updated 4/7/2008 3:21:50 PM ET 2008-04-07T19:21:50

Guest: Steve McMahon, Eugene Robinson, Chrystia Freeland, Michael Smerconish

DAVID GREGORY, MSNBC HOST:  The new jobless numbers that should scare McCain and the Clinton tax release that shows there‘s 100 million reasons why life after the White House has been pretty darn good. 

The RACE FOR THE WHITE HOUSE rolls on. 

Welcome to the RACE, Friday edition.  I‘m David Gregory.  This is your stop for the fast pace, the smart take and every point of view in the room.  At half past the hour, we will ask the three big questions tonight, including this: on the 40th anniversary of the assassination of the Reverend Dr.  Martin Luther King, how dangerous is the race minefield for John McCain?  “Inside the War Room” we‘ll go inside the numbers of the latest “New York Times”/CBS News poll. 

The foundation of our program, of course, a panel that comes to play.  And with us tonight, Democratic strategist Steve McMahon, MSNBC political analyst and columnist for “The Washington Post,” Eugene Robinson, the U.S.  managing editor of “The Financial Times,” Chrystia Freeland, and columnist and radio talk show host on WBHT in Philadelphia, Michael Smerconish. 

We begin, as we do every night, with everyone‘s take on the most political story of the day.  It‘s “The Headlines.” 

Here‘s my headline.  Are you better off now than four years ago?  The CBS News/”New York Times” poll says no. 

Look at the numbers. 

A startling 81 percent say the country is off on the wrong track.  The economy is the main sour of the malaise and more on that in just a moment.  But a jump in unemployment had Barack Obama blaming the Republicans today. 

To the quote board.  “It is time,” he said, “to the turn the page on a Bush-McCain approach that tells Americans who are struggling that you‘re on your own unless you have a lobbyist in Washington, because we‘re not going to strengthen our economy unless we come together on behalf of our common prosperity.” 

If that‘s not enough, here is the bright red warning flag for John McCain and the GOP.  The president‘s job approval rating according to this poll?  28 percent, at a time when McCain is asking Americans to keep his party in charge. 

Here‘s my take.  Whatever the financial markets are doing, up or down, the housing slump is real.  And it‘s hitting Americans hard.  We are pulling back on our purchases.  We are highly leveraged with mortgage or equities, home loan debts and the prices aren‘t likely to rebound in the housing market for several years.  That is likely to have voters feeling the pain by November. 

Steve McMahon, welcome to the program.  What‘s your headline tonight? 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Who says you can‘t make money being president of the United States, David?  The Clintons, over $100 million and look at where it came in.  Bill Clinton, speeches, $51 million, his book, $29 million, pension $1.2 million, and Senator Clinton, $10.45 -- I‘m sorry $10 million on her book and that was, by the way, not including the book about socks that she wrote in the White House.  Over $1 million in Senate pension.  And look at this, dollars going out?  $33.7 million in taxes, $10.2 in charity. 

Now remember, this is after the Bush tax cuts.  They would have had to pay $38 or $39 million if it hadn‘t been for the Bush tax cuts.  And that makes that charitably contribution just a little bit easier to make. 

GREGORY:  Yes.  Steve, there‘s a lot of wow numbers in that.  But let‘s talk about the politics here.  She‘s been under a lot of pressure to release all these tax returns.  Why didn‘t she do it sooner?  Big charitable giving, a lot of income.  Was there something to hide? 

MCMAHON:  You know, it‘s a really good question.  Generally, when you have a document dumped on Friday afternoon like it did here, you‘re doing it because you have something to hide or you want—there‘s something that you don‘t want people to discover.  We‘ll find out over the weekend if that‘s true.  But based on the top line, it doesn‘t look like to be a problem at all.  $10.7 million is a lot of charitable giving, although $100 million, of course, is a lot of income. 

GREGORY:  And they‘re putting the pressure on Barack Obama to match the kind of transparency they have.  We‘ll see if anybody‘s actually paying attention. 

Gene Robinson, welcome.  Your headline tonight. 

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  My headline tonight is that John McCain went the extra mile in Memphis today.  Of all three presidential candidates noted the 40th anniversary of Dr. Martin Luther King Jr.‘s assassination.  John McCain gave his speech from the balcony.  He went to the actual balcony in Lorraine and apologized for his vote in 1983 against a federal holiday for Dr. King. 

This may be a gesture he had to make and maybe he hoped to diffuse a potential issue in the fall.  But nonetheless he (INAUDIBLE) for making it. 

GREGORY:  Right.  He says he‘s going to go out for the African-American, right?  He says he‘s going to go after it.  He‘s going to go to places that other Republicans have not traveled to. 

ROBINSON:  He says he‘s going to do that and now I think the translation is he‘s going to be seen to do that and therefore. 

GREGORY:  Yes. 

ROBINSON:  .not turn off white suburban voters who think of themselves as not racist and want to see a Republican candidate do that. 

GREGORY:  Chrystia Freeland, welcome.  You‘re up tonight.  What‘s your headline? 

CHRYSTIA FREELAND, FINANCIAL TIMES:  My headline, David, is Hillary to Edwards.  I‘ll be prez, you be czar.  And that‘s because I think that today Hillary Clinton made a job offer to John Edwards. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), ‘08 PRESIDENTIAL HOPEFUL:  I believe we should appoint a Cabinet level position that will be solely and fully devoted to ending poverty as we know it in America, a position. 

(APPLAUSE)

CLINTON:  .that will focus the attention of our nation on this issue and never let it go. 

(END VIDEO CLIP)

FREELAND:  I think that that‘s a significant statement for Hillary to make for a couple of reasons.  One is that right now, as everyone is looking for the elders of the Democratic Party to speak, a person who hasn‘t spoken, is John Edwards.  And one of the things that John Edwards said when he pulled out of the race was that he wanted to make poverty his central issue, the central issue of the Democratic contest. 

Hillary Clinton has now done that and she‘s done that in spades.  She‘s also really cleverly done it on a day when, as you pointed out, David, the economy and particularly how the downturn, what is probably a recession, is hitting Americans, is really starting to have an impact on how they are perceiving the country. 

So I think it‘s a smart move by Hillary Clinton. 

GREGORY:  People are losing their jobs, 80, 000 unemployment number, jobless claims for last month.  So it comes at an important time.  And we know this reporting that‘s been out there that John Edwards did not have as good of a meeting with Barack Obama reportedly and that he didn‘t show the same level of detailed policy interest that Hillary Clinton has on this issue of poverty.  His issue. 

FREELAND:  That‘s exactly right.  And now, she has gone out and not just in a private conversation, but come out and publicly offered for John Edwards exactly the sort of thing that he has been looking for. 

GREGORY:  All right.  Michael Smockiness, good to see you.  Like the beard, by the way.  Hit me with your headlines. 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  Yes.  By the way, tell that to my wife.  Welcome to Philadelphia. 

My headline tonight is Hillary hopes humor will make us all misremember.  She, of course, went on the “Tonight Show” last night with Jay Leno and addressed that subject of landing in Bosnia and sniper fire.  Let‘s watch that. 

(BEGIN VIDEO CLIP)

CLINTON:  It is so great to be here.  You know, I was worried I wasn‘t going to make it. 

JAY LENO, HOST, THE TONIGHT SHOW:  Oh. 

CLINTON:  Yes.  I was pinned down by sniper fire. 

LENO:  Really?  Right out here? 

CLINTON:  This has just been, you know, such a mismatch of words and actions and I was thinking about it because, you know, obviously, I‘ve been so privileged to represent our country in. 

LENO:  Right.  Right. 

CLINTON:  .gosh more than 80 other countries, lots of war zones and all the rest of it.  And—you know, I wrote about this in my book and then I obviously just had a lapse. 

(END VIDEO CLIP)

SMERCONISH:  David, why did she go back to the well on that?  I mean there‘s a wealth of material that she could unload in front of Jay Leno. 

GREGORY:  Right. 

SMERCONISH:  I think she did it because she‘s still being stung by it.  I polled my audience in Philly as to whether they thought Barack Obama was injured more his relationship with Reverend Wright or Hillary Clinton for that which she said, both in the book and thereafter, in comparison about Bosnia.  And almost uniformly the audience said that they thought Hillary was injured more than Barack Obama.  Now comes the Bill Richardson controversy.  And it‘s another of these. 

GREGORY:  Right. 

SMERCONISH:  .misremembering in the making, and I think she‘s got real credibility problems. 

GREGORY:  Right.  And this issue is that she had a lapse, she says, after writing about it in her book.  She had a lapse on several occasions.  This wasn‘t one slip of the tongue.  It invites more of this discussion and examination that we‘re having here and that we‘re having in other places.  Why does she keep doing it?  It‘s a real question. 

SMERCONISH:  I think it highlights those worst attributes that folks sometimes associate with the Clintons. 

GREGORY:  All right.  Coming up, “Inside the War Room.”  SPU.  I just made that up tonight.  That special polling unit.  Voters aren‘t so sure Hillary Clinton can beat John McCain if it comes down to the two of them in November.  They‘re behind Barack Obama by almost 2-1.  We‘re going to bring you the numbers after the break. 

Later in the program.  Your play date with the panel, call us at 212-790-2298 -- sorry, 2299, rather.  790-2299, and you see Race08@MSNBC.com is the e-mail address. 

The RACE comes right back. 

(COMMERCIAL BREAK)

GREGORY:  Has Barack Obama reached his peak?  It began the slide down the other side of the mountain.  We‘re going to parse the numbers when we come back. 

(COMMERCIAL BREAK)

GREGORY:  Welcome back.  We‘re heading “Inside the War Room” and bringing you the best analysis on today‘s CBS News/”New York Times” poll. 

Still with us, Steve McMahon, Eugene Robinson, Chrystia Freeland, and Michael Smirkonnish. 

First up, Hillary Clinton has been hammering home the message that she is the stronger candidate to go up against John McCain in the general.  But the latest poll results show she could be losing that argument.  Here‘s the numbers in the latest CBS News/”Wall Street”—“New York Times” poll, rather, 56 percent of Democratic voters said Barack Obama can beat McCain, but only 32 percent said Hillary Clinton could do it. 

Steve McMahon, is she losing a key argument here at this stage? 

MCMAHON:  I actually think that she‘s starting to lose the only key argument that she has left, which is that she perhaps is more electable than Barack Obama.  She‘s making the argument very aggressively, some people think, too aggressively.  She‘s making it very publicly.  And you know, if this—if what you‘re seeing from former President Carter, who is an uncommitted delegate, but signal pretty strongly that he‘s for Barack Obama, and from people who are pledged delegates, like. 

GREGORY:  Right. 

MCMAHON:  .like Governor Corzine and other people.  If that‘s any indication, I think she‘s on a slippery slope now.  It could be difficult to regain her footing. 

GREGORY:  Chrystia, she tries to deny this earlier in the week saying no, she didn‘t really say that Barack Obama can‘t win, but we know that conversation is happening with superdelegates, that her people like Harold Ickes is bringing up the Reverend Wright issue.  These are all arguments about whether he‘s electable or not.  These numbers tell a very different story. 

FREELAND:  That‘s right.  And I think that there is an important intuition that we‘re seeing from Democrats and from the superdelegates, which is that Hillary Clinton‘s main message of experience is something that you can pretty easily imagine John McCain trumping.  If it‘s going to be a battle about experience, he just has more of it, especially after the Bosnia sniper incident.  But if you have Barack. 

GREGORY:  All right.  Moving on—yes, go ahead.  Go ahead.  Finish the thought. 

FREELAND:  I was going to say, but if you have Barack Obama with his message of change. 

GREGORY:  Yes. 

FREELAND:  .it‘s harder to see how McCain counter that. 

GREGORY:  All right.  Let‘s talk about moral values.  Interesting question when asked.  Which candidate shares the moral values of Americans.  Look at this, 70 percent said Obama, 66 percent said McCain and 60 said Clinton.  And worth noting, 34 percent, Michael, said Hillary Clinton does not share their moral values.  How important? 

SMERCONISH:  Very important.  And I think that it relates back to the Bosnia story.  I mean they were in the field taking this poll.  I think as Americans were digesting that film footage with the peaceful landing it in contradiction of what she was saying and what she‘d reported in her book, it‘s exactly what I was making reference to earlier.  I think it‘s a significant issue. 

ROBINSON:  It‘s more than just the Bosnia—the Bosnia incident, though. 

GREGORY:  Yes. 

ROBINSON:  It‘s the whole Clinton history and the fact that we‘ve known since the beginning of this race she had high negatives. 

GREGORY:  Yes. 

ROBINSON:  .and perhaps a feeling on her support nationwide.  There are a lot of people who—you know, who remember the Clinton years was less than untrammeled joy. 

GREGORY:  All right.  Next up, would policies put in place under John McCain‘s administration favor the rich, the middle class, the poor or treat all those groups the same? 

Back to those numbers in the poll.  53 percent said McCain would favor the rich, 53 percent compared to 16 percent who said he favor the middle class. 

How troubling is this for him given the voters have such a keen focus now, Steve, on their pocket books.  A guy who doesn‘t believe really in policy prescriptions to deal with what could a recession and then a perception that he favors the rich. 

MCMAHON:  I think it‘s a big problem for him.  I think if the housing crisis continues to get worse, which it looks to many people like it might do, it‘s going to be an even bigger problem because his solution, of course, is no solution.  Let them eat cake or just let them not eat at all if that‘s what it takes. 

GREGORY:  Michael? 

SMERCONISH:  I don‘t think it‘s a problem specific to McCain.  Take out McCain, put in GOP candidate of your choice, run this question in any cycle, I think you get the same number. 

GREGORY:  All right.  Next up, did Barack Obama really come away unscathed from the Reverend Wright flaps?  And bad news here for him, his favorability rating among Democrats dropped seven points since late February, from 69 to 62 percent. 

Eugene, he‘s facing a little bit of this question here about his overall numbers.  He‘s down a little bit in the head-to-head with Clinton in this Poll as well.  Has the bloom come off the roads, was February really his peak when he was on that winning streak? 

ROBINSON:  Well, we don‘t know yet if that was his peak.  What we do know, I think, it‘s very clear, he did not come out unscathed.  The question is, how scathed in the long run is he.  And you know, the—is he—does he really have something of the Teflon candidate about him?  You know, there‘s some other indications in some other polls that he didn‘t suffer all that much, still leading, you know, doing pretty well, maybe gaining in Pennsylvania.  So—and this may actually be something that Democratic voters are perceiving in that who-do-you-think-can-beat-McCain question.  They may be seeing, well, this guy. 

GREGORY:  Yes. 

ROBINSON:  .has got a little Teflon about him, she‘s got a little Velcro about her, and so maybe he could win. 

SMERCONISH:  Hey, David, it‘s still 62 percent.  I mean are you kidding me? 

I know candidates or how about our incumbent president. 

GREGORY:  Right. 

SMERCONISH:  .who would kill to have an approval number like this.  I don‘t think it‘s a problem. 

GREGORY:  All right.  Coming next, the “Smart Take” in the provocative question, did Hillary Clinton underestimate the intelligence of Americans?  Coming ahead next, “Smart Takes.” 

(COMMERCIAL BREAK)

GREGORY:  “Smart Take” time and from the most provocative to the most thoughtful, from the most informed, we track it down so you don‘t have to. 

Here again, Steve, Eugene, Chrystia and Michael. 

Our “Smart Take” tonight, Dick Morris wants to send Bill and Hillary Clinton back to school. 

To the quote board.  “The Clintons‘ entire approach,” he writes, “to this campaign season was based on learning the wrong lessons from their political history.  They survived the Lewinsky imbroglio, the pardons scandal and the theft of the White House gifts, and assumed they were bullet proof.  They confused our forgiveness with gullibility and came to feel that they could get away with anything.” 

“We saw through her claims of experience and followed her twist and turns on Iraq.  We realized that she was being propped up by lobbyists and special interests as a phony brand of change.  And when we saw the real kind of change offered b y Obama, we backed his candidacy.” 

Chrystia, pretty tough take. 

FREELAND:  Yes, I mean, one thing that I think is really interesting that he gets at with this comment is the whole dynamic issue with Hillary Clinton‘s campaign.  And in a country, which is the democracy that the rest of the world likes to look up to, there is something troubling about a Bush-Clinton-Bush and then the idea there would be another Clinton. 

I think that Hillary Clinton‘s Bosnia episode reminds us about that, because after all it‘s part of the much vaunted first lady experience that she likes to talk about. 

GREGORY:  I don‘t know, Steve.  Do you really think it‘s sad or do you think it‘s more of a personality contest, frankly?  It stopped being about policy differences, it seems to me, a couple of months ago and became much more about image in this race. 

MCMAHON:  Yes.  I actually think that‘s pretty much accurate, because what you have here are two candidates where the policy differences really don‘t exist.  And so when that‘s the case, what you have to choose upon are other things, like personality and character and like all the other things. 

I do think the Bosnia thing is something that gets to character and it‘s—it goes right at the core of what people wonder about with Senator Clinton.  I also think that, you know, in some ways, she‘s had a harder challenge because if you‘re a woman candidate, you have to prove you‘re tougher than a man does, because man exudes strength then woman have to demonstrate it. 

And the other thing is I think that she actually was running a general election campaign before she had the nomination, which is the biggest part of her challenge and her mistake, frankly, because, you know, she pivoted too soon. 

GREGORY:  All right.  Our second “Smart Take” tonight, John Kerry campaign strategist Bob Shrum argues a different way.  He says Clinton needs to win every state left to stay in the race, long art, but he argued she should stay in the race. 

To the quote board.  “Now she sounds a populism that recalls Bill Clinton‘s 1992 pledge to put people first.  Pennsylvania, the next test, is both ideal ground for this message and a demographic nightmare for Mr. Obama.  She should win the state by double digits and she has to.  Then she would need to upend expectations by wining North Carolina on May 6 and then roll up big margins in the remaining states, from West Virginia and Nebraska on Mary 13 to Montana and South Dakota on June 3rd, the campaign‘s last day of voting.  This is a tall order she cannot fill it.  Mrs. Clinton should then decide it‘s time for her to go.” 

Gene, if she can fulfill it—and that‘s a big if—if she can fulfill, there‘s a lot of time between now and then for the bloom to come off the rose for Obama, no? 

ROBINSON:  Well, if she can do that, she will become the nominee by acclamation.  The Obama campaign will have collapsed.  I mean I think what Shrum was doing there is setting the hurdle as high as you generally set the bar for the pole vault because this is—unless there‘s an actual collapse of Obama‘s appeal in his candidacy, it seems the chances are vanishingly small.  But if she can do every one of these things. 

GREGORY:  Yes, the question is whether it‘s actually good for the race at some level if they pulled it back from the attacks, he argues, for her to stay on the race. 

Michael, you‘re on deck.  Go to our final “Smart Take” tonight. 

Juan Williams says Dr. King spoke to all Americans with one voice, but claims Obama is selling his message in black and white. 

To the quote board.  “Among Obama‘s white supporters, race is coincidental, not central, to his political identity.  But as black support has become central to his victories, this idealistic view has been increasingly at war with the portrayal crafted by the senator to win black support of him as a black candidate.  Mr. Obama has been content to let black people have their vision of him while white people hold to a separate, segregated reality.  But when Barack Obama, arguably the best of this generation of black or white leaders, finds it easy to sit in Rev. Wright‘s pews and nod along with wacky and bitterly divisive racial rhetoric, it does call his judgment into question.  What would Jesus do?  There is no question he would have left that church.” 

Michael? 

SMERCONISH:  I like Juan Williams‘s piece.  As a matter of fact, this morning on my radio program, I read from it aloud.  What he really says is there was a self-help message that Barack Obama was delivering on the stump.  But he hasn‘t been delivering it ever since focusing on the African-American community.  I sat there with at the National Constitution Center for the speech and he actually did say some of that which Juan Williams wishes he‘d be saying more of. 

One final thought, I think he would do better in the white community if he would resume discussing some of these elements that Juan wants to hear more of. 

GREGORY:  Quick comment, Gene. 

ROBINSON:  He does deliver that message.  You know, I mean, I‘ve heard him delivered it to black audiences and white audiences throughout the campaign.  A personal responsibility.  It hasn‘t been covered necessarily every single time he‘s given it.  But I don‘t think I‘ve heard a speech in which he hasn‘t given it. 

GREGORY:  All right.  Up next, Hillary Clinton is on what seems to be a likability tour during “The Tonight Show” last night,  in “ELLEN” on Monday.  Question is: will it work?  We‘re coming right back. 

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY:  We‘re back on RACE FOR THE WHITE HOUSE. I‘m David Gregory.  Our back half now; time for three questions.  Still with us, Democratic strategist Steve McMahon, MSNBC political analyst and columnist for the “Washington Post,” Eugene Robinson, the U.S. managing editor for the “Financial Times,” Chrystia Freeland, and columnist and radio talk show host on WBHT in Philadelphia, Michael Smerconish.  Welcome all.

First up, Hillary Clinton is making the publicity rounds.  She was on Jay Leno last night.  She also taped an episode of “Ellen,” which will air Monday.  Watch.

(BEGIN VIDEO CLIP)

ELLEN DEGENERES, “ELLEN”:  To be fighting for something you believe in so much, and to have people announcing that you should stop, that you should let Barack continue to save the Democratic party and let Barack continue.  What does that feel—I know you‘re strong.  We know you‘re a strong person, but, still, to have somebody say to you, just stop right now and get out of it—

CLINTON:  Well, you know, boys used to say that to me all the time.  I figured, you know this contest is close.  I don‘t think either one of us should get out. 

(END VIDEO CLIP)

GREGORY:  The boys piling on again.  Our first question today, is Clinton‘s latest likability offensive working?  Chrystia, not just likability, also taking a swipe there at the boys pushing her to get out.  How‘s it working?

FREELAND:  You guys are going to have to let me talk for a long time now, because you don‘t want to be accused of piling on.  Do you?

GREGORY:  Yes, right. 

ROBINSON:  Doesn‘t work with us. 

FREELAND:  There you go.  I think Senator Clinton seems to do best when she is perceived as the underdog.  So that set up question from Ellen was fabulous for her.  I do think that her response was really, really clever.  We‘ve already seen that women voters, especially older women who have probably experienced more sexism in their lives, really find Hillary Clinton appealing.  I think that comment of hers, that, you know, the boys have been getting after me, I think for some voters, especially women who have experience that in their lives, that‘s going to make them think, hey, I want to support her. 

GREGORY:  Steve, there‘s another aspect to this.  Some of these appearances, “Saturday Night Live,” “Ellen,” Leno, other places where she‘s come out, been funny.  She‘s lightened up.  I think it does help her.  It has demonstrated that.  She had that good April Fool‘s joke.  It also tries to lessens the tension in this race, so people don‘t think that it is so intense all the time.  That can help her. 

MCMAHON:  Being a boy, David, I‘m reluctant to actually say anything meaningful here. 

FREELAND:  That would be unusual. 

MCMAHON:  I think she‘s done best when she shows a more human side. 

Look, people know Hillary Clinton is experienced and they know she‘s tough.  What they don‘t know is whether they like her very much.  When she shows a human side, and especially when she is humorous and self-deprecating, I think that she benefits herself.  I think her favorability ratings will improve.  I think she helps herself politically a lot by doing it. 

GREGORY:  Next up, a question fired by NBC‘s own First Read, which asks if John McCain is the candidate being hurt the most by the ongoing Democratic primary fight.  From First Read to the quote board, “McCain is strongest when he‘s running against someone.  In a general election, Clinton and Obama would be two different campaigns, both on message and geography.  So McCain has to hold off on his general election strategy until the Dems pick a nominee.”

Let‘s put it to the panel.  Who needs the Obama/Clinton race to end more, the Democrats or John McCain?  Michael, what do you say? 

SMERCONISH:  John McCain without a doubt, in my view, probably a minority view.  I know a lot of people say well, Barack Obama and Hillary Clinton are killing one another out on the campaign trail.  I happen to think it‘s been a relatively tame campaign, at least when viewed through historical lenses. 

John McCain is out of the spotlight.  Also, David, what vetting is going to be left to do for the general election?  For example, if the Jeremiah Wright incident had come out in the fall when it was just McCain and Obama, it could have run the risk of really taking down the Obama campaign.  When it comes up in October, we‘ve heard that before.  What else have you got? 

GREGORY:  Well, there‘s another aspect of this too, and that‘s, Eugene, John McCain has an opportunity here.  He may not get the same level of coverage that the Democrats will, but he can set the tone of this debate.  He is doing it with his biography tour.  He can do it by training national security fire on both of them.  There are similar positions between Clinton and Obama on the war in Iraq.  He can really try to use this time to build up a dialogue that he reinforces. 

ROBINSON:  Yes, I don‘t think this is awful for John McCain, because, as you said, he is getting to define himself, or to try to define himself, before they define him for him.  The problem is, of course, there‘s more attention on the Democratic race.  I‘m not sure how many people are listening to his biography tour.  I‘m not sure how many people are really paying attention to his national security positions, except that he wants to continue the war.  I think that‘s gotten through.

He is a candidate who does better when he can counter-punch, when he‘s got an opponent. 

GREGORY:  All right, let‘s talk about John McCain for our third question tonight as well.  He was in Memphis today, as we have noted, to pay tribute to Martin Luther King Jr.  McCain has a somewhat dicey history with the day honoring MLK.  He once voted against making it a federal holiday back in 1983, a vote he repeatedly said he regrets. 

Today, McCain apologized again.  He got a mixed reaction from the crowd.  Listen. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, PRESIDENTIAL CANDIDATE:  When I voted against a federal holiday in memory of Doctor King, I was wrong.  I was wrong. 

UNIDENTIFIED MALE:  We all make mistakes.  We all make mistakes. 

MCCAIN:  I was wrong and eventually realized that in time to give full support for a state holiday. 

(END VIDEO CLIP)

GREGORY:  Our third question for tonight, will race be a mine field for McCain if he faces Barack Obama in the general election?  Steve?

MCMAHON:  Yes, it will be. 

GREGORY:  How so? 

MCMAHON:  I think what you saw today is an example.  I do think John McCain was gutsy to go down there and do that.  I think it was a great thing for him to do.  I think this is going to be not necessarily a mine field, but it‘s going to be a little different and perhaps in some ways difficult for both campaigns.  This is something that no one is very familiar with.  The experience that people have had so far with African American candidates is that polling becomes a little bit more difficult because people don‘t always honestly state their intentions.  So I think it‘s going to be a more challenging race for a whole bunch of reasons, not the least of which are what you saw today. 

SMERCONISH:  Can I say something about that? 

ROBINSON:  That was a pretty good reaction he got though in Memphis, I thought, you know, people saying we forgive you; people saying, we all make mistakes.  I thought that came off well for McCain. 

SMERCONISH:  I think John McCain was gutsy to go do it, not just to say it from a thousand miles away, to go there and to say it.  I give him all the credit in the world to do it.  But listen, I think that Hillary Clinton did say to Bill Richardson, Barack Obama can‘t win.  Why won‘t she fess up to that if I‘m correct?  Answer, because that would be perceived as being a racist statement.  Why can‘t he win?  What are you really saying?

My point is, we are so damn muzzled in this country, we are scared to death to offend one another.  The answer to your question is yes, the general election will be a mine field on matters that could be deemed the R-word.   

FREELAND:  I would like to disagree a little bit.  I think the person, the candidates for whom race is the mine field is Barack Obama.  We‘ve referred already to the idea race makes polling difficult because people don‘t—aren‘t necessarily willing to admit to their own possibly race tinged voting preferences.  Any candidate who isn‘t Barack Obama, to a certain extent, is going to benefit from that. 

MCMAHON:  David, if I could.  I actually think you are both right.  It‘s going to be a treacherous race for both.  If McCain or his supporters chose to harp on Reverend Wright, which I presume they will do in some form or fashion, then John McCain is going to be accused of playing the racial card, even though John McCain may not have anything to do with it.

Similarly, Barack Obama has to chose between walking away from Reverend Wright a little bit more aggressively, and standing with him and taking the political hit for it.  That‘s a difficult position, and frankly, it‘s a position that no presidential candidate has been in before.  It‘s going to be treacherous for both campaigns from now until the end, assuming, by the way, Barack Obama is the nominee. 

GREGORY:  Right.  I think one of the questions is, does John McCain have the standing in the African-American community and beyond to try to initiate some kind of racial dialogue in the country that may be brought up by the Reverend Wright issue, if it continues to be an issue for Barack Obama?  That debate to be continue. 

Coming up, John McCain was booed in Memphis today, as we‘ve been talking about.  As one of our viewers said, they weren‘t surprised.  Are you?  Plus, you‘re wondering which candidate is going to save our economy from sliding down the slippery slope to an actual recession.  Up next, it‘s your play date with the panel.  Don‘t go away.

(COMMERCIAL BREAK)

GREGORY:  We‘re back.  Now, it‘s time for your play date with the panel.  Still with us, Steve McMahon, Eugene Robinson, Chrystia Freeland, and Michael Smerconish.  Pam in Tennessee is following Obama‘s money trail and writes the following: “if Obama has raised twice as much as Clinton and is spending it on his campaign, why is he not twice as much ahead, or better yet, hasn‘t he locked up the nomination.  You would think 20 million dollars more than Clinton would do something to boost his numbers.  What is he doing with all the money?”

Well, he is spending it.  He‘s spending plenty of it.  I think it‘s a fascinating barometer.  She gets 20 million dollars, huge.  He‘s at 40 million dollars, has all the small donors.  What political difference does it make?

MCMAHON:  Well, the biggest difference that it makes, having all the small donors, is that Barack Obama can reload his bank account with the push of a button the Internet.  Hillary Clinton or Bill Clinton or John McCain or anybody else has to go and do fund-raiser after fund-raiser after fund-raiser.  As everybody in politics knows, there‘s not a direct relationship between the amount of money you spend and the amount of support you get.  Otherwise, Rudy Giuliani would be the nominee, or Mitt Romney would be the nominee. 

SMERCONISH:  Or Michael Bloomberg. 

MCMAHON:  Michael Bloomberg would be the president next. 

GREGORY:  Is there a qualitative difference to be acquired, Gene, at this stage of the game, through advertising alone.  This really is kind of a war of attrition here. 

ROBINSON:  Yes, but advertising helps.  It helps.  Advertising helps.  If you‘re able to out-spend your opponent three to one or four to one on television advertising in Pennsylvania; if you are able to put up ads in North Carolina and Indiana before your opponent can put them up, that gives you an advantage.  It really does.  If you can open more offices and work the grass roots that way, that gives you an advantage. 

MCMAHON:  As an advertising guy, I hate to say this, but the higher up the food chain you go, in terms of the election, the less advertising matters.  Advertising actually matters a lot more in a Senate race or a governor‘s race than in a presidential campaign, because these are driven by earned media, by external events like the Reverend Wright or the Bosnia story and by momentum on the ground, not so much by advertising. 

It‘s a slight advantage, but it‘s not really very significant. 

FREELAND:  Just to answer Pam‘s question, I think Barack Obama needs at least double the amount of money that Hillary Clinton has, because she went into the race with something he didn‘t have, which is celebrity and name recognition.  So he needs to spend more money than she does. 

GREGORY:  All right, Jason in Ohio thinks McCain should have seen it coming.  He writes, “it‘s no surprise that John McCain was booed today in Memphis on the 40 anniversary of MLK‘s assassination.  McCain opposed the creation of a holiday to celebrate Dr. King‘s assassination.  Does he actually think he has a chance at the black vote.  What exactly is he trying to do?”

Michael, does he have a legitimate shot to make the claim that he can travel to places other Republicans haven‘t? 

SMERCONISH:  Two observations; one, it‘s not clear to me in watching that footage and listening as carefully as I can that he was booed.  I‘m not sure what exactly that reaction was.  Second, to the extent that he was booed, I‘m not sure that‘s all bad for John McCain, because, at least to me, it reinforces the view that the guy really had stones to go down there and to say what he said in that location. 

ROBINSON:  David, it didn‘t seem to me that he was booed.  The reaction after he pointed out his earlier vote and said it was a mistake seemed—I heard more people saying, we forgive you.  You heard the guy saying, we all make mistakes.  It seemed to be the kind of reaction, frankly, that you have in a church when a sinner comes forth to the rail to repent at the end, right before the benediction. 

GREGORY:  Glenn in Washington thinks Hillary Clinton should think twice about her super delegate strategy.  Listen. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Does the Clinton campaign‘s insistence of super delegates voting the way they want have the potential of backfiring upon her?” 

GREGORY:  Yes, absolutely, because it may not work, right?  That‘s the bottom line.  She has a net loss of super delegates since Super Tuesday.  That‘s the math.

FREELAND:  Absolutely.  I think, maybe, there was initially an assumption on the part of Hillary Clinton‘s campaign that because the Clinton‘s for so long had been the Democratic party establishment, because they had relationships, connections, had helped so many people who were sup delegates, that that was a group that would go with them.  I think, if you needed proof that wasn‘t going to happen, just say the words Bill Richardson. 

GREGORY:  Yes, it appears to have backfired there.  Margaret asks whether Obama is ready to be the nation‘s CEO.  Listen to her voice mail. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  In an era where the Fed rescued the fifth largest bank and the loss of jobs this month reached 70,000, and 28 percent of Americans say Obama‘s greatest weakness is his lack of experience, we need an economic superstar to win the economic Tour de France.  Do we really want to vote for the Democratic candidate who still has training wheels on his bike?” 

GREGORY:  Michael, I wonder why there isn‘t a candidate—I do think Hillary Clinton is starting to do this to some extent.  She said the other day, I‘m the Paulette Revere, saying a recession is coming.  Why no candidate is really stepping up and trying to own in a detailed fashion, own the economy as an issue.  I think of Bill Clinton saying, I‘m going to focus like a laser beam on the economy when he was inaugurated.  There‘s room for that this year. 

SMERCONISH:  Can we Zebreuter (ph) that phone call?  Isn‘t it curious that she leveled that charge at Obama among the three of them?  Frankly, what she said could have been said about any of the three; isn‘t that true?  This is just not the strong suit of any of them.  Frankly, I think it puts pressure on a vice presidential selection, because you really do need to surround yourself at that level with someone who understands what you don‘t. 

FREELAND:  Can I share a little bit of—I was just going to share a little bit of reporting on this point.  The caller referred today Bear Stearns and Wall Street.  When you talk to some of the Wall Street supporters of Barack Obama, they say that last summer, when he was first coming to them, one of their big questions was, how the heck are you going to run the economy?  You have no executive experience. 

His answer was interesting.  What he said then, before the campaign, was I am going to use my campaign and the way I run it as a way to demonstrate to you and to the country what kind of manager I am.  So—

GREGORY:  Steve in Minnesota thinks Clinton‘s announcement of poverty tsar is a direct appeal to John Edwards; “Hillary is obviously going after an endorsement from John Edwards.  If he endorsed Hillary before the Pennsylvania primary, how big of an impact would it have?

That‘s been my question all along, Steve.  Does John Edwards really matter at this point? 

MCMAHON:  I think he could have a marginal impact.  It‘s interesting, you know, just a few days ago, Barack Obama was—it seems like this week was take care of the vice president or vice presidential nominee week.  Just a few days ago, Barack Obama was saying that Al Gore needs to be the tsar on global warming, which, of course, Hillary Clinton quickly agreed with.  Hillary Clinton today does the John Edwards thing.  I‘m sure Barack Obama would think a poverty tsar would be a great idea too. 

I don‘t think that either one of them is going to make a big difference at this point.  Frankly, I don‘t think either one of them is going to endorse, Al Gore of John Edwards. 

GREGORY:  Marylin in Indiana thinks Clinton‘s joke on the “Tonight Show” fell flat.  Here‘s what she said:

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Do you think it hurt Hillary Clinton by going on Jay Leno last night and making fun of the sniper fire?  It seems like she did not take the Bosnia lie serious.  Some of us did. 

(END VIDEO CLIP)

GREGORY:  Michael, it‘s a mixed bag there.  It was a clever line.  I was actually born down the street from the studio there, and I don‘t think there‘s a lot of sniper fire in Burbank. 

SMERCONISH:  OK, David, here‘s the question: had she not said that last night, would we have addressed the subject of Bosnia on your show this evening?  I say no. 

GREGORY:  Probably not.  But there‘s obviously more rehabilitation to do, in her mind. 

SMERCONISH:  Even more after last night, I would say.  I don‘t think she should have gone back to that well.  I think she should get over it.  I still say that the Bill Richardson issue is what‘s driving it.  I don‘t think people are going to believe Hillary versus Richardson, when one says, you said Obama couldn‘t win, and the other said, I may or may not.  I mis-remember.  Come on. 

GREGORY:  All right, I got to get a break in here.  You can play with our panel every week night right here on MSNBC.  The email, RACE08@MSNBC.com, and the phone number, 212-790-2299.  When we come back, Chrystia looks into her crystal ball and has a warning for us and our pocket books.  You‘re not going to want to miss this.  Don‘t go away.

(COMMERCIAL BREAK)

GREGORY:  Before we leave you on a Friday night, it‘s prediction time from our panelists, Steve, Eugene, Chrystia and Michael.  Steve McMahon, you‘re up first. 

MCMAHON:  The Clinton‘s have already ruined the weekends of all the great political reporters in the country, because they do this document dive on a Friday night.  Everyone is going to be looking all weekend to see what they can find. 

GREGORY:  Is there anything to be found there really?  What should we be looking for? 

MCMAHON:  I don‘t know, but I think we should be wondering why it was on Friday night and not Monday morning that it was dumped.  There‘s going to be some interesting tid bits there, you can be sure.  Everyone is going to be racing to see who gets there first. 

GREGORY:  Michael.  What‘s your prediction? 

SMERCONISH:  From the front lines of Pennsylvania, I bring you the news that neither of the Democratic candidates has said a peep in our state about illegal immigration.  My prediction—some would say it‘s wishful thinking—is that that‘s about to change.  I predict that in the next two weeks, Barack Obama will come back to Pennsylvania and have something to say about that subject.  The country is going to grow by 100 million by the year 2050.  Somebody better address how we‘re going to handle that growth. 

GREGORY:  But how does he attack it and who does he try to reach? 

What voter base does he reach by dealing with it? 

SMERCONISH:  Guys who look like me, who are up for grabs in this race, and live in the suburbs of Philadelphia. 

GREGORY:  Is his position something that‘s going to reach guys like you?

SMERCONISH:  It depends what he says.  I don‘t think there‘s anything wrong with saying, the borders are porous.  Let‘s close them.  Then figure out what we‘re going to do with the 10 to 12 million.  That‘s a reasonable statement.  It‘s not xenophobic.  I think that somebody needs to say it. 

GREGORY:  He supported drivers licenses for illegal immigrants. 

That‘s not going to help.  

SMERCONISH:  Look what happened to Eliot Spitzer. 

MCMAHON:  Geez.

FREELAND:  That‘s what happens when you support drivers licenses? 

GREGORY:  Gene, what do you have for us tonight?  What‘s your prediction?

ROBINSON:  You know, Hillary Clinton made that—what was essentially that job offer to John Edwards today about the poverty tsar.  I don‘t think he‘s going to jump to take that job.  I think he‘s going to let the offer linger there for a while and kind of play this out, maybe to the point where he feels he actually has some influence in this campaign.  It seems to me that it‘s waning as we go on and on without his having made any sort of  endorsement. 

There doesn‘t seem to be a reason to do it now.  I think he‘s going to tell her, essentially, I‘ll get back to you on that. 

GREGORY:  Right, he certainly gets more attention now.  The question that rolls around my head, could you see an Al Gore and John Edwards in a Democratic administration, each with their particular portfolio to manage? 

ROBINSON:  No.  I don‘t really see it.  That‘s a whole lot of, you know, people who think they really ought to be running the whole country. 

GREGORY:  Running the whole show. 

ROBINSON:  Exactly.  You put them on special commissions.  That‘s what blue ribbon panels are for. 

GREGORY:  That‘s what they were designed for.  Chrystia, what‘s your prediction tonight? 

FREELAND:  I‘m afraid my prediction is a little gloomy.  It is that a crisis which began as a financial crisis on Wall Street is now really hitting Main Street.  The pain is going to get worse over the next few months. 

GREGORY:  What areas do you think it‘s going to really hit people? 

FREELAND:  I think homes, above all.  We are starting to see people lose their homes.  That then spreads into other parts of the economy.  I think the Times poll today was really interesting, because that confidence that people are losing inevitably has a real impact on spending decisions on the retail sector. 

GREGORY:  Michael, one of the things you‘re seeing is a withdrawal, a sense of malaise.  You may see it at the bank level.  You see it at the individual level as well. 

SMERCONISH:  I don‘t buy this.  It becomes a self-fulfilling prophesy.  People turn on television, open up the newspaper, and they are told things are horrible.  In that survey, 72 percent said the situation in my house is just fine.  Somewhere there‘s a disconnect.  But if you keep telling them the economy is horrible, it becomes horrible. 

FREELAND:  There are some hard numbers behind people‘s personal perceptions, and that is that Americans don‘t save anything.  They consume every single penny.  At a certain point, that becomes unsustainable. 

ROBINSON:  Actually, we consume more than we have.

SMERCONISH:  My wife is a realtor.  If you ask my wife, the realtor, how‘s the real estate market, she would say it‘s soft.  Why is it soft?  Because people keep being told that it‘s soft. 

GREGORY:  We‘re going to leave it there.  Thanks to a great panel. 

That‘s THE RACE for this week.  If they‘re running, we‘re on their trail.  Have a peaceful Friday night and weekend.  See you back here on Monday from a special Washington landmark.  “HARDBALL” is up right now.

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

END   

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