updated 4/2/2008 10:53:39 AM ET 2008-04-02T14:53:39

Guests: Rep. John Murtha, Ed Gordon, Roger Simon, Claire McCaskill, Linda Douglass, Jonathan Capehart

CHRIS MATTHEWS, HOST:  ... drama.  The “HARDBALL College Tour” with Barack Obama comes tomorrow.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL, again tonight from Philadelphia.  Three weeks to the day until voters here in Pennsylvania pick a president.  This time tomorrow, I‘ll be live from West Chester University outside Philadelphia for the big “HARDBALL College Tour” with Barack Obama.  We‘ve got the senator for the full hour to answer good, sharp questions from me and from the students.  We‘ll have a packed house.  Don‘t miss the show.

Today, Senator Hillary Clinton spoke to the AFL-CIO here in Philadelphia.  I was there when she told the audience it‘s not over yet.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Senator Obama says he‘s getting tired of the campaign.  His supporters say they want it to end.  Well, could you imagine if Rocky Balboa had gotten halfway up those art museum stairs and said, Well, I guess that‘s about far enough.  That‘s not the way it works.  Let me tell you something.  When it comes to finishing the fight, Rocky and I have a lot in common.  I never quit.  I never give up.

(END VIDEO CLIP)

MATTHEWS:  After her speech today, I caught up with the senator at her press conference.

(BEGIN VIDEO CLIP)

CLINTON:  Yes, Chris?

MATTHEWS:  Senator, when I grew up in Philadelphia here, you could get a job coming out of high school.  You know, you could work at (INAUDIBLE) You could get a real heavy-lifting job.  You could provide for a family.  Now, when you talk to the union guys here, can you honestly tell them that‘s going to come back?  I mean, that was a wonderful time for a lot of people.  You could provide for a whole family with a job, and you didn‘t have to have advanced education.  Can you have those manufacturing jobs come back to Pennsylvania without a higher education level of the workers?

CLINTON:  Well, Chris, you do have to be constantly educating and training the workforce.  That goes without saying.  I think that‘s an important goal for us to make, is that we‘re going to keep educating our workforce so that they can do the jobs which we can attract and keep here.  We‘re losing jobs we shouldn‘t lose.

(END VIDEO CLIP)

MATTHEWS:  Today, Senator Obama campaigned north of here in Wilkes-Barre, where he looked past his primary fight with Senator Clinton.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I have a lot of respect for Senator Clinton.  I think that she deserves to be able to run as long she wants.  And we are going to come together and focus on the fact that John McCain wants to continue the war in Iraq.  I want to end it.

(END VIDEO CLIP)

MATTHEWS:  In a moment, more Pennsylvania politics with a top Clinton supporter, a man who personifies the commonwealth of Pennsylvania, U.S.  Congressman Jack Murtha.

Today‘s Gallup tracking poll, by the way, shows Senator Clinton has closed the gap with Obama a bit.  It‘s a 49-to-45 lead for Obama.  But will the whopper about having faced bullets in Bosnia keep Hillary Clinton from overtaking him?  And on the other side of the equation, can Obama woo more regular voters—you know, the ones who actually do know how to bowl—and finish off Clinton for good?  We‘ll talk to Obama supporter U.S.  Senator Claire McCaskill of Missouri.  All of that more and more later with the roundtable in our “Politics Fix.”

But we begin tonight, as I said, with U.S. Congressman Jack Murtha, who supports Senator Clinton.  Congressman Murtha, thank you for joining us.  Here‘s your friend and Speaker, Nancy Pelosi, and what she said today about this battle for the Democratic presidential nomination.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  ... almost double the participation of before, but we want that participation to be sustained throughout the primary, past the convention and into November.  And I believe that any outcome that could appear to overturn the will of the voters could have a detrimental impact on us.

(END VIDEO CLIP)

MATTHEWS:  Congressman Murtha, do you agree with the Speaker that if the superdelegates, so-called, the party leaders and other office holders, veto the decision by the elected delegates, that that‘s a bad thing for the party?

REP. JOHN MURTHA (D-PA), CLINTON SUPPORTER:  Well, I don‘t think it‘s going to happen.  I‘m absolutely convinced that she‘s going to win Pennsylvania big.  As a matter of fact, it‘s interesting, we‘ve had almost 365,000 Democrats registered in this campaign.  So if you look at Clinton‘s record in the past, President Clinton, he provided 22 million jobs.  And I noticed you asked Hillary Clinton about that, and she said, Yes, we‘re going to prevent (SIC) some jobs.  President Bush has only provided 5 million jobs.

You know what it‘s I‘m all about jobs, man!  I‘m all about jobs, Chris.  So we‘re going to work in Pennsylvania.  We‘re going to try to work Michigan and Florida out, and then we‘re going to talk to the superdelegates.

MATTHEWS:  I‘m surprised that you‘re supporting Senator Clinton because Barack Obama came out against the war in Iraq.  You came out against the war in Iraq.  Senator Clinton voted for the war authorization.  How do you explain that surprise for people like me?

MURTHA:  Well, when I talked to her and explained to her the position I‘ve taken, and I listened to her speak at George Washington University and in Philadelphia, I came to the conclusion all three of us have about the same position.  We want to end this as soon as possible.

And what I heard, Chris, when I was back in the district, people want to spend money at home.  They don‘t want to be building roads in Iraq, building hospitals in Iraq, taking care of Iraq.  They want to take care of our own national security.  And what Senator Clinton says, we have to start to look beyond Iraq.  We have to get our forces back in shape in case something happens someplace else in the world.  Our forces are in terrible shape.  I‘ve been trying to do this for a year, and I know Senator Clinton will be in the forefront to try to do this.

MATTHEWS:  Well, let me ask you about that question of the war in Iraq.  Are you worried that the Republicans, if they get back in again, if John McCain wins, that we‘re in for a long occupation?  He talks about 100 years, a very long U.S. presence in Iraq.  Is that the price of this war, if they get reelected?

MURTHA:  I‘ll tell you something, Chris.  I have never seen such intensity back at home.  I‘ve never seen people so upset, that they want our troops to come home.  I‘ve never seen frustration, even by the families of the troops that are serving in Iraq.  No question in my mind.  No candidate can survive with President Bush on his back.  This is going to be something a Democrat is going to win.  And I‘m supporting Senator Clinton, and I hope that she‘ll win.

MATTHEWS:  Do you believe—I want to ask you again, Congressman, the real reason I‘m surprised by your decision.  Do you believe that Senator Clinton is as opposed to this war as Barack Obama and you are?

MURTHA:  I think she is now.  I think she was very hesitant because she wanted to be careful that she knew all the details.  You know, I came to the conclusion much earlier because I talked to the troops.  I go to the hospitals every week.  I saw the tremendous strain on these troops and on the people.  And then I started to look at the hidden costs of this war—

$423 million per day, $14 billion per month.  We need to transfer our effort to Afghanistan.  We need to get our troops home and start spending this money at home to take care of our own custody, look out for our own national security.

MATTHEWS:  What do you make of Senator Clinton‘s claim, which she‘s now taken back, that she was under sniper fire in Bosnia, that she, in fact, went in under a duck-and-cover situation where she was being fired upon, and has now said, as of today—I saw her a couple hours ago at a press conference.  She said it was a mistake that she said that.  How do you account for that?

MURTHA:  Well, I think she just made a mistake.  I know I went to Bosnia a number of times.  One time, I couldn‘t even get into the town itself from the airport because there was so much firing going on, a couple small children, I recall, killed not far from us.  So I think she embellished the story.  She admitted she made a mistake, and I think you have to move on.

MATTHEWS:  Let me ask you about Pennsylvania.  You‘re a Democrat in Pennsylvania.  You know that Pennsylvania is called the reddest of the blue states, but it‘s a state the Democrats need to win the next presidential election.  Could Barack Obama, if he were the nominee, win Pennsylvania?

MURTHA:  Oh, sure.  I think he can win Pennsylvania.  But I think Hillary Clinton‘s going to win it by a double-digit figure.  No question in my mind about that.

MATTHEWS:  Double digits?

MURTHA:  Double digits.

MATTHEWS:  Has she told you that, or are you just estimating that?

MURTHA:  No, talking to the crowds that I‘ve seen and talking to the politicians throughout Pennsylvania, I see a momentum, a enthusiasm.  People want our troops home.  They want to spend money on roads and bridges.  I‘ve got the most dilapidated bridges in the whole country in my district, and we need to start to take care of them.  Iraq has to step up themselves.  I said over and over again, until the Iraqis step up, we‘re not going to be able to solve this problem.  It‘s time to give them the incentive to step up.

MATTHEWS:  You‘re right.  They‘re the richest country in the world in oil.  I don‘t get it why we‘re helping build their bridges.  Anyway, thank you, U.S. Congressman John Murtha of Pennsylvania.

MURTHA:  Nice talking to you, Chris.

MATTHEWS:  Coming up: Senator Clinton‘s Bosnia whopper is a story with legs, apparently.  It‘s provided material for late night comics and for Internet parody.  What‘s made this story stick?  Well, when HARDBALL returns, we‘ll talk about that.

And tomorrow‘s the big day, as I‘ve been saying, the return of the “HARDBALL College Tour,” which I love.  Barack Obama‘s our first guest in Pennsylvania for the full hour tomorrow, a whole hour with Barack, at West Chester University.  It‘s right outside Philadelphia.  And that‘s tomorrow at 5:00 o‘clock and at 7:00 o‘clock tomorrow night.  Then the “HARDBALL College Tour” takes us to meet with Senator John McCain for a full hour at Villanova.  That‘s on April 15 -- you remember that date, tax day—also at 5:00 o‘clock and 7:00 o‘clock for a full hour with both of them.  I‘ve invited Senator Clinton.  I got a question with her today.  I‘d like to get a whole hour of questions with her.  We‘re waiting to hear from her about a firm date.  We‘d love to get one.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Today, there were more columns, in fact, criticizing Hillary Clinton for her recent claims of having faced sniper fire as first lady while traveling to Bosnia.  The whopper has become an issue that  Clinton can‘t seem to get away from, and it‘s now a punch line that our pop culture can‘t seem to ignore.  HARDBALL‘s David Shuster reports.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  It‘s been two weeks since this video prompted Hillary Clinton to admit her Bosnia claims were false, but the ridicule keeps coming.

DAVID LETTER MAN, HOST:  They had to crawl to the airport under sniper fire.  And then they dig out the footage, and everything was, Hey, how are you doing?  Nice to see you.  Well, she says the reason she said that was because of sleep deprivation.  Sleep deprivation.  So I‘m thinking, Well, she‘ll be great on those 3:00 AM phone calls, won‘t she?

JAY LENO, HOST:  She now admits there were no snipers, yes.  And today Bill Clinton said, Hey, if I knew there weren‘t any snipers, I wouldn‘t have sent her there in the first place.

SHUSTER:  All of the jokes have helped make Clinton‘s misleading remark a pop culture sensation.

CLINTON:  We just ran with our heads down to get into the vehicles to get to our base.

SHUSTER:  That statement, along with the CBS News report proving Clinton wrong, today on YouTube surpassed 1.8 million views.  Yesterday, newspapers jumped on interviews with the little girl who read the poetry in the tarmac video.  All grown up now, she told reporters Clinton‘s story left her surprised.  Other Bosnians called Clinton‘s remarks insulting.  U.S. military families are weighing in, saying Clinton diminished Americans who really have faced sniper fire.  And this parody has become an Internet hit.

UNIDENTIFIED MALE:  Our noble and brave first lady took time away from dodging attacks to shake hands and smile, and yes, even show off a little marksmanship on a terrorist hiding under a tank.

SHUSTER (on camera):  So what is fueling the pile-on?  Well, part of it may be due to Clinton‘s initial attempt at damage control.  Watch.

CLINTON:  No, wait.  That‘s what I said when I was sleep deprived. 

You can read my book and I said something very different.

SHUSTER (voice-over):  Clinton added that in 12 years, she never once made the false claim.  But actually, Clinton made the Bosnia claim repeatedly.

CLINTON:  ... ran out because they said there might be sniper fire.

The welcoming ceremony had to be moved inside because of sniper fire.

SHUSTER:  Making matters worse, Clinton already faces credibility questions.  She has claimed credit for peace in Northern Ireland.

CLINTON:  And I brought people together and had them sit across the table.

SHUSTER:  Clinton did bring Irish women together, but experts say she was one of many involved.  Clinton says she opposed NAFTA from the beginning.  White House documents indicated she supported NAFTA.  Clinton says she helped pass the Family and Medical Leave Act.  Documents indicate she didn‘t work on the bill.  Today, Clinton was forced to address the Bosnia remarks yet again.

CLINTON:  Well, you know, I said it was a mistake, and I think that there are plenty of mistakes in speaking that both of us have made during this course of this campaign.

SHUSTER:  But for several days now, it‘s Clinton who has been getting hammered.

LENO:  Hey, you heard Hillary Clinton‘s new campaign slogan? 

Incoming!

SHUSTER:  I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Ed Gordon is host of the Black Enterprises “Our World,” and Roger Simon covers politics for “The Politico.”  Gentlemen, let‘s take a look one more time.  Here‘s Senator Clinton, what she said on March 17 about her Bosnia trip.

(BEGIN VIDEO CLIP)

CLINTON:  I remember landing under sniper fire.  There was supposed to be some kind of a greeting ceremony at the airport, but instead, we just ran with our heads down to get into the vehicles to get to our base.

(END VIDEO CLIP)

MATTHEWS:  And here‘s the actual video of that day, which, as you can see, is a somewhat different story.  OK, we‘re going to be showing that.  It seems to me that there‘s nothing worth ducking down and bullets flying.

Let me go to Ed Gordon on that.  The thing about videotape is that it shows you something, reminding us of the old Groucho Marx joke, Who are you going to believe me or your lying eyes?

(LAUGHTER)

ED GORDON, HOST, “OUR WORLD” WITH BLACK ENTERPRISES:  Well, you have it there right, Chris.  And part of the issue, too, is people, I think—and I‘ve been talking to folks over the last couple of weeks as relates to this.  The problem is, it wasn‘t as though she faced sniper fire somewhere else and just thought it was Bosnia.  It just seems she was not in danger in that element, and people already see her as disingenuous to a certain degree because the Clintons, both she and her husband, have this tag of “They‘ll do anything to win.”  And I think this walks in lockstep with that.

MATTHEWS:  Is this a problem that does dovetail into the old, What‘s the definition of is is, that sort of thing, with Bill as well as Hillary?

GORDON:  Yes, and I think that that has dogged her and plagued her because he had that tag, and people are now questioning whether or not this is a family trait or not.

MATTHEWS:  Well, Roger?

ROGER SIMON, POLITICO:  Well, I think there are a number of problems with this.  Her biggest problem in this is that it knocked the Reverend Wright stories out of the headlines, a story that she wanted to remain in the headlines to hurt her opponent.  Secondly, it feeds into her opponent‘s storyline that she will do anything or say anything to be president.  And thirdly, unfortunately for politicians, voters remember the most stupid things you do.  They remember Dukakis in the tank.  They remember the Dean scream.  They remember the John Edwards haircut.  And they‘re likely to remember, at least for a little while, sniper fire that never took place.

MATTHEWS:  Do they remember things if they don‘t sync with their notions—their preconceptions ahead of time, as Ed suggested?

SIMON:  No, that‘s the trouble for her.  It feeds into the storyline

of her opponent, and as Ed said, that both she and her husband will parse -

will do anything, will say anything, will reverse course.  I don‘t believe this was a conscious lie.  I believe it was just too goofy for that, but...

MATTHEWS:  Well, what is your interpretation, then?

SIMON:  Well, it may seem strange, but I think she believes that Barack Obama is really not qualified and has done nothing to become president of the United States, while she is willing to risk her life for that job.  And I think that morphed in her mind to that she has risked her life for this job, when, in fact, she has not.  And if it had been truly dangerous, I‘m sure she would not have brought her daughter with her.

MATTHEWS:  Yes, but that‘s what we‘re all to some extent guilty of, when you tell a story, Ed, 20 years later, 15 years later in this case, you might tend to get a little Hemingway aspect.  In fact, Hemingway made his career embellishing stories.  But that‘s called fiction writing.  She‘s running for president.

GORDON:  Well, it‘s a grand tradition.  Chris, we‘ve seen it from George Washington to Abraham Lincoln.  We‘ve fudged stories throughout to make ourselves look better when running for office.  I think if it were just simply that, people would live with it.  But I think unlike Barack and the Wright situation—he came right out, dealt with it head on—she tried to put it on being sleep deprived.  I think anyone‘s who‘s been under sniper fire, sleep-deprived or not, you don‘t start to hallucinate that.  And that seemingly is what has occurred at this point. 

MATTHEWS:  Are we looking, gentlemen—start with you, Roger—are

we looking at a TV ad that‘s about to be made?  I remember it—we all do

Dukakis in a tank became a great Roger Ailes special.  That was a hell of an ad, because it was so funny.  I think they had—they had waltz music—Strauss music playing. 

(LAUGHTER)

MATTHEWS:  I think they definitely had Strauss music playing with John Kerry and his windsurfing.  It seems like Strauss is especially available for this kind of parody. 

But there you have—poor Dukakis.  He put that helmet on.  You just know there‘s a little metal that said, please wear helmet when driving the tank. 

SIMON:  Right. 

MATTHEWS:  Is this going to be a Republican ad if she gets that far? 

SIMON:  If she gets that far, I think it will be a Republican ad.  It will certainly be an ad by a 527, who will do ads about anything.

And, as I think you said some days ago, it was like, you know, a Snoopy and the Red Baron moment on top of the doghouse.  And that‘s as close as she‘s come to combat.

MATTHEWS:  I like the way you remembered my best metaphor. 

(LAUGHTER)

MATTHEWS:  Anyway, gentlemen, thank you very much.

Roger—thank you very much, Roger.

Thank you very much, Ed—Ed Gordon.

Up next:  President George W. Bush is about the get the Oliver Stone treatment.  Nobody should get that.  And will the director do for W. what he did for JFK, for Nixon, for Jim Morrison of the Doors?  Will he make up the best stuff in the movie? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, “LATE NIGHT WITH CONAN O‘BRIEN”)

CONAN O‘BRIEN, HOST, “LATE NIGHT WITH CONAN O‘BRIEN”:  People are now pressuring—have you heard this?  They‘re all pressuring Hillary Clinton to quit?  That‘s the latest story. 

(CHEERING AND APPLAUSE) 

O‘BRIEN:  Oh.  OK.

You just heard that vote here on the air. 

(LAUGHTER)

O‘BRIEN:  This weekend—this is the latest—this weekend, Bill Clinton said that Hillary should not drop out of the presidential race.  That‘s right.  Yes.  Yes. 

When—when asked why, Bill said, because then she would come home. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new in politics? 

Well, Clinton the comedienne?  In a nod to April Fools‘ Day, here‘s Hillary Clinton challenging Barack Obama to a bowl-off. 

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  We clearly need to do something, so that our party and the people can make the right decision. 

So, I have a proposal.  Today, I am challenging Senator Obama to a bowl-off, a bowling night, right here in Pennsylvania, winner-take-all. 

(LAUGHTER)

CLINTON:  I will even spot him two frames. 

(LAUGHTER)

CLINTON:  It‘s time for his campaign to get out of the gutter...

(LAUGHTER)

CLINTON:  ... and allow all of the pins to be counted. 

(LAUGHTER)

CLINTON:  And I‘m prepared to play this game all the way to the 10th frame. 

(LAUGHTER)

CLINTON:  So, happy April Fools‘ Day, everybody. 

(END VIDEO CLIP)

MATTHEWS:  Ron Allen of NBC News, who was sitting next to me at that presser, asked Senator Clinton afterwards if she wrote that gag herself.  She was noncommittal. 

Good news for the social types planning to attend the Republican Convention in Minneapolis/St. Paul this summer.  The Minnesota House is weighing a bill to push back last call for drinks from 2:00 a.m. to 4:00 a.m. for any bar within 10 miles of the convention. 

A Minneapolis Democrat who is co-sponsoring the bill made her case like this—quote—“Las Vegas is open all night long, and New Orleans is open until dawn.”  Well, that‘s her case.  Sadly for the Republicans, what happened in St. Paul last year, Larry Craig, didn‘t stay in St. Paul. 

As you have heard by now, Oliver Stone is planning a big biopic on the life of George W. Bush.  Now we get a scoop of what the film, titled “W,” will entail.  According to ABC, it will include the charge that George H.W.  Bush—that‘s Bush father—used his influence to get his son into business school—that‘s Harvard Business. 

And it will go into President Bush‘s arrest during college for tearing down goal posts at a football game.  The movie will hit upon a near fistfight between 41 and a drunk 43 in the 1970s.  And it will take on Bush‘s pledge to quit drinking.

Does it sound interesting?  Well—but if “Nixon” and “JFK” are any indications of Stone‘s movies, don‘t expect Oliver Stone to build his best stories on what is known to have actually happened. 

Next up:  Barack Obama went on “The View” last week.  Here‘s Jay Leno‘s take on that event. 

(BEGIN VIDEO CLIP, “THE TONIGHT SHOW WITH JAY LENO”)

JAY LENO, HOST, “THE TONIGHT SHOW WITH JAY LENO”:  Did anybody catch Barack Obama on “The View”?  Did you see that?

You know, there‘s something about “The View,” there‘s something about this show that makes men uncomfortable. 

(LAUGHTER)

LENO:  Now, we have not altered this footage in any way.  This is exactly the way it appeared on TV.  I want you to just check out how many times Barack Obama fidgets while he‘s sitting there.  This is the actual footage.  Take a look. 

(BEGIN VIDEO CLIP, “THE VIEW”)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I am surrounded by women.  I am surrounded by women. 

You guys always surprise me.  You always surprise me.  You always have something. 

(LAUGHTER) 

(END VIDEO CLIP)

LENO:  I got, what, 13, 14?

(END VIDEO CLIP)

MATTHEWS:  I love it.  Always check for the secondary characteristics.  Watch what people are doing with their hands and the rest of them when they‘re trying to talk.

Anyway, it was quite a grilling, apparently. 

And now it‘s time for the HARDBALL “Big Number” of the night.  By now, you‘re familiar with that Clinton-era adage, now part of our political parlance, it‘s the economy, stupid.  True?  But perhaps even truer would be this.  It‘s where the public expects the economy to go, stupid. 

And a new Gallup poll shows precisely where the American people see the economy headed.  According to a new survey, what percentage of expects the economy to get worse before it gets better?  Catch this—bad news for the Republicans -- 79 percent think we haven‘t seen the worst of this yet.

Tonight‘s “Big Number,” 79 percent think the worst is coming. 

Up next:  Obama supporter Senator Claire McCaskill of Missouri. 

And, tomorrow, it‘s the return of the HARDBALL College Tour.  Barack Obama is our guest for the full hour at West Chester University in Pennsylvania.  That‘s tomorrow, right here at this time, at 5:00, and 7:00 Eastern.

Then the HARDBALL College Tour continues with Senator John McCain at Villanova on April 15, also at 5:00 and 7:00 here. 

And I have invited Senator Clinton to a similar event.  We‘re waiting to hear her answer on a firm opportunity at a college somewhere in Pennsylvania, we hope.

You‘re watching HARDBALL right now, only on MSNBC.  

(COMMERCIAL BREAK)

MARY THOMPSON, CNBC CORRESPONDENT:  I‘m Mary Thompson with your CNBC “Market Wrap.” 

The second quarter starting with a bang, as stocks soar—the Dow Jones industrial average gaining 391 points, the S&P 500 up 47, and the Nasdaq up 83. 

The rally was triggered by investment bank Lehman Brothers raising $4 billion from a stock sale, calming fears about the stability of the banking sector.  Lehman‘s shares soared 17 percent today.  Stocks also getting a boost from better-than-expected manufacturing data.  It showed manufacturing slowed last month, but not as much as economists had predicted.

Oil continued to slide, as the U.S. dollar gained.  Crude fell 60 cents in New York, closing at $100.98 a barrel. 

And, in the meantime, top executives at the five biggest U.S. oil campaigns were summoned before Congress to explain the industry‘s huge profits in the face of record oil and gasoline prices.  They defended the earnings and claimed, factors beyond their control had driven prices higher. 

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

HARDBALL. 

(BEGIN VIDEO CLIP)

OBAMA:  I want to sign into law what I‘m calling the Patriot Employer Act, which is very simple.  It says, we will not gives tax breaks to companies that ship jobs overseas. 

(CHEERING AND APPLAUSE) 

OBAMA:  We‘re going to save those tax breaks for companies that are investing right here in Wilkes-Barre, right here in Pennsylvania, right here in America.

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

Obama—that‘s Senator Obama—has taken a different tone in Pennsylvania, where I‘m at right now.  He faces an aging blue-collar electorate, one of the oldest states.  I think it‘s the second oldest state, in terms of demographics.  People want details about how he plans to improve their lives, keep their kids from moving out of the state, and creating jobs down the road for their grandkids.  Can he win over working-class voters here in Pennsylvania? 

Senator Claire McCaskill of Missouri is an Obama supporter. 

Senator McCaskill, did you advise Obama to go out and try to bowl the other day?

SEN. CLAIRE MCCASKILL (D), MISSOURI:  Well, listen, I grew up in a small town where you learned to do two things.  You learned to bowl and you learned to roller-skate.  I can‘t wait to challenge him to a game of bowling.

MATTHEWS:  OK.  Let me ask you about how he—how‘s he connect with regular people?  Does he?  Or does he only appeal to people who come from the African-American community and from the people who have college or advanced degrees? 

MCCASKILL:  You know, I think people forget about how well Barack Obama is thought of in southern Illinois.  I know southern Illinois. 

They‘re our neighboring state.  They‘re very much like the people in many parts of rural Missouri.  These are working people, salt-of-the-earth people.  And if these people of Pennsylvania will give him a chance and listen to him, I think they will be surprised how much they will relate to him both as a leader and as a person. 

MATTHEWS:  What can a Democratic Senate candidate really promise the family out there that‘s worried about paying just to alive, the family that can‘t afford much beyond—they got Social Security coming in.  They desperately need Medicare.  They may have a long-term care situation with Alzheimer‘s.  They need the Medicaid opportunity.  They need something if they‘re a young couple to maybe look forward to putting their kids through college. 

What real help can Democrats deliver on to those real people? 

MCCASKILL:  Well, you know, Chris, we just fell a few votes short on a number of measures, like negotiating with prescription drug companies for lower prices with volume purchasing through the government. 

We fell just a handful of votes short in the Senate.  And the reason that those votes were so important is because we had a Republican president that wasn‘t pushing.  He was opposed to the things that we were trying to do. 

The other thing is, this is a guy who wants to get people together where we can find some common ground.  He‘s not somebody who demonizes people who have a different opinion.  He just comes at it a different way.  I have watched him do it. 

He will do a remarkable job of trying to find ways to bring us together on these things that will deliver for the American people.  The ideological splits have not really done much good for the American people at this point.

MATTHEWS:  I just listened to Hillary Clinton today addressing an AFL-CIO crowd, and she kept saying over and over again:  I‘m going to fight, fight, fight.  I‘m Rocky Balboa.  I‘m a fighter, not a quitter.  I‘m a fighter. 

What‘s wrong with that appeal: “I‘m a fighter”?

MCCASKILL:  Well, there‘s nothing wrong with working for what you believe in and working for it hard. 

But, frankly, we have got plenty of fighting right now.  I mean, we specialize in fighting in Washington, D.C., right now.  It‘s what we do best.  And, frankly, we‘re not getting anything done, and our approval ratings kind of reflect that. 

I think we need someone who‘s a uniter—I hate to use the word uniter, and I think everybody knows why—but, really, somebody who does, you know, kind of appeal to our better angels.  And that‘s what has really touched people about Barack Obama‘s candidacy. 

It‘s a bottom-up effort.  He has excited people, like we haven‘t seen before in this country for decades.  And that‘s the kind of leader we need right now, to challenge the American people to get behind their representatives and find this way that we can move forward. 

MATTHEWS:  Let‘s take a look at him today.  Here he is, Senator Obama, your candidate, speaking to regular people in Pennsylvania. 

(BEGIN VIDEO CLIP)

OBAMA:  Too many working people are struggling.  Too many factories have shut their doors because jobs have been shipped overseas.  I have met too many workers who are having to compete with their teenage kids for jobs at the local fast-food joint, paying seven, eight bucks an hour, because they lost their job, their pension, their health care. 

(END VIDEO CLIP)

MATTHEWS:  Well, how do you that?  How do you give back a guy or a woman that better-paying job at a factory that‘s disappeared, if the factory‘s disappeared? 

MCCASKILL:  Well...

MATTHEWS:  How do you give them back a job when there‘s no factory there? 

MCCASKILL:  Well, for one thing, you set a tax policy that doesn‘t encourage companies to chase the lowest common denominator in terms of labor costs. 

We get our health care costs under control.  That‘s one of the reasons these companies are not competitive with some of these manufacturing plants in other countries, because of health care costs.  And he‘s got a strong plan to deal with health care costs in this country. 

So, I think, if you look at the specifics, it‘s pretty impressive, what he is putting forward.  And I think a lot of people that have worked with him have the confidence that he will be able to get this stuff done.  He won‘t get all of it done, and it won‘t get done right away.  And he‘s a realist about that.  And people need to—to understand, he‘s not going tell them—he‘s not going to tell them things he can‘t do.  He‘s going to tell them what he also is going to work for and fight for. 

MATTHEWS:  Let me ask you about the ethnic factor.  When you look at your state, and you look at the demographics, how did he do in the white community, as well as the black community? 

MCCASKILL:  He did very well in suburban Saint Louis and Kansas City, where we have a huge number of swing voters. 

He did very well with the independent voters, regardless of their race.  He absolutely—we have an open primary and no party registration.  So, people could have chosen John McCain, Barack Obama, or Hillary Clinton in our primary.  And, by an overwhelming margin, Chris, they chose Barack Obama. 

MATTHEWS:  The trouble is, for your candidate in Pennsylvania, independents and Republicans can‘t vote.  It‘s a pure party vote. 

MCCASKILL:  And that‘s why it‘s going to be tough.  I think the Clinton campaign has said they‘re unbeatable in Pennsylvania.  I have heard the best pol around say that Hillary Clinton is definitely going to win.  And that‘s Governor Rendell.  We don‘t doubt that. 

I think this is a very difficult race for Barack Obama, but he‘s doing what I did in Missouri.  I lost a race in Missouri and I got out in an RV and went around the state and shook hands.  He‘s doing that retail, where people get to touch him and listen to him and ask him questions.  That kind of stuff flies around rural communities.  I think it will help. 

MATTHEWS:  We‘re going to touch him tomorrow night.  We have a an hour with him.  Thank you very much, Senator Claire McCaskill of Missouri, a big Obama supporter. 

Up next, how will soaring gasoline prices affect who wins the presidency?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.  Joining me now for the politics fix tonight, MSNBC senior campaign correspondent Tucker Carlson, the “National Journal‘s” Linda Douglass, and the “Washington Post‘s” Jonathan Capehart. 

Let‘s take a look at the hearing in Washington today about what may be the hottest issue in the country right now, four dollar gas.  

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  On April Fool‘s Day, the biggest joke of all is being played on American families by big oil, while using every trick in the book to keep billions in federal subsidies, even as they rake in record profits. 

(END VIDEO CLIP)

MATTHEWS:  Tucker I was at a meeting at the AFL-CIO, one of the applause lines for Senator Clinton was why are we giving tax breaks to the oil companies, when they‘ve got the biggest profits imaginable?

TUCKER CARLSON, MSNBC SENIOR CAMPAIGN CORRESPONDENT:  Yes, I mean, it‘s a great issue for candidates.  It affects everybody.  It raises the price of everything.  I guess those plans you heard about from the environmental lobby to raise the price of gas to discourage of us from driving are probably dead in the water at this point. 

MATTHEWS:  They‘re unnecessary. 

CARLSON:  They are.  Now, look, in the end the oil—the prices of oil are set on an open market, on the world petroleum market.  I think it‘s fair to ask, why are we subsidizing big oil?  That‘s a legitimate conversation.  In the end, they don‘t set the price of oil.  That is beyond the control of anybody. 

MATTHEWS:  So, Linda Douglass, the oil companies get the break when the price of oil goes up.  They get a bigger volume there before they get a bigger profit? 

LINDA DOUGLASS, “THE NATIONAL JOURNAL”:  Well, this is a perfect issue for the Democrats for so many different reasons.  First of all, it allows them to demonize corporations and big oil, always the enemy.  Secondly, it allows them—certainly Barack Obama to talk about the influence of special interest on Washington.  Is allows them to go down the environmental road and it gives them a populist route in a very populist state, Pennsylvania. 

MATTHEWS:  OK, let me go to Jonathan Capehart.  Not only does Pennsylvania use gasoline.  It also heats the homes.  It‘s a cold state.  It‘s above the Mason-Dixon line so it hits people at home and on the road. 

JONATHAN CAPEHART, “THE WASHINGTON POST”:  Right, this gives both Senator Clinton and Senator Obama an opportunity to talk about their, you know, clean energy proposals, what they want to do.  I think Senator Obama yesterday talked a little bit about this.  I was impressed that he didn‘t shy away from—he talked about the need to do something with coal, the need to do something to wean the United States off the dependence on foreign oil. 

He also talked about the need to look at how to make nuclear power part of the mix, which I think for the Democratic party constituency is a rather courageous thing to say. 

MATTHEWS:  It sure is.  Let‘s take look at Obama today on that point. 

(BEGIN VIDEO CLIP)

OBAMA:  I was in a bar with Bob Casey, great guy.  And we were catching a little bit of the Final Four, and we were talking to a guy sitting next to us who was out of work.  He made a point that should be obvious to so many of us, but, you know, you sometimes don‘t think about; he‘s out of work.  He‘s having to drive around looking for work and he‘s saying, it‘s killing me to try to fill up my gas tank just to get to an interview for a job. 

You‘re out of work, and here you are just burning money filling up the tank. 

(END VIDEO CLIP)

MATTHEWS:  I think he talked about an 85 dollar tank.  That‘s a hell of a big tank, even in today‘s prices, 85 dollars.  What is that?  Anyway, my thought, Linda—let‘s ask politics here.  Jack Murtha was on the show tonight, and he said that Hillary Clinton, his candidate—I find it a surprise that she‘s his candidate, because he‘s a big anti-war guy—will beat Barack Obama in the state of Pennsylvania later this month by double digits. 

Is that a bridge too far?  Is that a marker that can‘t be met?  Is that about right? 

DOUGLASS:  If you look at the polls, the polls seem to indicate that she could certainly beat him in double digits.  We have to see who these newly registered Pennsylvania voters are.  It‘s a steep climb for Barack Obama.  This oil, gas price thing, again, has been very helpful for him, one would think, in Pennsylvania, because it allows him to connect on a working class, kitchen table issue of the kind that he really hasn‘t been able to excel in.  But she‘s way ahead. 

MATTHEWS:  Let ask the question to Tucker.  In politics, you always want to set that bar fairly low.  Jack Murtha set it at over ten points. 

CARLSON:  Well, I‘m not surprised.  He‘s an enthusiastic guy, no matter what he‘s talking about.  Here‘s how I looked at it; you have about 140,000 people in the state of Pennsylvania switch their registration from Republican to Democrat.  How many of those do you believe did that in order to vote for Hillary Clinton?  Some maybe. 

You got to believe common sense tells you that the majority of those, the vast majority, did that in order to vote for Barack Obama.  That would be consistent to what we are seeing in other states. 

MATTHEWS:  Tucker, everybody I know fits that description for a couple reasons.  One of my relatives switched a vote not for Barack Obama.  She switched from Republican to vote against Hillary Clinton.  If Rush Limbaugh comes out in his pipe dreams and says the reason they switch the vote for Hillary ray because of some weird strategic move to bring down the Democratic party, I think he‘s as delusional as Senator Clinton was in Bosnia, let‘s put it that way.  

CARLSON:  For the purposes of April 22nd, I‘m not sure it matters.  Moreover, you‘re seeing polls that are closing.  I mean, this is not about the snap shot we get day-by-day of where the numbers are.  It‘s about the trend.  The trend is not her friend right now. 

MATTHEWS:  You have got a Jesse Jackson way with you now.  The trend, with that internal rhyme; the trend is not her friend.  Let me ask you about the Bosnia lie.  I want to go to Jonathan on that.  I know you have a sober, deliberative mind on this subject.  You‘ve been writing editorials for the “Washington Post.” 

Again today at her presser, very politely, someone raised the issue again.  That big, dark heavy balloon of her whopper about Bosnia.  Is it going to go away as long as it has gotten into the viral blood stream of the comics? 

CAPEHART:  As long as it‘s fodder for the late-night comics, as long as it plays into the narrative that the Clintons will say or do anything to get a vote or to squeeze out sympathy, it will continue to be out there.  Also, as you showed earlier in the show, the contrast between her words and David Shuster‘s piece—between her words and the actual video of her walking out of the airplane upright and walking over and greeting people is really stark. 

MATTHEWS:  Especially when we‘ve had a problem with intelligence in this country, the intelligence gathering.  What happens if the commander in chief comes back with an intelligence report—I was just in Bosnia.  I was under enemy fire.  I was in a duck and cover situation.  Bullets were flying.  Then you find out the videotapes come back and none of that was true and we have to question the intelligence of bureaucrats when—obviously, we all get it.  I don‘t want to beat a dead horse. 

We‘ll be right back with the round table for more of the politics fix. 

You‘re watching HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the politics fix.  Let‘s take a look at a clip of what we saw earlier tonight.  Here‘s U.S. Congressman Jack Murtha making his expert opinion on what‘s going to happen in Pennsylvania.

(BEGIN VIDEO CLIP)

MATTHEWS:  Could Barack Obama, if he were the nominee, win Pennsylvania? 

MURTHA:  I—no, sure, I think he can win Pennsylvania.  I think Hillary Clinton is going to win it by a double digit figure.  No question in my mind about that.

MATTHEWS:  Double digits? 

MURTHA:  Double digits. 

(END VIDEO CLIP)

MATTHEWS:  Tucker Carlson, give me the news value on that prediction.  I do think that if Barack wins or loses this by eight points, I still think the confetti is going to drop from the ceiling. 

CARLSON:  No doubt, that prediction comes with the Murtha discount.  I say that with all affection. 

MATTHEWS:  What do you mean by that? 

CARLSON:  You know what I mean.  He‘s (INAUDIBLE)  going to win it by 50 points. 

MATTHEWS:  Jack Murtha‘s one of the nicest guy in politics. 

CARLSON:  I‘m not attacking the guy at all.  He‘s excitable.  He‘s an energetic guy.  I would say the one advantage Barack Obama, who I believe will lose, as most people do in that state—one advantage though is NAFTA.  His spouse didn‘t make NAFTA the centerpiece of his first term.  I can‘t imagine NAFTA is super-popular in Pennsylvania.  You just heard his whole, I was sitting in a bar watching the Final Four, drinking boiler makers with my pal, the governor. 

He throws the anti-NAFTA rhetoric into that, it might work. 

MATTHEWS:  Boiler Makers, is that where you put the shot in the bottom of the beer? 

CARLSON:  Yes, you drop it in.  You get off work the third shift at 6:30 morning and you slam it back. 

MATTHEWS:  Oh, God.  Linda Douglass, have you ever had a Boiler Maker? 

I don‘t think I ever had one.  I never needed one either. 

DOUGLASS:  I think the answer to that would be no.  I‘ll take the fifth. 

MATTHEWS:  Don‘t drink a fifth.  Let me ask you, Linda, about this question of predictions.  It seems to be we‘re in the game here of caging this thing, of touting it.  If Pennsylvania‘s within ten or 15, I guess we‘re going to call it indecisive?  What are we going to do then?

DOUGLASS:  Ten or 15 is what we normally call a blowout.

MATTHEWS:  I would definitely call that.

DOUGLASS:  And that is something that Hillary Clinton—in the scenario that enables her to get the nomination, one of the parts of that scenario is a blowout in Pennsylvania.  Another one is winning North Carolina.  Another one is, you know, winning in Indiana.  But a blowout in Pennsylvania is part of the strategy for her to get the nomination, so they are hoping for those double digits clearly. 

MATTHEWS:  Well, Tucker—Jonathan, I would put down a marker here, just as a pundit; if Hillary Clinton wins by more than ten in Pennsylvania, if she wins North Carolina and Indiana, this thing‘s up for grabs again clearly. 

CAPEHART:  Absolutely, especially in North Carolina, because right now Barack Obama is leading in the polls there.  And it‘s considered to be Obama‘s turf.  So if she were to win a state that‘s considered Obama turf, that puts her back in the game for real. 

MATTHEWS:  While you‘re on deck there, and it is baseball season, Jonathan—on a scale of one a scale one to ten, how much mega-tonnage does this issue of her whopper about Bosnia, claiming to have this Earnest Hemingway experience under fire?  

CAPEHART:  From one to ten, ten being horrendous? 

MATTHEWS:  Yes. 

CAPEHART:  I‘d put it at about a six. 

MATTHEWS:  You, sir, Tucker Carlson? 

CARLSON:  I think, surprisingly enough, it‘s crystallized latent sentiments that have been floating around that she doesn‘t always tell the truth or that she will do anything to win.  I‘d put it—I‘m amazed to say this—at an eight, at least, if not a nine.  I think it‘s a big problem, bigger than I thought it would be. 

MATTHEWS:  Linda Douglass, will this—what kind of number would you give it, just to be fair here? 

DOUGLASS:  I agree with Jonathan.  I think it‘s about a six because there‘s no evidence it‘s hurting her yet with voters in Pennsylvania.  But if you look at the Pew poll and you see that 30 percent of voters say that they think Hillary Clinton is a phony, you have to assume that there‘s some connection.  It might have legs.

It very much depends in Pennsylvania on how much coverage it‘s getting in the local news there. 

MATTHEWS:  I think it‘s up to Barack Obama.  Pennsylvania, as I‘ve always said, because Bob Casey Sr. said it, it‘s the John Wayne state, not a Jane Fonda state.  If Barack Obama decides to play tough with this and put it on the air as a joke, like that wind surfer commercial, like that tank commercial with Dukakis—if he plays tough with this, it will hurt her up there in a John Wayne state. 

I expect the Republicans and the 527s, independent committees, will do exactly that if she manages to win this nomination.  We‘re facing this attack on her commander in chief ability, if that‘s the case.  Anyway, Tucker, it‘s great having you on.  Your ability at language is getting better every moment of your life.  Linda Douglass, it‘s always great.  Jonathan, thank you sir for you deliberative quality. 

Join us again tomorrow night when the HARDBALL College Tour returns.  Barack Obama is our big guest, live from Westchester University in Pennsylvania, the whole hour tomorrow night, at 5:00 and 7:00 Eastern.  Ending on a happy note, today, our senior producer, Cory Heartson‘s (ph) wife made him the proud father of a baby girl.  She arrived to this world early this morning.

From all of us here at HARDBALL, congratulations to Cort, to Kate and to the family and to the new baby.  Welcome to a HARDBALL world.  Right now, it‘s time for THE RACE TO 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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