updated 3/27/2008 10:17:20 AM ET 2008-03-27T14:17:20

Guests: Gov. Phil Bredesen, Ron Brownstein, Fred Kaplan, Ryan Lizza, Jennifer Donahue, April Ryan, Joan Walsh

CHRIS MATTHEWS, MSNBC HOST:  Guess what, the candidate whose gotten hurt badly these last couple of weeks is Hillary Clinton.  Barack has done amazingly OK.  For the first time in the campaign he‘s caught up to Clinton in the national polling.  And oh, yes.  The new NBC numbers show him beating McCain in November, Hillary losing.  Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews and welcome to 7:00 p.m. Eastern edition of HARDBALL.  Tonight a brand new NBC News/”Wall Street Journal” poll that tells us who is the winner and who is the big loser in the Clinton-Obama battles of recent weeks.  I predict you‘ll find it a hell of a surprise.

Also, is Iraq coming apart?  Some of the toughest fighting in recent memory has caused hundreds of casualties and is threatening to undo the cease fire that has kept a lid on violence.  What is happening and what does this mean for the U.S. surge and for our chances for some kind of success in Iraq?

More on that in a moment.

Plus, is Senator John McCain getting a good ride right now from the press because the media loves a maverick?  We‘ll talk about the reason so many reporters love to ride that Straight Talk Express.

We‘ll also have our nightly “Politics Fix” about how the Democratic Party leaders, a lot of the big shots are trying to bring this campaign to some kind of clear conclusion by mid June.  And can you name the presidential candidate who is related to a whole bunch of U.S. presidents?  We‘ll tell you that, we‘ll tell you who in our HARDBALL big number tonight.

But first we go to the messy Democratic race.  We have got new numbers with NBC News political director Chuck Todd and NBC News political analyst and “Washington Post” columnist Eugene Robinson.  There‘s actually two big headlines in this brand-new poll.  With all the noise of the last couple of weeks, Senator Clinton is the one who has been hurt the most.  Meanwhile Senator Obama has steadily risen.  We‘re going to talk about those numbers.

Look at the favorability numbers right now.  Senator Clinton is down from two weeks ago.  She‘s now 11 points in the hole.  Look at those.  She‘s less positive than she is negative at this point when she started out ahead of her negatives.  Look at that 37 positive, now 48 percent negative, 11 point difference there.  That‘s a big problem for her, a swing between two weeks ago.  For the first time, by the way, she‘s down among all women.  Chuck Todd, give us a sense, inside your numbers, MSNBC numbers, it shows for the first time women as a gender are off to Hillary a bit.

CHUCK TODD, MSNBC POLITICAL ANALYST:  Well, let me just make sure we paint the picture of when this poll was taken.  This poll was taken Monday and Tuesday night.  We went into the field specifically to test to see what kind of damage, if any, had been done, Reverend Wright and race.  And of course the biggest headline ends up being what you just pointed out, and that is Senator Clinton‘s favorable rating going down as much as it did.  We don‘t know, our pollsters, we asked them, do you think it has something to do with the fact that she had a very bad couple of days of news coverage, this Bosnia story, a few other things.  We can‘t be specific but clearly she is being hurt by this.  She‘s got her personal number settling on down.  You noted the number of women, that it‘s a net negative.  Well, it‘s also dropped 13 points among African Americans, her favorable rating.  And it does seem as if African Americans took out their anger toward what happened with the whole Reverend Wright thing not out on John McCain but out on Hillary Clinton.

MATTHEWS:  OK.  Eugene, the thing here that‘s amazing is this poll was only taken, as Chuck said, Monday and Tuesday.  It didn‘t pick up the whole Tuzla thing we‘ve been talking about the last couple of nights, which is Hillary Clinton making up that whopper, that Ernest Hemingway imagined story about her being under enemy fire.

EUGENE ROBINSON, “WASHINGTON POST”:  What‘s really fascinating here.  Remember, if roll the video back a few months, Hillary Clinton did start out with some high negatives in this campaign.  It looked like she was solving that problem.  The Reverend Wright controversy may have kind of boomeranged or swerved to hit Hillary Clinton.  It may be these are people who would have said either candidate would be OK.  We like both candidates.  But basically they were supporting Barack Obama.  Now they are still supporting Barack Obama and they are saying, you know what, we don‘t like Hillary Clinton.

MATTHEWS:  Why is she out there rubbing it in to her today?  Didn‘t she get our poll?  I guess she didn‘t get our poll.  The numbers weren‘t out.

EUGENE:  No.  The numbers weren‘t out this morning.

MATTHEWS:  She may tune in tomorrow because she was still rubbing it in today.  Chuck, did you notice that?  She was out on the stump talking about if I didn‘t like the minister, I‘d change churches, that sort of thing.

TODD:  It‘s interesting.  One of our pollsters said this to us, doesn‘t understand what Hillary Clinton ought to be doing is working on her own positives.  Her favorable rating has been going down as this campaign has lengthened, his has not been dropping steadily.  Instead of trying to find policy differences or bringing him down, she should work on favorables and try to get them back up.  If she would bring them up to 50, she‘d have a better chance of getting them.

The other question - I‘m don‘t want us to leave.  It‘s not as if Obama didn‘t get dinged on this Reverend Wright thing but is just a ding.

MATTHEWS:  Let‘s look at the numbers.  There is a ding.  He went from 51 percent positive down to 49 percent positive in two weeks.  He went from 28 percent negative up to 32.  It was a ding.  Eugene, not what you‘d expect after all this sturm und drang, this Gotterdammerung publicity about Reverend Wright.

ROBINSON:  There probably will be great relief in the Obama camp tonight at seeing the numbers.  It says to me two things.  One, that speech really was as impressive as it seems to have been.  And clearly .

MATTHEWS:  Especially among those who heard it.

ROBINSON:  Right.  You can extrapolate that, that it had a wider affect.  It wasn‘t intellectuals and journalists and people who listened intently and hung on every word.  It seems to have diffused into kind of larger public opinion.  And second, you know, if this ends up being the worst week they have, I think they will feel pretty lucky.

MATTHEWS:  Let‘s take a look at the match up now, for the first time Senator Clinton picked up—she‘s obviously even with Barack Obama.  That‘s a number we have been showing.  They are even at 45-45.  There it is.  Forty-five forty-five.  Let‘s jump ahead.  The first time in this whole campaign, believe it or not, Barack Obama in the NBC “Wall Street Journal Poll” has been up to Hillary‘s level.  Despite victories, 11 contest victory streak he had going.  Even then he wasn‘t this high.  He has up to even with someone world-widely known.

Let‘s look at the general question.  This whole question of electability now comes to the fore.  In the general election.  Look at this.  Barack Obama beats John McCain by two points within the margin of error.  On the other hand Senator Clinton has lost her once significant lead over Senator McCain.  She‘s down and McCain up by two.  Does that kill the electability issue.  After all this talk about Reverend Wright, and everything else, Senator Clinton and her husband Bill Clinton, the former president have been pushing this argument she‘s more electable come November, well, it‘s not there in the numbers.

TODD:  It‘s not and what‘s interesting, where Obama has strength and where he has weaknesses.  One thing we learned about the poll, Obama is back down to earth.  He is a mortal candidate, he is a rank and file Democrat.  We saw in this poll Republicans were the ones who became the most unfavorable to him, who gave him the most critical comments on the various questions that we asked when it came to Reverend Wright.  He has lost whatever sort of niceties he had with Republicans.  In these numbers, what‘s interesting is Obama does not do well among this one group of people.  That is southern older whites, both male and female.  But he does fine—he didn‘t lose any ground in the Midwest or in the West.  What does this tell you?  Electoral vote wise, as far as electability goes, who cares if you‘re a Democrat and you have lost southern rural whites because there are no states they are trying to carry as far as the math is concerned.  Now, some of those folks are that southern Ohio, that‘s the T in Pennsylvania.  The fact is he didn‘t lose ground in the Midwest and still outperforms Hillary Clinton in the Midwest and does better with her among independents even now post Reverend Wright.

MATTHEWS:  The other issue I found in the intangibles if you will, authenticity.  Barack does very well with people on that issue of authenticity, so does John McCain, Hillary doesn‘t.

ROBINSON:  I think the Clinton campaign frankly at times has been too clever by half.  There was a period when there was a new slogan every week, talk, open talk, of what kind of image they wanted to project, what sort of candidate they wanted her to be.  You know, I said at the time, let Hillary be Hillary.  I think what the Obama campaign has done is let Obama be Obama.  And not have the campaign aspect be so transparent and the image aspect be so transparent.  And I think that‘s obvious to people.

MATTHEWS:  It‘s one thing to say let Hillary be Hillary.  We‘ve never really been sure what that is, unvarnished, hair down, one of the boys, one of the girls, nobody is running for anything, just what she‘s like as a person, because she‘s been in public life since she has been about 28 or something.  It‘s hard to find out who that person in, in they have been in the popular spotlight all these years trying to pass muster with the popular vote.

ROBINSON:  Imagine if that authentic Hillary Clinton is the Hillary Clinton we saw two or three days before the New Hampshire primary.  Imagine where she would be now.  Remember the impact that glimpse, looked like a glimpse.

MATTHEWS:  It was powerful stuff.  I was in the rooms with her, and especially women, she looked like a very strong role model for a lot of people.  Let me go back to this problem, Chuck, authenticity.  This seems to be the problem.

TODD:  Well, it is.  This goes back to an internal debate that we have heard that has supposedly percolated for months in the Clinton campaign where you had Mark Penn on one side that believed this idea of trying to worry about humanizing her, worrying about the personality stuff is non-sense and he was focused on the microtrends of this stuff, right, focused on issues, less worrying about warming her up when you had another half of the campaign who said, guys, we‘ve got to let people get to know her.  You just pinpointed the problem.

And I remember Mandy Grunwald said this a year ago.  I heard this a year ago.  She said it to me.  “She is the most famous person nobody knows.”  You just outlined everything about how we don‘t know her on that personal front.  And I think that is when you look back, if you want to backseat drive this campaign, you look at the numbers on her positive-negative, that‘s been the problem.  They focus too much on the issue stuff.  Because they thought, well, we‘ll never win a personality contest against Obama but they never even tried.  They never even tried it seems.  Instead they just tried to pummel him on issues, yet they can win in the issue fight but not win in this personal fight.

MATTHEWS:  Last question.  This revenge voting, a fund-raise I created here the other night.  I‘m looking at the new numbers in the NBC “Wall Street Journal” poll, and I am looking at one in five voters vote revenge, vote McCain in other words to get even with the fact Hillary or Barack lost the fight.

ROBINSON:  I think in the cold light of day after the conventions that number goes down.  I don‘t think it‘s one in five.  If it‘s even one in ten that‘s a problem.

MATTHEWS:  Revenge voting is that going to be a reality?  I keep hearing anecdotally, relatives I know in Pennsylvania, they cover the gamut, changed registration to vote for Barack, changed their registration to vote against Hillary, people who say if Hillary doesn‘t win this thing they‘re going to vote for McCain.  I‘ve got them all in the family.

Anyway, go ahead.  You‘re theory about how it bottoms out.

TODD:  I‘m just going tell you what the pollsters told us.  This the second poll in a row where 20 percent of Obama supporters say they are voting for McCain in the McCain Hillary match-up, 20 percent are voting for McCain in the Obama McCain match-up.  The fact is I think gene might be right.  If this is settled fairly soon, you will see people coming—quote unquote coming home.  If this extends for two or three months the feelings get hardened.  Go back to Hillary‘s number a minute here.  On that positive-negative number, she is a net negative among Obama voters.  Those are all Democrats and they have a net negative favorable rating among her.  Among Clinton voters they still have a net positive feeling toward Obama.  If you look at just those two numbers you‘d see, geez, looks like Obama has a better shot at putting the coalition back together.

MATTHEWS:  OK.  And the longer we have the perception that Barack Obama has won this thing, the harder it will be for Hillary Clinton to take it away from him.  We learned that lesson badly back in 2000 when George Bush and family declared themselves winners.

TODD:  It does have that recount feel to it.

MATTHEWS:  Anyway, thank you, Chuck Todd, thank you Gene Robinson.  Coming up what‘s behind that surge of violence over in Iraq and what actually constitutes victory in Iraq.  We‘re going to find out that when we get a report from Baghdad.  You‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The Bush administration has been insisting in recent weeks that Iraq is making progress, but that doesn‘t seem to be the case this week.  Violence is on the rise, and recent security gains may now be in jeopardy.  HARDBALL correspondent David Shuster reports.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Today, in the southern Iraqi city of Basra, violence and gun battles erupted again between Iraqi security forces and Shiite militia groups.  This was the second straight day of Shiite-versus-Shiite clashes, and officials say more than 80 people were killed today and 300 were wounded.

The Iraqi government is in the midst of trying to crack down on militias in the Basra area loyal to hard-line cleric Muqtada al Sadr.  It was Sadr who brokered a cease-fire last summer that contributed to the 60 percent overall drop in Iraqi violence the past year.  The other credit for the drop, experts say, goes to the U.S. troop escalation.

But the new spike in violence raises big questions.  First, will the Shiite power struggle, which has spread from Basra to Baghdad, spread even further?  Second, will Sunni and al Qaeda groups try to take advantage of the mayhem by launching their own fresh attacks at Iraqi government forces and U.S. troops?

At the moment, Iraq‘s prime minister, Nuri al Maliki, is in Basra, where he has given Sadr supporters, as well as roving gangs and criminal groups, three days to surrender their weapons.  Those who don‘t, according to Maliki, quote, “Will face the most severe penalties.”  U.S. military leaders are praising the Iraqi government efforts.

MAJ. GEN. KEVIN BERGNER, SPOKESMAN, MULTI-NATIONAL FORCE IRAQ:  A year ago, the Iraqi security forces would have struggled to move this force.  They would not have been able to support it, and it would have been difficult for the government then to take this strong position against the criminals.

SHUSTER:  Basra used to be under British control, but a year ago, the British troops withdrew and the city was turned over to Iraqi forces.  Last year‘s cease-fire brokered by Sadr at first helped with the stability, but Sadr and his Mahdi Army have grown increasingly angry at efforts by U.S.  and Iraqi troops during the truce to crack down on Sadr‘s movement.

In addition to the violent confrontations now in Basra, Shiite militias in recent days have launched a flurry of mortar attacks at U.S.  and Iraqi buildings in Baghdad‘s Green Zone.  A resumption of intense fighting by Sadr‘s Mahdi Army in Basra and in Baghdad could threaten the security gains the Bush administration has hailed as a sign of progress.  The fighting could also kill more U.S. soldiers.  As it stands, 25 Americans have been killed in the last two weeks, the worst U.S. troop death toll in the past six months.

(on camera):  All of this comes just weeks before the top U.S.  commander in Iraq, General David Petraeus, gives his next progress report to Congress.  I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.

Now we go to Baghdad for a report from NBC‘s Ned Colt—Ned.

NED COLT, NBC CORRESPONDENT:  Well, Chris, compare all of this to, say, a year ago, and it‘s a lot quieter here, fewer car bombs, murders and kidnappings.  But clearly, things are heating up and have been over the last few weeks here, both down in Basra and up here in Baghdad, specifically Sadr City.

We have been hearing in Baghdad the frequent thump of rockets and mortars impacting in and around the Green Zone.  We have driven through the Green Zone a couple of times since yesterday.  Each time, we heard those sirens warning of incoming barrages, saw the streets empty as everyone headed into bunkers for safety. 

It has also been extremely quiet—quiet on the streets in Baghdad itself, likely sings that Sadr‘s call for a general strike are being heeded.  So, this is really a double-edged sword he that he is wielding, both violence down in Basra and in Sadr City, but also making the government aware, through this—this general strike, that he is definitely displeased by the way things are going here. 

MATTHEWS:  Does Muqtada al-Sadr hope to take over Iraq at some point as the years pass? 

COLT:  He has never made that as something that he has publicly stated.  But, clearly, he is the chief power broker in terms of the Shiites here.

And—and we are also seeing the prime minister wielding power as well, wielding power that many would have said even a year ago that he didn‘t have here.  And that is why we are seeing him down in Basra trying to gain the upper hand in this conflict, trying to finally drive out these factions of the Mahdi army.

And it‘s—it is unclear right now whether the government is attacking now out of desperation because of the threat presented by these breakaway factions, or whether the Iraqi government really believes it is in a position of strength.  It has got 15,000 troops and police on the ground in Basra there.  It must believe it is able to take on this largest Shiite militia in the country.

MATTHEWS:  OK.  Thank you very much for that courageous report, as always, Ned Colt, in Baghdad. 

Fred Kaplan is the author of “Daydream Believers: How a Few Grand Ideas Wrecked American Power.”  And he is—he‘s the war stories columnist for “Slate” magazine. 

Fred, thank you very much joining us.

FRED KAPLAN, AUTHOR, “DAYDREAM BELIEVERS: HOW A FEW GRAND IDEAS

WRECKED AMERICAN POWER”:  Thanks. 

MATTHEWS:  I loved your book...

KAPLAN:  Oh, thank you.

MATTHEWS:  ... because it raises a lot of questions about this war. 

You know, people use terms like the Iraq war was misconceived.  What do you mean by that notion of a misconception in going in with the American Army into Arabia? 

KAPLAN:  Well, the idea was that we could just get in there and get out very quickly.  It was as if Iraq itself were sort of an abstract entity.  It was seen as a demonstration of this new style of fighting wars, where we could, you know, beat an enemy to a pulp with one arm tied behind our backs using smart bombs and very light force.

They forgot that war is essentially a political thing.  You know, it‘s fought for political purposes.  It‘s not won until the political objectives have been accomplished.  And, in a place like Iraq, where the toppling of a dictator would unleash enormous sectarian violence and tensions, that would require a lot of boots on the ground, and there was just no way around it.

And we never did put in the ingredients for a true victory. 

MATTHEWS:  Well, didn‘t we see the conflict that we‘re looking at right now years ago?  I thought Dick Cheney saw it.  He‘s quoted as seeing it, that the majority of people in that country are Shia.

KAPLAN:  Right. 

MATTHEWS:  They are used to being under the boot of the Sunnis under Saddam Hussein.  They would want to get control of their country.  At the same time, the Sunnis would be scared to death of them taking over.

KAPLAN:  Right. 

MATTHEWS:  Didn‘t we know there would be a fight between these two groups and it would go on and on and on?

KAPLAN:  Well, a lot of regional specialists did.

As for Cheney, I mean, a lot of people think that he changed somehow after a couple of heart attacks.  Another possibility is that, now that the Soviet Union no longer existed, he didn‘t think there would be much resistance to just going in all the way to Baghdad.  Well, he was mistaken. 

MATTHEWS:  Let me take a look.  Let‘s both listen.

Fred, thank you for joining us.  A great book, by the way.  And I love the fact you took the line from “Seven Pillars of Wisdom,” by the way. 

Let‘s take a look at what the president said about this, so we can get back to the president here, President Bush. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  Victory will come when the terrorists and Saddamists can no longer threaten Iraq‘s democracy, when the Iraqi security forces can provide for the safety of their own citizens, and when Iraq is not a safe haven for terrorists to plot new attacks on our nation. 

(END VIDEO CLIP)

MATTHEWS:  How many years are we away from that definition being realized, Fred? 

KAPLAN:  You know, I don‘t—it is a hard question to answer, because I don‘t see that the road that we are on right now even necessarily takes us there. 

You know, you can talk about reduction in casualties and things getting better, and that is fine.  That is fine.  But are we really any closer to those definitions of—of victory that the president, himself, laid out?  No. 

MATTHEWS:  So, if we stay five years or 10 years or one year, we are not sure that that—longer periods of time would do the goal or reach—get closer to the goals we—we spotted there?

KAPLAN:  No.  No—no matter how long we stay, the thing will be completed when the Iraqi government is somewhat democratic, unified, when it can defend itself, sustain itself, govern itself. 

I don‘t know when that happens.  I don‘t think it has much to do with how the surge is doing or what Muqtada Sadr is doing.  So, the question is, how long are we going to be expected to sit there with a thumb in the dike of the collapsing Iraq, still taking casualties and waiting for something hopeful to happen? 

MATTHEWS:  Wonderful. 

Thank you very much, Fred Kaplan.

For those of you out there who have doubts about this war or believe in the war, the book is called “Daydream Believers.”  It comes from the line from T.E. Lawrence about people who dream during the day.  And they are quite dangerous. 

Anyway, Barack Obama jokes about his cousin, by the way, Dick Cheney, coming up, but you might not believe who else he‘s related to.  Wait until you catch who is in the royal family, if you will, of Barack Obama, of Hillary Clinton, and John McCain.  It is all coming up in our little genealogy moment here.  It‘s coming up on HARDBALL.

You are watching it, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new in politics? 

Well, so far in the campaign, Chelsea Clinton‘s most talked about moment was saying to an inquiring 9-year-old reporter—quote—“I don‘t talk to the press.” 

And exchange on the trail yesterday may have bummed that minor episode.  It happened when a student at Ball State University in Indiana—his name is Evan Strange—asked Chelsea about her mother‘s handling of the Monica Lewinsky scandal back when her husband, Bill, was impeached, what you might say was quite an historic part of the Clinton presidency. 

(BEGIN VIDEO CLIP)

CHELSEA CLINTON, DAUGHTER OF BILL AND HILLARY CLINTON:  Wow.  You‘re the first person actually that‘s ever asked me that question in the, I don‘t know, maybe 70 college campuses that I have now been to.  And I do not think that‘s any of your business. 

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Well, the fact is, the university student who asked that question says he is a Hillary booster. 

(BEGIN VIDEO CLIP)

EVAN STRANGE, STUDENT, BUTLER UNIVERSITY:  I am a supporter of Hillary.  I‘m a Hillary—I love Hillary.  It is not something that I asked to cause trouble.

It was to show those people, you know, what makes Hillary so strong.  And it was basically an opportunity for Chelsea, you know, to show all the doubters how strong Hillary is.

And I can see where she would get a little—little defensive because of the question and—and just hearing Lewinsky over and over and over again.  I mean, I can see where she would react that way.

But, I mean, I would have liked to hear her say something about, you know, her record or something else like that, instead of just, you know, dismissing the question. 

(END VIDEO CLIP)

MATTHEWS:  Well. 

Almost a year ago, I shared this moment with former Alaska Senator Mike Gravel. 

(BEGIN VIDEO CLIP)

MATTHEWS:  Where have you been for 35 years, sir? 

MIKE GRAVEL (D), PRESIDENTIAL CANDIDATE:  Hiding under a rock for 10 years, because I was so disgusted. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Well, Gravel is still running for president.  He‘s still disgusted, so much so that he announced he‘s leaving the Democratic Party to become a libertarian.

Gravel said the Democratic Party no longer represents—quote—“my great vision of our great country.”

Well, the former Alaska senator has now launched on a long dogsled trek to somewhere.

Mush, you huskies. 

We know that Barack Obama loves to joke about his cousin Dick Cheney.  Today‘s “New York Times” has some more family tree news.  Senator McCain is a sixth cousin of first lady Laura Bush.  Senator Clinton‘s notable relatives are Jack Kerouac, Madonna, Celine Dion, Alanis Morissette, and Camilla Parker Bowles, the wife of Prince Charles. 

And here is her Hollywood branch.  Senator Clinton is a nine cousin, twice removed—somebody tell me what that means—of actress Angelina Jolie.

Not to be outdone, Senator Obama has a common ancestor, 11 generations removed, with actor Brad Pitt.

But the big news for Obama brings us to tonight‘s HARDBALL “Big Number.” 

All Dick Cheney jokes aside, Obama may just have something presidential in him.  It‘s not just his fire in the belly.  According to New England Historic Genealogical Society, Obama is related to, not one, not two, but at least six U.S. presidents, both Presidents Bush, Gerald Ford, LBJ, Harry Truman, and James Madison, who wrote the Constitution. 

Six U.S. presidents in Obama‘s extended family—tonight‘s HARDBALL “Big Number.” 

Up next:  Eight years ago, John McCain was the darling of the media, wasn‘t he?  Is the same true today, and why? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And stocks tumble on February‘s slump in big-ticket durable goods and new home sales at the slowest pace in 13 years—Dow off nearly 110 points, the S&P 500 down 11, and the Nasdaq losing 16. 

Dire predictions from the financial sector, Citigroup shares taking a big hit, with one prominent analyst forecasting losses four times worse than expected. 

American Airlines‘ stock lost 10 percent, to nearly a 52-week low today—the nation‘s largest carrier canceling 13 percent of today‘s flights on safety concerns, American‘s fleet of MD-80 aircraft inspected after an audit raised questions about hydraulic wiring.

And protesters stormed Bear Stearns‘ Manhattan headquarters this afternoon, accusing the government of backing the bailout, while neglecting struggling homeowners.  Today, congressional Democrats demanded to see more details about the takeover by J.P. Morgan Chase by the end of this week.

And Motorola caves into Carl Icahn, agreeing to spin off its struggling cell phone unit. 

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

HARDBALL. 

MATTHEWS:  Welcome back the HARDBALL. 

John McCain had the press in his pocket, some said, with his Straight Talking Express eight years ago, but does he have a different straight talk with the press today than he has with the average voter?

Jennifer Donahue is with the New Hampshire Institute of Politics.  And “The New Yorker”‘s Ryan Lizza, a rising star in our business, he recently profiled McCain. 

I got to go to you, Ryan.

Is he still getting good press? 

RYAN LIZZA, “THE NEW YORKER”:  I think, for the most part, yes, he is. 

He has had a couple of bumps.

I mean, the dynamic is that everyone is paying attention to Hillary and Barack, and ignoring McCain.  So, when McCain does something like go to Iraq and misstate—you know, confuses the Sunnis and the Shiites, it sort of makes the news.  It is buried inside.  You know, we talk about it a little bit.  But it doesn‘t get the amount of play it would if we were in the general election race, where you have that head-to-head dynamic. 

I mean, for stuff to really take out, you have to have the opponent mentioning it and really—and really highlighting it.  And he‘s—and because we don‘t have a real head-to-head general election yet, he is basically doing... 

(CROSSTALK)

MATTHEWS:  OK. 

Jennifer, I was up there covering him, as you were, and we were covering him with HARDBALL, doing long interviews with him back when he was really down in the dumps, when everybody thought he was going to get killed in...

JENNIFER DONAHUE, SENIOR ADVISER FOR POLITICAL AFFAIRS, NEW HAMPSHIRE

INSTITUTE OF POLITICS AT SAINT ANSELM COLLEGE:  Yes. 

MATTHEWS:  ... that New Hampshire primary this time.  He was riding around there in that bus of his.  I don‘t know if anybody else was on the bus, except him and a couple staffers. 

DONAHUE:  No one else was on it.  That‘s right. 

MATTHEWS:  And no one on it. 

Tell me about that, because I think that is when he won some love from press, again.  After having served the country, he sort of served the interest of, well, the underdog, if you will. 

DONAHUE:  Exactly. 

I mean, this cycle, unlike the 2000 cycle, when you were up here as well, you know, he started out as the front-runner.  And the press said, this guy is going to grab the Republican nomination.  Then, his campaign was failing.  Organizationally, they weren‘t raising money.  So, the press left him for dead.

By August, when I wrote an op-ed for “The Boston Globe” saying McCain was picking up traction with voters, the national press corps that was ludicrous, because you could not see it from afar.  But you could see at town hall meetings.  It had taken him eight years to get his mojo back with the voters.

The problem for McCain right this minute, I think, is that, while he is not getting a lot of press focus in the newspaper, for example, he is loosening up and letting his guard down.  If he does that too much, he is going to start seeming unappealing to conservative Republicans.  And he‘s got to watch it.

MATTHEWS:  Why?  Because if we like him...

DONAHUE:  That line—then they won‘t.

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  Yes, I got the feeling, Jennifer, that, as long as the press seemed to like McCain, the conservatives didn‘t.  So, he had to sort of get a little cold on us for a while.  What do you think?

DONAHUE:  I think you are absolutely right, Chris. 

I think he was purposely keeping you guys away, keeping you out.  I actually—he doesn‘t know what to make of me, because I am an analyst and a press, and I—he doesn‘t know what.  He trusts me.  And I have gone to dinner with him. 

When he trusts a person, he is very open.  He trusts the back of the bus.  When he doesn‘t trust someone or doesn‘t know where a voter is coming from, he is guarded and very, very stiff. 

MATTHEWS:  Yes, well, we saw that picture a moment ago of Mike—of Mike Barnicle practically discussing his sandwich with him up there.

(LAUGHTER)

MATTHEWS:  And then it was Jill Zuckman of “The Chicago Tribune.”

I thought Mike was really attentive to his sandwich there.

(LAUGHTER)

MATTHEWS:  That is the kind of—and he is a fairly tough reporter.

What do you make of all this? 

LIZZA:  Well, Jennifer is right about that.  I have seen him—I remember getting off a bus and talking to a TV reporter who just did an interview with McCain.  Sometimes on the TV interviews, he is not the McCain of lore, and I said how did the interview go?  And she said, it was terrible.  What happens when the camera goes on?  Sometimes he stiffens up a bit.  And it is true, he does have certain reporters he is more comfortable with. 

MATTHEWS:  Let‘s talk about the thing—Neal Gabler‘s piece today writes about Hollywood.  He‘s written some great books.  He said in this piece today in the “New York Times” that the one reason the press likes McCain is, unlike a lot of stiff politicians—let me not be too ungenerous, but you can think of the list, very serious, earnest politicians, Dukakis, Senator Clinton, Mitt Romney.  They are very goody two shoes.  They‘re very, here is what I have to say.  I take it very seriously.

And then you have guys like McCain who sort of enjoy—they have a self-awareness.  They understand that there is a game aspect to this.  They understand that part of it is a catch me kind of game.  They seem to enjoy it in a way that says, I am as smart as you guys.  I get it. 

LIZZA:  And also I understand that the way we are interacting right now is basically a game.  So he gets a pass on some of these issues. 

MATTHEWS:  Do you have kids yet?  How old are your kids?  

LIZZA:  I have a 16-month-old. 

MATTHEWS:  They‘re not old enough to be ironic.  Jennifer, when your kids old enough to be ironic, you really have a whole new relationship with them.  I find that I really begin to have better conversations when we can both be ironic.  It is usually around 13 or 14, I think.  What do you think? 

DONAHUE:  Well, right.  I think you are right.  My kids are not quite there yet, but they are getting pretty ironic for little kids.  I think with McCain, the thing is he does love irony, but he has also been beaten and tortured.  Like the article, this fellow, Neal Gabler, which I love, is really pointing out that McCain has a streak in him that is slightly reckless.  I think that‘s what the press loves, the little bit of recklessness.  He is not afraid of much, and that is for good reason. 

But I would argue with one point in that piece; I think the press might love Obama more than McCain.  And if Obama is the nominee, that‘s going to cause a conflict, because I think Obama is going to be the darling over McCain, if that‘s how it plays out. 

LIZZA:  I will tell you one dynamic that will happen: the McCain campaign says they are committed to this open access back of the bus thing, going all the way through the general election.  And they have said to me that they are going to put some pressure on Obama to do the same thing. 

MATTHEWS:  Obama is not that kind of guy, is he? 

LIZZA:  No, he‘s not that kind of guy. 

MATTHEWS:  He is not a hang around guy? 

LIZZA:  No, if you talk to the reporters who cover him regularly, he does not have an open access policy like that at all.  As Maureen Dowd said, he wants to talk to dictators, but he doesn‘t want to talk to the press. 

MATTHEWS:  Oh, Maureen. 

DONAHUE:  But if he did that, it could be hard for him.  If Obama did that, he would probably have some big mistakes, because he has not been through this before the way that McCain has. 

MATTHEWS:  Let me explain why a lot of guys like McCain.  He served his country in ways that none us cannot imagine serving this country.  I think that gives him a moral edge over a lot of us and we show it. 

Anyway, Jennifer Donahue, thank you very much for being on.  Ryan Lizza, as always. 

Up next, Hillary Clinton says she is staying in this race.  But what is her strategy to actually win?  The politics fix is up.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time for the politics fix, with our round table, Joan Walsh, editor of Salon, Pat Buchanan of MSNBC, and April Ryan is the White House correspondent for American Urban Radio Networks.  Thank you very much. 

Let‘s start with April over there, all warmed up—I guess you are outside. 

APRIL RYAN, AMERICAN URBAN RADIO NETWORKS:  Yes. 

MATTHEWS:  Let me ask you about this situation.  For the first time, it looks like there might be something up in terms of this election fight ending on the Democrat side.  We have Harry Reid, the head of the Senate; we‘ve got Pelosi now, speaker of the House; we‘ve got, potentially, big shots lining up, beginning with Bill Richardson, saying it is time to ring the bell.  It‘s the 10th round or the 12th round or the 15th, if it‘s a heavy weight fight. 

It‘s over come June whatever, after Puerto Rico.  We heard Bredesen on tonight, the governor of Tennessee, saying he is going to try to convene some sort of conclave of super delegates and force them to vote.  Is it possible that the Democratic party leadership exists? 

RYAN:  Is it possible, yes, they exist.  But you have to remember that Bill Clinton, the husband of Democratic presidential candidate Hillary Clinton, is a major force in the Democratic party and you have to really try to have a handle this with kid gloves.  I have talked to people who are in the Clinton camp, some of her surrogates.  They‘re saying, look, we know we‘re not going to get the nomination, but she feels, look, we will keep on going, especially if we get Pennsylvania.

We are going to go from there, with the push from there, go on to June.  And going until June could kind of cause a problem for the party as we are seeing now. 

MATTHEWS:  Well, wait a minute going to June is OK, because they are all going to go to June, but what are they going to do after the primaries are over?  Are they going to stop this, Pat, or is she going to go right to the wall and risk the defeat of the Democratic party in the general, just risk it, if not intend it.  We don‘t even know if she intends it.   

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Chris, these mice aren‘t going to bell that cat.  The leaders of the Democratic party are Bill Clinton, Al Gore, the former presidential candidate, John Kerry, the former presidential candidate, has no clout whatsoever.  Gore is out of it.  Harry Reid can‘t do it.  Pelosi is there in Obama‘s camp. 

The Clintons are going to fight this thing out as long as they want. 

They are going to do -- 

MATTHEWS:  To what effect? 

BUCHANAN:  They think they are going to get the nomination.  They think they‘ve got a long shot at it.  They think something could come in and help them out.  They are going to go right to the convention, if they believe they have a chance to win it, and they have every right to do so, every right to do so. 

MATTHEWS:  From the Democratic party perspective, do they have a right to destroy the party? 

BUCHANAN:  Well, did Ronald Reagan have the right to go to the convention in Kansas City and fight Gerald Ford for the last delegate? 

MATTHEWS:  They lost.

BUCHANAN:  He lost, but he was widely praised for his speech there. 

Ford lost and Reagan was president next time.  Wasn‘t he?

MATTHEWS:  That is not funny if you are a Democrat.  Let me ask you this, Joan Walsh, in here: I guess the rules of engagement should be clearly stated here.  Is it OK, if you are a Democrat, if you care about the Democratic party, if you care about them winning this year, whoever you are, is it the right thing to have this war to the end? 

JOAN WALSH, “SALON”:  Chris, I don‘t want to see a bloody war to the end, but I don‘t really see anything wrong with them fighting it out.  I mean, there was a great piece by Dan Balz today of the “Washington Post” talking about how, in fact, this long primary season can help the Democrats.  Turnout is up.  Registration is up.  By June, they‘re going to have organizers in all 50 states, Howard Dean‘s 50 state strategy, not exactly what he wanted.  So I don‘t really understand why people are so upset by this. 

MATTHEWS:  You are smiling, Joan, but let me ask you this: if the perception continues that Barack Obama is ahead in all of the numbers and continues through June and then July and the come August, in the heat of August, the people who voted for him find out he got the most votes, the most popular, most delegates, led in the polls, perhaps, but he is being denied the nomination; do you think that would work for the Democrats? 

WALSH:  No, I don‘t.  But let me tell you what I would bet my daughter‘s college fund on. 

MATTHEWS:  Don‘t do that.   

WALSH:  I would bet he is the nominee.  I think we are talking about extreme examples.  I don‘t think it would be a good thing for the party if he is clearly ahead, clearly won more delegate and won more votes, and she forces it.  That could happen, but people are talking as though that is a done deal.  I don‘t think it is.   

BUCHANAN:  They are not going to take it away from Barack Obama unless there was some complete disaster. 

WALSH:  I agree. 

BUCHANAN:  Where everybody, even journalists, would say he can‘t win. 

They won‘t do it. 

(CROSS TALK)

BUCHANAN:  She should not—you should not, really—frankly, they shouldn‘t cut  -- if she falls behind after Puerto Rico and she is gone, between then and August, she should not cut up the party nominee.  She should go to the convention, say, I am going to go there.  I am going to fight my battle at the convention, but stop the attack ads, stop the attack stuff.  You don‘t wound somebody who is the certain nominee. 

MATTHEWS:  Well said.  We will be right back with the round table with more of the politics fix, with more softball from Pat Buchanan.

(COMMERCIAL BREAK)

MATTHEWS:  We are back with the round table and more of the politics fix.  I have to go to Joan Walsh for a very fascinating question here.  A couple of weeks ago, Hillary Clinton floated the idea of a dream team between herself and Barack Obama, with I think, it‘s fair to assume, the assumption that she would be at the top of the ticket.  Now Maureen Dowd, who is not always up to the best of the interests of the Clintons, putting out the idea today that there is worry on the streets that the Hillary Clinton folks may be thinking about another role on that ticket, number two place. 

Do you think that Barack Obama would be well advised to consider a ticket to include both himself and Hillary Clinton? 

WALSH:  Oh, that is a tough question.  I saw Maureen‘s column.  It is hard for me to believe the Clinton people are floating that, but she has her sources.  I think that is a very tough one.  I think she certainly brings something.  She could help him with the women‘s vote.  On the other hand, I think they both have to look for a certain kind of geographic balance, and probably a certain ideological balance, because they are both, let‘s face it, liberal. 

MATTHEWS:  How do you close the wounds, Joan? 

WALSH:  It is one way. 

MATTHEWS:  After all of the heat? 

WALSH:  It is one way that should be considered, but I would have some questions about it, to be honest with you. 

MATTHEWS:  Pat? 

BUCHANAN:  He should not slam the door on this idea, to help himself. 

He ought to say, she is an enormously accomplished woman and—

MATTHEWS:  Play it? 

BUCHANAN:  Sure, for heaven‘s sake, don‘t do what he did before. 

MATTHEWS:  In the interview, keep that door closed.   

BUCHANAN:  In your own mind, decide what you‘re going to decide, but keep it open publicly.  It is a smart move by Hillary Clinton, because it sort of helps her with Barack Obama‘s folks. 

MATTHEWS:  To suggest that she would take second place? 

BUCHANAN:  What it suggests is this man is purely acceptable to me and that will sit well with Obama‘s folks. 

MATTHEWS:  That she would take number two? 

BUCHANAN:  Well, even if she wouldn‘t, it sits well.   

MATTHEWS:  Is this a smart move for Obama to take seriously, or to play with, or to take seriously and end up picking her? 

RYAN:  Chris, this is a trust issue.  I‘m telling you, everyone I talk to, they‘re saying it is a trust issue.  J.C. Watts, a Republican, has said, look, he cannot trust her.  She can trust him. 

Also, people who the Clintons had stay in the Lincoln Bedroom said the same thing, and they said it would help to bring the party together, but he could not trust the Clintons. 

MATTHEWS:  Ha!  What can a vice president do to mess up a presidency? 

Can‘t you send them back to New York? 

BUCHANAN:  Put her on extra Secret Service.  

MATTHEWS:  Let me remind everybody, before this president got somewhat confused about the chain of command, and gave the vice presidency the house, the president doesn‘t even have to give him an office in the White House or in the Executive Office Building, doesn‘t have to give him a car if he doesn‘t want to—

BUCHANAN:  Just try it. 

MATTHEWS:  Can send them up to Capitol and let them sit there as officer of the Senate. 

BUCHANAN:  Just try that with Hillary Clinton. 

LIZZA:  It‘s a political calculation. 

MATTHEWS:  All right.  Is it for real, would she take number two? 

(CROSS TALK) 

MATTHEWS:  Pat Buchanan, there‘s a victory statement. 

BUCHANAN:  I think it would win. 

WALSH:  Pat Buchanan endorses this ticket.

BUCHANAN:  I think Republicans, if you read the Post, they are really going to nail this guy as a left winger.  They really are, Chris.  I think doing that is an enormous grace gesture.  It‘s like reaching out to LBJ, who called Kennedy‘s father virtually an appeaser of Hitler.  It‘s big play. 

WALSH:  He‘s got to worry about her working class base. 

(CROSS TALK) 

MATTHEWS:  I can‘t tell which Pat is talking to me, the right wing saboteur or the brilliant analyst.  Which one are you today?  Wear a button. 

BUCHANAN:  I‘m an analyst.  Put it together.  If you‘re talking with Nixon—Nixon would say it‘s a great idea.  He would tell me—we would sit down and talk about this and say, if they pull that together, they will win. 

MATTHEWS:  April, your thoughts on the smart play.  We‘ve heard from one of the superior HARDBALLers of all time, who may have invented the word, who says that if you‘re a real politician, if you‘re a Henry Kissinger type, you would say put the two fighting bears against each other. 

RYAN:  Too many people are saying that they are very angry with either one group or the other.  Many people are saying they think it‘s a bad idea.  Bottom line, it‘s a trust issue.  That‘s what many people are saying who have been friends, who have taken oaths of office under former President Clinton, who also stayed in the Lincoln Bedroom, who are friends of theirs.  They said that Barack Obama would be able to be trusted by her. 

Barack Obama would not be able to trust her, but she could trust him. 

Too many people are saying it. 

(CROSS TALK) 

WALSH:  It‘s politics, not trust. 

MATTHEWS:  Thank you, gang.  This is a great story.  Thank you Joan Walsh.  Thank you, Pat Buchanan.  Thank you, April Ryan.  Join us again tomorrow at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for the RACE FOR THE WHITE HOUSE with David Gregory.

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

END   

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