updated 4/14/2008 12:03:15 PM ET 2008-04-14T16:03:15

Guests: Joan Walsh, Melissa Lacewell-Harris, Jill Zuckman, Larry Kane, Dick Polman, Jennifer Palmieri, Alex Castellanos, Tom DeFrank

CHRIS MATTHEWS, HOST:  Has Bill Clinton made things tougher for Hillary?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Here‘s the question of the day.  What was he thinking?  The Bosnia sniper fire story has been the most damaging episode of the campaign for Hillary Clinton, but it was over, finished, dead, buried, forgotten.  So why in the world did Bill Clinton bring it all up again last night?

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  There was a lot of fulminating because Hillary one time late at night, when she was exhausted, misstated, and immediately apologized for it, what happened to her in Bosnia in 1995.  Did y‘all see all that?  Oh, they blew it up.

(END VIDEO CLIP)

MATTHEWS:  The former president talked even more about this today, and let me tell you something, he didn‘t help things.  Here‘s some political advice.  When you‘re in a hole, stop digging.  We‘ll assess the damage with a couple of political pros in a moment.

Also, how much money does it take to win a primary, not to buy ads or build an organization, but for what‘s called street money, walk-around money to pay workers to get out the vote on election day?  It‘s an old Philadelphia tradition, as it is elsewhere, and Barack Obama‘s campaign is saying no to it.  No comment yet from the Hillary people.  We‘ll look at that and all the latest in the Pennsylvania primary in just a few moments.

And never mind Pennsylvania, North Carolina, see if you can guess which state Barack Obama thinks could be make or break in this campaign.  We‘ll have that in the “Politics Fix.”

And is that really a naked woman we see reflected in Vice President Cheney‘s glasses?  Could it possibly be?  We‘ll unmask that mystery a little later.

But first, here‘s our own David Shuster on the moment last night when Bill Clinton reminded everyone of the one story Hillary Clinton wants no one to remember.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  It happened last night in southern Indiana, when President Clinton began trashing reporters.

BILL CLINTON:  You know, I got tickled the other day when—a lot of the way this whole campaign has been covered‘s amused me.

SHUSTER:  On his own and without any prompting, Clinton pointed to coverage of his wife‘s claim that as first lady, she faced sniper fire in Bosnia.  Listen carefully.

BILL CLINTON:  There was a lot of fulminating because Hillary one time late at night when she was exhausted misstated, and immediately apologized for it, what happened to her in Bosnia in 1995.  Did y‘all see all that?  Oh, they blew it up...

SHUSTER:  But nearly everything Clinton just said was false.

BILL CLINTON:  One time late at night.Good evening.

SHUSTER:  One time late at night?  Actually, Hillary Clinton made the claim several times, and each time was during the day.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  ... ran out because they said there might be sniper fire.

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

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.

SHUSTER:  Video from the trip showed the ceremony was outside and that Hillary Clinton faced no apparent danger.

BILL CLINTON:  ... misstated, and immediately apologized for it, what happened to her in Bosnia.

SHUSTER:  Immediately apologized?  Reporters did ask the Clinton campaign about her Bosnia remarks the day of her March 17th speech, but Hillary Clinton‘s apology did not come until eight days later, with this.

HILLARY CLINTON:  So I made a mistake.  That happens.  It proves I‘m human, which, you know, for some people is a revelation.

SHUSTER:  Most damaging to Hillary Clinton, though, may be the mentioning of her age, when Bill Clinton targeted the media with this.

BILL CLINTON:  And some of them, when they‘re 60, they‘ll forget something when they‘re tired at 11:00 o‘clock at night, too.

SHUSTER:  If Hillary Clinton is indeed forgetful and tired at 11:00 o‘clock at night, what does it say about this Clinton ad?

UNIDENTIFIED MALE:  It‘s 3:00 AM, time for a president who‘s ready.

HILLARY CLINTON:  I‘m Hillary Clinton and I approved this message.

SHUSTER (on camera):  Clearly, Hillary Clinton did not approve of her husband‘s message last night.  She called him and told him to knock it off.  A campaign spokesman said the Bosnia tale was Senator Clinton‘s mistake. 

Still, it was a mistake that her husband has now compounded.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Alex Castellanos worked on Mitt Romney‘s presidential campaign.  Jennifer Palmieri is an eight-year veteran of the Clinton White House.  Jennifer, how do you explain former president Clinton‘s statements here about that event?  How do you explain these various points he made?

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS:  Well, I think, you know, sometimes, when—sometimes President Clinton thinks—he‘ll be fulminating, in his—in his mind, and he feels that he needs to invite the public in, let them know what he‘s thinking about.  And I think that when it‘s your spouse that‘s on the line you, feel particularly passionate about it, you‘re going to—you know, stuff like this is going to come out.

MATTHEWS:  Well, what do you make of his assertions that Senator Clinton made this claim of being in hostile territory under enemy fire once, and having made it late at night?  What do you make of those claims?  I mean, they‘re very direct claims.  Why would he have made those claims?

PALMIERI:  Right.  I mean, he must remember it differently than the—you know, than actually happened, and...

MATTHEWS:  Why did he say that she immediately apologized, when it took eight days?

PALMIERI:  Well, obviously, he was wrong, as I said.  I mean, but I think that people—he may—I think he may remember this differently than—you know, than actually happened.  And he feels—you know, when it happens with spouses, and not just him, you feel particularly intensely about—you know, and passionately about defending your spouse, you know, maybe the facts gets a little mixed up in your head.

MATTHEWS:  But this was in the act of rebuking the press...

PALMIERI:  Are you suggesting...

MATTHEWS:  ... for getting the story wrong.

PALMIERI:  ... that he‘s trying to sabotage her?

MATTHEWS:  No, but why was he blaming the press—it wasn‘t like he was just reminiscing over good old times or bad old times.  He brought this up again to whack at the press for getting the story wrong, when in fact, here we have again the delineated fact that he was wrong on point after point.

PALMIERI:  Right.

MATTHEWS:  Why would he bring up something that he could have not brought up, and brought it up in a way that was inaccurate again and again...

PALMIERI:  Right.

MATTHEWS:  ... and then blamed us for getting the story wrong?

PALMIERI:  Right.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST:  Well, one explanation—there‘s some frustration setting in on the Clinton campaign...

PALMIERI:  Right.

CASTELLANOS:  ... now, and it may be boiling other.  You know, this—they‘re stuck.  There‘s not a lot they can do.  Barack Obama is cruising ahead, it looks like, to the nomination.  And what can the Clinton campaign do about it?

MATTHEWS:  Well, let‘s take a look at some more.  Here‘s NBC campaign reporter Mike Memoli asked if—he asked former president Clinton if he regrets the comments he‘s making because he suggests they might be distracting from Senator Clinton‘s campaigning for president.  Here‘s the reply from former president Clinton.

(BEGIN VIDEOTAPE)

BILL CLINTON:  I regret that people like you care more about that than whether she served the troops and whether she‘ll put people back to work and whether she‘ll do the best job of getting people out of Iraq.  And I also regret that there appears to be a double standard about misstatements.

(END VIDEOTAPE)

MATTHEWS:  Well, what do you think about that?  Can you give me some other misstatements that we have failed to report by other candidates?

PALMIERI:  Well...

MATTHEWS:  The only reason we know about the misstatements, by the way, is we do report them.  Go ahead.

PALMIERI:  We report them.  Right, but there is—I mean, I would imagine that he would point out that MSNBC has done a lot of coverage of this today.  You know, we don‘t know.  John McCain may have said something really important today, too, that we wouldn‘t know about.  And I think that, you know, the frustration is with the kind of coverage that...

(CROSSTALK)

MATTHEWS:  ... “Today” show, and when they told me what they were going to talk about, it was this right at the top.  So other people make these decisions.  I‘m told to respond to them.

Let me ask you something that truly defies logic.  And I say this about a man, Bill Clinton, who served his country and is smarter than I am, smarter than most people I know.  He‘s a really smart guy.

PALMIERI:  Right.

MATTHEWS:  So you got to ask, why would a guy who‘s really smart, and certainly politically astute, one of the best—well, I think the best in my lifetime, as a politician—why did he say the reason Hillary Clinton blew this story was because she was getting on in years, she was 60 and she was sort of losing it?  Why would you say that about a presidential candidate who has talked about being sharp as a tack at 3:00 o‘clock in the morning?  Why would you go back to this sort of queen sacrifice, as we‘d say in chess?  She‘s 60, and when you guys get 60, you‘ll know what it‘s like to forget things.  Why would he say that?

CASTELLANOS:  This is why you don‘t let surgeons, no matter how good they are, operate on members of their own family.

(LAUGHTER)

CASTELLANOS:  It is too personal and you lose your touch, either when it‘s something you care about that much...

MATTHEWS:  But saying that  she‘s getting on...

PALMIERI:  Right.

MATTHEWS:  ... and that‘s why she can‘t remember things?

CASTELLANOS:  Well...

PALMIERI:  I mean, none of what he said was helpful, so...

(LAUGHTER)

MATTHEWS:  That‘s my point!

(CROSSTALK)

MATTHEWS:  What news organization will not talk about this?  It is profoundly unusual for a candidate as smart as—a politician as smart as Bill Clinton, a candidate as well schooled and educated and smart as Hillary...

PALMIERI:  Right.

MATTHEWS:  ... to have the husband come on and say, You know, my wife‘s losing it.  She‘s 60.  When you‘re 60, you‘ll know what it means to forget things and maybe make them up or embellish them.

CASTELLANOS:  He‘s lost his perspective on this one.  And you‘ve seen it‘s not the first time.  It happened in South Carolina.  Bill Clinton is the boy with the golden political touch, and it‘s turned to lead in this campaign.  In South Carolina, went after Obama as Jesse Jackson, he‘s going to lose, it doesn‘t matter if he wins.  Bill Clinton had that deft—you know, the Fred Astaire of politics is now clubfooted, in a way, out there.  And I think it‘s just he‘s too close, I think, to it, as well.

(CROSSTALK)

MATTHEWS:  Let‘s go off this for a second, give him a break for about a minute...

(CROSSTALK)

MATTHEWS:  ... former president Clinton recalled his phone call with Senator Clinton about the Bosnia story.

(BEGIN VIDEO CLIP)

BILL CLINTON:  Hillary called me and said, You don‘t remember this. 

(INAUDIBLE)  Let me handle it.  I said, Yes, ma‘am.

(END VIDEO CLIP)

MATTHEWS:  Well, what do you think?

(LAUGHTER)

MATTHEWS:  I always want to know...

PALMIERI:  I‘m sure that...

(CROSSTALK)

MATTHEWS:  ... it is a delightful idea to think about these two married—this married couple, this long-married couple, talking politics and tactics and who did well that day and who didn‘t.  Wouldn‘t you love to hear it, like, Nice work, Bill?  I mean, like...

(LAUGHTER)

MATTHEWS:  ... Thanks for nothing.

PALMIERI:  Yes, I imagine...

MATTHEWS:  I mean, what a conversation it must be...

PALMIERI:  I imagine...

(CROSSTALK)

MATTHEWS:  I‘ve been through that with my wife.

PALMIERI:  Sure.

MATTHEWS:  You come back from a party and she‘ll say, Did you really say that, what I thought you said?

CASTELLANOS:  There‘s a bigger point there, too, though.  Look at her response.  It tells you something about her campaign and Obama.  Her response is, I‘m going to take responsibility.  The boys can make a mess, I‘m going to clean it up.  The matriarchal figure‘s strength comes in.  She goes right to strength against Obama, and that‘s, I think, the best part of her campaign.

PALMIERI:  Right.

CASTELLANOS:  So she‘s trying to the best she can out of it.  I think she‘s doing the right thing.

MATTHEWS:  What are you up to!

PALMIERI:  That‘ll be tomorrow‘s story...

(CROSSTALK)

MATTHEWS:  What are you up to (INAUDIBLE)  What strategy are you—the matriarchal in her?

(LAUGHTER)

CASTELLANOS:  If it‘s Hillary against McCain in the fall, it‘s strength against strength.  And if it‘s Obama against McCain, it‘ll be change against strength.  That‘s how she beat him in Texas.  At the end in Texas, it was all about change four our five days out.  And then Hillary comes up and says—you know, attacks him.  And it‘s not really about her experience.  That‘s what she was talking about in the 3:00 o‘clock AD.  She was talking...

MATTHEWS:  But you make it sound like one of those old sitcoms...

CASTELLANOS:  I‘m the Daddy Bear figure here.

MATTHEWS:  ... on television, where the wife is the smart one, the husband is kind of klutzy and stupid, and it has to be fixed all the time.  Is that the story you think‘s going to sell to the American people?

CASTELLANOS:  It‘s an impossible situation for him to share the stage with her.

MATTHEWS:  That‘s true.

CASTELLANOS:  He can‘t make good news because he diminishes her.  The only news left for him to make is bad news.  He‘s got to—he‘s got to take a step back.

MATTHEWS:  It turns out the “two for the price of one” is a bad deal.

PALMIERI:  And tomorrow, we‘ll be saying how great this is for Hillary...

(CROSSTALK)

MATTHEWS:  Anyway, thank you, Alex Castellanos.  Thank you, Jennifer Palmieri.  Thank you for being a good sport.  It‘s a tough night to put your head in a barrel.  Anyway, coming up...

(LAUGHTER)

MATTHEWS:  Or in the stove.

Coming up: Iraq, Iran and the race for president.  Next Tuesday, Senator John McCain joins the “HARDBALL College Tour” from Villanova University, home of the Wildcats, one of the Big 5 teams in Philadelphia.  We‘ll be there next Tuesday night for a whole hour, repeating it throughout the evening, 5:00 and 7:00 next Tuesday night, John McCain goes on the “HARDBALL College Tour.”

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  The regime in Teheran also has a choice to make.  It can live in peace with its neighbor, enjoy strong economic and cultural and religious ties, or it can continue to arm and train and fund illegal militant groups which are terrorizing the Iraqi people and turning them against Iran.  If Iran makes the right choice, America will encourage a peaceful relationship between Iran and Iraq.  Iran makes the wrong choice, America will act to protect our interests and our troops and our Iraqi partners.

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  President Bush put Iran on notice Thursday.  You just heard him.  Are we headed for another war in the Mideast?  How will it affect the fight for the presidency?

Andrea Mitchell is NBC‘s chief foreign affairs correspondent, who also covers the Clinton Campaign.  And Tom DeFrank is the Washington bureau chief of “The New York Daily News.”

It‘s great to have two pros here.  The question I want to get to—a couple things in this segment.  One is, are we headed towards some real action over there in that part of the world?  Is the president basically saying to the Iranians, Make my day, keep up this special groups activity in the south, backed by the Qods Force coming out of Iran, Teheran, and you‘re going to answer for it and I‘m going to act?

ANDREA MITCHELL, NBC CORRESPONDENT:  I think if he were given some action by the Iranians, he‘s certainly looking for an excuse, yet militarily, he really doesn‘t want to go there.  Bob Gates has made that clear.  All of his military advisers have made that clear.  They don‘t have the ability right now, except for perhaps some targeted air strikes, to go after Iran, and it would completely blow up the rest of the region, everything they‘re trying to do...

MATTHEWS:  Yes.

MITCHELL:  ... to calm down the Saudis and others.

MATTHEWS:  Do you think an attack by the United States on Iran, on its territory, on whatever basis, between now and the election would help the administration?  Would it help McCain, their candidate, or hurt him?

TOM DEFRANK, “NEW YORK DAILY NEWS”:  I think it would hurt him, Chris.  I mean, I think—I agree with everything Andrea says about the U.S.  military doing a great job with a bad situation in two wars right now.  I don‘t think the U.S. military can handle a third simultaneous war.  But geopolitically and politically, I think something in Iran would hurt him.  It would look like an October surprise, whenever it happened, and I think it would be a problem.

MATTHEWS:  Can you make that judgment yourself?  Is it objectively assertable whether this is something the country wants to see or not, more widening of the war situation in Iraq and into the region as a whole right now?

MITCHELL:  I just think the politics would be toxic.  You‘ve got people already criticizing this president for doing what he, as commander-in-chief, has to do, which is make a judgment that he does not think it‘s safe to draw down further from Iraq.  But to expand this to Iran, you would have mayhem with the allies.

MATTHEWS:  I have not remembered a campaign with as much ideological territory between the two candidates as this one.  If Barack Obama is the Democratic nominee, he‘s a man who‘s taking on the whole mindset, as he calls it, that led us into war with Iraq, against a candidate who has accepted the mindset 100 percent, now, can argue over tactics, but has accepted the mindset of an aggressive preemptive strike capability, in fact, an execution of strikes like that.

Here‘s Senator Obama, as I said, speaking in Indiana today.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  You know, I said it very early on.  I said in this campaign we will not just meet with our friends but with our enemies, not just with leaders we like, but leaders we don‘t.  And you know, I—some people—Senator Clinton, Senator McCain, George Bush, Dick Cheney—they all said, Oh, you can‘t do that.  And I said, Yes, I can, because I remember what John F. Kennedy once said.  He said, We can never negotiate out of fear, but we can never fear to negotiate.  That‘s what strong countries and strong presidents do, they talk to their adversaries.

(END VIDEO CLIP)

MATTHEWS:  Is that Jack Kennedy, what he‘s saying there, or is that George McGovern?

DEFRANK:  I think that‘s Jack Kennedy.  I think the American people don‘t have a problem with you talking to your adversaries.  When President Bush made that speech yesterday, Chris—I can remember his father in his inaugural address saying, Good will begets good will.  He was talk about Iran then.  And the elder Bush was willing to reach out a hand to the Iranians, and here all these years later, we‘re still—still—it still hasn‘t happened.  But I think the American people would buy talk as—more than they would buy war, and...

MATTHEWS:  I wonder—the reason I questioned that, because it is what we think.  This is a change election.  People are looking for an alternative after eight years of one-party rule.  They generally, in American history, switch to the other party.  In times of recession, they definitely do.  In times of war, especially a long war, they tend to, as well, perhaps.

But let me ask you this.  How do you put that up against the clear advantage that John McCain holds in terms of experience, credibility as a fighter?

MITCHELL:  Well, John McCain...

MATTHEWS:  People trust him more than they do either Obama or Hillary, dramatically so.

MITCHELL:  Well, that‘s clear.  What—that is going to be the debate if Barack Obama is, in fact, the nominee.  It‘s going to be this change election versus the more experienced John McCain, who is inextricably tied, no matter how much he criticized Donald Rumsfeld, he is tied to the George Bush war policy.  He is identified with that.  And Iran is going to be the fulcrum of that, I think.  I think—you know, we saw it in some of the testimony this week with General Petraeus.  I was very struck that Barack Obama had the guts, actually, in that questioning to say, How much of Iran are we willing to accept in that neighborhood?

MATTHEWS:  Right.

MITCHELL:  He didn‘t go for the predictable political option.  None of the questions...

(CROSSTALK)

MATTHEWS:  No, it was a—I thought it was a very finely questioned inquiry. 

He said to General Petraeus and to Ryan Crocker, yes, we know Iran has influence in Iraq.  It probably always will.  Are we going to stay there as long as it seeks to have influence in Iraq?  And is that an American cause, to stop Iran from influencing Iraq?  Is that something worth dying for? 

DEFRANK:  I think the American people are worried more about coming—getting out somehow honorably in Iraq vis-a-vis the American—the U.S.  economy. 

I don‘t think—I don‘t think expanding military action in that part of the world is a—I think that‘s a political nonstarter. 

MITCHELL:  And look at gas prices.  I mean, just think of what would happen if you start going into a shooting war with Iran.  You already have the impact of Iraq not coming back online in terms of real oil experts and... 

(CROSSTALK)

MATTHEWS:  Isn‘t this something that President Bush‘s chief economic adviser, Larry Lindsey, promised that we would get, more access to cheaper gas, if we fought this war? 

MITCHELL:  Yes, but it was Larry Lindsey who also said it was going to cost us a whole lot more than any of the people in the Pentagon were saying.  Larry Lindsey was right on target about the money of this—the extent of the war. 

MATTHEWS:  And Paul Wolfowitz told us the reconstruction after the war in Iraq would be paid for by Iraqi oil.  Only yesterday did the president say we will begin to zero out that cost.

Anyway, thank you, Andrea Mitchell.

Thank you, Tom DeFrank. 

Up next: the Republican veepstakes.  Does Mitt Romney still have a shot? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new in politics? 

Well, Romney watch.  It‘s well established right now by most people that Mitt Romney would, despite all the bad blood they shared during the primary campaign, love nothing more than to be John McCain‘s number two, his vice presidential running mate. 

Well, according do “New York” magazine‘s John Heilemann, Romney has the support now of two very influential Republicans from different generations, Karl Rove and George H.W. Bush, the former president.  That comes courtesy of a highly placed GOP insider. 

Well, I think, fairly or not, I don‘t think the recent events in Texas

I‘m referring to that raid on the rogue Mormon compound down there—are any help to Romney‘s chances. 

John McCain may model herself after Ronald Reagan, but Cindy McCain wants to model herself after a Democrat, Jacqueline Kennedy.  And she said to Nancy O‘Dell on “Access Hollywood”—quote—“She was probably to me the most representative of what any first lady would like to emulate, in my opinion.  I think, certainly, her style, her elegance, not only how she handled her role in the White House, but how she handled herself abroad.  And I think it‘s important.  I think it‘s a fine line that I believe a first lady or a spouse walks.”

Well, I think Cindy McCain realizes that she‘s not the only American who values glamour, as well as glory, in the American presidency.

There‘s a photo out there right now of Dick Cheney that seems to be causing quite a stir.  Here it is, a closeup of the vice president‘s glasses while fly-fishing.  But it‘s the image reflected in those lenses that is getting attention.  The reason, the reflection, some say, looks like a naked woman. 

Believe it or not, Cheney‘s office actually had to respond, saying—quote—“Clearly, that picture shows a hand casting a rod.”  I think we can declare this case officially closed. 

And now it‘s time for the HARDBALL “Big Number.” 

Talk about storming the airwaves.  If you live in a key primary state, you have no doubt been bombarded with campaign ads, especially from Barack Obama.  If you watched MSNBC—which you obviously do—you can‘t miss them either—a whopping 100,000 of them.

Just to put that in perspective, Obama has spent as much on TV ads so far as the Burlington Coat Factory and diet company Jenny Craig.  Each spent last year, according to a CNN analysis, just so much.  So, how much are they all talking?  Sixty million dollars, they‘re here, $60 million to build a brand like Jenny Craig.  That‘s tonight‘s “Big Number.”  And Barack‘s up in that league. 

Take a look at this Obama ad, by the way, running in Pennsylvania. 

Up next: politics, Pennsylvania-style. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

REBECCA JARVIS, CNBC CORRESPONDENT:  I am Rebecca Jarvis with your CNBC “Market Wrap.”

Stocks plunging after a normally reliable General Electric stunned Wall Street with an unexpected drop in quarterly earnings.  The Dow Jones industrial fell 256 points.  The S&P 500 tumbled 27.  The Nasdaq dropped 61 points. 

GE, the parent of company MSNBC and CNBC, reported, first-quarter profits fell 6 percent, the first decline in five years.  CEO Jeff Immelt blamed the extraordinary disruption in the capital markets in march.  GE also lowered its outlook for the full year.  GE shares plunged almost 13 percent today. 

Frontier Airlines has become the fourth low-cost carrier to file for bankruptcy protection in less than a month.  But unlike ATA, Skybus, And Aloha Airlines, Frontier plans to keep flying. 

Meanwhile, American Airlines cancels another 600 fights today, as it inspected its fleet of MD-80, cancels nearly 3,100 flights since Tuesday. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

In my hometown of Philadelphia, part of grassroots campaigning means giving walk-around money, or street money, to local leaders to get voters to the polls on Election Day.  Today‘s “Los Angeles Times,” however, reports that Senator Obama‘s campaign is refusing to hand out what some people chemical street money.  Could this hurt his chances against Hillary Clinton come a weekend-and-a-half from now, especially if she decides to spread the wealth? 

Dick Polman is a national political columnist for “The Philadelphia Inquirer.”  And Larry Kane is known as the dean of—of, actually, Philadelphia TV anchors.  I grew up with this guy.  He‘s the host of “Larry Kane: Voice of Reason” on CN8 and a contributor to KYW News on radio.

Gentlemen, thank you. 

I want to start with Dick, has reported this story. 

Are we sure now that Barack will not give the ward leaders, and, therefore, their committee people, any money to help get the vote out? 

DICK POLMAN, “THE PHILADELPHIA INQUIRER”:  Well, it would be pretty difficult, I think, at this point if he changed his mind.  Then he would kind of look like he‘s just—you know, just being too influenced by the local complaints. 

I think he‘s got a little bit of a dilemma here, in a sense, though, because if he—if he gives the street money, then he looks like a hypocrite, right, because he‘s not, all of a sudden, new politics.  If he doesn‘t give the street money, then some people are going to say he‘s a—a naive dreamer who doesn‘t look how—doesn‘t know how the real world works. 

MATTHEWS:  Well, what‘s wrong with paying money to people to drive people the polls, if you pay money to people to drive the TV ads?  He‘s spending millions of dollars on TV ads to influence voters.  Why not give them a ride to the polls? 

POLMAN:  Well, you know, I think—I think they‘re betting basically that they don‘t have to do the kind of old kinds of things that—look, South Carolina was the same kind of issue. 

We forget that street money was a little bit of a tradition down there, African-American ministers in the South Carolina primary.  And they wanted the same kind of things.  The Obama people didn‘t do it there either.  They ended up winning in South Carolina by way more than the polls generated. 

I think they‘re basically calculating, fairly or not, justifiably or not, smartly or not, that—that they actually have a new paradigm here, that they don‘t have to do things the old way. 

MATTHEWS:  Larry, what‘s your reporting on this, on the streets, with the ward leaders? 

LARRY KANE, HOST, “LARRY KANE: VOICE OF REASON”:  Well, I talked to Carol Campbell, Chris, who is the leader of the black ward leaders in Philadelphia, very powerful ward leader in west Philadelphia. 

She says that she needs the street money to get people to polls, transportation for older voters and for voters who are low-income voters who do have no means of transportation.  But she adds she‘s in Obama all the way, and that there will be a high victory in Philadelphia, a large victory, but perhaps not as high as it could be with the street money. 

Now, I also talked to a source—highly reliable source—in the Obama campaign.  They say there is no way the Obama campaign, between now and April 22, is going to give out street money to the ward leaders in Philadelphia.  They have—they have been offered to do it before in other communities.  They simply will not do it. 

MATTHEWS:  Will there be any kind of job action in reaction to this?  Will they try to show their anger as a way of suggesting to Senator Obama, you better come through with something on Election Day, if you get through to the November elections? 

KANE:  I think it‘s a little different than that. 

I think this is a different election.  Street money is usually used in primaries, where it‘s an organizational effort by the Democratic machine to get someone elected.  In this case, Chris, I think it‘s much different. 

There‘s a lot of passion on the streets of Philadelphia about Obama, especially in the black community, in some ways, in the Latino community as well.  There is no question in my mind that street money could make a difference, but how many extra votes will you get?  I don‘t know.  The passion is there.  If people want to vote for someone, whether it‘s Hillary Clinton or Barack Obama, they‘re going to go to the polls.

MATTHEWS:  Let me ask you, Dick.  It‘s a tough question.  But we grew

up—and I grew up in Philadelphia.  And I know that ethnicity and race

are parts of politics.  Sometimes, they‘re the main issue

Do you think that there‘s going to be much crossover in that sense?  Will you get any white ward leaders backing Obama, any black ward leaders backing Hillary?  Well, I guess the mayor is one of them.  Mayor Nutter is a ward leader.  He is backing her. 

POLMAN:  Yes.  Well, he is.

I think, for the most—I think there‘s going to be a lot of white ward leaders who are going to be backing Obama, frankly.  I mean, you know, I think—he‘s—he‘s—I think there‘s a lot of people who see him as a post-racial—a post-racial candidate. 

And I don‘t think they‘re going to, in the end, think that—that, you know, street money, that they‘re going to need—I think they look bad, frankly—to go back to what you were saying before—I think they look bad asking for street money and saying, we have got to have our taste. 

And the idea that, if they don‘t get the street money, oh, now we‘re going

to go to Hillary Clinton, I mean, what?  They‘re going to be just—

they‘re putting themselves out there, making it look like they can be

bought off for just a few bucks

MATTHEWS:  OK.  Now that you‘re—I want to test you now, Dick.

POLMAN:  Uh-oh.

MATTHEWS:  What do you think the majority coming out of Philly is going to be for Obama? 

POLMAN:  You mean in percent wise?

MATTHEWS:  No, the number of votes, the absolute number of votes you will have over Hillary, so you can take it statewide and try to offset her advantages in the west, for example,. 

POLMAN:  Oh, boy, I don‘t know, hundreds of thousands, perhaps. 

MATTHEWS:  What do you think, Larry? 

POLMAN:  Ninety to 10.

MATTHEWS:  Is she going to get—is he going to get—will he get much of an advantage coming out of the city to perhaps get close and get within single digits of this fight come April 22, when we count the votes? 

KANE:  I think it‘s 60/40 Obama in the city. 

POLMAN:  That‘s all?

KANE:  But there‘s a bigger—there‘s a bigger county that is more important.  And that is Montgomery County, Pennsylvania.  You know Montgomery County.  You‘re familiar with it.

MATTHEWS:  Right. 

KANE:  Montgomery County is a bellwether county now.  It‘s a Democratic county for the first time since 18-something.  It is a critical place for Obama.  He must win by eight to 10 points in Montgomery County, Bucks County, and Chester County to do the job.

And he‘s got to win big in Allentown.  The southwestern part of the state is for Clinton.  People forget, this is not Ohio.  I don‘t—I don‘t find it similar to Ohio.  It might be in the center and western part of the stay.  But it is not in the eastern part of the state, very independent, fiercely independent voters. 

And, by the way—I don‘t know what this means—but at this point, I know the F&M poll from Terry Madonna is out in the field.  And I will tell you that there‘s no indications yet, but there are—there are some feelings in the community that Hillary Clinton has come back in the last weeks with her commercials.  But, on the other hand, she‘s losing the lawn sign battle. 

MATTHEWS:  Yes. 

KANE:  You don‘t see many lawn signs in Montgomery County.  I know that‘s not scientific, but I have been watching them very carefully.

POLMAN:  Could I speak to that just a second? 

MATTHEWS:  Sure, Dick.

(CROSSTALK)

POLMAN:  No, just—I mean, I think Larry made a good point about the suburbs, in that I think this is—could possibly be part of the Obama campaign‘s calculations, that maybe on the margins, maybe they would lose a few votes from people who don‘t go to the polls because of the street money issue in the city.

But I think they‘re—you know, the populous suburbs around Philadelphia, which are his potential slingshot to keeping this close statewide, I mean, he‘s figuring he‘s going to pick up extra votes on the margin out there that... 

MATTHEWS:  Yes, it‘s so funny.

POLMAN:  Right. 

MATTHEWS:  It‘s so funny, Dick.  You‘re talking about Barack Obama getting the Eddie Rendell vote against Eddie Rendell. 

POLMAN:  Yes.  It‘s the Rendell template.  It‘s the Rendell template. 

MATTHEWS:  And that‘s the way you‘re describing it.

POLMAN:  It‘s the Rendell template.  And Terry Madonna has talked about this, that it‘s the Rendell template from the 2002 gubernatorial election. 

MATTHEWS:  OK. 

From the beginning of this race, Larry and Dick, I have thought that an eight-point spread would be something I would set as a marker in Vegas, right?  I will stick to that now.  I still think eight points is the dividing point.  If it‘s over that, it‘s a big win for Hillary.  If it‘s under that, it‘s a draw.

Where do you see it, Larry?  What‘s a good marker here?

KANE:  I see a three- to six-point win for Hillary Clinton as not a huge victory.  I think anything nine-plus is huge. 

I know it‘s apples and oranges here, but I will tell you, they came into the state with a 17-point lead, and, right now, it‘s managing the expectations. 

MATTHEWS:  That‘s what I‘m doing here.

KANE:  The Obama people—the Obama people are much more positive privately than they‘re saying publicly.  And I think they think it‘s going to be a close finish.  We will see.

MATTHEWS:  We‘re fairly close there, Larry and I.

Where are you on this?  Can you go, Dick, and say it‘s about eight points, or you can‘t do that? 

POLMAN:  Well, I‘m—I‘m thinking—I mean, after New Hampshire, who wants to predict anything?  But I‘m still thinking modest single digits.

MATTHEWS:  OK. 

POLMAN:  You know, I think the longer—this is a long campaign here, seven or eight weeks. 

MATTHEWS:  OK. 

POLMAN:  And I think that helps Obama.  That helps him to get known here...

MATTHEWS:  OK. 

POLMAN:  ... like Iowa.

MATTHEWS:  I think these undecided votes are hidden Hillary votes.  That‘s my concern, Ed, my belief.  I think that is what is going on.  I think it‘s going to be a wider spread for Hillary, because I think these undecided people—I‘m looking at all the polls, and I can‘t see the numbers getting above 41 for Obama.  If I were his people, I would be worried, because people are not willing to commit publicly, even to pollsters.

If 41 is as high as he can get with the polling, he‘s not going to get much higher on Election Day.

Anyway, thank you very much, Dick Polman of “The Inquirer.”

Thank you, Larry Kane.

POLMAN:  Thank you, Chris. 

MATTHEWS:  I will see you on Sunday, sir, at that big event we‘re going to.

Up next, in the “Politics Fix,” we look at the week that was. 

Clinton, Obama and McCain, who is up and who is down?

This is HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time for the politics fix.  Jill Zuckman covers politics for the “Chicago Tribune.”  Joan Walsh is the editor in chief of Salon.com.  Melissa Lacewell-Harris—a professor, a professor of politics and African American studies at Princeton.   She‘s an Obama supporter.  Just kidding dear.  I mean, just kidding, professor.

Let me ask you—let‘s look at this, an amazing comment, I think, by Barack Obama in Indiana. 

(BEGIN VIDEO CLIP)

OBAMA:  Senator Clinton I think is more favored in Pennsylvania and I‘m right now a little more favored in North Carolina.  So Indiana may end up being the tie breaker.  And so we want to work very hard in Indiana. 

(END VIDEO CLIP)

MATTHEWS:  Professor, why would Barack Obama, a skilled politician, set up a rubber match, like they do in boxing, where you have one side wins one, the other side wins the other.  He says it‘s going to come to Indiana.  Isn‘t he basically saying if I lose Indiana, even by a shred, I‘m out of this thing. 

MELISSA LACEWELL-HARRIS, PRINCETON UNIVERSITY:  No, he‘s just trying to depress expectations in Pennsylvania, so that if he comes out higher in Pennsylvania than expected it looks good.  Of course he‘s trying to encourage the people of Indiana to feel enfranchised, to feel like they should come out to vote.  It‘s a little bit—I‘m not convinced that he thinks one will take one.  I know they‘re trying to win Pennsylvania just as much. 

MATTHEWS:  Well, Jill, agree or disagree with me?  Professor Lacewell-Harris disagrees with me.  I think it‘s laying down a marker. 

JILL ZUCKMAN, “CHICAGO TRIBUNE”:  I think whenever the presidential candidates start doing their own political analysis, playing pundit, it‘s never a good thing.  They should be talking about the issues, the issues that the voters care about. 

MATTHEWS:  He should be making—should he be setting up, I‘m going to win this one or lose this one attitude about Indiana, the Hoosier state? 

JOAN WALSH, SALON.COM:  I think he‘s got to get his supporters plugged in.  I agree with Melissa.  I think it‘s smart.  I think he‘s playing down what he‘s going to do in Pennsylvania.  I think he‘s resigned himself to the fact this is a long campaign.  She‘s not going to go away.  He‘s trying to make sure that people in Indiana are still paying attention and going to come out and support him.  I thought it was interesting.  I don‘t think he‘s in any danger of being in big trouble if he loses Indiana, I really don‘t. 

MATTHEWS:  Let‘s get back to the Princeton professor on this one.  Street money in Philadelphia—perhaps you‘re too high tone for this, professor.  Street money means money that goes to the committee people.  It means money to buy lunch, money to buy dinner, money to buy car fare and just the time of people to get out there and work harder then they normally would on election day.  Was Barack smart to hold back the money? 

LACEWELL-HARRIS:  I got to say, as somebody who lived in Chicago for nearly ten years, I‘m surprised to see any Chicago politician not want to play street money politics, but this is part of sort of how the Obama campaign has been refiguring and re-imagining what it is.  I mean, the problem with the Obama campaign‘s strategy is that they can‘t do even sort of normal politics without being called hypocrites.  So they have to keep pushing above the politics in order to do something that looks different. 

If he plays normal politics, even if it‘s not dirty, just normal, he gets said that he‘s not really doing something new. 

MATTHEWS:  So if he had given out a couple thousand bucks to each of his 30 some wards in Philadelphia where he needs to do strong turn outs, that would be considered old politics?  Do you agree with the professor—when I get to know you, I‘ll have a better name for you than the professor.  Do you agree with the professor from Princeton that this would make him look another sleazy if he had passed out money? 

ZUCKMAN:  Chris, I‘m not sure we would have even known about it.  It would have been sort of in the organizing category.  One of the things they do, get a van and haul people to the polls.  That‘s a normal—

MATTHEWS:  Who‘s counting chicken lunches and ham sandwiches and coffee and donuts?  I don‘t know if anybody‘s counting that.  Let me ask you, Joan, are you one of those people from San Francisco.  I know they don‘t do this sort of thing.  But the idea of actually helping the hand of the working guy, working woman who has to take the day off, who has to work hard starting at 6:00 in the morning or 4:00 in the morning, all day until 7:00 or 8:00 at night, working hard; shouldn‘t they get a few bucks in their pocket to lighten their burden or not? 

WALSH:  I actually think they should.  I‘m not a fan of paying voters or anything like that, Chris, but I think there‘s something a little bit cynical here about the Obama campaign.  I mean they also talked about we only rely on volunteers.  That‘s actually not true.  They have plenty of paid organizers that they‘re shipping in from out of state.  They‘ve done it throughout the campaign.  More power to them.  They‘ve run a great campaign. 

There‘s something here where I think they like this story.  I think it plays well in the suburbs.  I think it‘s part of a post-racial strategy.  It could back fire on them, because you‘re right.  There is a way to do this that isn‘t cynical or corrupt, but is a nod to the fact that people are going to work hard.  Some people will get paid for their work in Pennsylvania.

MATTHEWS:  Let‘s talk about—Joan, you stay there, what do you think is the story of the weekend?  Has Bill Clinton sort of bumped into this story again, unintentionally, I‘m sure, bringing back this question of whether Senator Clinton was really wrong do have claimed she was in harm‘s way in Bosnia or just a little bit wrong?  Is this making this a bigger story than it was already, maybe a gone story as of a couple days ago? 

WALSH:  Of course it is.  It‘s really kind of disturbing.  I mean, you invite me back.  You smack President Clinton, I defend him.  But today, I was just shaking my head.  I‘ve had more conversations about this all day.  The charitable explanation is that when he talks about somebody who is 60 and maybe not as sharp as they used to be, he‘s really talking about himself.  It was kind of an awful thing to say.  It reminded me—remember we he said, I can‘t make her younger and I can‘t make her a man, it‘s another one of these strangely undermining things.

And the Bosnia story—I don‘t know if it had totally gone away, because it was a bad blow for her, but it was fading.  Terrible day. 

MATTHEWS:  Keep coming back defending the Clintons the way you are tonight.  I think it‘s great.  No, just kidding.  I think it was strange.  Look, it‘s easy to enjoy the Clintons both ways.  We can enjoy them for or against them.  They‘re always entertaining.  But when you say my wife‘s losing it; she‘s 60 years old.  Give her a break.  That‘s a clean sacrifice in chess.  That‘s like saying, in order to win this game, I‘m willing to sacrifice her dignity, her intelligence, and accuse her of basically—what do you call it when you get older?  You get that thing called—I‘ll think of it in a minute. 

Dementia. 

ZUCKMAN:  If she can‘t handle it at 11:00 at night, what is she going to do at 3:00 in the morning when the phone starts ringing? 

MATTHEWS:  I‘ve got a worse one for you.  When you think it‘s 11:00 at night and it‘s daytime and it‘s 3:00.  I got a little tickled the other day, all this fulminating.  The whole thing was an act, I think, professor, don‘t you?  Why is he going into this bad performance art?

LACEWELL-HARRIS:  Well, look, Bill Clinton likes to be the center of attention.  I mean, I think this is part of what we can certainly expect in the Clinton administration.  We‘re going get an opportunity to see Bill Clinton on TV doing what Bill Clinton does best, which is bringing the story back to him.  I think that‘s what‘s distressing here. 

Look, my mother is well over 60 and cares for my six-year-old daughter on a regular basis.  If I thought she couldn‘t remember what was going on in the day, I wouldn‘t allow that to happen. 

MATTHEWS:  And here we are in a campaign that is so exquisitely torturous for these candidates, where the slightest mistake or question about your capability, your competence, your IQ even—here the president, her number one surrogate, who has been sent out to play triple A ball in the smaller towns—he is now going to go to double A ball.  You know what, it‘s too easy.  I want life to be tougher than this.  I have no right to have these conversations, which almost take care of themselves. 

We‘ll be right back with the round table with more—although I can‘t think of a more fun topic.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table for the politics fix.  I want to go through the week with all three people right now, starting with Jill Zuckman.  You know, the Clinton week, how would you describe it. 

ZUCKMAN:  Well, i f you have to end on Bosnia, it‘s a pretty bad week for you.  We have all of us talking about it again and rehashing the whole thing.  It‘s not a very good week.

MATTHEWS:  The fact that she‘s back in that role of having to describe the battle scene that didn‘t occur? 

ZUCKMAN:  Right, we have to talk about the fact that she—she didn‘t just say it.  You have to pick apart what President Clinton said.  She didn‘t just say it once.  She said it multiple times.  She didn‘t just say it at 11:00 at night.  Now we‘re questioning whether she has all her mental faculties late at night because she‘s 60 years old. 

WALSH:  We‘re not though.   

MATTHEWS:  Let me go to Melissa and ask you the question.  Does that raise the some what broader question, maybe this is enough, of how the two Clintons work together these days, how the difficult of this duet, if you will, politically, of one person saying something, having the other person have to defend it or explain it or tell that person to be quiet is what we saw this time? 

LACEWELL-HARRIS:  Well, I mean, I got to say, as bad as it is to end on Bosnia and your husband suggesting your mental faculties are not all together, that can‘t be anywhere close to as bad as the other thing this week, which is Mark Penn.  I mean, hello, this should have been the big, bad story of the week, is the end of Mark Penn, and what that means for the campaign. 

MATTHEWS:  Is it big that he‘s in trouble or he‘s been bad news for the campaign or that he was secretly dealing with the Colombians as head as Burso-Marsto (ph), as was Bill Clinton in the earlier faux pas of the week, perhaps more significant to working people, being seen as having taken 800,000 dollars from those supporting a Colombian trade deal, which is very much against the politics of Hillary Clinton in Pennsylvania. 

LACEWELL-HARRIS:  Right, I mean, you might read this as a bad week for the Obama campaign that they were not able to spin something this sort of obviously easily able to spin into things and they weren‘t able to turn it into something that was as big as, for example, the Jeremiah Wright problem.  Why wasn‘t this on Youtube everyday, right?  Why didn‘t we sort of consistently see this issue?  So maybe that‘s a bad week for the Obama campaign for that reason. 

MATTHEWS:  Joan, go ahead. 

WALSH:  I think the Mark Penn story could have been a positive story, actually.  A lot of people think it could have happened a long time ago.  She‘s taking more control of her message.  Maggie Williams is fully in charge.  All those things could have been positive and then we ended on this note. 

MATTHEWS:  What do you make of the fact, Joan, that you‘ve been covering this thing, why in these national polls we‘re getting, all this week I guess, that McCain is Even Steven with these two candidates, who have gotten all the bright news of the last six months.  McCain is moving along there like the tortous and the hair.  He‘s the tortous.  He‘s gotten the same kind of numbers, really, within the margin of error, as these two bright stars on the Democratic side. 

WALSH:  Well, I think it is a little bit, you know, the spill over effect of their gunning for each other and that helps the Republicans, at least temporarily.  We‘re not voting now, Chris.  You know as well as I do, it‘s like looking at Clinton‘s national lead a year ago.  These things narrow when people start to really pay attention.  I really think the big story of this week—we would be remissed if we sat here and only talked about President Clinton‘s faux pas. 

I think President Bush‘s faux pas in saddling John McCain with an endless war, which he apparently welcomes is It‘s going to be, in the long run, a much more lasting problem than what President Clinton did or didn‘t say, or meant to say on the campaign trail. 

MATTHEWS:  Good point.  Let‘s take it Jill.  Your thoughts on the fact that the war will have 140,000 troops over there in perpetuity, setting up the campaign? 

ZUCKMAN:  I think it‘s a longer term issue for Senator McCain.  It‘s been an issue from the beginning.  It will be an issue to the end.  For this week alone, he‘s getting right on the economic issue, where he didn‘t quite get it right a couple weeks ago.  He‘s having a chance to sort of lay out where he is on the economy.  He had Mayor Bloomberg introduce him in New York and say, I wouldn‘t have been elected if it weren‘t for John McCain.  I think that‘s a pretty good week. 

MATTHEWS:  Melissa, your last thought.  McCain, how come he stays even with the two stars?  They get all the publicity.  He gets the numbers to equal them. 

LACEWELL-HARRIS:  I got to say, it‘s only progressive liberals and folks on the left who are certain that the war is definitely a bad thing for the John McCain campaign.  Listen, fear, the belief that we‘re in a national security crisis, the possibility of Iran, these sorts of things actually work very well with American voters to make them think that John McCain is their guy.  I understand that there‘s a strong anti-war vote, but we‘ve got to remember there‘s also a strong fear factor. 

MATTHEWS:  Well said.  Thank you very much, Jill Zuckman, Joan Walsh and Melissa Lacewell-Harris.  Join us again Monday night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it‘s time for RACE FOR THE WHITE HOUSE with David Gregory.

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

END   

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