updated 1/4/2008 12:47:31 PM ET 2008-01-04T17:47:31

Guests: Howard Fineman, Pat Buchanan, Rachel Maddow, Chip Saltsman, Eugene Robinson, Rudy Giuliani, Joe Trippi, Howard Dean, David Axelrod

KEITH OLBERMANN, CO-HOST:  And good evening.

It is 9:00 p.m. in the East, 8:00 p.m. in Iowa, where the early entrance poll and early precinct results suggest Mike Huckabee is leading Mitt Romney in the Republican Straw Poll.  On the Democratic side, the entrance poll and precinct results show Obama with the lead and Clinton and Edwards vying for second place. 

What you’re seeing here are the hard numbers.  This much we do know: the first presidential primary season without an incumbent president or vice president since 1928 is under way, and NBC News is now calling the Republican straw vote as a victory for Mike Huckabee. 

Percentage numbers will come in later, but based on our projections and based on those early results, with now 25 percent of the Republican polls reporting a 7,809 vote to 5,355-vote lead of Huckabee over Romney -- 35 percent to 24 percent.  The hard numbers, NBC News at 9:00 Eastern, 8:00 Iowa time, has called former Arkansas governor Mike Huckabee the winner of our first primary of sorts in 2008. 

CHRIS MATTHEWS, CO-HOST:  Right.  And it’s a big one for him, and he came from nowhere. 

Talk about single digits, he was zero.  And he’s come across with a name like “Huckabee,” he’s got to be good, right?  Not exactly your typical suburban surname. 

“Huckabee” sort of reminds a lot of people of the rural areas of America.  “I Heart Huckabee,” one reason. 

OLBERMANN:  Yes.

MATTHEWS:  And clearly, he has established not just a hook into the evangelical vote, but he has apparently won the hearts of a lot of people who just cover the campaign.  A lot of reporters like him, a lot of people who work on our crews I know like him. 

He seems to have a common touch.  I noticed that several months ago when my floor director said, “This guy ain’t bad.”  And my floor director is not a man of the right, I must tell you that.  And he started to say, “This guy is OK.” 

And I began to listen to him.  But I think he’s an acquired taste.  He’s a bit of a rural televangelist without some of the saccharine qualities of some of his brethren. 

OLBERMANN:  As you suggested, as we closed the last hour, the Republican race so far has been a series of people stepping up to the front where it’s easiest to shoot arrows at them from other Republicans.  Is that now his designation?  Is he now the guy who has to accept the slings and arrows? 

MATTHEWS:  Well, he’ll have to read a morning newspaper now.  He’ll have to keep up, because as he displayed the last couple weeks, not to be an elitist about it, but he didn’t know about the national intelligence estimate a day and a half later.

OLBERMANN:  Got to subscribe to that, yes.

MATTHEWS:  He didn’t seem to know that NBC was being struck by the Writers Guild.  He didn’t seem to know that when he did Leno the other night.  A lot of things he’s not up to date on.  He wasn’t familiar with the fact Pakistanis are not our biggest problem in terms of illegal immigration. 

OLBERMANN:  At number 25 on the list, in fact, in terms of illegal immigration. 

MATTHEWS:  Right.  A lot of information.

And the president, and I say this in fairness—I’ve never gotten personal about our president—his best friends would not claim him to be earnest in the curiosity department.  That he doesn’t always keep up.  He didn’t keep up in a lot of very important times, like Katrina.  And he’s not deeply curious about a lot of events in the world. 

I think we’re looking for a president who is more curious, more up to date, more on target.  And I think it’s going to be hard for Huckabee if he continues to make these demonstrations of being out to lunch. 

OLBERMANN:  All right.  If we’re right—and our folks usually are on this—the Republican race in Iowa is over.  So let’s...

MATTHEWS:  And I’ll tell you, and Romney has a big problem coming up in New Hampshire.  That state is right next door, but he’s already running even with McCain.  But this is the actual result tonight after everything—and it sure looks like it is according to our estimate here—and, in fact, our projection—he goes into New Hampshire this weekend a loser.  That’s not the way to go into New Hampshire, because John McCain will see how he does tonight if he’s in competition. 

OLBERMANN:  Yes, not in what is at best a double elimination tournament. 

Let’s look at the Democratic numbers as we’re getting them so far, and this will be a long time coming, one expects, for a projection. 

OK.  Again—gee, I was expecting something a little tighter than this—just 33, 32, 32.  It is, however, showing—you would assume, would you not, that those second choice votes that we’ve been hearing about, that process did, in fact, influence this significantly, simply by the margin of how much of the vote has been dedicated to these three candidates? 

MATTHEWS:  Well, it looks like they’ve gotten it all. 

OLBERMANN:  That’s what I’m saying.  I mean, nobody else is...

MATTHEWS:  You did say that, I’m sorry.  I’m being redundant.

But 33, 33 are the three-thirds of 100, and they’ve been allocated.  It looks like no one else broke the 15 percent caucus threshold.  Therefore, they had to yield over, as you say, their votes in those caucuses to one of the top three...

OLBERMANN:  Yes.

MATTHEWS:  ... which we’ve all thought all along wouldn’t help Hillary.  It would help one of the anti-Hillarys, because, by definition, they had already chosen a non-Hillary.

OLBERMANN:  Exactly.

MATTHEWS:  Hillary being a very strong personality and either attractive or not depending on your disposition. 

OLBERMANN:  If you want to know where the other 3 percent are going so far, Bill Richardson, 2 percent; Joe Biden, 1 percent; everybody else just watching.

David Shuster is watching for us at the Polk County Convention Center in Des Moines. 

David, good evening. 

DAVID SHUSTER, MSNBC CORRESPONDENT:  Good evening, Keith. 

Keith, just to fill you in on some of these numbers, what they’re showing, of course, is you have to remember there are 2,500 delegates to the state convention that are essentially in play among the Democrats.  So when they flash these numbers, these percentages, that is a percentage of the delegates reporting so far.  Roughly about 900 delegates, a little less than that, have been awarded so far. 

The number to keep track of, Keith, is that usually you would think you win the Democratic caucuses on the Democratic side if you get the magic delegate number to about 830, 840, 850, because that would be about 33 percent.  But, again, these are just the delegates counts, and it’s incredibly complicated. 

But one thing to keep in mind, as we hear all these reports about incredible voter turnout, that doesn’t really matter.  It doesn’t change the predetermined delegates that are being awarded. 

The delegates are awarded based on Democratic turnout from previous elections, and in some cases, Keith, the rural precincts have as much power as some of the more urban areas like Des Moines.  So, it’s weighted a little bit towards these rural precincts and, again, the figure to watch is the overall delegate count. 

It’s quite possible, Keith and Chris, that somebody—if you just look at the number of caucus-goers that turned out for one of these candidates, that it could be a clear victory.  But when it comes to the delegate count and who wins the percentage, that’s where it could be a different story—Keith. 

OLBERMANN:  David Gregory (sic) doing the inside the numbers and the complicated process that is the caucuses in Iowa. 

Now let’s go back again to get some wisdom out of the entrance polling.  Tracking that for us throughout the evening, MSNBC’s Norah O’Donnell here with us in New York. 

Norah, good evening.

NORAH O’DONNELL, MSNBC ANCHOR:  Hi, Keith.

And we’re learning some very interesting results tonight.  Huckabee’s victory tonight can be explained by taking a look at the qualities Republican voters wanted to see in a candidate. 

Listen to this.  Forty-three percent told us they were looking for someone who “shares my values.”  And Mike Huckabee was able to pick up 44 percent of those voters, with only 26 percent for Romney. 

And to explain who those Huckabee voters might have been, 60 percent of those people who came to the caucus for the Republicans tonight describe themselves as born again or evangelical Christians.  That is a huge number for Mike Huckabee, who worked very, very hard to get their support.  And tonight we are learning that they turned out to support him. 

As for John McCain, his supporters tonight seem to be much less enthusiastic, but listen to this—more than half of those who cast their ballot for him said they had some reservations or disliked the other candidates.  So McCain benefited from that. 

Now, among Democrats, this election has been about change versus experience.  Well, we have numbers tonight that show the qualities Democrats prefer in their candidate. 

Fifty-one percent said they wanted a candidate who can bring about needed change.  Twenty percent wanted a candidate who has the right experience.  About the same amount, 19 percent, want someone who “cares about issues like me.”

Now we’ve been talking about how Obama is in the lead, that there is a battle between Clinton and Edwards.  Well, we’re learning about where their support is coming from. 

First, Hillary Clinton among the voters who care about experience.  Forty-nine percent are throwing their support to Hillary, while 32 percent of married women who came to the caucus are also behind her.  Thirty-two percent of those want a candidate who can win in November.  They think that Hillary is their candidate. 

For Obama, here it is, 51 percent of his support came from those who want a candidate who can bring about change.  Fifty-seven percent of his support is coming from people between the ages of 17-29.  Isn’t that remarkable?  And while it’s too early right now to say how many young people came out to vote, it is clear that they did go overwhelmingly for Obama—Keith. 

OLBERMANN:  Norah O’Donnell.

And just in case that number 17 popped into your head, you only have to be as old—if you’re 18 during the actual vote, you’re allowed to participate in the caucuses. 

O’DONNELL:  That’s right. 

OLBERMANN:  Thank you, Norah. 

All right.  Let’s go out to Des Moines for another interpretation of this from NBC News political director Chuck Todd. 

Chuck, we’ve called this race for the Republican part of it anyway.  We’ve called it for Huckabee. 

The ramifications as you see them from the Polk County Convention Center? 

CHUCK TODD, NBC NEWS POLITICAL DIRECTOR:  Well, it’s the size of the victory that has to really have the Romney folks shaking a bit.  I mean, they’ve issued a statement saying that this is the first inning of a 50-inning game.  And Keith, I think you’re aware of this in baseball --- there are not many 50-inning games.  So the idea that he was trying to merge baseball and 50 state primaries and caucuses showed that I think Romney is a bit shaken tonight. 

Losing here as badly as he did, it now won’t matter whether or not McCain didn’t finish third.  It’s now on to New Hampshire, and they’re going to see that Romney got rejected here in a big-time way.  Romney went negative for a long time, tried everything he could to stop Huckabee’s rise.   Huckabee looked like he was in the midst of self-destructing, and, if anything, appeared to not only come up off the mat but get better. 

Now, what will be interesting, Keith, is to watch Huckabee.  You know, what worked here, that number, the fact that 60 percent of the Republican caucus-goers were evangelicals, literally, and 40 percent were not, in actual Republican primaries that number is usually flipped upside-down.  It’s usually about 40 percent of Iowa Republicans are evangelicals and 60 percent are not. 

So he really benefited from this.  But the fact is, New Hampshire doesn’t have a very large evangelical population.  And while South Carolina does, it’s not clear that he can get those numbers out of Michigan.  He’s going to have to build a bigger coalition than what he’s got here in Iowa. 

OLBERMANN:  Chuck Todd, NBC News and MSNBC political director, at the convention center in Des Moines. 

Great thanks it for the analysis.  It’s a remarkable thing so far to see—Chris. 

MATTHEWS:  Let’s bring in reaction from the panel we have and talk about Huckabee’s victory tonight. 

We’ve got Newsweek’s Howard Fineman; NBC News political analyst Pat Buchanan.  We have got Eugene Robinson of “The Washington Post,” and we’ve got Rachel Maddow of Air America. 

Let me start with Howard.

Your thoughts about Huckabee winning this thing? 

HOWARD FINEMAN, “NEWSWEEK”:  It’s big.  It can’t be overstated that a guy who was basically unknown a few months ago came and won this race in convincing fashion and really obliterated Mitt Romney, who had spent a year’s worth of time and maybe $10 million in that state thinking he had it locked up.  He ended up being blown away. 

I think it opens the race wide up for the whole Republican nomination.  I don’t think Huckabee is likely to win New Hampshire, but South Carolina is going to be a battle between the Huckabee and the non-Huckabee. 

Who thought that at this point in the race we would be saying, OK, we’ve got the Huckabee.  Who is the non-Huckabee?  That’s where it is right now, because he’s got the evangelical base. 

Chuck Todd is absolutely right.  It’s not the entire Republican Party, it’s not even a majority of the Republican Party.  But in the primaries, if it’s 40 percent, Huckabee’s going to now, I think, get virtually all of it, which is going to make him a player all the way through. 

The Republican Party has been built on evangelicals.  Now they not only have an evangelical, they have a Southern Baptist preacher as one of the front-runners in the campaign.  It’s remarkable but historically appropriate if you think about it. 

MATTHEWS:  Pat, what’s this going to do to the party, to wake up tomorrow morning and realize that the front-runner now for the nomination to succeed George W. Bush is a person more religious in his context than the president.  The man is more of a Christian, more of an evangelical, more of a person who identified with conservative social issues in the Republican Party. 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Well, I think that, look, the Republican Party is going to have to deal with it.  Mike Huckabee has a ticket into the finals for the Republican nomination. 

He’s going to go into South Carolina the favorite.  I don’t care what happens in New Hampshire.  And what we’ve got now is, who gets the second ticket? 

And from the showing of Romney tonight, which was very weak, quite frankly, given his vaunted organization, given his time and money, the probability is that Romney will lose New Hampshire and that would put McCain into South Carolina against Huckabee.  And I think that is shaping up right now as the Republican race for the nomination. 

I don’t see how Rudy gets into it.  Thompson looks like he’s beating McCain in—out there in Iowa, but I don’t think Thompson has any support at all in New Hampshire.  So I would bet we are headed for a McCain-Huckabee battle for the nomination.  And the winner—the one who merges ahead will be the one who wins South Carolina. 

MATTHEWS:  No, well that—the trouble with that, Pat, it’s a setup if you say it that way.  You’re saying that South Carolina conservative primary will determine the Republican victor.  What about...

BUCHANAN:  I said—no, I said he will become the front-runner like Bush became the front-runner...

MATTHEWS:  I know. 

BUCHANAN:  ... when he carried South Carolina. 

MATTHEWS:  I know that, but there are so many big state Republican parties not to be heard from yet who will want to choose McCain over Huckabee. 

BUCHANAN:  Well, I don’t doubt that, Chris.  But what I’m saying is, it’s not only the Evangelical Christians.  He is going to become—he could become the conservative alternative to McCain, who is not loved by conservatives in the Republican Party.  And many of them really don’t want him. 

Conservatives are going to have to face a question here—do we want McCain?  Do we want to go in that direction or do we want to try to win with Mike Huckabee? 

MATTHEWS:  Astounding. 

I want to ask, Rachel, your thoughts on this distant planet you’re describing here, we’re watching here, the Republican Party, for you. 

RACHEL MADDOW, AIR AMERICA RADIO:  I think the big story here is that Mitt Romney is starting to look a lot like Steve Forbes from a distance.  I mean, Iowans are not giving the nomination, not giving their vote to people who they—are not giving the vote to people who they—who buy it.  And so for Romney to have gone in and spent this much money and to have been kicked in the teeth electorally by a guy who spent as much in Iowa as Romney probably spends on his lawn care in a year, is a real reminder that money is not everything. 

Now, what’s going to happen here coming out of this is that the conservative wing of the Republican Party is going to have to decide if they can get over their abject hatred of Mike Huckabee. 

MATTHEWS:  OK.  Thank you, Rachel. 

OLBERMANN:  Rachel, thank you. 

Howard, thank you.

Pat, thank you.

Gene, stand by.

We’ll get back to the panel in a moment.  And we’re also going to go to the Huckabee camp in a first. 

First, let’s get you the new characterization on the Democratic race from Iowa.  While in the initial preference race Obama holds a lead, there is a virtual three-way tie so far in the race for state delegate equivalents in the Democratic Iowa caucus.  That’s actually what you receive at the end of this labyrinthine process -- 35, 32, 31 the hard numbers in those in-state delegates’ sign (ph).  Again, that is much to be decided in terms of the Democrats.

The Republicans, who we’re already projecting here at NBC News, as you’ve been hearing, that former governor Mike Huckabee of Arkansas is going to be the winner of that straw vote in Iowa which changes the cosmetic makeup and the factual makeup of the Republican campaign for the presidency for the 2008 election. 

To find out how that is going over, one can guess, at Huckabee camp, NBC’s Kelly O’Donnell is at Huckabee headquarters in Iowa in Des Moines. 

Kelly, good evening. 

KELLY O’DONNELL, NBC NEWS CORRESPONDENT:  Good evening to you, Keith. 

This has been a pretty happy place, as you would expect.  And I think folks probably didn’t expect to have the kind of news they’re getting so early, so we’ve seen lots of reaction as results have been flashing on the screen, cheers and applause.  And we’ve been hearing the chant, “I like Mike!”  And that really is a slogan that represents a lot of what’s happened, the likability of Mike Huckabee, his skills as a communicator, and the message he brought to Iowans. 

When I would go to his events, you would hear over and over again sort of a call to Iowa voters who say you don’t have to follow the money, which would be a reference to Mitt Romney, that ideas matter.  And we even heard that from the campaign manager, who came out early tonight—and you know that’s always a good sign that they believe things are going well—and they said that ideas matter here.  And that’s really what Huckabee has been trying to push in an improbable race. 

We have seen him go from nowhere to now front-runner status.  And what they think this will do is give him a sense of legitimacy. 

When he goes to New Hampshire, they pretty much concede he’s not going to win there.  They’d be happy if they got third in New Hampshire.  But there’s a debate, and that will give him yet another forum to talk to voters more broadly and to show people that sense of humor, as well as the ideas that he is bringing.  And of course, you know, he’s a strict social conservative, and that’s how voters here responded. 

So they’re really looking then to South Carolina, as you’ve been discussing.  And they feel that that will be important in changing the dynamics here. 

So, over and over, Huckabee has talked about how voters didn’t need to respond to the money, that you couldn’t buy the presidency.  That kind of rhetoric, which must have resonated with many Iowans, because the improbable candidate is going to come out on top tonight based on the numbers that we’re reporting. 

We expect him back to this hotel fairly soon.  He was out in Waterloo at a caucus site trying to shake the last hands and maybe convince the last few before he is heading back here to what I’m sure is a happy suite upstairs—Keith. 

OLBERMANN:  Kelly O’Donnell at Huckabee headquarters in Des Moines. 

And we’ll see how all this resonates and how the handshakes go with the donors who view this as kind of an investment in a campaign and a candidate. 

Thank you, Kelly.

Let’s look at the Democratic side again and go to another corner of the city of Des Moines, Iowa, where Andrea Mitchell of NBC News is covering the Clinton campaign. 

At the moment, the hard numbers suggest that this senator is in a tie for second place, but if we look at this board long enough, it’s not your eyes playing tricks on you.  The percentages and the leadership changes.  It’s that tight. 

Andrea, good evening. 

ANDREA MITCHELL, NBC NEWS CORRESPONDENT:  Good evening, Keith. 

And you can imagine how nervous people here are upstairs, where former President Clinton and, of course, the candidate Hillary Clinton are looking at these numbers together. 

What may be happening here—and it is still early—but what may be happening is there is a generational divide among women.  And if that is the case, if younger women are going to Barack Obama, then Hillary Clinton has potentially lost her bid to win in Iowa and would, indeed, place second or even third, because she was really counting on a big turnout of women for Clinton.  And she is apparently getting that among the older women, but if younger women are going with Barack Obama, that is a serious setback for her—Keith. 

OLBERMANN:  Andrea, is that the concern among the people that you’re talking to there?  Is that something that leads to (INAUDIBLE) being hung in the windows? 

MITCHELL:  Well, not quite yet, but certainly they are seeing numbers that suggest a very, very large turnout. 

Now, when talking to them all day and the last couple of days, they felt that if the turnout were around 150,000, 160,000, even, that they could survive and even win if enough women turned out for them.  But if the turnout broke all records and was over 200,000, which is what they are now suggesting, then that would mean a lot of new-time voters, a lot of first-time caucusers, a lot of Republicans and Independents, are coming out to vote for Barack Obama. 

That certainly would validate his argument that change is what the voters want more than experience.  And that’s certainly what we were seeing in all of the polls leading up to this election night, this caucus night here in Iowa. 

And that is a more serious problem for her, because even as Hillary Clinton goes to New Hampshire, a much more hospitable and competive environment than Iowa, she then has to re-evaluate her whole message.  And she can’t change who she is. 

She tried that a couple weeks ago with new messages that emphasized change over experience, but basically she is someone who has been around for decades, who has been in public life for 15 years.  And another 20 years before that in public service in various incarnations, and she cannot deny that this younger man is something very new and different. 

MATTHEWS:  You know, I’m thinking about this as we’re reporting this tonight and commenting on it that in Europe they’re already reading the papers this morning, they’re getting their early editions within a few hours.  And I’m thinking, how does the world explain the United States?

And everyone watches us.  We are the 800-pound gorilla they have got to sleep with in the world.  And I’m thinking, well, we picked an African-American guy who is literally an African-American—his father from Kenya and his mother is from the middle part of America, one parent black, one parent white.  And now we’re picking this religious fundamentalist who spent his life as a Baptist preacher before entering politics. 

You would think the Republican Party is going fundamentalist and the Democratic Party is offering a dramatic alternative to Bush doctrine. 

Is that a fair reading if you’re looking at this from, say, London or Bangkok? 

MITCHELL:  Sure, if these results hold up.  But what you’re seeing is that Iowa Republicans are turning more conservative than in some past years, although of course Pat Robertson won here, too.  And you’re seeing a real liberal turnout, which is the traditional liberal turnout of Iowa Democrats. 

MATTHEWS:  Thank you. 

OLBERMANN:  Andrea Mitchell at Clinton headquarters in Des Moines. 

We’ll get back to you throughout the evening.  Andrea, thanks. 

MITCHELL:  You bet. 

OLBERMANN:  Chip Saltsman is the national campaign manager for the Huckabee campaign, who joins us now.  And it would be silly to ask you if you’re delighted with the projection that your man has won in Iowa.  Perhaps we should phrase it this way, sir—how delighted are you? 

CHIP SALTSMAN, NATIONAL CAMPAIGN MANAGER FOR HUCKABEE:  Keith, we’re pretty delighted here.  And you can hear from the crowd a lot of excitement here about what’s happened in Iowa. 

OLBERMANN:  There was on the part of both your campaign and Governor Romney’s campaign, there was a certain—we’re going to interrupt and go to New Hampshire, where John McCain is about to address his supporters there. 

Let’s hear the senator as he talks to those supporters. 

JOHN MCCAIN (R-AZ),  PRESIDENTIAL CANDIDATE:  Thank you very much.  Thank you.

I’d like to say that I just left a voice message, and I’m sure I’ll talk to him later on tonight to congratulate Governor Huckabee for his victory.  He’s run a very good, strong, positive campaign, and I think he can be very proud of it. 

I’m very proud of our campaign in Iowa.  As we know because of our financials, we didn’t run any ads and we were predicted to finish very badly.  I’m proud of the team that we had on the ground and the work that we did.  And I’m glad we were out there working hard. 

I think that the lesson of this election in Iowa is that, one, you can’t buy an election in Iowa.  And two, that negative campaigns don’t work.  They don’t work there and they don’t work here in New Hampshire. 

(APPLAUSE)

MCCAIN:  Sometime tomorrow we will have our 100th town hall meeting here in the state of New Hampshire.  We just had a great one tonight with my friend Joe Lieberman.  We can feel—we can feel the momentum, the same kind of momentum we felt in 2000.  I’m very confident with a strong, positive finish here that we’re going to win here in New Hampshire and go on to Michigan and South Carolina. 

(APPLAUSE)

OLBERMANN:  John McCain speaking in Manchester, New Hampshire. 

And when we move on, of course, after tonight’s events we have all the way until Tuesday for someone to be the consensus leader in the Republican campaign.  It will be Mike Huckabee and, again, his national campaign manager, Chip Saltsman, has been good enough to stand by with us.  And we’ll pick it up from there. 

Mr. Saltsman, you heard John McCain, along with the rest of us.  He seems undaunted by this.  You’re going head-to-head with him, in your estimation, when we move of to Manchester? 

SALTSMAN:  Well, Senator McCain is a good man and he’s obviously an American hero.  And if it is between us and Senator McCain in New Hampshire, we think we’re going to have a good campaign and talk about the issues.  And we look forward to that. 

MATTHEWS:  I thought it was interesting that John McCain, given his opportunity to congratulate your candidate, put the shiv (ph) into Romney twice.  He said you can’t buy a state. 

You guys have pointed that out.  You were outspent 20-1.  And I’m going to make a call right now. 

Excuse me.  You’re interrupted again by the news, sir.  But here it is. 

Barack Obama, the senator from Illinois, the junior senator from Illinois, has won the Iowa caucuses, the Democratic caucuses in Iowa, the first big test of the 2008 presidential campaign. 

I’m telling you, Keith, history—this is Lexington and Concord.  This is going around the world right now. 

I’ll say it again, in Rangoon they’re putting their front page together.  A guy named Barack Hussein Obama from—whose father is from Kenya, war-torn Kenya right now, who has grown up in Indonesia, a good part of his youth, came to America, had a first-rate education, was very successful in politics, and here he is on a victory projectile to win the Democratic nomination, defeating the president’s wife.  And that’s the big story as well. 

I think the lead here is Barack Obama and the second lead is Hillary loses. 

OLBERMANN:  And a projectile victory would be a new political term, but thanks for coining that.  That’s—but you’re right.  This is something we talked about separately about 1932 coming into people’s mind in terms of an election. 

MATTHEWS:  Changes.

OLBERMANN:  This is the first inning of whatever we’re seeing.  This is the start of the race, but this could not be more...

MATTHEWS:  Yes. 

OLBERMANN:  ... more...

MATTHEWS:  I want to say it loudly.  I want to say it loudly. 

OLBERMANN:  Say it loudly. 

MATTHEWS:  This country—and this is not a partisan comment—this is the country’s view right now.  We are in a rut.  We are stuck in this rut. 

We are stuck in Iraq.  No one has any idea how to get out of Iraq. 

Sure, we’ve had the surge succeed, but that’s not the way to get out.  That’s just more stuck, we’re more necessary. 

We have got a situation on every issue where the two sides are divided 50-50.  Nancy Pelosi gets whacked every day because she can’t get the job done because she doesn’t have the 60 senators to get the job done on the Senate side.  So, we have climate change, we’re not doing anything really. 

We’re not doing anything on energy.  We’re not doing anything on Social Security, Medicare reform.  We’re not doing anything on the war or foreign policy. 

Everything is stuck.  It’s intractable.  And I think the American people feel that.  It’s coming across in our NBC polling. 

People don’t like the direction.  They want something to happen. 

Now, here is the question.  Will they follow through and pick one side or the other to run the government and get something done, or will they pull back again and clinch and divide power again which was done before, which does bring about gridlock? 

OLBERMANN:  Well, I mean, and also, as we’re looking at the analogy to 1932 and the choice between staying with Hoover and at the start of the Depression...

MATTHEWS:  Right, a big jump.

OLBERMANN:  ... and moving towards FDR and this extraordinary—what was then at least seen as an extraordinary social change... 

MATTHEWS:  It wasn’t an improvement.  It wasn’t finding somebody smarter than the guy we have in office. 

OLBERMANN:  It was a total change.

MATTHEWS:  It’s taking us out of the rut and taking us to a new place. 

The biblical term for it, since we’re in a biblical era, is “deliverance”.  We’re being picked up and moved to where we have to be. 

By the way, the first 100 days of the Roosevelt administration in the 1933 period was totally different than the Hoover period. 

OLBERMANN:  But is 1932...

MATTHEWS:  And the same, by the way—you could say the same thing with ‘52 with Eisenhower, with ‘80 with Reagan.

OLBERMANN:  But is it -- 1932 even sufficient at this point in what we’re talking about?  Could we be looking at something more from the 1850s or even 1860s elections?  Could it be that serious?

MATTHEWS:  This country moves in a strange pattern.  In 1870, we gave African-Americans, men, the right to vote, at least in the Constitution.  Obviously Jim Crowe got in the way of that for 100 years.  But it was written down into law, the amendment to our Constitution, African-Americans, former slaves, will be voting citizens of the United States. 

Women got to vote, which is always interesting, 50 years later.  So there’s something perhaps primordial about the willingness of this country to at least, in theory, extend the franchise, the presidency, even, to an African-American rather than a woman.  That is the interesting question mark that this Hillary Clinton campaign raises. 

Let’s go to the panel with this hot potato, starting with Rachel Maddow.

Rachel, and then Howard, I want you, and Pat, and, of course, Gene Robinson, all of you from your different perspectives, what is it about America that here we are in 2008, finally picking an African-American with a real shot to be president of the United States, and a woman just got a very bad night in Iowa? 

Rachel? 

MADDOW:  I think that you’re calling this a really bad night for Hillary too early.  I think that we need to see how close it’s going to be.  And if ultimately the results are a three-way tie or look close to it, or Barack Obama wins tightly, that’s a story.  I think it matters. 

I don’t see this as a huge rejection of Hillary if she doesn’t come in with a big win, honestly.  I know you see it differently.

MATTHEWS:  You mean, the fact that two-thirds of the Democratic Party voted against her isn’t a rejection?

MADDOW:  Two-thirds of the Democratic Party will have voted against all of the candidates if it comes in as a three-way tie, Chris.  That’s the point. 

The issue, if it comes out it’s a really close race, it’s going to be close heading into New Hampshire as well.  And I think we discount that at our peril. 

If Barack Obama, as you guys are projecting is going to be the winner, I think that’s the America we all want to live in.  I think it’s an amazing day for the country and it’s great.  I don’t know if it means that he gets the nomination ultimately, but it’s an exciting, historic day for the country.

OLBERMANN:  Let me throw something in from the decision desk.  Edwards and Clinton are in, just apropos what you’re saying, Rachel, a very tight race for second in the race for the state Democratic delegate equivalent.  Those are the numbers we’re seeing so far.

And again, NBC News has projected, as you heard, Barack Obama as the winner of this Iowa caucus at 36 percent.  Those other numbers are as close as you would suggest they would be, 31 percent and 31 percent. 

MATTHEWS:  But Howard—well, Rachel, I’ll go back to you so you can have a response here.

From the beginning of this year in the polling we’ve noticed that Hillary has been ahead of Obama all year.  So she can’t claim to be somehow a comeback kid or someone who, you know, somehow never had a chance.  She had a big chance in Iowa and she’s lucky to get second. 

MADDOW:  No, I think it may be a more comfortable place for her to be running from, to be able to say, I’m fighting for this, and to maybe play the gender card in a big way, to say we have got to fight in order to get a woman in the White House in a way that she couldn’t have played that way had she been in an inevitable front-runner.  So, I mean, I think it’ll be real interesting to see how the Clinton campaign responds to this.  They’re going to have to come up with something creative, but it’s not the worst position for her to be in. 

MATTHEWS:  Let’s go to Rudy Giuliani, the former mayor of New York, two-term mayor of New York.  He’s campaigning tonight in—there he is. 

Rudy Giuliani, it’s great to have you on the show tonight. 

What do you make of Huckabee?  Could you support a candidate for president who believes we should have guns to protect ourselves against our own government, that we need that Second Amendment to preserve the inalienable rights also listed in the Bill of Rights? 

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE:  First of all, I’m going to congratulate Mike.  I think he ran a great race in Iowa. 

I’ve been in numerous debates with him.  He’s very positive, he’s very strong, and he really is to be congratulated on his victory tonight. 

And I think we have a number of good Republican candidates, and it’s going to be a very—it’s going to be a very mixed field.  And I think we’re in good shape. 

We’re ahead in maybe 16, 18 of the 29 states that are coming up.  This was the first one.  It’s one that quite honestly we didn’t expect that we would win, and we didn’t put a lot of resources into it.  Now we’ll move on to the others, 28 more that are coming up. 

MATTHEWS:  Do you think there’s a probability that your party might have a hard time picking a candidate until Florida?  In other words, Huckabee wins, as we’re projecting here in Iowa, perhaps John McCain wins in New Hampshire, or Romney.  Romney could win in Michigan. 

I’m sure you’ve thought about this scenario much more than we have.  South Carolina, Huckabee.  So you have a mixed bag of different winners in different states, leaving the door open and perhaps the field flat for the former mayor of New York to come in triumphantly, blow the bugle and start winning primaries. 

GIULIANI:  Well, I mean, I don’t know if that’s exactly the strategy that we have in mind, but I am in Florida today, and that is where I’m talking to you from today.  I’ll be back in New Hampshire tomorrow afternoon. 

And we’ve had a proportionate strategy.  I mean, there are 29 -- there are 29 primaries and caucuses between now and the 5th of February, and you have got to win most of them.  That’s the point.  If you win an early one, but then you lose a late one that’s very big, it’s not going to help you very much. 

MATTHEWS:  I’m looking at the states where you’re leading now, Mr. Mayor.  I’m looking at Connecticut, New York State, New Jersey.  I think my home state of Pennsylvania.  You’re very popular there on the Republican side.  I’m looking at California, where you have a lot of popularity. 

I can’t think of a single one of those big states where Mike Huckabee could beat you, say, two or three weeks ago.  But now having come off of this victory tonight and being the resounding figure of the Republican Party for the next week or so, can he challenge you in those big states?  Mike Huckabee of Hope, Arkansas. 

GIULIANI:  Well, look, I think everybody can challenge anybody else here.  We have got four or five very strong candidates.  I think we’re in a good position, but the reality is there are four or five good candidates. 

There are going to be 29 primaries and caucuses, including the ones that you just mentioned, including the one here in Florida.  And I think our message of being on offense against terrorism and being on offense for a growth economy, and having been tested by crisis and having been tested by having to handle difficult problems, I think that message will succeed in a number of these—a number of these primaries. 

MATTHEWS:  Do you think Mike Huckabee is the kind of person who pays attention to foreign policy? 

GIULIANI:  Oh, I’m sure Mike does.  I mean, you know, all of us have to speak for ourselves and we all have our different strengths and weaknesses.  And over the course of the next three or four weeks, everybody is going to find out about all of those.  So I’m going to stick to mine. 

I think my strength is I held one of the most difficult jobs in the country, I had to deal with crisis quite a bit. 

MATTHEWS:  Right.

GIULIANI:  Had to deal with problems, solve them, and got results. 

MATTHEWS:  Let me ask you about the New York press, your favorite topic.  I’ve noticed working with a lot of reporters, even mild-mannered reporters from New York, they don’t like you much.  I don’t quite understand it entirely. 

I’ve dealt with you.  You’re a difficult guy to deal with, but I don’t quite understand it. 

“The New York Times” ran a story after the tabs in New York, The Daily News and the Post ran stories about how you had failed to give an accurate accounting as mayor of the cost of your security detail when you went off to visit your now wife.  OK.

“The New York Times” finally came back on page 35 in the national edition and pointed out that they were wrong.  You had accurately reported the cost of those trips fair and square.  You did it all right, according to the book.  But none of the papers ever came back and said, wait a minute, we blew it. 

Does that bother you?  Do you think you’re getting screwed by the press? 

GIULIANI:  Well, first of all, I’m glad, Chris, that you pointed it out, because it was buried sort of in the back of the newspaper.  As I said from the very beginning, that all of those expenses were handled in a legitimate way.  They were determined by the police department, paid for by the police department...

MATTHEWS:  Right.

GIULIANI:  ... and they were because of valid and serious concerns. 

MATTHEWS:  But you lost 10 points in the polls because of those stories.  Are you going to be able to get back that 10 points based on the basis of a retraction buried on page 35 of “The New York Times?”

GIULIANI:  No, you don’t.  It’s nice to have it because now you can point out that it was untrue, that the story wasn’t correct, or at least that part of the story wasn’t correct. 

You’ll get it back on other things.  I mean, elections are much bigger than the things that you concentrate on, you know, every day in these almost like gossip pieces.  Elections are about who should be the leader of the country, who can give us a brighter future, who do you want in time of crisis, who has the experience, the background, who has been tested? 

These are the big things that people ultimately vote on.  And I think that you’re going to see that in these primaries, that that becomes the defining feature of how people are selected.

And in the case of Republicans, I believe we need a candidate who can run in all 50 states.  And I think I’m the candidate that can run in all 50 states.  That will give us the best chance of defeating the Democrat, whether it’s Hillary Clinton or Barack Obama or John Edwards. 

MATTHEWS:  Mayor Giuliani, it’s great to have you on.  Thank you for joining us tonight on MSNBC. 

GIULIANI:  Thank you.  Thank you very much. 

OLBERMANN:  And we’ll turn now to an old friend, a former colleague here, Joe Trippi, who is now a senior adviser to the Edwards campaign.

As we have projected Mr. Huckabee to win the Republican event in Iowa tonight, Joe, obviously you’ve heard that the projection is that it is Barack Obama on the Democratic side of things with a very tight race for second place.  And those numbers perhaps to expand as the evening goes on. 

How would you characterize this night for your candidate, John Edwards? 

JOE TRIPPI, EDWARDS CAMPAIGN SENIOR ADVISER:  It’s a strong night for us, and I think it’s really a repudiation of the status quo in Washington and of the Clinton campaign.  I mean, you have over 65 percent, nearly 70 percent of Democrats in Iowa siding for change. 

John Edwards—I mean, we had in a real amazing turnout.  We held our own after—you know, against two candidates who spent—you know, who raised $200 million, and it proves our message is working.  So we’re very excited. 

We’re going on to New Hampshire, and it’s a three-way dead heat.  Obama deserves, you know, credit, but we hung in there.  And Clinton doesn’t have a whole lot to talk about with this finish given the first lady, Bill—President Clinton are running around the state.  We feel very good about where we are. 

MATTHEWS:  Let me ask you, Joe, about your situation looking down this month, the next month.  It looks to me that Hillary has a chance to come back if she loses New Hampshire.  And on top of losing this one out in Iowa,  Hillary would have to come back in Nevada.  That would be her best chance.  But you guys are pretty well poised in Nevada to knock her off there. 

Talk about the labor union situation, the restaurant workers, et cetera, out there.  Can you knock Hillary off out in Nevada? 

TRIPPI:  I think, look, we’re strong.  I think we’re going to do much better in New Hampshire than people think.  I think we’re going to do well in Nevada, but we’re also going straight into South Carolina. 

While everybody has been focused on Obama and Clinton and talking about this being a two-person race, we’ve been coming on, we’ve been growing in New Hampshire, growing in South Carolina, and we have a strong organization in Nevada.  I mean, Chris, this is the first step.  This is a long fight.  And we held our own against these two candidates. 

Why?  Because John Edwards is out there talking about standing up to Washington, to the mess there, to the corporate greed, and fighting for the middle class.  And what people voted for today was change. 

They don’t want the status quo.  That’s what the Clinton campaign represents.  I don’t think that’s going to do very well in New Hampshire or anywhere else.  And if they couldn’t—you know, they raised $100 million.  Obama did the same thing.  We got massively outspent here and held our own. 

MATTHEWS:  OK.  Thank you much. 

Joe Trippi out there in Iowa. 

OLBERMANN:  And whatever has happened in Iowa, and whatever the final numbers are, and we’ve heard the projections so far in the tight race for second place, and also the hunch that is going on that the first place and the second place tie-ees will be separated by much more than the six percent or so that currently is represented, whatever’s going on, it’s being done by a lot of people in Iowa. 

David Gregory, NBC News White House correspondent, is at Precinct 214, if I remember my numbers correctly, in west Des Moines. 

David, huge turnout tonight, correct? 

DAVID GREGORY, NBC NEWS WHITE HOUSE CORRESPONDENT:  Yes.  You wouldn’t know it now.  Everybody is gone.  The place is closed down, and it was a big night for Obama here.  But, Keith, the big story was, in fact, turnout. 

Four years ago, they had 86 people crowding this library as a caucus site here in west Des Moines.  Two hundred and sixty-seven people came tonight. 

The biggest numbers for Barack Obama.  He gets three out of the five delegates here, so he has a really big night.  But again, that turnout number reflective of the fact that there were Republicans and Independents who came here to caucus as Democrats.  That was what was going on here in this room. 

Even spoke to a woman who was a Republican, voted for George W. Bush, came here to caucus for Barack Obama tonight.  These first-time caucus-goers, as you can see from the entrance of polling, indicating that they broke for Obama. 

So this is a small story, it’s part of a larger story that reflects what Obama was counting on, which was that big turnout.  Then there’s other things that you discover in the caucus process. 

All of the horse trading, was he a second choice for some people?  You saw here at this site Biden’s people, Richardson’s people falling in behind Barack Obama. 

Again, that’s somebody that they were looking for as they were canvassing the state.  So we had a small picture here of what may be a larger dynamic here in the state for Barack Obama. 

MATTHEWS:  David, tell me about the spirit in that room.  I was watching you earlier tonight report almost like on a golf green trying to get it real quiet, reporting without interfering with what was going on there. 

GREGORY:  Yes.

MATTHEWS:  And it was interesting to watch you.  What did it feel like in there as an American to watch these people go to this caucus today? 

GREGORY:  Uncynical, Chris.  Uncynical, thoughtful, energized. 

I mean, that was really my takeaway.  I mean, the crowd was huge, and it just kept getting bigger.  And I felt like in a way it was like a PTA meeting and then—but it was so orderly and energetic. 

Barack Obama’s people, you could tell the level of organization.  They had beads around their neck with a count so that they could keep track of their numbers, but they only had about 80-some of those beads.  So they had numbers of -- 127 people came, so they he exceeded their numbers. 

A great deal of energy from the Obama people.  They were organized.  They were ready. 

Look, Hillary Clinton, John Edwards, they were viable in this room as well.  And then stuff happens that you don’t expect. 

The Edwards Web site had their supporters go to the wrong elementary school.  So his numbers were down here.  He was barely viable. 

What happened to Chris Dodd?  His precinct chairman got called out of town, so nobody showed up here for Dodd except a buddy of his who came in from New York and was trying to organize on the fly. 

A really dynamic process.  But these are people who are very serious.  They’ve listened to these candidates, they’ve asked the questions, and they showed up tonight. 

MATTHEWS:  Thank you very much.

David Gregory, who’s right there at one of the caucuses.  He’s been there, he’s seen it, he knows it.  He’s part of it.

Thank you, David.

OLBERMANN:  Looks like the floor of the stock exchange in west Des Moines with David Gregory. 

Now we’re joined by NBC’s Tom Brokaw. 

And Tom, a pleasure to have you. 

The nature of this, we were able to call these two extraordinary figures in our current political scene, makes it look like—and, again, top of the first inning—makes it look like this could be one of the epic elections of all time. 

TOM BROKAW, NBC NEWS:  Well, let me just change metaphors for a moment.  We always have to remember that Iowa is still overture.  We still have a big store to come here. 

Nonetheless, it’s been a very impressive performance tonight for Barack Obama.  He did spend $9.5 million more than any of the other Democratic candidates, and for the last three weeks to a month or so, the word in Iowa has been that he could very likely win the Iowa caucuses. 

The question was going to be, what happens next?  And that’s numerically, as well as qualitatively, between Hillary Clinton and John Edwards. 

Do they stay in the race?  Is it jump ball coming out of Iowa?  It looks like Obama has got a little higher leap at this point than the other two going into New Hampshire, but New Hampshire is going to be an interesting test next week. 

I think what it does say tonight is that the Democrats—I was in Iowa 10 days ago with the governor and some other people there, and the Democrats really want to win.  And you saw a lot of Independent participation tonight as well.  That indicates this country, which is increasingly independent when it comes to election time, is pulling a lot of Independents across to the Democratic side. 

So, what you’re seeing a highly energized Democratic Party being able to attract more Independent voters than they have in the past.  And on the Republican side, you have Governor Huckabee, of course, who is going to be viewed by the Republican Party establishment as a more eccentric figure within their own party.  But he did extremely well in Iowa because it has a natural base for him, that very heavy evangelical vote.  Whether he can carry that forward into New Hampshire, and then of course into South Carolina, and to Florida, where Rudy Giuliani, who Chris was talking to just a few moments ago, is trying to establish a firewall. 

So there are lots of possibilities and probabilities to come out of Iowa tonight.  But the big winners obviously are Mike Huckabee and Barack Obama.  Obama winning by a larger margin than even some of his own people thought that he might. 

OLBERMANN:  And Tom, that use of the term “natural base,” that’s exactly what Mitt Romney has said this evening, that Mike has a natural base here in Iowa, and he was able to call on that base.  And he said congratulations for the first round to Mike. 

Is it—I’ve heard Pat Robertson’s name evoked a couple of times relative to Iowa.  Give me your assessment of how Huckabee differs from Robertson if, indeed, he does. 

BROKAW:  Not much, actually.  I was in Iowa when Pat Robertson did win, and that was also the year that Gephardt finished first in the Democrats.  And we didn’t hear from him after Iowa, either one of those two candidates.  This time it’s a much more front-loaded process. 

I think what’s also important to say here is that Huckabee probably will get a good deal more money as a result of this showing in Iowa.  He’s been running on that natural base.  But  now he’ll begin to pour in, my guess is, from the Internet in the Ron Paul tradition, being able to get more contribution from evangelicals around the country, and take that probably to South Carolina.  New Hampshire is not much of a play for them. 

This is good news for John McCain in New Hampshire, who can now go head-to-head against Mitt Romney and call him damaged goods. 

MATTHEWS:  Tom, let me ask you about the generational piece of this.  Do you see one there with women, younger women, going with Barack? 

You’ve written about the ‘60s.  Is that a rejection of that—well, the boomer debate, if you will, between—somebody put it today, Joe Scarborough, the difference between people who love Jane Fonda and those that love John Wayne, that kind of old debate on culture. 

BROKAW:  Well, I’d have to see more of the numbers before I can make that kind of a judgment, Chris.  Do I think that both Hillary Clinton and Barack Obama, especially, are bringing new people into the process, and I think that’s especially true with Barack Obama. 

It’s kind of heartening to see in a nonpartisan way more young people getting involved in Iowa.  And it’s not easy to get involved in these caucuses. 

You have to show up at a specific place and then play by these kind of arcane rules.  But earlier today, when I was talking to some people in Iowa, they were saying on the Obama side that they were very excited about the number of Independents and the 17-to-21-year-olds who were signing up enthusiastically for his campaign.  So that’s a good tell sign for the weeks and months ahead. 

OLBERMANN:  Tom Brokaw, an honor, as always, to share a desk and a microphone with you, sir. 

Thanks for your time tonight. 

BROKAW:  OK.  My pleasure, guys. 

MATTHEWS:  Thank you.

Barack Obama is the projected winner, as we said, for NBC.  And Hillary Clinton is locked in a tight race, with John Edwards for the number two slot out there. 

NBC’s Andrea Mitchell is covering the Clinton campaign for us tonight. 

Andrea, are they game now to win two here, to come in second? 

MITCHELL:  Well, exactly.  And this room was, until about five or six minutes ago, completely empty. 

This is a manufactured celebration.  It really felt more like a funeral as people started scrolling in from upstairs where they had obviously been gathered. 

This is unlike anything that I’ve ever seen, a completely empty (INAUDIBLE) event.  And clearly now they have got to go on to New Hampshire. 

That was originally to be the firewall, but Barack Obama could do very well in New Hampshire.  Then, of course, South Carolina, where he has enormous support among that state.  A large number of African-American voters, African-Americans who were, some say, rallied to great lengths by Oprah Winfrey. 

So she has got a problem now.  She has to face the possibility where she’s lost Iowa.  Competitive but, you know, hanging on, trying to compete against Barack Obama going into New Hampshire. 

Then a real challenge for her in South Carolina, which is a natural advantage for him.  Then they’ve got Nevada, where union support may now start going his way.  And she now has February 5th as what could be a last stand for Hillary Clinton. 

It is a remarkable occurrence.  Bill Clinton and Hillary have been upstairs.  We expect them down very shortly. 

MATTHEWS:  Thank you, Andrea Mitchell.

I think, Keith, we’re going to see a big publicity event there at the Clinton headquarters.  Knowing them, it will be something along the lines of “comeback kid,” something like that. 

OLBERMANN:  The second comeback kid.  The sequel.

MATTHEWS:  I expect that they will try to turn a lemon into lemonade by midnight. 

OLBERMANN:  As suggested by what Andrea just told us about the turnout. 

MATTHEWS:  They’re bringing in the meal tickets, they’re bringing the confection back.  They’re creating a moment.

The event people are working hard.  Everyone with a stake in this victory will be called to quarter and told to show up at this point. 

Watch the Clintons.  They’re the best at this game, but they are professionals.  And the one message out of tonight is the voters may not like professionals. 

They may not like them at all, in fact.  They’re picking two people, a longtime Baptist minister and a newcomer.  They may be saying to the slick crowd, no mas. 

OLBERMANN:  We’re joined now by one of the contestants in the Iowa caucuses of four years ago, Howard Dean, who of course is now chairman of the Democratic Party. 

Thank you for your time tonight, sir. 

HOWARD DEAN, CHAIRMAN, DNC:  Thanks for having me on. 

OLBERMANN:  All right.

Let’s just pick up Chris’ point right there.  Is this indeed a rejection of the professionals in Iowa in both parties? 

DEAN:  You know, I think basically what you have is three Democrats, all of whom got over 30 percent, which is extraordinary.  I mean, I think Senator Obama deserves all of the congratulations for winning this one, but the big news from the point of view of the chairman of the party, who is obviously not involved with a particular candidate, is that our turnout was enormous. 

We doubled the Republican turnout, I think we’re going to find out at the end of the day, and that’s because so many Independents decided they would vote in the Democratic primary.  You’re going to see that all over the country, and that is not good news for the Republicans. 

OLBERMANN:  Doubled.  Joe Trippi said this was a rejection of Hillary Clinton, and of course he may wind up having his candidate, John Edwards, tied with Hillary Clinton for perhaps a distant second.  Every time we look at that board it seems like the percentage change is 1 percent more in favor of Senator Obama. 

Is that the sort of thing that you want to see in the early stages?  Is this—is this any indicator about how Democrats feel about their second choice or whether or not the person they originally went into much as the Iowa caucus represents something of the mindset that the second choice of an individual supporter, an individual Democrat, is just as good as their first choice in their own minds? 

DEAN:  I think what you’re seeing is a pretty close race with three really strong candidates.  Senator Obama won this round and now we’re going on to New Hampshire.  We’re going to go on to Nevada and South Carolina. 

Each one of these states is very different.  All of these candidates have worked very hard in these states.  This is how you choose the nominee. 

At the end of the day, this is an important day not just because Senator Obama won the Iowa caucuses, but because finally the voters are having their say.  And it’s not just pollsters and pundits that are droning on about this kind of stuff. 

This is real voters.  This is democracy.  And again, from the point of view of the chairman of the Democratic Party, the big news here tonight is the turnout.  What a turnout.  I think this is really a repudiation of George Bush, is what I think it is. 

OLBERMANN:  As we’ve been pointing out, certainly that’s the case, but it may also be the case in the Republican Party that it’s a repudiation of George Bush. 

I’d love your perspective.  Has there ever been a blanker contrast between the first victory, however utterly indecisive or ultimately indecisive either of those first victories may be, have there ever been greater contrasts than Barack Obama than Mike Huckabee? 

DEAN:  Well, I think, you know, if you look at all of our candidates, they’re very different than the Republicans.  There’s not much difference among the Republicans, there’s not much difference among the Democrats. 

We believe we shouldn’t be in Iraq.  All the Republicans think we should. 

We believe that we ought to have health insurance for children.  All the Republicans think it’s great that President Bush vetoed the bill. 

All the Republicans think it was a great idea to pardon Scooter Libby.  We think we ought to end the Republican culture of corruption. 

These are really big differences.  And there are many, many more. 

You have got gasoline going above $3 a gallon, oil is at $100 a barrel now. 

The Republicans couldn’t manage Katrina.  They got us into Iraq but not telling us the truth, all of which their candidates are supporting.  And now they can’t manage the economy. 

I think tonight is a pretty bad—pretty bad piece of news for the Republican Party. 

OLBERMANN:  Howard Dean, chairman of the DNC, smiling at the turnstiles tonight in Des Moines and throughout Iowa. 

DEAN:  It’s true. 

OLBERMANN:  Great.  Thanks for your time, sir. 

DEAN:  Thank you. 

MATTHEWS:  Barack Obama, as we said, is the projected winner in Iowa in the Democratic caucuses.  We’re joined right now by one of his top campaign strategists, David Axelrod. 

David, thank you for joining us tonight. 

We’re looking forward. 

DAVID AXELROD, OBAMA CAMPAIGN ADVISER:  Good to see you, Chris.

MATTHEWS:  Let’s look forward.  In your vision, in your mind’s eye, what do you see down the road for Barack Obama? 

AXELROD:  Well, listen, I think this—it’s going to be hard to hear me, Chris.  I think that this was such a meaningful victory not just because of how it turned out, but because of the composition of that victory. 

Barack Obama brought so many new supporters to this cause—Independents, some disillusioned Republicans, young people in numbers they’ve never seen before.  And this is exactly what we as a party have to do in order to succeed in November. 

So I think we’re going to see more of this in New Hampshire and the other states.  We look forward to going there.  But I think this portends something very good for the Democratic Party come November. 

MATTHEWS:  Is there a danger that what happens in Iowa stays in Iowa? 

AXELROD:  Well, look, we’re not taking anything for granted.  This was a great start. 

The people in New Hampshire are very independent-minded.  They’ll take this under advisement and they’ll make their own judgments.  So we look forward to going there tonight and beginning the campaign in New Hampshire.  And we’re going to take this one step at a time. 

But it’s clear, Chris, that the hunger for change isn’t just limited to Iowa.  The hunger for change is all over this country, and Barack Obama represents that change in this race. 

MATTHEWS:  What is your candidate’s appeal to younger women rather than older women?  Apparently it broke on generational lines tonight. 

AXELROD:  I think that—I think Barack has broad appeal.  The fact is that Senator Clinton has a very strong appeal to older women, and I think that was reflected in these returns tonight.  But we have a very broad-based coalition here, and we feel that it’s sturdy and durable and we can reconstruct that in state after state.  We’re very enthused about where we are right now. 

MATTHEWS:  Do you think that your candidate offers the most dramatic alternative to George Bush?    

AXELROD:  Well...

MATTHEWS:  That’s a good question.  Can you—David, that’s a good question.  Do you think your candidate offers the most dramatic alternative to George Bush?

AXELROD:  I believe that he does, Chris.  I think that what people want is, rather than a leader who divides, a leader who unites, rather than a leader who coddles special interests, one who will push back and put the national interests first.  And someone who will be candid and straight forward with the American people.  That is who Barack Obama is, and I think that’s why he did well here. 

I think every election is defined by the incumbent, even if it’s the outgoing incumbent.  And I think you saw on both sides of this contest tonight a real hunger for a change from what George Bush has delivered. 

MATTHEWS:  Give some help right now to the international newspaper editor who is trying to write his lead right now.  You’re in London, you’re in Paris, you’re in Rome, and you have to write the lead.  Barack Obama has won the Democratic caucuses in Iowa, running on a campaign of what?  In what way does he distinguish himself from the incumbent president in the White House? 

AXELROD:  Running on a—well, if I were writing from over there, I would say running on a platform of change, of unity and a new direction in American foreign policy, which I think was part of this debate here.  As you know, this has been a big discussion we’ve had about whether we should vigorously engage not just our allies, but our adversaries, to try and bring a more peaceful world.  And I think people gave strong, strong approval of that notion with their votes today. 

MATTHEWS:  Thank you very much, David Axelrod.

Congratulations, sir, on the Obama campaign—Keith. 

AXELROD:  OK.

OLBERMANN:  And as the Obama and Clinton headquarters appear to try to do their own version of “stomp the yard,” we are having much more coming up.

Again, Mike Huckabee and Barack Obama the big winners in Iowa, at least according to the projections from NBC News.  As the percentages begin to stretch out in both the Democratic caucus and the Republican straw vote, we’ll be hearing from both of them.  Senator Clinton is going to speak shortly after 10:00 Eastern Time.  We’ll hear from all the other candidates. 

The actual voting may be at an end, but the speeches, the projections, the analysis and the percentages of these victories are yet to come. 

Please stay with us.  This is MSNBC’s continuing coverage of the Iowa caucuses. 

CHRIS MATTHEWS, HOST:  Good evening, I’m Chris Matthews in New York, alongside Keith Olbermann.  And NBC has projected, as we have said before, Barack Obama as the big winner in Iowa in the Democratic Caucuses.  The race for second place is hot between Hillary Clinton and John Edwards.  A very tight race for number two position. 

On the Republican side, way out front, Mike Huckabee, the former governor of Arkansas, projected winner right now.  And so it’s an easy one to go home with tonight.  You’ve got an African-American guy, first time in history with a real shot to be president of the United States.  You can’t call it anything else.  A man with an interesting background, his father is from Kenya, which is right now in the midst of amazing turmoil.  So we’re being refreshed as to history of Kenya again. 

And Huckabee, a man who wasn’t on the score card a few months ago. 

KEITH OLBERMANN, HOST:  Going into history with the comparisons of Williams Jennings Bryan running against someone in the early 1900s, a stark choice of William Jennings Bryan versus McKinley.  You already talked in the last hour, we’ve talked about Hoover versus Roosevelt or Lincoln versus the field in 1860.  Sometimes it’s shades and nuance, there would be no nuance involved in choosing between, no matter what your political perspective is, a Mike Huckabee and a Barack Obama. 

MATTHEWS:  No, this isn’t between Hubert Humphrey and Bob Dole.  This is outside the 40-yard lines definitely for the first time I think.  Interesting candidates with fascinating histories.  And I think these two fellows are interesting people if they weren’t running for president. 

OLBERMANN:  And we’re going to—incidentally, we’ll just drop this in again, we’re going to be hearing from Hillary Clinton, we believe, within a few moments. 

MATTHEWS:  Get ready for the machine.  They are professionals, they will say something tonight which will be grabbing—grabbable (ph) of the headlines.  They will make news tonight.  Let’s go right now to NBC’s Brian Williams and Tim Russert, they are with us tonight from Des Moines, Iowa. 

Gentlemen. 

BRIAN WILLIAMS, NBC ANCHOR:  Well, first of all, I’ll go first.  You don’t hear many McKinley references during modern day election night coverage.  So my hat is off to Keith for working that in.  McKinley, of course, shot visiting Buffalo, New York, the exhibition there.  Made big news as the people of Iowa have done again tonight. 

Chris and Keith, they have a funny way of showing in this state that they have their own opinions about American politics.  And for analysis, that’s why we have this guy who is having one of the more exciting nights of his political life. 

TIM RUSSERT, HOST, “MEET THE PRESS”:  Yes.  It’s amazing, Brian and Keith and Chris, when you look at these entrance poll numbers, it’s so revealing.  First of all, 56 percent on the Democratic side were in fact first-time caucus-goers.  And they are asked what’s more important to you, change or experience?  Overwhelmingly they said change.  And those who said change voted for Obama 51-19. 

I mean, it’s breathtaking when you hear that.  That’s why it looks as if Obama, not only won men, he won women.  And one last salute to the young people for turning out.  In 2004 young voters were about 17 percent of the model we saw.  Tonight it’s over 20 percent, which is a very significant increase.  And they really did respond and decide to caucus tonight. 

The message here in Iowa, change, change, change.  They selected the two youngest candidates, Obama and Huckabee, and they selected the two candidates who talked about change more than anything else.  It’s, I think, a real transformation of our politics. 

I just saw the governor of Iowa down here who said to me, this is the greatest party-building event of his lifetime because all these fresh young people and middle-aged people are now being brought into the political process. 

WILLIAMS:  And, Chris, one more point here, as a lifelong student of American politics, you saw this coming as well.  That great book, bad movie, “The Perfect Storm,” where the meteorologist sees these low pressure systems adding up, look at all these factors, the first lack of a presumed nominee since ‘52.  Americans troops on the ground, two fronts overseas.  During this last two-term presidency, the domestic United States, the upper 48, attacked by a foreign power that proved tough to get, ambiguous but multifaceted.  Talk about a recipe for an electorate to get riled up. 

Young people coming online as voters.  A society coming online electronically.  In a way, if you take tonight as a spark that lights an inferno, looking back I suppose, a year from now we could say, well, the evidence was all there.  Looking at this on a two-party front. 

MATTHEWS:  Tim, so much of this is included, I think it’s fair to say, for our own account in The Wall Street Journal/NBC poll.  Gerry Seib did a good job of that on the front page of the paper the other day, pointing out the fact that this is probably the most anti—how should I phrase this?  The most people who don’t like the direction of the country in 15 years. 

RUSSERT:  Exactly right, Chris.  I was talking to you and talking to Keith on his program earlier.  Think about what this might mean for November.  It appears that 200,000 people participated in the Democratic caucus here.  That is enormous.  In 2004 it was 125,000 at best.  It looks like double the number of people who participated in the Republican caucus. 

This is a swing state.  George Bush carried this state in 2004 against John Kerry.  If the political energy with independents and Democrats is in November what we’re witnessing tonight in Iowa in this quasi-red state, it is very, very striking.  Because if you put Iowa in play, you suddenly shake up that whole red state/blue state electoral college map. 

OLBERMANN:  And Tim and Brian, in fact, that number is going to be extraordinarily over 200,000.  The Iowa Democratic Party has released a preliminary number based on 91.5 percent of the predictions.  Their total is 212,000 caucus-goers, with a little of the number to go. 

The one number—obviously, the winner is important to the camps of the participants, Tim.  But as we heard Howard Dean just glowing over the turnstile figures and what that means at 212,000 -- but I need to ask about the Republican turnout, something that David Shuster has pointed out for us from Des Moines, in that more cosmopolitan, if you will, community, less evangelical, more progressive, certainly more urban among the Republican caucus-goers or voters there, that went to Huckabee too. 

Tim, can you interpret the meaning of that? 

RUSSERT:  Well, the evangelical Christians, 60 percent of the caucus-goers were that, that was solid Huckabee.  But it was interesting.  I think his populist message really resonated.  Mike Huckabee did not sound like a traditional Republican during this campaign.  He was talking about leaving the poor guy out and having to pick him up and get him back going again. 

He talked about the arrogant bunker mentality of the Bush administration foreign policy.  And also, Keith, I think negative ads, Mitt Romney went heavy, heavy negative on Huckabee here.  And I think it may have backfired based on the anecdotal data that we are now reading.  People didn’t like that.  They wanted a cleaner campaign.  And I think they held it against Mitt Romney. 

This was a classic David versus Goliath.  And I think the Baptist minister, former governor of Arkansas would accept that analogy. 

WILLIAMS:  And by the way, guys, go inside these numbers on when people decided on Huckabee.  Look at the data on decided just today, in the last three days, in the last week, this thing just happened.  This was a prairie fire of a sort.  We’ll see what the national media do to the result and his fellow Republicans if they try to diminish or lessen, oh, that’s just Iowa. 

We’ve seen that effect with other Iowa results in the past.  Others try to build on them.  Others knock it down. 

OLBERMANN:  Could be the Jay Leno effect, Brian. 

MATTHEWS:  I was thinking that Jay Leno’s ratings are underestimated. 

Anyway, thank you Brian Williams and thank you Tim Russert. 

As we have reported, Hillary Clinton is deadlocked right now with John Edwards for actually second place behind the projected winner Barack Obama.  NBC’s Andrea Mitchell is at the Clinton campaign where the candidate and her husband are about to appear, we understand—Andrea.

ANDREA MITCHELL, NBC CHIEF FOREIGN CORRESPONDENT:  We expect them soon,

but it is not going to be a happy appearance obviously.  As you pointed out earlier, the Clintons do not like to lose.  And perhaps this is the David Letterman effect when she appeared on Letterman, versus Jay Leno and Leno won. 

This is a remarkably bad outcome from her because she came in here as the frontrunner, and now is trying to hang on to second place, tied, virtually, with John Edwards.  And what we’re seeing on the Democratic side is really parallel outcome to what you’re seeing on the Republican side in that people not only wanted change, they wanted something fresh.  And they’re angry, they’re upset with the status quo. 

John Edwards did better than expected with his fiery, angry message of discontent.  And that took away really from Hillary Clinton.  So Clinton now has to rebuild her campaign, try to recapture some momentum in New Hampshire.  Because New Hampshire might be a hospitable environment for Barack Obama coming out of Iowa with everyone talking about Barack Obama as the real story. 

I don’t know, Chris, in your experience whether you think that she can recapture it, especially given the calendar now works against her with South Carolina coming after New Hampshire. 

MATTHEWS:  I know that they are professionals…

(CROSSTALK)

MITCHELL:  … she really has to get traction in New Hampshire. 

MATTHEWS:  Andrea, I know the professionals, I’m looking at the clock, because 10:00 is very important to them.  They’re going to try to make the morning papers on the East Coast with a statement they’re about to make.  They’re going to try to make the evening news, including the independent stations, at 10:00.  They will try to go live on the channel 5s around the country.  They’re going to hit all the local stations at 11:00.  They’re putting this together brilliantly. 

I know what they’re up to.  They’ve done this before.  They did it in New Hampshire in ‘92.  I think the Clintons are planning their comeback.  And it begins in a few moments where you’re at. 

MITCHELL:  Well, and in fact, in New Hampshire, as you and I know, Bill Clinton lost in 1992 to Paul Tsongas, the late senator from Massachusetts.  But he won it as the comeback kid.  And that was the narrative that developed.  So they will try to come out with something—this is really a manufactured event. 

These are union people, people from AFSCME.  They weren’t here a half hour ago.  They were all upstairs watching the returns.  They came down and this is not a typical crowd of local supporters who were waiting to see their candidate.  And we do expect them to come soon and presumably they will come down because they want to get their appearance on the record before Barack Obama.  They’ve got to concede really before he can declare victory. 

MATTHEWS:  OK.  In the old parlance of politics, they’re known as meal tickets, people who have a personal advantage in winning this election, it is not a theoretical thing for the people in that room.  Thank you very much, Andrea Mitchell for giving us an update. 

As we await Hillary Clinton’s address in Iowa, which is coming in just a few moments, in the meantime we’re going to make use to that by getting back to Norah O’Donnell with more of what we’re learning from those entrance polls—

Norah. 

NORAH O’DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  And we are

learning a lot.  You know, NBC News talked to voters as they went inside these caucuses.  From this data we can explain why Obama won tonight.  It has to do with the qualities the Democratic voters wanted to see in a candidate. 

More than half of the Democratic voters were looking for someone who could bring about needed change.  And Obama was able to pick up 51 percent of those voters compared to only 20 percent for John Edwards and 19 percent for Hillary Clinton. 

Now, let’s talk about women.  They were key tonight.  I mean, more than half of the Democratic caucus-goers tonight were women.  Hillary was counting on them to carry her to victory.  But look at this, Obama bested her among women with 35 percent to her 30 percent.  Women made the difference in this race—Chris. 

MATTHEWS:  Wow.  Thank you very much.  What about first-time voters?  Let’s—I’m sorry, we’ve got to go right now to John Edwards who is making an appearance, I believe, at his headquarters.  There he is.  There’s John Edwards coming in.  He’s fighting with Hillary Clinton for second place tonight in the caucuses.  He’s smiling rather broadly, moving around through the room.  But he can’t be happy.  Many people believe he needed to win this to really have a good chance of winning the nomination—Keith. 

OLBERMANN:  Yes.  Our friend Joe Trippi had suggested that what was going on in Iowa was a rejection of Hillary Clinton.  But right now as things are projecting outwards, John Edwards may wind up tied with Hillary Clinton.  And you have to then sort of join in the rejection, if it’s an absolute dead tie for second place. 

Let’s listen in to the introduction as the former senator gets towards the podium. 

ELIZABETH EDWARDS, WIFE OF FORMER SENATOR JOHN EDWARDS:  Don’t worry,

you only have about 15 seconds of me.

(LAUGHTER)

UNIDENTIFIED MALE:  We love you, Elizabeth!

E. EDWARDS:  Thank you all.

(CHEERING AND APPLAUSE)

E. EDWARDS:  Thank you.

In this election, we had a candidate who had a message and was a messenger of such determination and such spirit that, despite the fact that he was outspent six to one, that message got through.

I’m glad to introduce the next president of the United States and the second place winner in Iowa, John Edwards.

(CHEERING AND APPLAUSE)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  Thank you.  Thank you. 

Thank you.

(CHEERING AND APPLAUSE)

J. EDWARDS:  Thank you.

Thank you, Elizabeth, very much.

The one thing that’s clear from the results in Iowa tonight is the status quo lost and change won.

(CHEERING AND APPLAUSE)

J. EDWARDS:  And now we move on.  We move on from Iowa to New Hampshire and to the other states to determine who’s best suited to bring about the change that this country so desperately needed, because what we have seen here in Iowa is we have seen two candidates who thought their money would make them inevitable.

But what the Iowa caucus-goers have shown is if you’re willing to have a little backbone, to have a little courage, to speak for the middle class, to speak for those who have no voice...

(CHEERING AND APPLAUSE)

J. EDWARDS:  ... if you’re willing—if you’re willing to stand up to corporate greed, that message and the American people are unstoppable, no matter how much money is spent, no matter how much...

(CHEERING AND APPLAUSE)

J. EDWARDS:  And we are so proud of this cause.  But I want all of us to remember tonight, while we’re having all these political celebrations, that just a few weeks ago in America, Nataline Sarkisyan, a 17-year-old girl who had a—needed a liver transplant, and whose insurance company decided they wouldn’t pay for her liver transplant operation, finally, her nurses spoke up on her behalf.  Her doctors spoke up on her behalf.

Ultimately, the American people spoke up on her behalf by marching and picketing in front of her health insurance carrier.  And, finally, the insurance carrier caved in and agreed to pay for her operation.  And, when they notified the family just a few hours later, she died.  She lost her life.  Why?  Why?

James Lowe was born 51 years ago in the United States of America with a severe cleft palate, which kept him from being able to speak.  And he lived for 50 years in the greatest, most prosperous nation on the planet, not able to speak because he didn’t have health care coverage and couldn’t pay for a simple operation.  Why?

Doug Bishop, who’s actually behind me tonight, Doug and his family worked at the Maytag plant in Newton—Newton, Iowa.  For generations, for generations, they worked.  They sacrificed.  They did everything you’re supposed to do in America.

And, then recently, this plant closed, and the jobs went overseas. 

Why?  The reason is because corporate greed has got a stranglehold on America.  And, unless and until we have a president in the proud tradition of Teddy Roosevelt, Franklin Roosevelt, Harry Truman, who has a little backbone, who has some strength, who has some fight, who’s willing to stand up to these people, nothing will change.

We will never have the America that all of us dream of.  The promise of America, which has been available to so many of us, will not be available to our children and our grandchildren.  And I take this very personally.

I watched my grandmother, who I loved dearly, work year after year after year in the mills.  And we lived in the same neighborhood.  She would cook for us, leave the house, walk her way to the mill, work her shift, and come back home and take care of us again.

My grandfather, who was partially paralyzed, would go to work the graveyard shift in that mill and come back in the morning, when we would have breakfast together.

My father, who’s here with me tonight, worked 36 years in the mills, hard, tedious work, hard, tedious work.  Why did he do it?  Why did he struggle and sacrifice?  Why did your parents and grandparents struggle and sacrifice?  They did it so that you could have a better life.  My parents did it so that I could have a better life.

And we, all of us, to whom the torch has been passed, we carry an enormous responsibility.  And that responsibility transcends politics and transcends elections.  It’s our responsibility to ensure that we leave America better than we found it, that we give our children a better life than we have had.

And this is what I see in America today.  I see an America where, last year, the CEO of one of the largest health insurance companies in America made hundreds of millions of dollars in one year.  I see an America where Exxon Mobil’s profits were $40 billion just a couple of years ago, record amounts, record profits, all of that happening at the same time that this picture of America emerges.

Tonight, 47 million Americans will go to bed knowing that if their child gets sick, they will have to go to the emergency room and beg for health care.  Tomorrow morning, women will go to their doctor and be diagnosed with breast cancer, just like Elizabeth was.  But unlike Elizabeth, they will have no health care coverage.

And, as a result, they know that they can’t go to the emergency room and get chemotherapy.  What are they supposed to do?  What are they supposed to do?  You can literally see the fear and terror in their eyes.

Tomorrow morning, 37 million of our own people will wake up literally worried about feeding and clothing their own children.

I went to a shelter here in Des Moines just a few weeks ago, where they took single moms with their children who had no place to live.  And I said, so, do you ever have to turn people away?

Yes, a few months ago, they had to turn 70 to 75 families away in one month.  And I said, these are moms with kids?  Yes.  Some of them with three or four children.  And I said, well, where did they go when you sent them away?  They went back to the street, back to their homes.

Thirty-five million people in America went hungry last year in the richest nation on the planet.  And, tonight, 200,000 men and women who wore our uniform proudly and served this country courageously as veterans will go to sleep under bridges and on grates.

We’re better than this.  The United States of America is better than this.  And what happened tonight is, the Iowa caucus-goers said, we want something different.  We are going to stand up.

(CHEERING AND APPLAUSE)

J. EDWARDS:  We are going to rise up.  We’re going to create an America that all of us believe in, because the truth is, when we speak up, when we speak up for James Lowe and the millions like him who live in the darkness, when we speak up against corporate greed and for the 37 million Americans who live in poverty, when we speak up for single moms who have no place to live with their children, when we speak up for hundreds of thousands of veterans who served this country proudly and are homeless, with no place to live at night, when we do that together, as a nation—and Iowa caucus-goers did it tonight, when we do it, America is a better place.

It says something about who we are. It says something about our character, because, when we do, America rises up.  America becomes what it’s capable of being.  And what began—and it is not over, what began tonight in the heartland of America is the Iowa caucus-goers said, enough is enough.  We are better than this.  We are going to bring the change that this country needs.

(CHEERING AND APPLAUSE)

J. EDWARDS:  And you have created and started a wave of change, a tidal wave of change that will travel from here to New Hampshire to Nevada to South Carolina, all across this country...

(CHEERING AND APPLAUSE)

J. EDWARDS:  ... because we know the torch has been passed to us.  We stand proudly on the shoulders of our parents and grandparents and all those generations who came before us.  And we take our responsibility seriously.

And this tidal wave of change that began tonight in Iowa and that will sweep across America, when that wave is finished, when it is done, every one of us are going to be able to look our children in the eye and say, we did what our parents did for us and what our grandparents did for us, which is, we left America better than we found it, and we gave our children a better life than we had.

(CHEERING AND APPLAUSE)

J. EDWARDS:  That’s what this is about.  That’s what this change is about.  Continue on.  This march of change continues on.  God bless you.  Thank you for everything you have done.  Stay with us in this fight.  We are in this fight together.  Thank you.

(CHEERING AND APPLAUSE)

J. EDWARDS:  Thank you for second place!

MATTHEWS:  It’s an unusual speech for a candidate to give the night he loses a political contest.  Usually they concede and at some point in the speech admit that they didn’t win and congratulate the victor.  He didn’t congratulate the victor.  Neither did his wife, an unusual thing to do. 

And I remember—it reminds me that back in 2000 when he was running mate with Al Gore, he—or rather running mate with Kerry back in ‘04, he opposed conceding there, too.  He doesn’t like to concede. 

OLBERMANN:  And that had echoes and perhaps large passages that were essentially his stump speech in the entire lead-up, in the entire campaign in Iowa.  It’s also extraordinary, some of those interior numbers that we heard that, of all people, this may be a night of what the losers or the second and third place finishers did not achieve as we saw Clinton’s lack of support among younger women, Edwards’ lack of support in the union vote and lower income houses, he finished third in Iowa in those which is supposed to be his strength area.  You have to admit something at this point, some sort of concession with at least that statistic. 

MATTHEWS:  Well, maybe we’re seeing a breakthrough in the Democratic Party where people are breaking out of their pens and they’re voting the way they want to vote, not the way their pen is supposed to vote.  Well, we’ll see.  Because this will be an example of the old politics coming up right now, the Clintons are taking to the stage.  They’ve got the room.  They’re arriving, they’re coming in to address the troops after not a good night for Hillary Clinton. 

OLBERMANN:  And this familiar process of who speaks and who stays out of the room and who appears on camera to make sure that there is not conflict and that somebody doesn’t talk too long.  Here is the senator. 

(CHEERING AND APPLAUSE)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Thank you.  Thank

you so much.  Thank you.  Thank you so much.  Wow.

(CHEERING AND APPLAUSE)

CLINTON:  I will tell you, this...

CROWD:  Hillary!  Hillary!  Hillary!  Hillary!

CLINTON:  Thank you.  Thank you.

CROWD:  Hillary!  Hillary!  Hillary!  Hillary!

CLINTON:  Thank you so, so much.

CROWD:  Hillary!  Hillary!  Hillary!  Hillary!

CLINTON:  Thank you.  Thanks, everybody.  Thank you.

(CHEERING AND APPLAUSE)

CLINTON:  Well, we’re going to take this enthusiasm and go right to New Hampshire tonight.

(CHEERING AND APPLAUSE)

CLINTON:  This is a great night for Democrats.  We have seen an unprecedented turnout here in Iowa.  And that is good news, because, today, we’re sending a clear message that we are going to have change, and that change will be a Democratic president in the White House in 2009.

(CHEERING AND APPLAUSE)

CLINTON:  I am so proud to have run with such exceptional candidates.  I congratulate Senator Obama and Senator Edwards.  I thank Senator Dodd and Senator Biden and Governor Richardson and Congressman Kucinich.  Together, we have presented the case for change and have made it absolutely clear that America needs a new beginning.

(CHEERING AND APPLAUSE)

CLINTON:  And I am as ready as I can be, after having had this incredible experience here in Iowa, starting out a long time ago, and making this journey with so many people who have become my friends and who I am so grateful for their hard work and support, those from Iowa, those who have come from around the country.

And the people who were there, exceeding anybody’s expectations about what it would mean to have the caucuses this year, I thank you.  I thank each and every one of you for coming out and standing up for a Democrat.

(CHEERING AND APPLAUSE)

CLINTON:  What is most important now is that as we go on with this contest that we keep focused on the two big issues, that we answer correctly the questions that each of us has posed.  How will we win in November 2008 by nominating a candidate who will be able to go the distance, and who will be the best president on day one?

I am ready for that contest.

(CHEERING AND APPLAUSE)

CROWD:  Hillary!  Hillary!  Hillary!  Hillary!  Hillary!  Hillary! 

Hillary!  Hillary!

CLINTON:  Now, you know, we have always planned to run a national campaign all the way through the early contests, because I want the people of America, and particularly Democrats, and like-minded independents...

(LAUGHTER)

CLINTON:  ... and Republicans who have seen the light...

(CHEERING AND APPLAUSE)

CLINTON:  ... to understand, number one, that the stakes are huge, that the job is enormous, but that I believe we’re going to make the right decision.

There will be a lot of people who will get involved, as they have here in Iowa, of all ages.  That is what we want, because we’re not just trying to elect a president, we’re trying to change our country.  That is what I am committed to doing.

(APPLAUSE)

I have set big goals for our country.  I want to rebuild a strong and prosperous middle class.  And to me, that is the most important job the next president will have here at home.  Because if we don’t begin to pay attention to the people who do the work and raise the families and make this country great, we will not recognize America in a few years.

(APPLAUSE)

And I want to make it absolutely clear I intend to restore America’s leadership and our moral authority in the world.  And we’re going to tackle all of the problems that are going to be inherited because of the current administration, including ending the war in Iraq and bringing our troops home and then giving them the support that they need.

(APPLAUSE)

And we’re going to reform our government.  We’re going to make sure that it’s not the government of the few by the few and for the few, but it actually works for every American again.  And we’re going to reclaim the future for our children.

I have done this work for 35 years.  It is the work of my lifetime.  I have been involved in making it possible for young people to have a better education and for people of all ages to have health care.  And that transforming work is what we desperately need in our country again.

I am so ready for the rest of this campaign.  And I am so ready to lead.

(APPLAUSE)

So if you’re concerned about whether or not we can have quality affordable health care for every America, then I’m your candidate.

(APPLAUSE)

And if you’re concerned about whether we can have an energy policy that will break the shackles of our dependence on foreign oil and set forth a new set of goals for us to meet together, then I’m your candidate.

(APPLAUSE)

And if you’re worried about once and for all taking on global warming, making it clear that we will end the unfunded mandate known as No Child Left Behind...

(APPLAUSE)

...that we will make college affordable again, that we will be, once again, the country of values and ideals that we cherish so much, then please join me in this campaign.

We have a long way to go but I am confident and optimistic, both about the campaign, but maybe more importantly about our country.  This country deserves everything we can give to it.

You know, there were a lot of people who couldn’t caucus tonight, despite the very large turnout.  There were a lot of Iowans who are in the military.  They’re in Iraq or Afghanistan or somewhere else serving our country.  And they need a commander-in-chief who respects them and who understands that force should be only used as a last resort, not a first resort.

(APPLAUSE)

And there are a lot of people who work at night, people who are on their feet, people who are taking care of patients in a hospital or waiting on a table in a restaurant or maybe in a patrol car keeping our streets safe.  And they need a president who’s going to care about them and their families.  And I wrote a book some years ago called “It Takes A Village To Raise A Child”.  And in it, I have a chapter that I titled “Every Child Needs A Champion.” Well, I think that the American people need a president who is their champion and that is what I intend to be.  So...

(APPLAUSE)

...I want to thank all the people who have been part of this campaign so far.  I especially want to thank all of my friends here in Iowa who have worked so hard.  I want to thank those who have come from across America.  I want to thank all of the unions—the more than six million union members who support my candidacy.

(APPLAUSE)

And I know that we’re going to get up tomorrow and keep pushing as hard as we can to get the message out about what is at stake in this election.  Because we know that it is literally the future of our country.

So thank you all so very much for caring enough to be involved in politics, for giving of your time and your resources, for understanding that this great democracy of ours deserves to have all of our best efforts.  And I promise, you this campaign that I am running will certainly have mine.  And I ask for yours, as well.

Thank you all very, very much.  God bless you.

MATTHEWS:  And that was Hillary Clinton conceding defeat.  There’s her husband, of course, former President Bill Clinton.  He did not speak.  Her daughter Chelsea, some other people, all supporters for her there.  I thought, Keith, it was a gracious speech.

OLBERMANN:  It’s the team player’s speech.  The headline, perhaps—and, again, we repeat this—that who wins in this is vitally important.  And the placement is vitally important for the candidates.  But maybe the overall question here, the overall headline, is that the turnout for the Democratic caucuses in Iowa will be up about 82 percent from what they were 2004.  That’s a lot of votes out there for a Democratic in the fall.  And the first half, at least, of that speech differed from John Edwards’ speech in basically recognizing that the Democrats want the Democrat to win, whether it’s Hillary Clinton, Barack Obama or a Democrat to be named later.

MATTHEWS:  Those two men embracing there, former President Clinton and, of course, former Governor Tom Vilsack, who is on the short list, I believe, for vice president is Hillary wins the nomination.

Let me go right now to Tom Brokaw, Keith, who’s been waiting for us—you know, Tom, it seems to me that while certainly as long as I can remember, I have been waiting for the big election where people who don’t vote are going to show up and—and really change things.

Do you think we might be on the verge of such an election?

BROKAW:  You mean the verge in Iowa or in this year?

No, I think there’s no question that this is a very big year.  The country is energized.  They’ve been paying attention for a long, long time—not as much attention as we’ve been paying, obviously.  I think, also, it’s important, however, that we not—those of us in this business—draw an end to it tonight, because the country wants in.  We do have Nevada and North Carolina and then tsunami Tuesday coming up.

We ought to have the kind of dialogue that this country deserves across the party lines—Republican, Democrat and Independent.

There’s a big meeting next week Oklahoma, as you know, for some people who are disaffected by the polarization going on in this country.

So I do hope that we have a real campaign this time in which we have a discussion of these critically important issues.

I think there are a couple observations we should make tonight.  Iraq, which was the defining issue going into Iowa, disappeared in the last several weeks.  The surge is having some success.  Iraq is not in the headlines.

Pakistan did not play as much as some people thought that it might. 

When I was talking to some people in Iowa today, they were saying, look...

MATTHEWS:  OK...

BROKAW:  ...this is about domestic issues.

MATTHEWS:  Tom...

BROKAW:  Here’s Governor Huckabee...

MATTHEWS:  Tom...

BROKAW:  ...who is the big winner tonight on the Republican side.

Let’s hear what he—he has to say.

I’m not assuming my old role here—Chris.

(LAUGHTER)

MATTHEWS:  Go for it.

BROKAW:  Here’s Governor Huckabee, who is the little known former governor of Arkansas who tonight comes up with a big victory.  And right behind him, of course, is Chuck Norris, who is at his side.  That was his defense against illegal immigration.

(LAUGHTER)

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  Thank you very much.

You know, I wasn’t sure that I would ever be able to love a state as much as I love my home state of Arkansas, but tonight I love Iowa a whole lot.

(APPLAUSE)

HUCKABEE:  Over the past several months, my family and I have had had the marvelous joy and privilege of getting to know you and it’s been an incredible honor.  I was thinking last night is that some of the friendships that we’ve forged here in the last several months are friendships that will last a lifetime.

And we didn’t know how this was going to turn out tonight.  But I knew one thing—I would be forever grateful to the people that I met—the ones who voted for me, even the ones who didn’t, who still treated me with respect and who gave me their attention and who allowed me to come often—not just into their communities, but into their homes—not once, but time and time again.  And a few of them I even convinced to vote for me tonight and that’s really remarkable.

(APPLAUSE)

HUCKABEE:  I want to say how much I appreciate my wife, Janet.

(APPLAUSE)

HUCKABEE:  She was a wonderful first lady of Arkansas.

(APPLAUSE)

HUCKABEE:  And I think she’ll be a wonderful first lady for the United States of America.

(APPLAUSE)

HUCKABEE:  We also want to say thanks to our three children who are with us tonight.  I would like them to come and just be a part of this tonight.  They have all been so much involved.  Our oldest son John Mark, our son David, his wife Lauren, our daughter Sarah—who has literally lived in Iowa for the past two-and-a-half months...

(APPLAUSE)

HUCKABEE:  And I told her if she stayed much longer, she’ll have to get her an Iowa driver’s license and probably start paying even more taxes up here.  But...

(LAUGHTER)

HUCKABEE:  And I say thanks to all of them for joining with us in this effort, because a family goes through it, not just the candidate.  But tonight it’s a celebration for everybody on our team—so many of you who have traveled from all across America to be here.

I’m amazed, but I’m encouraged.  Because tonight what we have seen is a new day in American politics.  A new day is needed in American politics, just like a new day is needed in American government.  And tonight, it starts here in Iowa—but it doesn’t end here.  It goes all the way through the other states and ends at 1600 Pennsylvania Avenue one year from now.

(APPLAUSE)

HUCKABEE:  I think we’ve learned three very important things through this victory tonight.  The first thing we’ve learned is that people really are more important than the purse—and what a great lesson for America to learn.

(APPLAUSE)

HUCKABEE:  Most of the pundits believe that when you’re outspent at least 15 to one, it’s simply impossible to overcome that mountain of money and somehow garner the level of support that’s necessary to win an election.  Well, tonight, we proved that American politics still is in the hands of ordinary folks like you and across this country, who believed that it wasn’t about who raised the most money, but who raised the greatest hopes, dreams and aspirations for our children and their future.  And tonight, I hope we will forever change the way Americans look at their political system and how we elect length presidents and elected officials.

(APPLAUSE)

HUCKABEE:  Tonight, the people of Iowa made a choice and their choice was clear.  Their choice was for a change.  But that choice for a change doesn’t end just saying let’s change things.  Change can be for the better.  It can be for the worse.  Americans are looking for a change, but what they want is a change that starts with a challenge to those of us who are given the sacred trust of office, so that we recognize that what our challenge is, is to bring this country back together—to make Americans once again more proud to be Americans than just to be Democrats or Republicans...

(APPLAUSE)

HUCKABEE:  ...to be more concerned about being—going up instead of just going to the left or to the right.  And while we have deep convictions that we’ll stand by and not waiver on or compromise, those convictions are what brought us to this room tonight.  But we carry those convictions not so that we can somehow push back the others, but so we can bring along the others and bring this country to its greatest days ever.  Because I’m still one who believes that the greatest generation doesn’t have to be the ones behind us.  The greatest generation can be those who have yet to even be born.  And that’s what we’re going to see.

(APPLAUSE)

HUCKABEE:  And ladies and gentlemen, we’ve learned something else tonight.  And that is that this election is not about me, it’s about we.  And I don’t say that lightly.  I’m the person whose name gets on the signs, who occasionally gets the attention in some of the few ads that came out here and there...

(LAUGHTER)

HUCKABEE:  But the election is not about me.  And the country is not just about me.

What is happening tonight in Iowa is going to start, really, a prairie fire of new hope and zeal.  It’s already happening across this nation, because it is about we—we the people.  We saw it tonight.  We’ve seen it in other states and we’re going to continue to see it because this country yearns and is hungry for leadership that recognizes that when one is elected to public office, one is not elected to be a part of the ruling class.  He’s elected to be a part of the serving class...

(APPLAUSE)

HUCKABEE:  ...because we the people are the ruling class of America.

(APPLAUSE)

HUCKABEE:  G.K.  Chesterson once said that a true soldier fights not because he hates those who are in front of him, but because he loves those who are behind him.  Ladies and gentlemen, I recognize that running for office is not hating those who are in front of us, it’s loving those who are behind us.  It’s about recognizing...

(APPLAUSE)

HUCKABEE:  ...it’s recognizing that behind us are great patriots, dating back to the beginning of this wonderful country, when 56 brave men put their signatures on a document that started forth the greatest experiment in government and the history of mankind and gave birth to the idea that all of us are created equal and we have been given by our creator inalienable rights—life, liberty and the pursuit of happiness.

These who signed that document, who gave birth to this dream, were the beginnings of those who, throughout our history, have continued—with great sacrifice and extraordinary valor—to pass on to us that liberty and the quest for something better than the generation before them had.

I stand here tonight the result of parents who made incredible sacrifices as a part of a great generation who went through a Depression and a world war and said our kids won’t have to go through these things.  And every sacrifice they made were to lift us on their shoulders and gave us a better America than they ever could have envisioned.  And they were successful in doing that.

Now, ladies and gentlemen, for the same reason that our founding fathers and those before us saw what was behind us and gave it their best, I ask you to join me across Iowa and the rest of America to look out there in front of us and not to hate those, but to look behind us and to love them so much that we will do whatever it takes to make America a better country, to give our kids a better future, to give this world a better leader and that we join together tonight for that purpose.

God thank—help you and thank you for all you’ve done.  I’m so grateful for the support, the incredible work that you’ve done.  And now we’ve got a long journey ahead of us.  I wish it were all over tonight and we could just celebrate the whole thing.

(APPLAUSE)

HUCKABEE:  But, unfortunately, if this were a marathon, we’ve only run half of it.  But we’ve run it well.  And now it’s on from here to New Hampshire and then to the rest of the country.  But I’ll always be wanting to come back to this place and say wherever it ends—and we know where that’s going to be...

(LAUGHTER)

HUCKABEE:  ...it started here in Iowa.

(APPLAUSE)

HUCKABEE:  Thank you and God bless you, every one of you.

Thank you tonight.

Thank you.

MATTHEWS:  Tom Brokaw is still with us.

That, of course was Governor Huckabee giving his victory speech tonight.  Quite a speech, actually.

Tom, what did you make of that?

It was very Jimmy Stewart, I thought.

BROKAW:  Well, I—in fact, you get a sense there of why he did so well in Iowa and why he remains so popular on Main Street and in the small towns.  He’s a practiced preacher from Arkansas who was the governor of that state, after all.  He lost 110 pounds.  He’s been a popular guest on programs like “Imus,” for example.  He’s a practiced politician and preacher.  And he has a different message than the other Republicans do.

It seems to me, Chris, that if you’re handicapping all of this, this is very good news for John McCain, because it put a big hole in the expectations and hopes of Mitt Romney in Iowa.  And now we’ve got just five days to go in New Hampshire.  That’s where the race starts fresh tomorrow morning.

On the Democratic side, Hillary Clinton, from whom we heard just a few moments ago, obviously has still a very big hurdle out there.  Whenever I was in Iowa or talking to anyone, they would say—women included—and women went for Obama in greater numbers tonight than they did for Hillary—I just don’t think she can win next year, and we really want to win this time.  That’s a hurdle that she still has to overcome.

And the question is can she be as nimble as her husband, Bill Clinton, when he didn’t do well in Iowa and New Hampshire and made himself into the comeback kid?

That’s a tall order given the kind of momentum that Barack Obama has coming out of Iowa tonight—Chris.

MATTHEWS:  Well, it’s only the beginning, Tom.

And we’re watching another episode in American political life.  And it has reverberations and echoes of the past.  I think in 1984, I think of Mondale, how he came back and defeated Gary Hart.  So oftentimes in the Democratic Party, the young whippersnapper wins, the new kid on the block wins the early outings and then the establishment fellows gradually take hold again.  We’ll see if it happens.  Maybe it won’t happen this time, Tom.

Thank you very much.

BROKAW:  Chris, I’m going to go to New Hampshire early tomorrow morning, where we have four undecided voters who have been watching all of this tonight.  I’ll be spending much of tomorrow with them.  And then tomorrow night on “NBC NIGHTLY NEWS WITH BRIAN WILLIAMS,” we’ll give you an idea of what they thought about what they saw from Iowa, because some of them are Independents, some of them are Democrats in the past and Republicans in the past.  So we’ll get a little better sign tomorrow night, I suppose—some tea leaves, at least, to look at.

It’s been a pleasure being with us.

MATTHEWS:  Great.

Thank you, Tom.

OLBERMANN:  Thank you, Tom.

Let’s go back to NBC’s Brian Williams and Tim Russert in Des Moines.

And we’ve got so many separate headlines.  Leaving aside the victories by Huckabee and Obama tonight, Tim, what is your headline—the Democratic turnout, some of those interior numbers?

What is it?

RUSSERT:  Yes.  Enormous, huge Democratic turnout.  It looks like more than double what the Republicans turned out, Keith.  And the embracing of Barack Obama by Iowa Democrats and a considerable number of Independents.  And I think, to underscore what Tom said about Huckabee, the Republicans embracing someone whose message is populist.  And in terms of foreign policy, anti-George W.  Bush.

The other thing, Keith, I saw Bill Clinton the other night in Carlisle, Iowa.  And he said, you know, people are surprised about Mike Huckabee’s success within the Republican Party.  He said, I’m not—not just because he’s from my hometown of Hope, Arkansas, but he’s the only Republican candidate who can give a speech and tell a joke.

He meant it in all seriousness as a respectful nod toward Huckabee in terms of the art form.

But all that being said, the headline is massive Democratic turnout in a red state for change.

WILLIAMS:  And I’ve been sitting here thinking about, gentlemen, the cruelty, the kind of—the human aspect of all of this.  Yes, this is kind of politics as natural selection.  Things have to winnow down.  Things have to shake out and develop from here and they’ll—they’ll grow to all different parts of the country.  But also think about the commitment out here, the families.  For all the happy ballrooms, think of the, you know, the Chris Dodds, who naturally have to fall by the wayside now—a guy who moved out here, put his two kids in local schools, really moved out to Iowa.

Think of the role of the spouses, even thus far in this campaign—whether that spouse is a former president of the United States, whether that spouse is Elizabeth Edwards, trying to schedule chemo and other treatments around her husband’s campaign.

Notably, one thing few caught tonight, she introduced her husband, made awfully sure she said tonight’s second place finisher here in Iowa, when he finished his speech, she went up to him at the podium, and while I don’t dare to indicate I know what was said between spouses, she whispered something in his ear.  John Edwards went back to the microphone tonight and said, “Thank you for making us second place here in Iowa.”

Very important.  And she is no amateur strategist, Mrs.  Edwards.  Very important for that Edwards campaign to get that message out tonight—we finished second.  As he put it, the wave of change is sweeping across the country.  John Edwards almost jumped in the Obama change bandwagon tonight in a losing effort in Iowa here aimed at New Hampshire.  What an incredible evening to watch.

MATTHEWS:  You know, gentlemen, let me start with Brian.

It seems to me although the war has receded as a front page issue and the—fortunately, of course, the casualty listings have come down and the noise level, if you will, have come down, I wonder, what do you think?

You know, we’ve been in this war in Iraq almost six years now—going on six years.  And I wonder whether it isn’t just part of our psyche that it’s just too long a war—there’s a sense that that’s one of the big sort of—we like to say the light motif—the background that says change must come.

WILLIAMS:  Well, I have to say this—I’m duty bound to say this.  For a lot of us in our jobs and living where we must live to have these jobs, I think it’s easy for the war to kind of take a background.  But when you get out into America—i.e.  Outside the New York metropolitan area, the beltway, outside of L.A.  , you realize the war—the other way of looking at it is it’s completely crocheted, woven into the American fabric.

Of course, among those who have raised their hand, volunteered, all their families who are doing the same Herculean effort back here at home, yet they consider it part of the job, part of the volunteer sacrifice.

They leave it up to the policymakers to make those decisions.  I saw one of the incredible television—the volume of television ads here in Iowa last night.  It seemed a little incongruous.  It was a Richardson ad—“my plan to get troops out of Iraq is the best of the plans.  It calls for them to get out the fastest.”

And you look at that vis-a-vis where these two parties are headed tonight, what people were talking about to our entrance and exit pollsters tonight.  It just creates an interesting set of circumstances—Tim, I don’t know how you feel.

RUSSERT:  In the entrance poll, the war still hugely important.

WILLIAMS:  Yes.

RUSSERT:  And Chris and Keith, every hall I went into with a Democratic candidate, whenever they mentioned ending the war in Iraq, the place just jumped to its feet.  It is a hugely important issue to Democratic voters.

Obama made a very big point out here of being the only major Democratic candidate who opposed the war from the beginning—pointing out that both Edwards and Clinton voted for it.

I am endlessly curious tonight as to what Hillary Clinton now.

How does she pivot off of this Democratic unity speech, as you accurately described it, Keith, before New Hampshire?

Does she go negative on Barack Obama?

Does she really try to separate herself and go after him in a very hard way?

WILLIAMS:  Yes.

RUSSERT:  That’s a very risky strategy, but that’s what’s being decided tonight and all the way back on the plane to New Hampshire.

OLBERMANN:  Thank you, Brian Williams.

Thank you, Tim Russert.

Much more ahead, including this one notation here, that just among the Democrats in Iowa, the vote was 32-31 Obama over Clinton.  So that might explain that Clinton magnanimity there at the end.

We’re expected to hear from the projected Democratic winner, Barack Obama.

And we will continue with MSNBC’s coverage of the Iowa caucuses after this.

(COMMERCIAL BREAK)

KEITH OLBERMANN, MSNBC ANCHOR:  Good evening.  Alongside Chris Matthews, I’m Keith Olbermann.  This is continuing coverage of the 2008 Iowa Caucuses, the mathematically bewildering process by which voters in the Hawkeye state choose their presidential candidates.  It could not have been simpler tonight, though, when it came to projecting the winners. 

Governor Huckabee projected to all but run away with the Republican race, if not all the delegates that come with it, Governor Romney the runner- up, former Senator Thompson and Senator McCain in an apparent tight race for third place. 

Senator Obama about to speak in Des Moines, within a few minutes, projected to handily win the Democratic field, though subtract those 20 percent independent voters, it’s Obama 32, Clinton 31.  Senators Clinton and Edwards still fighting it out officially for second place. 

In the last hour, Senator Clinton acknowledging turnout in a good way, even though it appears the high turnout was not kind to her. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE:  We have seen an unprecedented turnout here in Iowa, and that is good news because today, we’re sending a clear message that we are going to have change and that change will be a Democratic president in the White House in 2009. 

(END VIDEO CLIP)

OLBERMANN:  And also in the last hour, Senator Edwards declaring himself the second-place finisher, without congratulating the projected winner, Senator Obama, failing to note something of an irony of the status quo, that would make him the runner-up in the Iowa caucuses for the second presidential election in a row. 

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  The one thing that’s clear from the results in Iowa tonight is the status quo lost and change won. 

And now, we move on.  We move on from Iowa to New Hampshire and to the other states to determine who’s best suited to bring about the change that this country so desperately needed. 

OLBERMANN:  On the Republican side, Governor Mike Huckabee, meanwhile, promising his supporters tonight that he plans to repeat tonight’s victory on November 4th, 306 days from now. 

(BEGIN VIDEO CLIP)

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  A new day is needed in American politics, just like a new day is needed in American government.  And tonight, it starts here in Iowa.  But it doesn’t end here.  It goes all the way through the other states and ends at 1600 Pennsylvania Avenue one year from now. 

(END VIDEO CLIP)

OLBERMANN:  The governor spoke of who was behind him.  As you saw, Chuck Norris was behind him. 

In what might be considered by some political sour grapes, Governor Romney choosing to speak at the exact same hour as the winner in this race. 

His remarks evoking his past as Olympic organizer. 

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  You win the silver in one event, it doesn’t mean you’re not going to come back and win the gold in the final event and that we’re going to do. 

(END VIDEO CLIP)

OLBERMANN:  We’re waiting for Senator Obama to address his supporters. 

In the interim, let’s go to Obama Campaign Headquarters and NBC’s Lee Cowan. 

Lee, good evening. 

LEE COWAN, NBC NEWS CORRESPONDENT:  Good evening.  The senator was, we are told, was at dinner with his family when he found out the news he had actually won here tonight.  He’s making his way up to the stage as we speak. 

He had talked a lot about how this—a big turnout was certainly going to do him well.  He talked a lot about how he thought he was going to prove all the pundits wrong, that not only a lot of young people were going to turn out, but a lot of independents were going to turn out.  That’s exactly what happened tonight. 

Expect to see and hear a lot of that as we go to Senator Obama, as he takes the stage.  

OLBERMANN:  You will see how this plays tomorrow.  Let’s repeat that one statistic, as we wait for Senator Obama to get to the podium and enjoy verbally his moment of triumph.  The number without the 20 percent independents, which is the same number who voted in the Democratic caucus in Iowa in 2000, about 20 percent.  Without that, he wins 32-31, not by a large margin.  That obviously would be the thing that the Clinton camp hangs on. 

CHRIS MATTHEWS, MSNBC ANCHOR:  Consider the fact that this is the Clinton Democratic party.  He’s beating the incumbents.  That’s something in itself, plus drawing all the independents that they’ll need in the general election.  Let’s be honest, if you only win with Democrats, you’re not going to win the general.  Pretty stylish family, I must say.  There they are. 

OLBERMANN:  There’s the senator. 

(OBAMA SPEECH)

OLBERMANN:  Senator Barack Obama’s victory speech in Iowa tonight, after a thunderous and successful evening.  Not so for Senator Joe Biden, who got one percent of the delegate count and is withdrawing from the race.  Here’s Senator Biden. 

SEN. JOE BIDEN (D), PRESIDENTIAL CANDIDATE:  Excuse me a point of personal privilege.  My staff and my friends—I mean, you know, we’ve had people, the highest paid guys in the country, working for me for nothing on the promise that some time we’ll be able to pay them.  I mean that’s incredible. 

That’s absolutely incredible. 

One of the best film makers in the country, Joe Slade White (ph), and John Martilla (ph) -- I guess I shouldn’t start naming all these people.  I mean, people who are really, really—Mike Donald (ph) -- these guys are able to command significant, significant sums.  Other campaigns asked them to be with them.  And they knew I had no money, because they knew I made no promises.  And they knew there would only be a time that we will, in fact—we will in fact, be able to meet their minimum requirements that they provided for us. 

There’s so many of you that have sacrificed for me.  I feel so indebted to you.  But you know, folks, Jill and I—come on up here with me, Jill. 

Jill and I when we decided to do this -- 

OLBERMANN:  Senator Biden dropping out as the speech from Senator Obama was still in progress.  Senator Dodd dropped out in the last hour.  It is symbolic—the timing is symbolic, in terms of the outcome.  Zero percent of the delegate count to Chris Dodd, and one percent of the delegate count among the Democrats to Joe Biden. 

Let’s now go back to the other end of things, Chris, and to our headlines and to our panel.  You want to take us in with. 

MATTHEWS:  Let’s give everybody a shot.  We’re looking over the numbers tonight, Howard and Rachel and Pat and Gene.  It seems that if you look at this profile of the vote for Barack Obama, it’s fascinating, very young, very liberal. in some cases very rich.  It’s quite an impressive group, Pat Buchanan. 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  It certainly is.  I mean, he put together a terrific achievement here, I think, Chris.  You’ve got to say it’s gotten pretty much, I think, down to an Obama/Hillary race.  I know Edwards is going to go on.  But I notice both Hillary and Obama were touching the same populist chord that Edwards used to good effect to come in second and Huckabee did the same. 

I think economic populism is going to be one of the themes of this campaign.  I think Mrs. Clinton’s speech was exceedingly gracious.  She is still the national front-runner, although it’s getting to be a two-person race right now.  I’ll tell you, I thought Mike Huckabee gave a perfectly splendid, uplifting, positive victory speech, as opposed, you might say to what McCain did, who really chomped into Mr. Romney. 

I think Huckabee’s been, maybe, being underestimated as a national candidate. 

MATTHEWS:  Let me go to Gene Robinson.  Gene, it seems to me, going back to the Democrat, because I think it is going to be the worldwide headline, certainly the American headline tomorrow morning, that Barack Obama has come from where he’s come from.  I like that speech he just gave. 

EUGENE ROBINSON, “THE WASHINGTON POST”:  That was a goose bumps moment for me.  It really was.  It reminded me, people have drawn the comparison—you know, I was old enough, I was in my teens when Bobby Kennedy was running for the presidency.  There was something about Obama that has the—that captures some of that feeling, I think, of the Bobby Kennedy candidacy, that enormous outpouring of hope that he kind of inspires. 

You know, this was not a narrow victory tonight by Obama.  I mean, his margin over Hillary Clinton, as of now, is nine points.  That’s the same as Huckabee’s margin over Romney.  So this is pretty much a thumping that he gave to Hillary Clinton and John Edwards.  And I really think this not only boosts the Obama candidacy, but in a way that I find, you know, touching and important, I think does turn a page in the life of the nation. 

MATTHEWS:  If you compare the two speeches, Rachel, it seems to me that Barack gave a big picture speech, a heroic speech in many ways about America today.  I look at Hillary Clinton’s speech and it looked like a bunch of buttons were being pushed, the same old, you know, focus group approved buttons.  Here’s—say the word, say the word, say the word and you’ll get the conditioned response.  And it certainly doesn’t work for people like me, who are watching this thing year after year after year.  I just think it’s manipulative.

Whereas his appeal is heroic.  It’s different.  It’s just different in quality than hers. 

RACHEL MADDOW, AIR AMERICA RADIO:  The emotion is definitely there with Obama tonight.  I think it’s worth noting—I think, Gene, this is some of what you’re getting at too, that as an American, it feels great to have a totally viable black candidate win Iowa, whether he’s a Democrat or a Republican.  That’s the country I want to live in, where that’s possible.  I think that a lot of people are feeling that emotion, feeling good about the country because of that. 

I will say, I think having Joe Biden there for a seconding to jump of for is maybe really relevant here, because Joe Biden, Chris Dodd, Bill Richardson and Hillary Clinton are the people who are all running on this I’m ready, I have the experience to lead platform.  They all essentially had the same message. 

That’s not the camp that Hillary Clinton wants to be in right now. 

Obama is running on saying, hey, we need someone new to lead.  I think you’ll start to hear other people echoing that message. 

MATTHEWS:  The thing is, you have to count, the fact there, if Hillary Clinton had had her way, she would have authorized the Iraq war.  She did have her way.  She did authorize the Iraq war.  How can that candidate be the change candidate?  I don’t get it.  I think there’s a factual problem for her nomination.  If she’s seeking the nomination of a party insisting on change, how does she play rear guard in defending her own vote to authorize the war in Iraq?  I don’t get the argument.

MADDOW:  That depends on whether or not the election is going to be about Iraq. 

MATTHEWS:  The numbers show to a large extent it is. 

MADDOW:  It’s about the economy, about Iraq, about a lot of things. 

But Barack Obama’s whole message is not just the word change, which we’re now hearing everybody use on both sides of the aisle, Barack Obama’s message is we need a new cast of characters.  His most effective line in his stump speech is about how much experience Cheney and Rumsfeld had. 

MATTHEWS:  There’s a factual problem—Howard, I want to go to you on this.  There’s a factual problem; how can she be the candidate that calls for change if she will not change the position she took on the Iraq war?  She will not change that position, which was a position of authorization of the war.  I just don’t see it.  We’re in the seventh year of this war.  It’s going on and on and on with no sign of ending.  It is one of the paramount issues of the campaign.  It’s the back drop of this campaign.

And Hillary Clinton is in the position of having authorized it, and refuses to change that position. 

HOWARD FINEMAN, “NEWSWEEK”:  Chris, what that vote did was allow Barack Obama to paint Hillary as an agent ultimately of the past, as an old story.  I saw Bill Clinton the other day in Iowa making the speech for Hillary, and I was trying to think in my mind as I watched Bill Clinton, am I watching the end of something here?  Am I watching the end of an era?  I wasn’t sure.  But I think the results tonight tell me that it is the end of an era. 

I feel in Iowa, having spent a lot of time out there the last few weeks, a kind of torch passing moment from one end of the Baby Boom generation to the other.  Gene talks about it in terms of race, which is very important. 

If you look at the AP lead, the AP wire lead, it says Senator Barack Obama, bidding to become the nation’s first black president, captured the Iowa Caucuses.  It’s a historic moment. 

But what Barack Obama’s race signifies is not his race per se, but a generational change to a generation that paradoxically doesn’t look to race first.  Obama’s race becomes a symbol for change.  It becomes a mark of change, a measure of change from one generation to another. 

Hillary’s vote on the war put her in the past, especially with young voters.  If you went to the Obama headquarters in Des Moines—and I spent a lot of time there—you saw a lot of younger people from all over the country, Democrats, young kids, who wanted a new vision of America and the world. 

That’s why they were out there voting for Obama. 

They organized superbly, Chris.  This is a big story.  These were kids who didn’t know that much about Iowa, who used their brains and shoe leather to organize the state in a way that nobody had organized it, arguably since Jimmy Carter surprised the world a generation ago.  They came into that state.  Not only did they know the state, they knew the caucus mechanisms. 

David Gregory said earlier tonight that the Obama organizers had necklaces of beads around their neck so they could count the delegates.  They worked the secondary votes, the realignment votes.  They picked up all the loose change.  This is a generational change.  I’m telling you, even if they don’t win, they’ve made their mark tonight. 

OLBERMANN:  Howard, I’ve got to fact check you on one thing.  I’m a big fan of coroners and undertakers when the time is right.  Having said what you said, and not to diminish that or to diminish what Barack Obama did in Iowa tonight.  But again, without those independents—I understand you don’t get elected just by getting the Democrats to vote for the Democrats or the Republicans for the Republicans.  You’ve got get the independents and the people who grade themselves as such.

What happens when you take the independents out of what happened in Iowa.  And it’s not an eight or nine percent victory for Obama over Clinton, but a one percent.  It’s 32, 31.  how does that jive with what you’re saying. 

FINEMAN:  Let’s look at the next couple of events.  New Hampshire independents can vote in the Democratic primary.  I would say right now at this very minute, Obama is probably in a matter of hours going to be, if he isn’t already, the leader in New Hampshire.  Then you go down to South Carolina, where the Democratic constituency is half African American.  They were waiting for a sign of white voters voting for Obama.  I think he’s got a very good chance of winning South Carolina, too. 

You look at Nevada, where, yes, it’s Democrats.  The culinary workers, the unions in Nevada have to decide whom to endorse.  Do you think they’re going to endorse Hillary Clinton now?  I don’t think so.  So where does Hillary, where does John Edwards gain the momentum to carry the thing forward to Democrats only events like you’re talking about? 

This is a media wave going on here.  You saw it tonight.  You saw that audience.  You saw that speech.  That was one of the most elegant, broad-gauged speeches on a caucus night that I have ever heard.  And I would say everybody else in this room would agree. 

I mean, the guy is a major phenomenon.  He just is.  And the whole world better look at it. 

MATTHEWS:  I think there’s something grander going on here.  I can never say that about America, where race has always been our San Andreas Fault, the thing that always threatens to divides, in fact too often does.  But there’s something about Obama, where he comes from, he’s almost delivered to us through Indonesia, through a Kenyan father.  He’s a man of the world, a Third World, in many ways, person, not just an American.  It’s all a big picture here. 

You know, I’ll bet there’s not a Peace Corps volunteer in the country --  who served in the Peace Corps in the ‘60s, ‘70s, ‘80s, ‘90s or recently that won’t vote for this guy.  He is so emblematic of our attempt I think to rejoin the world. 

Anyway, thank you.  The panel is staying with us.  And when we return, more on why Obama and Huckabee both were winners tonight.  We’ll have more from our entrance polling—you like that?  And we asked them questions on the way in.  Maybe they didn’t change their minds when they were in there.  We’ll be back in a moment. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Now in big cities, you came together as Democrats, Republicans and independents to stand up and say that we are one nation.  We are one people.  And our time for change has come! 

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  The one thing that’s clear from the results in Iowa tonight is the status quo lost and change won. 

(CHEERING AND APPLAUSE)

OLBERMANN:  And Senator Obama won the change, 51-19.  Let’s take a look at some more numbers from tonight’s entrance polls and why Obama and Huckabee were the winners in Iowa tonight.  And for those numbers, let’s go to MSNBC’s Norah O’Donnell—Norah. 

NORAH O’DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  You’ve heard it, huge turnout.  And of course, the key to Obama’s victory tonight was a broad-based coalition.  He won among voters who wanted change.  He had the overwhelming support of young voters too, and they showed up in greater numbers tonight than they did four years ago. 

And look at this number, 57 percent of those under 30 went for Obama. 

That number is astronomical considering that neither Kerry nor Dean got more than 35 percent in 2004.  This year, there was a youth vote, and it went for Obama. 

We know Hillary was counting on women who try and carry her to victory tonight, and they did turn out, more than half the caucus-goers were women. 

See that 57 percent.  But they voted for Obama.  That’s right.  Obama bested Hillary among women with 35 percent to her 30 percent.  So women did make the difference in this race. 

But what about John Edwards?  You know, we’ve been talking about him. 

He was counting on union households, he was counting on low income voters to carry him through.  He had that populist message.  But our polling shows he lagged behind Hillary and Obama in both of those groups, union households and low-income.

Talking about the Republican victory of Mike Huckabee, 60 percent of the people who came out to the caucus for Republicans tonight described themselves as born again evangelicals, 45 percent of those went to Mike Huckabee.  Mitt Romney was only able to pick up about 19 percent.  That’s key. 

One source told me tonight that Romney tried to pretty much hit his model for turning out voters.  They just couldn’t account for the large number of evangelicals that turned out.  It was record turnout among the Republicans as well as the Democrats tonight. 

OLBERMANN:  Norah O’Donnell, great thanks.  We’ve had our third dropout from the Democratic race.  Mike Gravel, who was notable here for having been the first one in on April 17th, 2006, 20.5 months ago is now out.  And as are senators Biden and Dodd, as we reported to you earlier. 

Now let’s go to the other end of the spectrum, to Obama campaign headquarters, NBC’s Lee Cowan is standing by there where I imagine there is still some celebration going on—Lee. 

LEE COWAN, NBC CORRESPONDENT:  There is, Keith.  They’re just starting to leave, actually.  I think, you know, it is fair—talked about this before, Senator Obama is a gifted speaker.  Sometimes the expectations of his speeches are pretty high because people who didn’t know him necessarily all that well still expected that Democratic National Convention speech that he gave back in 2004. 

But over the last couple days, you really saw the passion come back into his voice.  He was really feeding off the crowds.  And I think you saw that again tonight.  I mean, I think a lot of the headlines tomorrow are going to be talking about, like you mentioned, a very broad speech, higher-themed speech.  And it really got the crowd going here. 

I think, as Norah was saying, so many of the young people turned out just as his campaign had hoped.  And I think you got a sense of that from the people here.  And they really got a sense that they were witnessing history. 

As he walked out on the stage tonight, you could see a sea of iPhones and digital cameras and cell phone cameras all trying to record the speech or at least his entrance onto the stage. 

You just get a sense that it’s a different kind of folks that are here, they’re engaged and they’re just—there seems to be a different kind of energy.  It’s hard to describe.  But it just seems a little bit more youthful and certainly more pointed (ph), I think than we’ve seen in the past—Keith. 

OLBERMANN:  Thank you, Lee Cowan, at Obama headquarters where they are no doubt noting this number, that after cleaning up among the independents, they now move to New Hampshire where it is 40 percent registered independents there.  Also, we have an update on the total number at the Democratic caucuses, 236,000 with still a couple to check in, 89 percent growth in the total attendance since 2004. 

This did not turn out to be that great of news for Hillary Clinton. 

NBC’s Andrea Mitchell is at Clinton campaign headquarters in Des Moines and joins us again. 

Good evening, Andrea. 

ANDREA MITCHELL, NBC CHIEF FOREIGN CORRESPONDENT:  Good evening, Keith.  It really is a stinging rebuke.  And one of the most interesting numbers in those earlier exit polls is that by 41 percent to 17 percent, Barack Obama defeated Hillary Clinton among independents. 

She has long argued that she had electability going for her.  Well, in fact, in her concession speech here tonight, a rather graceful speech, she talked about moving on and how great this is for the Democratic Party and that she needs to continue to prove that she’s ready to serve from day one. 

But the very fact is that in all of these numbers that we’re seeing tonight, Keith and Chris, she is not the most electable Democrat right now.  He did better among independents and among the small number of Republicans who voted in the Democratic caucus than did Hillary Clinton. 

So all of her key arguments that she had going into Iowa and now going into New Hampshire have been really deflated.  The women’s vote is devastating in fact, 35 to 30 percent, as Norah was just explaining. 

These exit polls just destroy her whole argument for going forward. 

She has to come up with a new rationale for her candidacy.  And obviously, they’ve got the money, $100 million.  She can compete dollar for dollar with Barack Obama, but she has to come up with a reason to give people to vote for her other than harking back to the past. 

This does seem to be the passing of a torch to a new generation as Howard Fineman was describing it. 

MATTHEWS:  What did you make of the fact that we didn’t hear from the former president tonight?  He often accompanies his wife and says a few words. 

Not tonight. 

MITCHELL:  Not tonight.  This really was for her to define her defeat, to be as gracious as she could be in conceding and to come up with a reason for going forward, which was to say that this is a great night for the Democratic Party because the turnout was so big and the party has grown and expanded and it shows that people are rejecting the seven years of George W. Bush and want a change, want, as she put it, a new beginning. 

The worst thing that she could have done tonight would have been to have been introduced by her husband, because it would be as though he were trying to bail her out of a very bad spot. 

OLBERMANN:  Andrea Mitchell, at Clinton headquarters in Des Moines—third place Clinton headquarters, as it turns out.  Andrea, great thanks. 

John Edwards was right in that last moment’s speech that he made that our projection now is that this is the way it’s going to pan out pretty much, the numbers may change, but with only 1 percent not in, 38, 30, 29. 

Now let’s go out to David Shuster on that other extraordinary number at the Polk County Convention Center in Des Moines, that number coming in throughout all of Iowa.  The voter turnout at the caucuses in comparison to what was a pretty enthusiastic Democratic caucus in 2004 even—David. 

DAVID SHUSTER, MSNBC CORRESPONDENT:  Yes, Keith, that’s right.  I mean, 236,000 and they’re still counting the votes, counting the participation compared to the 125,000 in 2004.  But what’s so fascinating, Keith, is that on the models of a very heavy turnout, The Des Moines Register, for example, suggested that 45 percent would be non-Democrats, if you’re talking about a turnout that high. 

Actually, it was largely Democratic turnout.  When you look at the non- Democrats, you’re only talking about 20 percent independents and only 4 percent Republicans.  So in other words, it was—despite record levels, it was a largely Democratic tidal wave, registered Democratic voters. 

A couple of other things, Keith.  When you look and hear the numbers, of course, on the Democratic side, when you look at the Republican turnout, the Republican turnout was also up compared to 2000, the last competitive Republican caucus.  Back then, it was about 85,000.  Tonight over 100,000.  The lesson being great interest in the Democratic side but also strong interest on the Republican side. 

And speaking of the Republicans, Mike Huckabee, we were looking at some crucial districts and crucial precincts where it was important for Mike Huckabee to do well with evangelicals.  The evangelicals came out, as Norah O’Donnell pointed out, 60 percent of all the caucus-goers on the Republican side. 

However, when you look at the map of Iowa and you look at areas like Des Moines in the central part of the state and some of the suburbs that are not known for having evangelicals, Huckabee won those precincts strongly, as well—Keith.

OLBERMANN:  David Shuster, inside the numbers in Des Moines.  Great thanks.  Let’s go back to our panel.  We—let’s pick up on what the Republicans did.  And I’ll start with Gene Robinson. 

Who is in this race right now?  Who is—obviously, Huckabee has cemented his bona fides here.  But is it Huckabee, Giuliani, McCain, Huckabee, Romney, Giuliani?  Who’s in here now? 

ROBINSON:  Your guess is as good as mine besides Huckabee.  Obviously he’s in the race.  I think John McCain is definitely in the race because he seems in a strong position in New Hampshire.  I don’t think Mitt Romney is out of it yet, but he had better do well in New Hampshire. 

I think this was not a good night for Rudy Giuliani, of the Giuliani’s come in late strategy seemed to depend on—he would have preferred I think a more narrow victory by Huckabee.  But you know, Huckabee showed some domination tonight.  And I think that that throws into question yet again Giuliani’s strategy of wait until Florida. 

OLBERMANN:  Is that the story, Pat Buchanan, that there is a headline- maker among the Republicans and it is not Rudy Giuliani?  That he will barely be an afterthought in the coverage of this throughout the next—well, at least ‘til next Tuesday? 

BUCHANAN:  I don’t think Rudy—I don’t think his coverage next Tuesday is going to be very good.  This is now down to—Mike Huckabee, I think, is in the finals.  You notice John McCain, when he was very acerbic about Romney, almost gloating in the defeat.  He said, we’re going to come to New Hampshire, these kinds of politics are going to be defeated and then we’re going to Michigan. 

Now Michigan is the fallback position if there’s anything for Romney. 

And McCain said he’s going out there after him.  I think Mitt Romney has got to win New Hampshire, in my judgment, or I don’t see how he comes back to win the election. 

I think it looks now to me like McCain will probably win New Hampshire, although that independents moving to Barack Obama could be a problem for him. 

But it looks to me like he wins New Hampshire, and if he does, it looks like a Huckabee /McCain battle in South Carolina. 

And I know Chris might disagree with this, but I think that in that race, as it continues out, I would not make Huckabee the underdog right now. 

His speech was outstanding.  It was inclusive.  It was centrist.  He has got the evangelicals for him and he’s moving toward the conservatives and he’s moving into states like South Carolina where John McCain has got real problems. 

MATTHEWS:  The reason I’m skeptical about the Republicans nominating Huckabee is because this election for president is always decided in those purple states, as you know, Pat.  Pennsylvania, Ohio, states like that.  I’m familiar with Pennsylvania and I still think that someone like McCain or Giuliani would be a much stronger Republican candidate in states like those. 

BUCHANAN:  Well, I think you may very well be right, Chris.  But I think when you go into those Republican primaries, I think those people, many of them vote their heart and their convictions.  On this I think Huckabee now is putting is himself much more in tune with the Republicans’ base than I think McCain can get to be. 

OLBERMANN:  Pat, thank you.  We are now joined by one of the men of the hour, the gentleman we are discussing, the winner of the Iowa Caucuses on the Republican side, Mike Huckabee, the former governor of Arkansas. 

Governor, congratulations.  And congratulations on and then engaging speech. 

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  Well, thank you very much, Keith.  It’s a big night for us.  But I think it’s a bigger night for the people of the country who really do want to change the type of politics that maybe we’ve become used to.  And I think the Democrats are showing the same thing with their process tonight. 

MATTHEWS:  Let me ask you about New Hampshire, Governor.  What are your plans to compete up there?  How do you intend to do well there as you did so well tonight in Iowa? 

HUCKABEE:  We have geographical disadvantage in New Hampshire that we know.  But we also have a message that resonates with the people of New Hampshire.  We don’t have a whole lot of time to punch it home.  But I think people in New Hampshire are going to be paying a lot of attention to us when they talk with us and we get a chance to talk about lowering taxes and changing the tax structure, which 80 percent of America wants to do, implementing a productivity elimination of taxes and instead going to consumption tax. 

People get that.  They understand that they’re being penalized for working harder.  And that’s counterintuitive to a good economy.  People in New Hampshire believe in the Second Amendment, they want somebody who understands it.  And I think our message will work well there. 

I don’t know that I’ll finish first, probably won’t, don’t have to. 

But we’re going to be competitive in New Hampshire and that’s what’s important.  We’re still running first in South Carolina and in Florida.  And I think tonight is going to boost us in all of those states. 

MATTHEWS:  What do you make of Mayor Giuliani’s decision to sort of begin his campaign in Florida? 

HUCKABEE:  Well, the mayor has got a different strategy than we do. 

And I respect it.  And he looked at the landscape and thought, what does he need to do in order to get the nomination.  Clearly he’s betting on some of the bigger states.  I think it would be a little early to say, well, he made a mistake. 

No, he’s doing his plan.  I have to do mine.  We’re different candidates.  I have great respect for the mayor.  In fact I’m personally very fond of him.  So I think until we will see the process unfold through the first part February, we won’t know whether it’s a mistake or not. 

OLBERMANN:  Governor, there were some issues, and you just raised this point yourself, that seemed to overlap at least in terms of tone, inclusiveness between you and Senator Obama in his victory speech tonight after what he did with the Democrats.  I don’t think anybody would be more delighted to see a positive—an entirely positive campaign.  Is it practical even in these days?  At some point, is there going to be blood drawn despite what you said tonight? 

HUCKABEE:  Keith, you and Chris both know you’d love to see a good scrap if this thing got down to anybody.  People like the tension and the conflict.  Campaigns ultimately end up going there most of the time.  I agree with you, though, if we could actually have that kind of civil discourse and an honest discussion about here are the differences we have, I think the country would win. 

And I think so many people in this country, though they say they respond to negative ads, the truth is they really do get sick of it.  Iowa was just inundated with mail, with television ads.  It just got disgusting.  And I think there comes a point in which people just don’t want to spend their whole political lives doing dumpster diving. 

MATTHEWS:  Well, you’re making the news of the world tonight, Governor.  I’m looking at the international headlines now.  You’re in Al Jazeera.  You’ve won the press attention of Al Jazeera, along with Barack Obama.  The International Herald Tribune, The Jerusalem Post.  It describes you as a “Baptist preacher turned politician rode a wave of support from evangelical Christians to victory.” 

Does that sound like an accurate description of your victory?  The Jerusalem Post account, I wouldn’t fight with them…

HUCKABEE:  No, I think what I am…

MATTHEWS:  … if I were you.

HUCKABEE:  Yes.  Well, I think that was an AP account that was quoted in The Jerusalem Post. 

MATTHEWS:  You’re right. 

HUCKABEE:  You know, I think people will try to say—well, of course, I am, Chris, why do you doubt me? 

MATTHEWS:  Because I didn’t know you were such a veteran newspaper reader, based on recent history, that’s why.

(LAUGHTER)

HUCKABEE:  That’s why, well, the fact is, there’s going to be an attempt to say, oh, this is just the evangelical thing.  I was a governor longer than I was a pastor.  And in that time, we improved roads and education system and health care.  We did in our state what people are wanting to see happen in America. 

And when people try to say, oh well, he’s this Baptist minister turned politician, now what they really are understanding is, I was a governor, I led a state.  We saw jobs created, we saw roads built, we saw health care system improve.  And they look at their own lives and say, what do we want in America?  That’s what they want, somebody who actually solves problems rather than just punches the daylights out of the other party. 

That is kind of polarizing and paralyzing politics, is what people are sick of. 

MATTHEWS:  You were very successful in retail politics, as we say, sort of a David Broder term, retail politics, meeting people one-on-one, not relying on big media buys in Iowa.  How do you project that ability when you have to do like 10 states the same day, when you really have a hard time retailing all those big states? 

HUCKABEE:  Well, people still like retail politics, and though you may not be able to shake every single person’s hand, if they know that you want to, if they know that when you talk to people, you look them in the eye and you really do care, as I said last night on Jay Leno, I think people are looking for a president that resembles the guy they work with, not the guy that laid them off from their job. 

And when people feel like their president relates to them, actually cares what kind of life they’re living, they don’t have to personally see you. 

They just need to see that when do you talk to other people and when you talk to them, whether it’s on television or in a speech or wherever it is. 

OLBERMANN:  Governor, looking at some of this entrance polling numbers, one jumps out at me here on political philosophy.  That between those who identified themselves as very conservative and voted tonight, and those who identified themselves as somewhat conservative, that’s 35 and 34 percent respectively, and unless my math has lost me here, that’s nearly 70 percent voted for you, is that 100 percent to your advantage as you go forward in the campaign either in the Republican primaries or if you get to it in the general election?  Or can that be as much of a negative as if 70 percent of the liberals voted for you? 

HUCKABEE:  I think people—whether they’re Democrat, Republican, liberal, conservative, I do think they want somebody who may not share all of their same views, they just want you to be consistent and believe your own stuff.  And frankly, one of the things that I think is happening in this country and maybe you’re seeing it on both Democrat and Republican sides, is people are looking for somebody who is willing to say things that are a little unorthodox for their party. 

I mean, I’m talking about hunger and poverty and disease and the environment.  And I’ve got Republicans saying, those aren’t Republican topics. 

But my response is, oh, yes, they are, because they’re American topics.  It matters to people in America that we deal with issues like education and health care.  And I’m not willing as a Republican to cede those over to the Democrats. 

That’s one reason I believe we’re doing as well as we are because Republicans have kids.  Republicans have health care concerns.  Republicans pay 70 cents a gallon more this year than they did last year at the pump and they’re feeling it in their budgets and in their wallets. 

If we don’t address those issues that are touching their families, we’re not going to get elected next year.  That’s why I think we’ve got to be inclusive in our message as well as in how we approach those topics. 

OLBERMANN:  Not to overwhelm you on the religious questions, sir, but the—another statistic in here, dovetails with something than happened, I think to Governor Romney.  Maybe it’s my interpretation of things.  Maybe it isn’t.  But 56 percent of those who said that it matters to them a great deal that the candidate shares your religious belief and 30 percent who said that that somewhat was true, that’s 86 percent of those who voted tonight voted for you as opposed to anybody else in this, including Governor Romney. 

When Governor Romney made his speech, it was ostensibly to explain his religious conviction.  There was a specific reference almost in there to the necessity of having a religious conviction.  And those who is thought that that might be an inappropriately strong statement seemed to recoil from it, not just critics of the Republican Party, but people in the Republican Party, as well.

Do you think at some point you would face a question of what do you do about those who do not share not necessarily your religious beliefs but any religious beliefs or religious beliefs to the degree that you have expressed them? 

HUCKABEE:  No, I don’t think Americans necessarily vote for or against somebody just because of their religion.  At least, I certainly wouldn’t want to believe that, whether they vote for or against me or somebody else.  I think they want, however, you to be consistent with your own religion. 

You know, I said on Bill Maher, and got a lot of people surprised and their eyebrows raised when I was asked about Pete Stark, a congressman from California, who is an openly declared atheist.  And I said, that doesn’t bother me.  I’d rather have somebody who is an openly declared atheist who is honest about it than a person who claims to be a Christian but doesn’t live like it. 

That is what disturbs me, is when people claim a faith and then they don’t practice it.  People are looking for authenticity, not necessarily someone who just absolutely goes right down the line of their own personal doctrine. 

OLBERMANN:  Well, amen to that is the only possible response.  Governor Huckabee, congratulations. 

HUCKABEE:  I’ll pass the plate, Keith.  And you know, since you’re amen- ing, I’ll pass the plate, we’ll just have us a revival meeting right here. 

Wouldn’t that be something, you and Chris Matthews giving to me. 

MATTHEWS:  Well, that would something.  Anyway, congratulations, Governor, it’s a big night for you. 

HUCKABEE:  It would.  Thanks, it is. 

OLBERMANN:  Thank you, sir.  Sense of humor is never a drawback in any field. 

MATTHEWS:  I was impressed he knew that The Jerusalem Post story was an AP wire copy.  I was impressed by that.  After a couple of days of not keeping up with some of the other stories, I was impressed he did that one. 

OLBERMANN:  One would suspect somebody would have suggested that perhaps keeping an eye on the newspapers and certainly the articles about himself would be a good thing to do at all times. 

MATTHEWS:  Well, he beat me.  He proved me wrong. 

OLBERMANN:  In the remaining moment, really, before we take a break, I’ve got to ask our panel, and specifically Howard Fineman, that—how far does that hail, well-met-fellow stuff work with those who do not agree with the governor’s principles? 

FINEMAN:  Well, I thought it worked pretty well right here over the last few minutes.  You know, as big and as broad as Obama’s speech and message was, Huckabee is the opposite in a way, he’s the intimacy candidate.  I mean, I thought his conversation with you guys showed the skill he has at trying to disarm people. 

He talked about the other things he has done, non-religious topics, his role as governor.  Very, very skilled.  Very true.  If he can do that all the time, he can get a long—go a long way, Chris. 

MATTHEWS:  Howard, did the earth move for you? 

(LAUGHTER)

FINEMAN:  No, the earth didn’t move but I thought you smiled and laughed, which meant a lot. 

OLBERMANN:  You thought it was the Jay Leno factor.  It’s the Chris Matthews laugh factor.  All right.  We’re staying on for another hour with highlights from the speeches tonight on this big night for Governor Huckabee and a big night obviously for Senator Obama.  Big night for the Democrats as we keep mentioning that turnstile count. 

Plus, our panel will continue with us.  You are watching MSNBC’s continuing coverage of the Iowa Caucuses. 

OLBERMANN:  This is MSNBC’s continuing coverage of the Iowa caucuses. Alongside Chris Matthews, I’m Keith Olbermann.  It is the night of Barack Obama and Mike Huckabee.  If somehow you’ve been locked inside without a TV, here’s what’s happened:  The projected winner with about 99 percent of the actual vote counted, Barack Obama has taken and rather significantly—by significant margins that is, the Democratic caucus, 38 percent to 30 percent for John Edwards.  We believe the second and third place status numbers we believe are locked in.  Hillary Clinton finishing in third place, at 29 percent, and already Mike Gravel, Chris Dodd and Joe Biden having dropped out this evening. 

On the Republican side, it was another large margin of victory for the former governor of Arkansas, and tonight’s show guest, Mike Huckabee, 34 percent, 9 percent more than governor Mitt Romney, whom he defeated soundly, with Fred Thompson currently in third place.  The others in that area, McCain and Paul, close to Fred Thompson in the race for third place.  So that part of it is not over yet.  Somebody gets that last number.  There it is.  There’s the rest of it.  McCain also at 13 percent, though slightly behind Thompson, Paul at 10 percent.  Rudy Giuliani literally just watching. 

MATTHEWS:  Well, let’s go right down to Chuck Todd, who’s NBC political director, to give us a sense of what we’ve been perhaps overlooking tonight.  We’ve tried to cover everything. 

Chuck, what’s out there, in terms of, you know, putting this together analytically? 

CHUCK TODD, NBC NEWS POL. DIRECTOR:  Well, I think there’s a couple of things.  I mean, one is that we’ve got to remember that everything is going to change about Barack Obama in the next 24 hours and this perception.  Ad you’ve been talking about it in the positive.  But there’s going to be a slight other change.  He is going to be covered like a front-runner now.  You know, he has been the challenger.  The challenger has knocked out, you know, whatever analogy you want to use, the challenger has knocked out the front-runner here, the person that was holding the belt, and that’s Hillary Clinton.  So now everything gets turned.  She gets to now start running as a challenger candidate, but Barack Obama now has to be a front-runner.  There’s lots of tough things that come with being treated like a front-runner.  The spotlight gets brighter. 

And so, you know, this is not—I mean, sometimes a lot of folks get caught up in the momentum.  I think Obama’s likely to raise some $3 million, $4 million, $5 million tonight, because you could probably tell that he got a lot of energy going.  No doubt that you’ll see something like that online with money.  But there is going to be just sort of an entire shift, and you will just see the focus go and him, and it’s going to be a different test for Obama.  It’s easy being a challenger.  It’s a lot tougher suddenly running from the front of the pack. 

MATTHEWS:  Can Hillary count on that?  In other words, does she have to unsheathe some weapons here in the next several days? 

TODD:  It’s all she has left in this case, and I think that’s exactly how they’re going to set this up, which basically to say OK, now let’s make this a referendum on him, not a referendum on whether he’s changed, but a referendum on various things.  They’re going to probably try to hit him again with a lot of things that they felt none of us would pick up on in the national media, and I think they’re going to come back with some of those things, and say, OK, more voters should know this.  Maybe it won’t be negative, but I think they think that we’ll get some tougher press coverage of Obama and see if he stacks up. 

Saturday there will be a debate.  That’s going to be—we have three candidates already out.  I mean, it’s going to be a very intimate debate, just four people.  So it’s going to be a moment for her to suddenly act like the challenger, but also Obama’s got to know what it’s like to take incoming, but incoming a different way than he’s taken before. 

OLBERMANN:  You just made me feel very sad that I didn’t get to do a debate, Chuck, with an intimate crowd rather than that group at Soldier Field. 

TODD:  Fifteen-thousand watched. 

MATTHEWS:  With 900-degree temperatures, but that’s neither here nor there. 

I’m not disagreeing with the conventional wisdom about John Edwards.  But explain—walk us through it again why a second-place finish that actually exceeded Senator Clinton’s by 1 percent means that he’s not a viable candidate at this point. 

TODD:  Well, look, I’m not going to sit here and say he’s not a viable candidate.  Let’s see what he can do in New Hampshire.  Let’s see.  But the problem is the calendar is stacked against him.  He has not ever had a great organization here in New Hampshire.  The last time he finished second here in Iowa, he didn’t take off in New Hampshire.  A lot of the folks that were sitting behind me are going to remember that.  And so he is going to have a hard time in the next five days getting a lot of the folks to pay attention, to believe that somehow this second-place finish is different than the second-place finish he had four years ago, when that one catapulted him to fourth place in New Hampshire. 

You know, this time, he’s got to figure out how to—I think what he was trying to do tonight, guys, he was trying to put a stake through Hillary Clinton’s heart.  I mean, I think you saw that in a lot of other candidates, too.  Edwards wants to somehow get into a one-on-one with Obama.  I mean, I’ve heard them talk this up over the last couple of weeks.  So that’s what that whole concession speech, or whatever you want to call it, was designed to do, was to go after her, to try to see if they can somehow get her out of the way.  But the idea that somehow that the media will do that and, frankly, that the Clintons will allow that to be done to them is unlikely. 

MATTHEWS:  Well, let’s see.  It’s interesting you were talking just a moment ago, Chuck, about how Barack Obama will exploit his victory tonight in Iowa to raise money.  I’m just looking right now at an e-mail he’s sending to all his contributors.  It begins, “Friend, we just won Iowa.  And I’m about to head down to talk to everyone.”  This was obviously put out right before he gave his speech tonight.  “Democrats turned out in record numbers, and independents and even some Republicans joined our party to stand together for change.  Thank you for everything you’ve done to make this possible,” signed simply, “Barack.”  And then there’s a large long button that says “donate.” 

OLBERMANN:  I’ve got the colored version.  It’s a red button. 

MATTHEWS:  And it says donate.  In other words, you are encouraged to push that button tonight, and I’m sure it breaks out into a number of options and prompts that suggest $50, $100 or $5,000. 

OLBERMANN:  Push a button is the message here. 

MATTHEWS:  It’s great.

TODD:  Well, I’ll tell you, and guys, we were talking earlier about movement candidacies.  Movement candidates have to have victories.  It’s their fuel.  They don’t need money; they need victories to get them going and keep them going, and that’s what this victory will do tonight.  I mean, I think we’ll see Obama raise sums of money in the next 24, 48 hours that we haven’t seen before in a post-primary or caucus, period.  And that’s going to seem intimidating.  And I think that’s what the Obama campaign is going to try to create.  The irony here, guys, is that he’s now going to try to create an air of inevitability, that he can’t be stopped. 

MATTHEWS:  Right, I heard him ®MD+BO¯®MDNM¯him become the incumbent right then. 

Thank you, Chuck Todd. 

TODD:  That’s right, and—OK. 

MATTHEWS:  We’ve got to go.  Thank you very much, Chuck. 

Let’s go listen now to some of Obama’s speech tonight. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE:  They said this day would never come. 

(APPLAUSE)

They said our sights were set too high. 

(APPLAUSE)

They said this country was too divided, too disillusioned to ever come together around a common purpose.  But on this January night, at this defining moment in history, you have done what the cynics said we couldn’t do. 

(APPLAUSE)

You have done what the state of New Hampshire can do in five days. 

(APPLAUSE)

You have done what America can do in this new year, 2008. 

(APPLAUSE)

In lines that stretched around schools and churches, in small towns and in big cities, you came together as Democrats, Republicans and independents to stand up and say that we are one nation, we are one people, and our time for change has come!

(APPLAUSE)

You said the time has come to move beyond the bitterness, and pettiness and anger that’s consumed Washington, to end the political strategy that’s been all about division, and instead make it about addition, to build a coalition for change that stretches through red states and blue states. 

(APPLAUSE)

Because that’s how we’ll win in November, and that’s how we’ll finally meet the challenges that we face as a nation. 

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Great speech.  Let’s go right now to Obama campaign headquarters tonight and NBC’s Lee Cowan.  Empty room, but it was filled awhile ago.  What a speech. 

LEE COWAN, NBC NEWS CORRESPONDENT:  It really was, Chris.  I mean, I think we’ve talked a lot about how sometimes Barack Obama can be a little inconsistent when he was out on the campaign trail.  But I think in the last couple of days, we really saw him, especially after that “Des Moines Register Poll” came out, he started to pick up that enthusiasm.  He was connecting with the audiences, and he is the kind of candidate that really feeds off that, and did he tonight.  And I think you saw the kind of speech that he was made famous for in the first place.  His speech back in 2004, the Democratic National Convention where he really hit some of the very same themes he’s hitting again. 

And you’re right, he nailed it tonight.  And you could really get a sense in the room that people did think this was history.  I mean, they were really getting a sense.  Everyone was taking pictures.  Took him probably a good 45 minutes to get out of this room.  By the time he walked all the way out the door, he was still here a lot longer than he ever is at any of these kind of events.  So pretty amazing.

MATTHEWS:  Well, this is sort of the second time we’ve noticed him acting as if he might just win that thing.  The other night when he had that debate with Hillary Clinton, where he seemed to be almost avuncular with her, as he parried her blow, her joke about so many Clinton people working for him.  And I thought that tonight he did that as well, offering himself as really a grand figure. 

I guess the question is how does he convert his victory tonight and the money that may come from that in terms of contributions online and otherwise to winning in New Hampshire? 

COWAN:  Well, I think, you know, Chuck Todd’s point was good that now he’s going in as the front-runner now.  He’s not a challenger any more.  But he does have this ability to turn any sort of negative attack into a positive, whether it was that debate with Hillary Clinton, whether it’s criticism about him being too hopeful in general, whether any of those kind of attacks, somehow he manages to turn it around, and it ends up being a line in a stump speech that usually gets a lot of laughs and a lot of applause.  So he does have that ability to take some of those punches. 

I think Chuck’s right, that the attacks are going to be different than in the past, but does he have a way to spin it around and use it to his advantage.  And I think if he does that in New Hampshire, clearly, you’ll see the effects. 

MATTHEWS:  Let me draw this question out of you.  Do you think, as you mixed among the people there tonight, I guess is a big question, there might not be an answer yet, is there a sense on the part of the Obama people that they might be able to win this one fairly early?  In other words, they might be able to turn the screws on the Clintons in New Hampshire next Tuesday, win again in South Carolina and begin to push them out of the race before February 5th?  Is that doable, or do they realize it’s a war of attrition, and they simply have to go on and on and on using up all the resources they can gather against an almost infinite amount of Clinton resources? 

COWAN:  Well, I think it is a war of attrition, to some extent.  And I think they have to do what they did here, and that is pretty much use as many of their resources as they can and match the Clinton campaign.  It worked here.  It was a lot of hard work, they admit.  A lot of money was spent.  They say they’re taking this one step at a time; they’re not taking anything for granted in New Hampshire.  They’ve worked just as hard there as Hillary Clinton has worked, and the polls are still so tight there, as well.  So I think they’re seeing New Hampshire as a very similar kind of fight that will Iowa was.  South Carolina clearly a lot easier for them.  But these were the two states, really, they had the best chance of beating Hillary Clinton in.  If they can do it in New Hampshire as well, they’ll be a sense anyway that they really can win this thing.  But I don’t think they’re there, not quite yet.  I think they’ve got to get past New Hampshire first.

OK, thank you very much, Lee Cowan, at the headquarters of Barack Obama, the big victory tonight.  Coming up, we’re going to hear more from Huckabee, Romney, Edwards and Clinton, Mrs. Clinton.  You’re watching MSNBC’s live coverage of the Iowa caucuses. 

(COMMERCIAL BREAK)

OLBERMANN:  Mike Huckabee the big winner tonight among the Republicans.  Although there are some weird numbers coming out of the exit poll data.  We’re going to discuss him and these numbers with our panel.  Just let me throw this out, 52 percent of those who identify themselves as born again or evangelical Christians did not vote for Mike Huckabee tonight.  Obviously among the individual support, his support was phenomenal, 46 percent to the others, combined 52 percent.  But that’s still a remarkable number.

Anyway, let’s listen to a little bit of what Huckabee said in, as I phrased it earlier, an engaging speech after his victory in Iowa tonight. 

(BEGIN VIDEO CLIP)

MIKE HUCKABEE ®, PRESIDENTIAL CANDIDATE:  Thank you.  Thank you very much.  You know, I wasn’t sure that I would ever be able to love a state as much as I love my home state of Arkansas, but tonight, I love Iowa a whole lot. 

(APPLAUSE)

Over the past several months, my family and I have had the marvelous joy and privilege of getting to know many of you.  And it’s been an incredible honor.  I was thinking last night that some of the friendships that we forged here in the last several months are friendships that will last a lifetime.  We didn’t know the how this was going to turn out tonight.  But I knew one thing.  I would be forever grateful to the people that I met, the ones who voted for me, even the ones who’s didn’t, who still treated me with respect and who gave me their attention, who allowed me to come often, not just into their communities, but into their homes.  Not once, but time and time again.  And a few of them I even convinced to vote for me tonight, and that’s really remarkable. 

(APPLAUSE)

I want to say how much I appreciate my wife, Janet.  She was a wonderful first lady of Arkansas. 

(APPLAUSE)

And I think she’ll be a wonderful first lady for the United States of America. 

(APPLAUSE)

We also want to say thanks to our three children with us tonight.  I would like them to come and just be a part of this tonight.  They have all been so much involved.  Our oldest son, John Mark, our son, David, his wife Lauren, our daughter, Sara, who’s literally lived in Iowa for the past 2 ½ months.  And I told her if she stayed much longer, she’ll have to get her an Iowa driver’s license and probably start paying even more taxes up here.  And I say thanks to all of them for joining with us in this effort because a family goes through it, not just the candidate. 

But tonight, it’s a celebration for everybody on our team, so many of you who have traveled from all across America to be here.  I’m amazed.  But I’m encouraged.  Because tonight, what we have seen is a new day in American politics.  A new day is needed in American politics just like a new day is need in American government.  And tonight, it starts here in Iowa, but it doesn’t end here. 

(END VIDEO CLIP)

OLBERMANN:  Mike Huckabee, former governor of Arkansas with the first actual win in this the third year of the four-year campaign for the presidency in 2008.  And Chris has made this point before, but it just hit me and tonight, if you’re sitting there going, who does he remind me of, it’s Kevin Spacey.  It’s Kevin Spacey playing Clarence Darrow in the HBO film from the 1990s.  It’s the same inflection and the same appearance and everything.

MATTHEWS:  It is.

OLBERMANN:  All right, let’s go back to the panel.  We’re not going to ask who they... 

MATTHEWS:  Can I ask a question of the panel, and I want to start with you, sir.  Have you ever seen a Chuck Norris movie? 

OLBERMANN:  I have not seen a Chuck Norris movie. 

MATTHEWS:  Howard Fineman, have you ever sat through a Chuck Norris movie? 

HOWARD FINEMAN:  Well, I’ve walked “Texas Ranger,” so that’ll have to do.  Rachel. 

MATTHEWS:  Rachel, do you want me to just pass by you quickly.

RACHEL MADDOW:  No, no, no, I watched enough so that I could grab really good fight sound effects to use for my radio show.  I have the most awesome punching noises ever.

MATTHEWS:  Pat, have you ever watched a Chuck Norris movie. 

PAT BUCHANAN:  One “Texas Ranger” show. 

Gene, have you ever watched a Chuck Norris movie? 

ROBINSON:  I don’t think it’s possible to watch an entire Chuck Norris movie.  You can watch snippets. 

MATTHEWS:  I just established the elitism of this group. 

MADDOWS:  And you, Mr. Matthews.  And you?

MATTHEWS:  Not a chance.  Not a chance.  And I’m just wondering why...

FINEMAN:  But he was a sensation out there, Chris.  This sounds like a small thing.  But that ad that Huckabee put on about Chuck Norris approved was a sensation on the Internet.  It got a million hits on YouTube.  It helped Huckabee raise money.  Norris campaigned with him all over Iowa.  I even got to meet Chuck Norris and suddenly became a hero in the eyes of my own 16-year-old son, because there’s a huge fan club on the Internet, sort of facetious Chuck Norris Web sites about the heroics of Chuck Norris.  So it’s a two-generational play.  It’s the older folks, who are not elitist like us, who actually watched all the Chuck Norris movies and TV shows and kids who love the Chuck Norris Web sites and decided that Mike Huckabee was sort of cool, because he was associated with Chuck Norris.  It was remarkable, and of course, all of us inside the beltway completely missed it. 

MATTHEWS:  My point exactly. 

OLBERMANN:  He’s got the support of Chuck Norris, we’ve established that, and it’s a really cool thing to have the support of Chuck Norris. 

MATTHEWS:  Yes, it is.

OLBERMANN:  And if you disagree, he’s going to come and kick your head in. 

But here’s the contra-question here.  Already tonight, there’s been an e-mail sent out by Richard Vigery, who’s one of the—either the greats or the demons, depending on your point of view of the conservative movement, slamming Huckabee on spending.  And when asked about Huckabee tonight, the chairman of the RNC, Mike Duncan, changed the subject from a congratulatory kind of question lead-in to what the Democrats are doing. 

Let’s start with Rachel Maddow.  Is there a backlash anticipated here by the GOP mainstream, with or without Chuck Norris’ support?

MADDOW:  Bigtime.  I’m really actually glad that we’re finally getting to this, because I think it’s really hard to talk about a candidate’s chances for becoming the nominee of their party without talking about the powers that be in that party.  And if the Richard Vigery of the conservative movement and if the Club for Growth and if the Swift Boat Veterans funders and all these other, you know, really important powers within the Republican Party structure continue to hate Huckabee more than they will love life itself, that’s going to be a big problem.  What we’re going to have to figure out is who they’re going to pick as the anti—Huckabee.  They don’t particularly like John McCain.  I’m not sure that they’re going to have planned for Romney imploding like this.  But we’re going to have to look at who those forces are going to support, because they’re never going to support Huckabee. 

OLBERMANN:  Pat Buchanan knows this from the inside and outside.  What do you think of this? 

BUCHANAN:  Well, there is a—there have been conservatives, especially people like Phyllis Schlafly, who’s very highly regarded, who are very, very down on Huckabee, and also Vigery and some of these others, and they all of them, some of them are moving toward Romney as the alternative. 

But the point you make, Rachel, is an important one, who do they get behind?  I don’t think these folks are going to get behind John McCain in a Republican primary.  And that’s what, Keith, if you’ve got those figures again of the conservatives, they were very dramatic when you said that number of people out there went for Huckabee.  He apparently is convincing these folks that he is the populist conservative out there, as well as the Christian evangelical.  As I mentioned earlier, he goes in with those two aces, and he’s got this is the engaging demeanor. 

Now, Obama is an orator, but if you look at him, you say that was a phenomenal speech, and here’s somebody that’s sitting talking to you on almost a one-to-one basis, which I think is extraordinarily effective with grassroots Republican voters.  This is going to be a tough man to stop. 

OLBERMANN:  Gene Robinson, those numbers in particular very conservative.  It’s 35 Huckabee, 23 Romney tonight, Thompson 22, somewhat. It’s 34 Huckabee, 27 Romney and then 18 McCain.  So where does the opposition from within the Republican party rally behind?  That conservative end, I’m thinking that’s not going to be Giuliani. 

ROBINSON:  I don’t think it’s Giuliani.  It could be Mitt Romney.  But, you know, he’s not the most beloved by the true conservatives. 

Look, Huckabee is a very persuasive man.  We’ve seen that tonight.  I suspect we’ll see him do more persuading in New Hampshire than maybe we would have thought possible.  So I don’t put it beyond the realm of possibility that over time, he somehow brings around enough of these elements of the traditional Republican coalition to get behind him.  Now, it’s farfetched, I realize that, because they really don’t like this guy.  But he might shift some of his positions.  He might soften some of his rhetoric, and we’ll just have to see if they can learn to live with their new front-runner. 

OLBERMANN:  Lady and gentlemen, stand by.  We’ll be getting back to the panel.  They’ll stay with us.  And when we return, Romney, Edwards and Clinton, plus more from our entrance polling, including some remarkable facts about the Barack Obama percentage tonight, when compared to John Kerry in Iowa in 2004.  This is MSNBC’s continuing coverage of the 2008 Iowa caucuses.

(COMMERCIAL BREAK)

MATTHEWS:  We’re back.  And earlier tonight, Mitt Romney picked the same time as Mike Huckabee to speak to his supporters.  So here is some of what Governor Romney had to say tonight. 

(BEGIN VIDEO CLIP)

GOV. MITT ROMNEY ®, PRESIDENTIAL CANDIDATE:  Well, we won the silver. 

(APPLAUSE)

And congratulations to Governor Huckabee for winning the gold.  Nice job.  But you know, just as Jan Jansen pointed out, you win the silver in one event, it doesn’t mean you’re not going to come back and win the gold in the final event, and that we’re going to do. 

(APPLAUSE)

This group, this thousand plus group of people here, and my whole family here, Ann and I and mostly you, we have come a long way in this last year.  You think about where we started.  An unknown governor from the bluest state in America comes to Iowa running against, well, at that time, three household names, Rudy Giuliani, John McCain, Fred Thompson, and somehow tonight we beat all of them.  We just got to make sure we keep that up state after state after state. 

And, you know, as I was going across Iowa over this last year with Ann and the boys here and my daughters-in-law and my grand kids, we heard something time and time again.  People feel that Washington is broken.  That Washington just can’t get the job done.  It’s not just the White House they’re talking about.  It’s not—it is Washington. 

They look at what’s happening there and they say, how come Washington can’t deal with illegal immigration?  How come Washington can’t build better jobs for us?  How come Washington can’t help us become energy independent?  How come Washington can’t get health insurance for all of our citizens without making it Hillary care or socialized medicine?  Washington is broken and we’re going to change that. 

(END VIDEO CLIP)

CHRIS MATTHEWS, MSNBC ANCHOR: That’s Mitt Romney who spoke at the same time that winner Mike Huckabee did earlier tonight.

KEITH OLBERMANN, MSNBC ANCHOR: Right.  Let’s take a look at some more numbers from tonight’s entrance polls.  How the races broke down.  For that we go again to MSNBC’s Norah O’Donnell. 

Norah.

NORAH O’DONNELL, MSNBC CORRESPONDENT: Hi there, Keith.  Hi there, Chris. 

Well, we’ve been digging deeper into these numbers and kind of look forward to New Hampshire because the next key contest, yes, just four days from now.  And one of the key constituencies there as you know, independents in New Hampshire.  They make up 40 percent of the electorate.  So let’s take a look at how the independents voted tonight in the caucuses. 

So we’ll break it down starting with the Democrats.  One in five identified themselves as independents.  And who won among independents?  Check it out.  Tonight’s victor, Barack Obama with 41 percent and Hilary Clinton came in last of the big three with only 17 percent of independents.  I think that’s pretty interesting. 

Among the Republicans who identified themselves as independents, 11 percent turning out.  And there’s a name we haven’t seen much of tonight, Ron Paul capturing that vote with some 29 percent.  McCain close behind with 23 percent.  And Romney and Huckabee were just about even there. 

Also, on the Democratic side tonight, we learned if this youth vote was real.  It propelled Barack Obama to victory.  Can he replicate that in New Hampshire?  Take a look at these numbers.  Twenty-two percent total were under 30, 57 percent going for Obama. 

Now let’s turn to the Republicans.  Forty percent of those under 30 went to Huckabee.  Twenty-two percent for Romney.  Twenty-one percent to Ron Paul.  Only 7 percent to McCain.  If McCain wants to win in New Hampshire, he is probably going to have to improve that number of voters under 30 and also do better with independents because we know he’s going to be competing with Barack Obama for those independents in New Hampshire, which, again, make up 40 percent of the electorate. 

OLBERMANN: Norah O’Donnell with the, again, entrance polling information.  Great.  Thanks, Norah. 

O’DONNELL: You’re welcome.

OLBERMANN: Let’s return to the panel and talk about what this independent stuff means or does not mean.  The analysis of this, Howard Fineman (ph), in both parties for support drawn from independents is this is a good auger for obviously a general election, but also a good auger in many cases because of the way the cards lay out for nomination within the party?

HOWARD FINEMAN: Well, I think certainly on the Obama side that’s true, as we were talking about before.  I think because New Hampshire as so many independent voters, the so-called undeclareds, they’re 40 percent of the electorate in New Hampshire, it’s very helpful to Obama as he tries to convert this into victory in New Hampshire. 

For Huckabee, it’s a little more complicated.  He can try to draw in some of those voters in New Hampshire too and he may get some of them.  Then they all go to party only contests in most cases. 

But I think the interests that independent voters show, and sometimes people from the other party show, is a broader indication of the excitement that some of these candidates are bringing to the campaign.  The bigger picture here, as Chris was saying earlier, is that at least based on this, people don’t want your usual, traditional, political candidates.  People like Romney, who is so mechanical and obviously political and Hillary Clinton, who comes out of 20 years worth of visible political tradition in Washington. 

At least this first cut, voters are looking for outside the box candidates.  That’s of appeal to independents and I think it will be of appeal to party activists also.  I think it’s going to be that way.  That’s the way it was here, too.  Obama only won by one point among Democrats, but he did win. 

MATTHEWS: You know, I think that we have to always project ourselves because it’s all we have to try to figure out how voters are voting.  It could we’ll be that the voters are trying something new.  That they are really desperate.  That they have voted, in many cases, from the time they were 18.  They’ve been trying every four or eight years to try to find good government and they have voted the traditional line.  They voted for the middle of the road Democrat, the middle of the Republican per say and they keep saying, well that’s not working.  I’ve got to try something else. 

And so on the Republican side they’ve gone, in this case, to the fundamentalists.  To someone who’s the pure thing.  Who’s very much a values driven guy.  Who’s not necessarily in any way a politician really in the traditional sense. 

And on the Democratic side, they’ve gone to someone who is—he’s almost third world in his background and the way he grew up and rarely offers himself as a politician.  He doesn’t run as a nationalist per say.  And maybe they’re just trying—Howard, to make your point, I really think they might be just out there earnestly trying to find a solution to this puzzle of American government. 

And they don’t think that the traditional way of voting, the way the ward leader tells to you vote or the way they do in the voter guide, has ever worked because they’ve tried every four years and they’ve gone to vote and they just want this country to work.  And yet they look at health care is stuck.  The war is stuck.  Energy is stuck.  The climate change is stuck.  There’s not an issue that we’ve resolved since the Civil Rights Act in ‘64.  We don’t do anything in our government anymore.  We don’t finish a job.  Name something we’ve done, except raise taxes, lower them, raise spending, lower spending, pork barrel, this, that.  Congress doesn’t solve problems.  And that’s a problem. 

FINEMAN: You get the sense, Chris, and this may change, this may be naive, but you get the sense, at least on this night, that if it were up to Barack Obama and Mike Huckabee, they might be able to sit down and reasonably work something out because they seem, they may not end up being that way, but they seemed on this night and to these voters in Iowa to be the kinds of leaders that you’re talking about.  And that’s clearly what people are looking for. 

One other point about Obama.  I don’t totally buy that whole third world or global view.  I think what he’s trying to do is marry that with traditional American rhetoric.  In his speech tonight he said, my story could only happen in America.  So what he’s trying to do is say, you can have a global perspective and a uniquely American one at the same time.  And that’s incredibly reassuring to Americans who feel they’ve been read out of the world community.  That’s very, very powerful.  But it’s because it’s so American.  That’s what he’s trying to show. 

MATTHEWS: But, you know, there’s a real problem here, and I think you’re getting to it.  You know, the real pros have not been really helpful to us over the years.  You know, back when Nixon, of all people, back in ‘74, was trying to do national health care, and he was really trying to do it, a mandated program.  It was an employer mandate.  It was pretty strong.  Ted Kennedy didn’t like the looks of it, so he undermined it. 

When Hillary Clinton was trying to do her health plan, Bill Crystal (ph) ran a brilliant scorched (ph) earth (ph) campaign against her from outside government and it worked.  So there’s always some guy on the other side who’s going to be a saboteur.  And it’s not to hard to do it once you want to do it.  And it seems to me we’ve got to figure out how we get those people to accept the best we can do and to try to make the best deal.  And not to try to kill what the other side—when Hillary Clinton was also trying to do health care, somebody came along with an idea for—hey, look, why don’t we take every public high school in the United States and really bolster up their infirmary so the kids can get shots, so the kids can get health checks.  And the kids, at least while they’re in school, can get pretty good health care.  Just bolster up the nurse.  Just give her more than she has.  A few more people.  A few more drugs, whatever.  More chances to give shots.

Just   and she said too small board (ph).  That’s not what I want.  I want something bigger.  So we got nothing. 

It’s amazing how, you know, the more you learn about government, how it just breaks down because of people being either perfectionists or saboteurs of the other side.  And, maybe you’re right, maybe these two guys are the kind of guys that say, damn it, let’s try to get what we can get done in a year.  Let’s try to do the best health care plan we can figure out in a year and then sign the damn bill and move it on.  I don’t know.

RACHEL MADDOW (ph): I would say, Chris, though, that there’s—I think it’s not party versus party and it’s not just bureaucracy.  It’s that there are entrenched interests that really don’t want there to be advancement on the big issues that face America, on health care, on energy, on our infrastructure and all of these things.  If there isn’t a leader who’s got their eyes on the horizon, who actually has a vision of where they want to go and is willing to knock a few skulls to get there, then the people who end up holding the center and keeping things the way they are, are the, you know, pharmaceutical companies and the insurance companies and all those (INAUDIBLE). 

MATTHEWS: OK, that’s an ideological argument.  I’m making a simpler argument, which is that politicians don’t want other politicians to get credit.  It’s a jealousy game.  They want all the credit.  And that’s why they don’t want the other side to get any of the credit.  And that’s what often happens in these efforts to try to fix some problem.  A side would rather the other side fail completely than something got done.  And I think that’s the tradeoff you see too often with politicians from the inside.

MADDOW: But sometimes it’s politicians versus politician.  Sometimes it’s politician versus the system.  And that’s when populism has a role. 

MATTHEWS: That’s a good—it is a useful argument for the ideologue.  But, unfortunately, inside the political game I have seen so much vanity stand in the way of so much progress again and again. 

MADDOW: Who’s arguing against health care reform?  Who’s arguing against energy independence?  Look, nobody is.  But there’s a reason these things never happen.  And it’s not because somebody has a political platform where they say, I want America to keep going backwards on these issues.  Everybody says they want to fix them and they never get fixed.  And it’s because nobody’s knocking the white (ph) heads.

MATTHEWS: A better politician than Hillary Clinton could have cut a health care deal. 

MADDOW: Well, maybe that’s the case.  Hillary says she’s learned from that experience and you can take that where you want to. 

MATTHEWS: All right.  Well, that’s useful.

MADDOW: But somebody’s going to have to take on the insurance companies to win that, not just the other political party. 

OLBERMANN: All right, let me step in.  We’re going to be back with our panel.  And when we return, the words of the second-place finisher, John Edwards.  He may be a little too used to that in Iowa.  And the third place finisher among the Democrats, Hillary Clinton.  And also a question that will put me in the category of wet blanket once again on the subject of actual change and what we did or did not see of it in Iowa tonight.  Chris Matthews and I will continue from here in New York.  MSNBC’s continuing coverage of the Iowa caucuses continues.

(COMMERCIAL BREAK)

OLBERMANN: John Edwards finished second among the Democrats in Iowa tonight.  Here is some of what he told his supporters earlier this evening. 

(BEGIN VIDEO CLIP)

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: The one thing that’s clear from the results in Iowa tonight, is the status quo lost and change won.  And now we move on.  We move on from Iowa to New Hampshire and to the other states to determine who’s best suited to bring about the changes this country so desperately needed. 

Because what we’ve seen here in Iowa is we’ve seen two candidates who thought their money would make them inevitable.  But what the Iowa caucus-goers have shown is, if you’re willing to have a little backbone, to have a little courage to, speak for the middle class, to speak for those who have no voice, if you’re willing, if you’re willing to stand up to corporate greed, that message in the American people are unstoppable.  No matter how much money is spent, no matter how much. 

Corporate greed has got a stranglehold on America.  And unless and until we have a president in the proud tradition of Teddy Roosevelt, Franklin Roosevelt, Harry Truman, who has a little backbone, who has some strength, who has some fight, who’s willing to stand up to these people, nothing will change.  We will never have the America that all of us dream of.  The promise of America, which has been available to so many of us will not be available to our children and our grandchildren. 

And I take this very personally.  I watched my grandmother, who I loved dearly, work year after year after year in the mills.  And we lived in the same neighborhood.  She would cook for us, leave the house, walk her way to the mill, work her shift, and come back home and take care of us again.  My grandfather, who was partially paralyzed, would go to work at the graveyard shift in that mill and come back in the morning when we’d have breakfast together. 

My father, who’s here with me tonight, worked 36 years in the mills.  Hard, tedious work.  Hard, tedious work.  Why did he do it?  Why did he struggle and sacrifice?  Why did your parents and grandparents struggle and sacrifice?  They did it so that you could have a better life.  My parents did it so that I could have a better life. 

And we, all of us, to whom the torch has been passed, we carry an enormous responsibility.  And that responsibility transcends politics and transcends elections.  It’s our responsibility to ensure that we will leave America better than we will found it.  That we give our children a better life than we’ve had. 

(END VIDEO CLIP)

OLBERMANN: Moments after that, a much more conciliatory, almost team player kind of speech from the third-place finisher, Hillary Clinton, as she spoke to her supporters. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: Thank you so much.  Thank you.  Thank you so much.  Wow.  I’ll tell you, this—thank you, thank you.  Thank you so, so much.  Thank you.  Thanks, everybody.  Thank you. 

Well, we’re going to take this enthusiasm and go right to New Hampshire tonight.  This is—this is a great night for Democrats.  We have seen an unprecedented turnout here in Iowa and that is good news because today we’re sending a clear message that we are going to have change and that change will be a Democratic president in the White House in 2009. 

I am so proud to have run with such exceptional candidates.  I congratulate Senator Obama and Senator Edwards.  I thank Senator Dodd and Senator Biden and Governor Richardson and Congressman Kucinich.  Together, we have presented the case for change and have made it absolutely clear that America needs a new beginning. 

And I am as ready as I can be, after having had this incredible experience here in Iowa.  Starting out a long time ago and making this journey with so many people who have become my friends and who I am so grateful for their hard work and support.  Those from Iowa, those who have come from around the country.  And the people who were there exceeding anybody’s expectations about what it would mean to have the caucuses this year, I thank you.  I thank each and every one of you for coming out and standing up for a Democrat. 

(END VIDEO CLIP)

OLBERMANN: Let’s, again, get the estimates from our panel on this.  And, as I said, this is going to make me look like the wet blanket in terms of change. 

Gene Robinson (ph), explain to me, and I’m willing to accept that I’m wrong as I ask this question.  I know there’s a fundamental difference between some of the names I’m going to mention here.  The 2008 Iowa Democratic caucuses, Obama 38 percent, Edwards 30 percent, Clinton 29 percent.  The 2004 Democratic Iowa caucuses, Kerry, 38 percent, Edwards 32 percent, Dean plus Gephardt, 29 percent.  Explain to me what the difference actually was. 

GENE ROBINSON: Well, a few years and, you know, a terrible war in Iraq and these intractable problems that many people believe George W. Bush has succeed in making much worse than they ever had to be.  So, you know, I think we’re in a slightly different situation, in quite a different situation from the one we were in last time. 

And I get the sense that people really are looking for a different approach, for different people.  It’s interesting that neither Obama nor Huckabee talks about a kind of fake bipartisanship, you know, hands across the aisle.  Each says he’s going to lead.  He wants to be inclusive.  But they make clear that they want to lead in a direction.  And I think the combination of inclusiveness, but also a sense of direction, is hopeful to people.  And I think people are responding to that. 

MATTHEWS: You know, I think that makes the point.  Pat Buchanan (ph), I know you have strong views, but don’t we need—well not but, but don’t we need people who have strong views to lead and others have to sort of go along with them.  That there isn’t some common, golden mean that allows us to move ahead by just sort of agreeing to be agreeable. 

PAT BUCHANAN: Well, I mean this has been my view.  Frankly, I think your best leadership, and you would take Franklin Roosevelt, and I might take Ronald Reagan as someone who comes to office with strong views, who knows where he wants to take the country and who persuades a sufficient majority to follow him and who succeeds.  I mean you mentioned government hasn’t done anything right.  We won the Cold War, the Soviet empire collapsed.  That was certainly one of the greatest achievements of all of our lives.  And that’s my view of it, Chris, is that it is not that you all get together in bipartisanship, it is that someone has the right ideas at the right time.  My problem with the Democrats is, I hear all this talk about change, change, change.  I don’t know exactly what they want to do in foreign policy.  Frankly, other than get out of Iraq.  And I haven’t heard any of them talk recently about what they think is going to happen there when we’re gone. 

OLBERMANN: Rachel Maddow, the subject of strong views.  Did not the strong views get us the president we have as well?  Is there not fire to be played with in that category. 

MADDOW: Well, it’s interesting.  I actually feel like although I like Obama a lot more than I like George Bush as a politician and I guess probably as a person, I see a lot of shades of George Bush as a candidate in what we’re hearing from Obama.  In that what Obama’s actually offering are fairly liberal policies, but spoken in language and delivered in a style that’s very moderate and that’s actually kind of post partisan in tone. 

We don’t think of George Bush’s presidency as having been that way.  But as a candidate, that’s exactly what he was.  He was proposing very conservative policies, but in a conciliatory, compassionate, post partisan, can’t we all just get along kind of way.  And that’s why people I think maybe ended up surprised at the way he governed.  I think that Obama learned a little bit about how to campaign from what George Bush did.  I hope that he would be, of course, a better president than Bush has been though.

FINEMAN: We need—the country operates on argument.  That’s how we make prosecuting.  But in order to argue, you have to be able to listen.  The thing about George Bush is, it’s not just that he had strong views.  And that part of it Pat would agree and probably support it.  It’s that George Bush never seemed to be willing to listen.  You can have strong views and listen. 

The way we achieve consensus, the way we move forward is by letting everybody have their say and listening to their say and then there’s legitimacy to whatever deal results.  It’s that George Bush didn’t seem to listen.  These guys seem like people who are willing to listen, at least as of tonight. 

BUCHANAN: You know, Keith, bipartisanship gave us the war in Iraq.  It was the people who were out there on the extremes, you might say, who were saying, this is an insane idea to send an army up to Baghdad.  It’s when the Democratic leadership in the Senate, all these folks running out there right now, Dodd and Biden and Kerry and Edwards and Clinton and the whole gang, and Daschle gave Bush a blank check that we got a bipartisan war.  And it was the folks, I think, who are outside standing up and saying, no who are the ones that should have been listened to. 

MATTHEWS: Can I agree with Pat. 

OLBERMANN: I was just going to say, Pat, boy, when you get me, you really get me. 

MATTHEWS: I think the biggest mistake we make in American politics is that the truth lies somewhere in between the two sides that are arguing, when oftentimes it’s outside the box.  The way to look at Iraq wasn’t to reach a common ground on when to go or whether we went with the U.N.’s support or not or after several inspections or not.  It was whether it made sense for the American army to be placed in the middle of Arabia surrounded by hostile countries.  Was that a smart move or not.  We didn’t have the right debate. 

OLBERMANN: Balanced does not mean fair.  Thank you to Pat Buchanan, to Howard Fineman, to Eugene Robinson, to Rachel Maddow. 

And, don’t forget, Chris and I will be back for coverage of the second test of the presidential campaign, the New Hampshire primary, on Tuesday. 

For Chris Matthews, I’m Keith Olbermann.  Let’s leave you with some of the sights and sounds of our evening in Iowa. 

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

END   

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