “MORNING JOE”:  No, it doesn‘t. 

But I have heard the word devastating now used regarding Mitt Romney‘s chances in Iowa and also in New Hampshire if the results don‘t go well.  Actually, the worst-case scenario—and we talked about that this morning, Chris—is not only that he loses to Mike Huckabee by a few percentage points.  That won‘t be great news, but they can survive that.  They can move on to New Hampshire, and they get their ticket punched.

Their bigger fear must be that John McCain comes in at that 18 to 20 percent that you were talking about this morning, because they are looking ahead to New Hampshire.  What they can‘t afford is a loss in Iowa and a loss in New Hampshire. 

Right now, the Romney campaign‘s best friend, really, is Fred Thompson.  If Fred somehow loafs into that third-place position, John McCain can say all he wants.  He knows—McCain knows that, if he comes in third place, then he‘s the sub-headline tomorrow, and everybody is talking about the McCain resurgence.  He rides that wave all the way into New Hampshire, and everybody is talking about his big mo‘. 

So, for Mitt Romney, he can loose by a few percentage points to a guy who was ahead of him by 7, 8, 9 percent next week.  He just can‘t lose to Huckabee and have a strong showing by John McCain in Iowa. 

MATTHEWS:  So, there could be three weddings and many funerals tonight? 

(LAUGHTER)

SCARBOROUGH:  Yes, exactly.  Exactly. 

But I will tell you, you—you talk about urban Republicans, suburb Republicans, and also Middle American Republicans.  Mitt Romney, the media -- I don‘t know that the media really likes this guy too much.  They may think he‘s too safe. 

But he plays very well in blue state America for Republicans and in Middle America.  He can stand a couple of second-place finishes and then go to Michigan and win that, be competitive in South Carolina, then have the big Bush machine in Florida carry him through to Super Tuesday. 

He‘s—he‘s—again, he—his worst-case scenario is a strong showing by Huckabee and John McCain tonight. 

MATTHEWS:  Do you think Huckabee could, with a lot of luck, become the Republican nominee?  Do you think that‘s possible, or plausible? 

SCARBOROUGH:  I—you know, Chris, I—I—really, I have loved coming on your show over the past seven, eight, nine years.  And, usually, my predictions are right simply because I play it cynically, and I look at the person that‘s got the most money and the most organization, like you.  You always say that the dreamers don‘t win, that the party always wins. 

MATTHEWS:  Oh, I hate to say it, though. 

(CROSSTALK)

MATTHEWS:  I hate to say it. 

SCARBOROUGH:  I hate to say it.

I think tonight may be your night.  I think tonight may be the night that Iowa voters decide to put Barack Obama on the front pages of the headlines across the world and Mike Huckabee. 

If that happens, then all bets are off.  You know, as you know, in 1992, Mike Huckabee could have won a state like Iowa and not had the bounce, couldn‘t raise the money fast enough.  Now you go on the Internet.  If he wins tonight in a big way, he could raise $10, $15 million over the next five days. 

You look at Ron Paul raising $6 million in one day. 

MATTHEWS:  Yes. 

SCARBOROUGH:  He could do it.  And he—he believes that he can...

MATTHEWS:  OK. 

SCARBOROUGH:  ... raise enough money to be competitive.  We will see.

MATTHEWS:  Well, if it‘s Barack and it‘s Huckabee tonight, it‘s not a good day for the regulars.

Anyway, thank you very much, Joe Scarborough. 

(LAUGHTER)

SCARBOROUGH:  No, it‘s not.

MATTHEWS:  Up next...

SCARBOROUGH:  All right.  Thanks, Chris. 

MATTHEWS:  ... it‘s all up to the Iowans, as we have been saying.  And now David Shuster is going to come and tell us how he‘s going to be watching certain precincts tonight, as the first voting in the presidential campaign is just minutes away.

You‘re watching HARDBALL, on the big night in Iowa, only on MSNBC.  

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  I‘m the one with the experience and the judgment in order to lead this nation in difficult times.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

We‘re just about a minute away right now before the doors actually open in those Iowa caucuses. 

David Shuster is at the Polk County Convention Center, where the caucus returns are going to be coming in—David.

DAVID SHUSTER, NBC CORRESPONDENT:  Well, Chris, the caucusing will actually be allowed to begin right at—right in just the next couple of minutes. 

And state party officials here in Des Moines are ready to take the results.  And some of the results, Chris, from some of the smaller precincts could come within a matter of minutes, because, in a few of these 1,8000 precincts across the state, you‘re only talking about 15 or 20 people. 

Now, while the Democrats are about to begin, the Republican caucuses, they start at the top of the hour, because the process is much more simple on the Republican side.  It‘s just a matter of people raising hands, counting a few ballots in some particular cases, or standing in a corner.  And then those results get called in here to Des Moines.  And it‘s really just a popular vote. 

So, the Republican results could be known a half-an-hour after starting, or as early as an hour from now, whereas, on the Democrats, you may be talking about another two hours, Chris, until the final results are known on the Democratic side. 

However, there are some counties that officials are going to be watching very closely tonight for a sign of things to come.  First on the Republican side.  Plymouth County, which includes the—which is in the northwest part of the state, northwest part of Iowa.  It‘s known for an ice cream plant.  There are a lot of Evangelicals and home-schooling families in this particular county and turn-out is going to be very crucial as an indicator of Mike Huckabee‘s strength.  A strong turn-out among these families in this small area, that will be a good sign for Mike Huckabee.  Bad sign for Mitt Romney. 

Now on the Democratic side.  Democrats paying close attention over to next few minutes to Jasper County, which includes the town of Newton.  Newton is the town that had the Maytag factory that was closed earlier this fall.  There are big economic problems in this town of 15,000 people.  This should be a stronghold for John Edwards.  After all, he had a Maytag employee.  He was part of his final campaign commercial.  However, Clinton and Obama have fought very hard for Jasper County.  And to the extent that Clinton and Obama do well and get their people to the caucuses tonight, that could spell problems for John Edwards. 

But again, Chris, the Democratic caucuses are beginning just this very minute.  The doors are closing.  You‘re either inside or you‘re not.  Those inside will start standing in the corner of the candidates that they prefer.  There is a complicated mathematical formula, Chris, as far as the awarding of the delegates to the state convention.  That‘s why the Democratic process takes longer tonight than the Republicans.  Chris?

MATTHEWS:  It‘s finally starting.  Thank you very much, David Shuster.  It‘s just after 7:30 here on the East Coast, 6:30 out in Iowa where the caucuses are about to open.  Up next, it‘s coming down to the wire in Iowa as we‘ve been saying.  We‘re going to find out what‘s going on down there on the ground.  We‘re bringing in NBC‘s Tim Russert to tell us.   You‘re watching HARDBALL, only on MSNBC.

(BEGIN VIDEO CLIP)

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE:  Something different is going to win this election.  We hope it‘s our different strategy that wins it, and we‘re confident it will.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to HARDBALL.  It‘s just after 7:30 Eastern Time right now, 6:30 Central time.  That‘s out in Iowa.  The first voting of this presidential election is underway already.  Thousands of Iowa voters are making their way to vote for the next president of the United States. 

Tim Russert, the Washington bureau chief of NBC News and the moderator of “Meet the Press,” he joins us from Iowa.  Well, it‘s Thursday, so it‘s got to be Iowa, Tim and here we are, Mr. Meet the Press.   What are the voters going to tell us tonight?

TIM RUSSERT, NBC NEWS WASHINGTON BUREAU CHIEF:  Oh, it‘s finally here. 

And I cannot wait to hear their verdict.  You know, Chris, the talk all day

and I spent some time with the top advisors in the key campaigns. 

The anxiety level, the anguish, the uncertainty is extraordinary.  They just don‘t know who‘s going to show up tonight.  The Obama people are very clear.  They need a turn-out of 150,000 Democrats, which would be 25,000 more than turned out in 2004.  They are looking for young people, looking for Independents.  They just don‘t know who‘s going to show up. 

The Clinton people, they‘re targeting middle age, elderly women.  If they can get a spike in that category, they feel pretty good.  John Edwards has been living out here for six years.  First in 2004 and now in 2008.  He has a hard-core base.  Will they show up? That‘s the key.  We‘ll know so much more in an hour.

MATTHEWS:  The Clinton people, as they want to do, are very good at putting out a message in defense.  In other words, they‘re putting out a word tonight in preparation for a possible bad night by saying this was never her state.  What is it essentially about Iowa that is hostile to the Clintons?

RUSSERT:  Well, they will say that Bill Clinton did not campaign here in ‘92 because Tom Harkin was the senator from Iowa also running for president. 

But the difficulty is if Hillary Clinton won here tonight, they would proclaim victory and they would say the nomination is all but won.  A win is a win.  A loss is a loss, no matter who it is. 

And the fact is if Hillary Clinton does not win Iowa, it‘s going to put enormous pressure on her to rebound in New Hampshire or rebound in Nevada or rebound in South Carolina.  These nominations are—have to be won.  And you have to fight for them and you have to win primaries and caucuses.  And that‘s the bottom line no matter what kind of spin any of the campaigns try to put on it. 

MATTHEWS:  There was a little nugget in the “New York Times” a couple of days ago, I‘m sure you saw it.  I think it was Patrick Healy‘s piece.  It was a straight news piece, but it had this little nugget in it.  It said that that the Clinton people of a high command, it referred to them, are out there telling their money people in Manhattan and in the other better quarters financially in the United States that don‘t worry.  The worst that will happen in Iowa is that John Edwards will win.  Don‘t even have to worry about Obama winning.  What do you think of that prospect? Was that a smart marketing move by the Clinton fundraisers?

RUSSERT:  Well they‘ve been very open out here that if Edwards won, as long as they were ahead of Obama, they could accept it.  They don‘t see John Edwards capable of going long distance because of lack of financing against Hillary Clinton.  The Edwards people obviously will dismiss that and say, we can raise all the money we need to go one-on-one with Hillary Clinton. 

But the fact is, Chris, the Clinton people—a very senior official in the Clinton camp said we understand if Obama wins Iowa and he gets momentum and he wins in New Hampshire because the Independents in that state cross over and vote for him and he wins South Carolina because half the voters in the Democratic primary are African-American. 

We have to start winning very, very quickly.  That‘s why Hillary Clinton is already calling people in the Super Tuesday states, the February 5th states, trying to put in a second firewall—in a disastrous scenario where she happened to lose the first four primaries and caucuses.  They don‘t expect that.  But they are planning to dig in and fight for this nomination for as long as they can sustain it. 

MATTHEWS:  It‘s hard to call yourself the people‘s choice if two thirds of the Democrats are voting against you.  Anyway, Tim Russert, you‘ve got the hot man this Sunday on “Meet the Press,” John McCain—the third man to come out of these victories.  It looks like he‘s going to be in the running big-time this weekend.  Thank you, Tim.  “Meet the Press,” John McCain, the main guest this weekend. 

Out in Iowa, voters are gathered at the caucus sites right now.  The voting is beginning already.  Up next, our Iowa caucus election panel will join us as we preview the big night. 

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  Two campaigns believe that their money would make them inevitable.  But tonight, Iowa caucus goers are going to prove that our campaign to stand up for the middle class and stop corporate greed in America is unstoppable.  

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  It‘s like the last supper here or the masters of the cloth hall, the Dutch Masters cigar boxes is what it looks like right here.  Now for the politics fix.  Look at this, everybody is in dark suits and white shirts.  Remember the box of cigars?  Anyway, thank you. 

I‘ve got Pat Buchanan, of course “Newsweek‘s” Howard Fineman, Rachel Maddow of “Air America” and Gene Robinson of the “Washington Post.”  Gene, I‘ve been reading you regularly.  I see you on TV and then I want to read you.  See how it works? This is television, it moves things around. 

EUGENE ROBINSON, WASHINGTON POST:  Well, that‘s the way it‘s supposed to work. 

MATTHEWS:  I want to talk about the interesting battle on the Democratic side, which I think is the headline tonight.  If Obama wins tonight, according to the polls, he‘s in good shape.  Gene, you start.  If he wins tonight, that‘s the shot heard around the world.  This is Lexington and Concord with the target being not King George for President George this time - but Hillary has got to rebound from that.  And the Clintons don‘t have a reputation for quitting. 

ROBINSON:  No, they don‘t.  And so it becomes a tough battle.  But if Obama does win tonight, it‘s—it‘s not just a big story.  It‘s a transcendent story, really because it‘s a story about race.  It‘s a story about history, it‘s a story about America. 

MATTHEWS:  That‘s our story.  And we can enjoy it.  But the Clintons are sitting at home ignoring that big-picture story thinking, how the hell do we win this thing?

ROBINSON:  Right and so what do they do?  Well if he wins tonight, he wins New Hampshire probably, doesn‘t he? 

MATTHEWS:  So therefore they‘ve got another problem.

ROBINSON:  So therefore they‘ve got to look at Florida.  They‘ve got to look at the states coming up.  I‘m pretty sure he‘s going to win South Carolina.

MATTHEWS:  Is Hillary‘s first chance way down the line if she loses two in a row, perhaps in South Carolina, perhaps?  In the middle, she has to win something small like Nevada.

RACHEL MADDOW, AIR AMERICA:  I don‘t think it‘s a given that Hillary doesn‘t win New Hampshire if Barack Obama wins tonight.  I think the discussion then comes to was Iowa a fluke?  Was there an abnormal sort of turn-out at the caucuses in Iowa that‘s non-duplicable in other states?

MATTHEWS:  Who‘s going to say that?

MADDOW:  I think that‘s what the Clinton surrogates are going to have to say. 

MATTHEWS:  They‘re going to say what happens in Iowa stays in Iowa? Is that going to be the theme here?

MADDOW:  That‘s right.  They‘ll say the college students went out because it was a warm night in Des Moines.

MATTHEWS:  Oh god, you know, people with such docile minds shouldn‘t listen to the Clintons.  They should close their ears and put ear muffs on.  They‘re too good at it.

HOWARD FINEMAN, NEWSWEEK:  The Clintons might say that but nobody will be listening when the gale force coming out of Iowa will be so loud that they won‘t be heard.  The interesting thing here is that with New Hampshire being only five days after Iowa, it‘s actually the perfect kind of bounce if Obama or anybody else gets one out of Iowa.  It‘s enough to get the bounce going up.  But it‘s not enough, I don‘t think, for it to come back down again, for the counter attack. 

MATTHEWS:  What about the debates coming up Saturday night with ABC?

You‘ve got—

FINEMAN:  Those are crucial.  Those are crucial. 

MATTHEWS:  A lot of people don‘t watch debates on Saturday nights, but some will. 

FINEMAN:  People will watch the debates.  But I was on the phone with a lot of people in New Hampshire just in the last hour or so.  A lot of the neutral people over there who are watching events over here are saying with Obama only four or five points behind now in New Hampshire, if he wins this thing, even by one vote in Iowa, then that five-point lead of Hillary‘s is going to disappear in a second.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Look if she‘s going to - I know - I saw Bobby Kennedy concede to Gene McCarthy for the first defeat ever by a Kennedy in Oregon.  I was in the Benson Hotel, standing in front of him.  He came up and gave one of the most gracious speeches I‘ve ever seen a candidate deliver.  Gene McCarthy ran a fine campaign.  I want to congratulate him, how well he did, we‘ve got a battle going next week.  Let‘s all go to California.  If I were her, I would be very gracious and upbeat and say this is a marathon.  We‘re going to have a lot of races ahead New Hampshire and on.  In other words, say this is the first one and congratulations, he won the first battle, but be very, very gracious. 

MATTHEWS:  You don‘t expect a lot of piss ant remarks then coming out of their camp tonight? No, really. 

(CROSSTALK)

MATTHEWS:  I mean—let‘s not change the front of this campaign.  The language of this campaign, the lingo has been the snarky attacks back and forth by unnamed officials, by high command people.  You know, his name is Hussein.  He used drugs.  Come on.  We‘re used to that. 

ROBINSON:  I don‘t think that‘s going to change overnight. 

MATTHEWS:  Right so the Clintons are not likely to be as gracious as Bobby Kennedy was at the Benton Hotel. 

BUCHANAN:  But look, the whole nation is going to see and it‘s going to see her and it‘s going to take away an impression.  And I‘ll bet you she‘s got writers working on her statement right now and that it is gracious. 

MATTHEWS:  Wow. 

MADDOW:  If you were going to advise the Clinton campaign about what to do if Barack Obama wins, what are you going to tell them to do? They‘re going to have to explain it away in a way that still makes Clinton look like she‘s going to win the next few contests.  The only way you do that is by highlighting what‘s unusual about Iowa and talking about how it can‘t be replicated anywhere else.  What other case do you make?

MATTHEWS:  The music man argument?  They‘re a bunch of hicks in Iowa?  The fall for the band that‘s going to come? Henry Higgins, you know, they‘re going to bring in the band, give them uniforms?  They‘re just a bunch of suckers?  What are you going to say?

MADDOW:  You don‘t want to say that Iowans are stupid.

BUCHANAN:  Iowa is not Obama‘s home court for heaven‘s sakes. 

He‘s not—

MATTHEWS:  Oh, thank you. 

FINEMAN:  That‘s a very important point. 

MATTHEWS:  That‘s been the clever spin here. 

FINEMAN:  In places like South Carolina, the African-American voters that I talked to down there when Obama was there said we‘re waiting to see how he does in the first few races.  The fact that Iowa is so lily white, if Obama wins, it makes it even bigger. 

MATTHEWS:  Explain that. 

ROBINSON:  Because in a state like South Carolina, there‘s a lot of African-Americans who have trouble getting over the hurdle of believing that white America will vote for a black president.  When push comes to shove. 

MATTHEWS:  You mean, you can‘t use the water fountain, but you can be president?  The older people I‘m talking about. 

ROBINSON:  No, it‘s difficult to imagine it actually happening.  And if it becomes, you know, visible and tangible—

MATTHEWS:  I think that‘s so logical. 

MADDOW:  But when that is the narrative, though, if Barack Obama does not win New Hampshire, which is also an incredibly white state, doesn‘t that—aren‘t people just waiting to see what it is, their foregone conclusions about that anyway?

ROBINSON:  I think one is enough to win South Carolina. 

MADDOW:  You do?

MATTHEWS:  Gene and everybody here grew up with Tom Bradley getting most of the polling in California for governor of California.  He‘s been police chief, mayor of L.A., a conservative guy in many ways.  Thumped in the actual voting.  We saw Doug Wilder in Virginia 13 points ahead, wins by one because white voters have historically been liars about how they vote when they talk to pollsters.

I think that‘s beginning to change.  We saw it in Tennessee where Harold Ford Jr. did better than his polling.  Whites have stopped lying about race, which is a profound improvement, I think. 

ROBINSON:  I sincerely believe that has changed.  I don‘t think you get the lying right before the vote that you got back in - the Bradley effect, I think maybe yes.

MADDOW:  I think that what‘s interesting is that this is a caucus and this is not a primary.  These are people voting in front of their friends and neighbors and not behind a curtain where nobody can see what they do. 

MATTHEWS:  A lot of Americans are incapable of doing that.  I mean, I don‘t think my parents ever told each other how they were voting.  Does this sound so odd?  Most people don‘t brag about their politics. 

MADDOWS:  No, I‘m not saying.

MATTHEWS:  . she‘s saying that it helps Obama.

(CROSSTALK)

MADDOW:  It helps Obama, but it may help Clinton because the same factor may be at work both in terms of race and gender.  In terms of people being willing to tell pollsters that they‘ll do something more progressive on race and gender than they really will in secret. 

BUCHANAN:  But the truth is if Obama were not African American, does anyone think coming out of the state legislature, he would now be a serious candidate for president of the United States?  I think it‘s a net advantage just like the woman thing for Hillary.  It‘s a net advantage now.  There‘s going to be pluses and minuses.  But in the Democratic Party, it is a positive.

MATTHEWS:  You know, if Franklin Roosevelt wasn‘t a Roosevelt, he wouldn‘t have been one of our greatest presidents, either.  And he wouldn‘t have gotten a legacy and invitation to go to Harvard.  I mean, we‘ve had these set-asides a long time before Obama came along, Pat. 

Anyway, the caucuses are under way in Iowa and the results are coming tonight.  We‘ll be back with the round table.  I love playing the liberal to Pat.  You‘re watching HARDBALL, only on MSNBC.  There‘s a lot of room over there.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with our round table.  If you get a wide shot here, if the director gave us a wide shot, it does look like the masters of the cloth hall.  Everybody in dark suits, everybody looking like the Dutch Masters cigar box here. 

But there‘s a—you could pass as an old Dutchman.  Let me go to Gene on the question.  Pat, you‘re the biggest Republican here, I think.  Ersatz is a Republican.  Let me ask you about this thing with Huckabee.  He‘s come out of nowhere.  The guy, you talk about single digits.  He didn‘t even have digits and now he hooks like the front-runner tonight.  Is Huckabee travel, or does what happens in Iowa stay in Iowa?

BUCHANAN:  He‘ll travel to South Carolina.  Huckabee comes in with two aces.  I‘m a Christian, a devout Christian, and I am a conservative, a solid conservative.  He doesn‘t have all those credentials in Arkansas, but he certainly played those two cards in Iowa. 

MATTHEWS:  Who is not a Christian in this race?

BUCHANAN:  Mitt Romney, they say, might not be a Christian.  He‘s a Mormon, you know. 

MATTHEWS:  Is Rudy Giuliani not a Christian? Is John McCain not a Christian?  I just wonder about the unique selling point of this guy. 

BUCHANAN:  Well look, let me tell you.  You‘re talking about evangelical conservative Christians out in Iowa.  To them, Rudy Giuliani is not one of them.  Mitt Romney is. 

MATTHEWS:  I know, the word Christian has a particular meeting to them.

BUCHANAN:  There‘s a divide in the Christian community. 

MATTHEWS:  Right, right.  So what do you think? That‘s his selling point?

BUCHANAN:  Those two are his selling point.  Again, all you need is a third of the vote out there to win it. 

FINEMAN:  I think there‘s more to it than that.  I think Huckabee has some populist notes to him.  He talks about economics, for the fair tax.  By the way, a lot of his support in Iowa are these people who want the sales tax instead of the income tax.  It sounds trivial, it‘s important. 

Also he‘s a great communicator, he‘s a folksy guy and he was a Baptist preacher.  He knows how to talk.  Ironically, if McCain comes on strong and wins in New Hampshire, then you have McCain going back down to South Carolina to potentially have to face off against the Evangelicals again, just like George Bush did and McCain did eight years ago.  That‘s where I see this thing go. 

MATTHEWS:  Are we going to call it - in Europe we had the Christian Democrats in power in many countries.  Are we going to have the Christian Republicans?  Is that a political party now?

ROBINSON:  It sounds like we almost do.  But there is the kind of Wall Street wing of the Republican Party and I wonder, I still can‘t see them coming to terms with Mike Huckabee as candidate of the Republican Party. 

FINEMAN:  They‘ll take McCain.

MADDOW:  That‘s an important difference.  When you look at McCain

George W. Bush in South Carolina and you look up that match up and then you try to line that up against McCain-Mike Huckabee.  What you get is the difference between George W. Bush and Huckabee and that‘s that Huckabee is in a different class. 

MATTHEWS:  Rachel, I want you to start this.  Ladies first, Huckabee versus Obama, national election, who wins?

MADDOW:  Obama. 

FINEMAN:  Obama. 

BUCHANAN:  I‘m not sure. 

ROBINSON:  Obama. 

MATTHEWS:  OK, Huckabee versus Hillary, who wins?

MADDOW:  Huckabee. 

FINEMAN:  Hillary. 

BUCHANA:  I think Hillary is stronger than Obama. 

ROBINSON:  Huckabee. 

MATTHEWS:  Interesting. 

BUCHANAN:  Huckabee beats Hillary?

MATTHEWS:  McCain against any Democrat, who wins?

ROBINSON:  Against any Democrat?

MATTHEWS:  Well OK, McCain against Obama?

ROBINSON:  That‘s tough. 

BUCHANAN:  He splits the Republican Party, I think.

MADDOW:  McCain loses to everybody.

FINEMAN:  I‘m not sure McCain can beat everybody.  I‘m not sure if he can beat them all.  I think there‘s some he could lose to.  I think a McCain-Obama race would be one heck of an interesting race. 

MATTHEWS:  I‘m watching McCain.  I think the guy is coming back tonight.  I think he‘s going to be one of the winners tonight by coming in strong by 18 points.  Anyway, the panel is staying with us all night. 

Keith Olbermann is coming up next with “COUNTDOWN” and then Keith and I will have complete coverage of the Iowa caucuses.  This is Huntley-Brinkley time with Keith Olbermann and Chris Matthews.  “COUNTDOWN” starts right now.

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

END   

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