updated 6/18/2008 2:31:41 PM ET 2008-06-18T18:31:41

Guest: Chrystia Freeland, Jennifer Palmieri, Mike Paul, Steve McMahon, Todd Harris, Perry Bacon, John Heilemann, Margaret Carlson, Howard Fineman 

CHRIS MATTHEWS, HOST:  The return of the green giant.  Al Gore endorses Obama.  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  He couldn‘t win the presidency in 2000 and chose not to run this year.  So can he help Barack Obama win?  Last night, former vice president Al Gore came out, finally, and endorsed Barack Obama.

(BEGIN VIDEO CLIP)

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES:  In looking back over the last eight years, I can tell you that we have already learned one important fact since the year 2000.  Take it from me, elections matter.

(END VIDEO CLIP)

MATTHEWS:  Yes, elections do make a difference, and on the campaign trail today, John McCain is saying if he‘s elected, he‘ll lift the ban on off-shore drilling.  We‘ll have much more on that and the 2008 race in a moment.

Also, you know a general election is just around the corner when you start seeing stuff like this on television.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Who opposed health care for uninsured children last year?  The answer is, both.  Go to Moveon.org and take the Bush/McCain challenge.  Bet  you can‘t tell them apart.

(END VIDEO CLIP)

MATTHEWS:  The ad wars are just getting started.

Also tonight, the strategists, two guys who know their stuff, one Democrat, one Republican, debate tonight over whether the candidates should hold town meetings or not in addition to the big debates this fall.

Plus: Does life begin at concession?  How Hillary Clinton may be bigger now than ever.  That in today‘s “Politics Fix.”

And all day long, the people of Washington have been saying good-bye to our colleague and my friend, Tim Russert, NBC‘s own.  That‘s a live shot, by the way, from the St. Alban‘s school right next to the National Cathedral here in Washington.

But as Tim would want it, we begin the show with politics.  NBC‘s and “Newsweek‘s” Howard Fineman is an MSNBC political analyst and Chrystia Freeland is with “The Financial Times” of London.  Are you on—oh, you‘re in New York?

CHRYSTIA FREELAND, “FINANCIAL TIMES”:  I‘m in New York.  That‘s where I live.

MATTHEWS:  Chrystia, ladies first...

FREELAND:  We sell more papers in the U.S. than in London, Chris.

MATTHEWS:  Big deal.

(LAUGHTER)

MATTHEWS:  Let‘s go on with—just kidding.  Why is that a relevant statistic?  I want to know why you (INAUDIBLE)

FREELAND:  Because you introduced me as “The Financial Times of London.”

MATTHEWS:  Oh.  OK.  I thought that was your home base?

FREELAND:  We consider ourselves equally comfortable around the world.

MATTHEWS:  Is this a reemergence of the British Empire?

(LAUGHTER)

FREELAND:  It‘s globalization.

MATTHEWS:  I think you‘re reclaiming us.

Anyway, let me ask you, getting back to the fact that—Al Gore gave a masterful concession back in 2000.  Some Democrats believe it was too grand, too generous.  He walked away from politics.  Today he‘s come back and he‘s endorsed—here he is, last night in Detroit, Michigan.

(BEGIN VIDEO CLIP)

GORE:  I think we would recognize it in a candidate who, in response to those doubting our ability to solve the climate crisis and create a bright future, inspired millions to say, “Yes, we, can.”  We have such a nominee.  We have such a leader.  Yes, we can!  Ladies and gentlemen, the next president of the United States of America, Barack Obama!

(END VIDEO CLIP)

MATTHEWS:  Make that the jolly green giant.  That‘s Al Gore back again.  Howard, I can‘t resist—the jolly green giant.  He‘s back and he‘s endorsing this guy, Barack Obama.

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  Well, I would say the Goreacle (ph), at least.

(LAUGHTER)

FINEMAN:  And—well, thank you for—thank you—but the thing about him is, I think, it‘s sort of one crusading figure endorsing another.  I think it‘s of a piece.  I think Gore made himself the kind of cult figure of the environmental movement, made himself the kind of the planet in that sense.  I think it helps Barack Obama with his strongest constituency that can always get stronger, which is younger voters.

Obama‘s beating John McCain two to one among voters under 30.  And I think that‘s now Gore‘s constituency, with the movie, “Inconvenient Truth,” with his Nobel Prize, with his environmental message.  Everybody under 30 has that as the default setting of their view of the world, and Al Gore helped make that happen, and he‘s now kind of helping bestow that on Obama.

MATTHEWS:  I agree completely.  But Chrystia, the down side of Al Gore is that where they make cars, in Michigan, where they were doing this event with Governor Granholm there of Michigan—is he a problem with the people who build cars because of his strong green presence because of the old BTU tax proposal, because he‘s seen as an environmentalist, perhaps at the cost of manufacturing jobs?

FREELAND:  You know, the people who build cars, especially the people who run car companies, have realized that the age of the SUV is over.  I spoke to Rick Wagoner last week, and he is really retooling his company, as are they all.  So I think that that dissidence that may be existed between the idea of having to not drive gas guzzlers as being an environment affectation -- $4 a gas has made that something that everybody is embracing.

The other thing that I thought was really interesting about Al Gore‘s speech was his reference to the Supreme Court.  And I think that we‘re going to see the Democrats playing on that a lot, and that will be where we see the Hillary Clinton women really going over to Barack Obama, specifically for that reason.

MATTHEWS:  I was surprised because Al Gore never pushed abortion rights as a big issue with him.  Is that something—are you surprised he pushed that, the Supreme Court issue?

FINEMAN:  No, I‘m not surprised he pushed it now.  Back when he first ran for president 20 years ago, there were some mixed messages on that because he was coming out of Tennessee and the Bible Belt.  But by the time he ran for president, he was strongly pro-choice and he remains that way.  But I do think the environmental issue is his main thing now.  That‘s how he‘s known around the planet.

The risk for Obama is that he‘s a systems thinker, he‘s a big, broad thinker, and so is Al Gore.  And John McCain is going to try to come at him with specific proposals to increase supplies now and try to portray Obama as too much head in the clouds with Al Gore.  That‘s not going to work with younger voters, as I say, who get it, who get it on the environment.  But with older voters, that‘s where...

(CROSSTALK)

MATTHEWS:  With gas moving up towards five bucks a gallon, Chrystia, do you think that the voters of the United States, if they had a plebiscite and everybody got to vote, wouldn‘t vote right now to open up the Arctic wilderness, wouldn‘t vote right now for off-shore if it could get them $2 gas (INAUDIBLE) gas?  Wouldn‘t they be very pragmatic and say, Enough of the environmentalism, we want the cheaper gas?

FREELAND:  Well, I‘m not sure...

MATTHEWS:  I mean politically.

FREELAND:  I‘m not sure that it would instantly deliver $2-a-gallon gas.  So I think that that might be a slightly flawed plebiscite.  I do think that Obama‘s stance on the gas tax holiday idea was really interesting, really brave, and it didn‘t seem to hurt him that much.  So you know, I think that Howard makes a good point about the systems thinking versus the chipping away, trying to do some pandering with voters on very specific economic issues.  But you know, maybe systems thinking will be more popular this year than other years.

MATTHEWS:  I don‘t agree.  I think—I—well (INAUDIBLE) what do you think?  I think people now are very angry about high gas prices, and they‘re just a little bit less stringent on issues like environmental concerns about the Arctic wilderness.  If you had an ad campaign right now for the oil companies that said, We‘re only going to infringe on a small piece of property up there, very small, with lots of safety controls, there won‘t be any spills, it‘s just going to be this little place we go to in this vast wilderness, what‘s wrong with cheap gas?

FINEMAN:  Well, John McCain isn‘t doing that.  He‘s doing just the opposite.  He‘s saying, Let‘s free up the entire outer continental shelf.  Let‘s leave ANWR alone.  Let‘s not touch Alaska.  But let‘s go all the way around from Maine all the way around the country back to Washington state.

MATTHEWS:  (INAUDIBLE) Chinese will get there first.

FINEMAN:  Because—and what he‘s going to do is he‘s going to try to turn energy into a security issue, as well as a meat-and-potatoes thing on gas tax holiday, on more drilling, on nuclear power, very, very specific things that  people can try to interpret or he wants them to interpret as...

MATTHEWS:  Do you think it‘s a smart move?

FINEMAN:  Well, he‘s got to play to his strength, which is security.  And he‘s going to try to draw it all in...

(CROSSTALK)

FREELAND:  The only point I would make there, Howard and Chris, is I do think that John McCain needs to be a little bit sensitive to the danger of being perceived to be a flip-flopper.  His great strength, the central strength of his brand, is that he is a straight talker and he tells the truth.  And if he changes too many positions for what are perceived to be tactical reasons, I don‘t think that‘s good for him.

MATTHEWS:  Did he switch on this, Chrystia?

FREELAND:  Yes, he did.

MATTHEWS:  He was against off-shore drilling?

FREELAND:  He was.

MATTHEWS:  OK, let‘s take a look at the big developments here.  Here‘s how close this race is.  The new “Washington Post”/ABC poll shows these two candidates for the presidency now 48 to 42.  That‘s an almost to me negligible lead.  Plus, you could throw in the Bradley effect and how people may be talking one way and voting another.  Look, it was seven, now it‘s six.

Now take a look at the issues here.  What‘s fascinating is that the people now think the economy is the huge issue.  We know that 33 -- the Iraq war is still up there close to 20.  Health care, of course, is always there.  And gas and energy.  You throw that on top of the economic issue, you have 40 percent there roughly.

Now let‘s take a look at how the candidates do on the issues—“Who do you trust more to handle.”  And then this is—we‘ve done this before.  Obama is killing him on the economy, killing him on health care, killing him on gas prices.  McCain‘s got this almost inconsequential advantage of one point on Iraq.

OK, if that‘s all true, why is he only six points ahead, Howard Fineman?

FINEMAN:  Well, because...

MATTHEWS:  Because you average those babies out, it‘s about 15 he ought to be ahead.

FINEMAN:  Well, I think it‘s largely a measure of people not deciding yet, or not being sure yet whether they think Barack Obama is really ready to be president.  I think that‘s what it‘s all about.  I don‘t really think it‘s about McCain.  I don‘t think this campaign has ever really been about anybody but Barack Obama and whether he‘s ready or not.  And I think that‘s what the hesitancy is, and I think that‘s why the horse race number is as close as it is on the commander-in-chief readiness question and...

MATTHEWS:  Boy, you have nailed the importance of the coming debates in the fall.

FINEMAN:  Right.

MATTHEWS:  Because that‘s when people will look to see for that sign of maturity, right?

FINEMAN:  I think so, and they‘ll look side by side because don‘t forget, nothing‘s ever decided in the abstract in an American election.  It‘s always compared with what, compared with whom.  They‘ll look at John McCain and they‘ll measure him against Barack Obama, or the other way around.  That‘s what‘s going to decide it.  That‘s why those numbers aren‘t moving now.  They‘re static.  I wouldn‘t be surprised if they stayed relatively static until people get to see them side by side.

MATTHEWS:  Chrystia, this is the Kennedy/Nixon race.  I know I‘m getting old, but this is 48 years ago, the same thing happened to the polls.  They froze because people wanted to see how these two candidates reacted to each other on a public stage when they were within a few feet of each other and saw who was the stronger person.  I think it‘s—isn‘t that well, how do you see it?  Is that why the polls are sort of icing up right now?

FREELAND:  Yes, I think that‘s absolutely right.  And I think the other issue which the polls point to is people perceive rightly that the economy is the dominant question right now.  So far, Barack Obama has an edge, but what I think Barack Obama needs to do to really consolidate that edge is to find a way, simply, to communicate his economic vision.  And that‘s going to be really hard to do because the economic problems are very complex.  But if he can do that, then I think he goes along way towards assuring people that he can really lead and not just give wonderful speeches.

MATTHEWS:  Chrystia, where would someone get a copy of “The Financial Times,” if one was interested in reading the paper, the...

(LAUGHTER)

FINEMAN:  On any street corner!

FREELAND:  FT.com, as well, Chris.

MATTHEWS:  I am just—it is a hugely successful newspaper, dominant in many ways, a great challenge to “The Wall Street Journal” in this North American continent, a hugely—and I love reading it, by the way.  And thank you for those complementary copies.  I read them every morning.  I love the fact—what color is it again?  I think it‘s green.

(LAUGHTER)

FREELAND:  Here it is.  Salmon color.

MATTHEWS:  It‘s a beautiful -- (INAUDIBLE) you are a paper boy!  You are not just a journalist, you‘re out there hawking them on the corner!

FREELAND:  I believe in what I do, Chris.  What can I say?

MATTHEWS:  You know, people with that kind of zeal scare me.

(LAUGHTER)

MATTHEWS:  Anyway, thank you, Chrystia, as always.  I will never again say “The London Times of”—you know what I just said.  I won‘t say it again.  Thank you, Chrystia Freeland and Howard Fineman.

Coming up: John McCain finds himself the target of two tough new commercials out there already—they‘re already running these ads against him—while his newest ad tries to distance himself from his biggest liability, which is, of course, President Bush, whose numbers are now—I just saw a new poll -- 84 percent think this country‘s going in the wrong direction.  We‘ve got the best of the new campaign ads, and the worst, depending on how you look at it, coming up.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now to look at some of the new TV ads airing right now already in this race for the presidency.  What is it, June 18, it‘s already starting?  Mike Paul Is public relations consultant and a former top aide to the late, great—I‘m sorry, the formally great—or once great or still great Senator Alfonse D‘Amato of New York.  Thank you, Mike Paul.  You‘ve reminded us of that great senator.  And Jennifer Palmieri is a senior vice president of the Center for American Progress and a former spokeswoman for Senator John Edwards.

Now, since neither one of you have won a race lately...

(LAUGHTER)

MATTHEWS:  ... and you‘re experts at that sort of thing—oh, I‘m sorry, I offended Mike Paul, but D‘Amato is...

(CROSSTALK)

MATTHEWS:  Isn‘t he trying to start a talk radio show or something?

MIKE PAUL, PUBLIC RELATIONS CONSULTANT:  I think he‘s doing very well as a consultant right now, Chris.  And he‘s still alive.

MATTHEWS:  OK.

PAUL:  And he is one of the greats, yes.

MATTHEWS:  OK.  Well, you‘re a loyalist, and that‘s what we like. 

Let‘s all of us put on our—our brains.

(LAUGHTER)

MATTHEWS:  Here we go.  Here‘s a new ad out from (INAUDIBLE) labor union, American Federation of State, County and Municipal Employees, a powerful union that endorsed Hillary Clinton.  I‘m not sure they‘ve yet endorsed Barack.  I‘m sure they‘ve adjusted, though.  And their ad going with the left group called Moveon.org—can I say left-wing?  I don‘t know.  In America, let‘s say on the left.  Let‘s put it that way.

PAUL:  You can say it.

MATTHEWS:  Moveon.org, a very activist group, AFSCME.  Here they are in an ad talking about John McCain, and I‘m sure it‘s not favorable.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Hi, John McCain.  This is Alex, and he‘s my first.  So far, his talents include trying any new food and chasing after our dog, that and making my heart pound every time I look at him.  So John McCain, when you say you would stay in Iraq for 100 years, were you counting on Alex?  Because if you were, you can‘t have him.

UNIDENTIFIED MALE:  Over three million members of Moveon.org Political Action are responsible for the content of this ad.

(END VIDEO CLIP)

MATTHEWS:  Jennifer?  Pretty strong stuff.  Going to take my baby and put him in uniform and send him over to war.

JENNIFER PALMIERI, CENTER FOR AMERICAN PROGRESS:  Right.  I think that it could be effective.  I think that it will remind people that—you know, that --  you know, fundamentally, it‘ll have the impact of reminding people that John McCain, you know, wants to stay in Iraq.  He‘s for—you know, he continues the war.  I think that it will be—I think it will have some (INAUDIBLE) effective.

MATTHEWS:  Mike, your view of that ad?  Is it effective?  Is it too strong?  Will it work?

PAUL:  I think it‘s pretty strong, but I think it will work.  I think this is more than a women‘s ad, by the way.  I think this is an ad that touches everybody that has a child.  I think that there‘ll be some that‘ll say, Look, obviously, the 100 years is being taken out of context by some.  But you know...

MATTHEWS:  What is the context, by the way?  I want to give you a shot at that one.  What is the context it was taken out of?  What does he mean by 100 years?

PAUL:  Well, I think when he talks about, from a diplomatic perspective, obviously, not just with bullets flying for 100 years.  And I think that‘s something that he needed to be more clear on and he didn‘t do a good job of doing so.

MATTHEWS:  But didn‘t he say he wants to keep our troops over there for 100 years?

PAUL:  Yes, but what are those troops doing?  Are those troops actually firing bullets, or are those troops there as more as protection or security, or are we all in an all-out war on a day-to-day basis for 100 years?  That‘s what I think that that ad is implying.

MATTHEWS:  Well, how—how will he—how will he end the war?  I mean, if you‘re in a war zone and you‘re there, you get shot at.  How does he avoid our troops getting shot at, if they‘re in the war?

PAUL:  Well, I think no different than some of the other areas we‘ve been—we‘ve been in war around the world.  We still have troops in Japan.  We still have troops in other areas of the globe.

MATTHEWS:  No, but there‘s no war in Japan.  But there‘s no war in Japan.  There‘s no war in Korea.

PAUL:  And I think he used...

MATTHEWS:  How do you keep troops in a war zone...

PAUL:  That‘s what I think...

MATTHEWS:  ... without them being shot at?

PAUL:  ... was taken out of context, or maybe better said, he used the wrong word—

(CROSSTALK)

MATTHEWS:  OK, what did he mean by keeping our troops over there for 100 years?  You say out of context.  What was the proper context?  What does he mean when he says I want to keep our troops in Iraq for 100 years?  What does that mean?

PAUL:  I think what he meant by that was that we were going a have troops on the ground that will be in Iraq, and as I said before, from a security perspective, not necessarily in war.  And I think he should have been more clear as to what the troops will be doing and taking it out of a war context so that it‘s not seen as a 100-year war.

(CROSSTALK)

PALMIERI:  I think that this demonstrates the problem that John McCain has, which is why the 100-year war is sort of that moniker...

PAUL:  He should have never said it. 

(CROSSTALK)

PALMIERI:  ... on him.

PAUL:  He should have never said it.

PALMIERI:  And he‘s never answered the question, if it‘s not 100 years, how long is it?  He‘s never answered that.  And, until he does, then it‘s going to stick.

(CROSSTALK)

MATTHEWS:  He can take it back any time he wants to.

Here‘s another ad from MoveOn, another—it‘s a left-wing ad, obviously.  This one was on, has a famous face in it, actually, an actor I really do like, John Cusack.

(BEGIN VIDEO CLIP, MOVEON.ORG AD)

JOHN CUSACK, ACTOR:  You think you can tell President Bush apart from John McCain?  Really?  Pop quiz.  Who supports keeping our troops in harm‘s way in Iraq, but not a bipartisan G.I. bill of rights to support them when they return home?  Whose top advisers are linked to war profiteers?  Who tried to convince Americans to privatize our Social Security?  Who opposed health care for uninsured children last year?

The answer is both. 

Go to MoveOn.org and take the Bush/McCain challenge.  I bet you can‘t tell them apart. 

NARRATOR:  MoveOn.org Political Action is responsible for the content of this advertisement. 

(END VIDEO CLIP)

MATTHEWS:  Mike Paul?

PAUL:  Well, I want to start by saying, this obviously is a very left group.  And there is no more liberal a group in America than MoveOn. 

However, I think it‘s another effective ad.  There are going to be some that say, you know what, I like John Cusack, no differently than you just said.  And these are key areas where, hey, if this is true, that they both are lined up like this, he must be more of a Bush guy than he‘s saying. 

But this is an opportunity for McCain to come back with a strong ad, himself, and showing the differences that he has with the current president of the United States.  McCain is walking a very—a very...

PALMIERI:  That‘s going to be a very difficult ad to make. 

PAUL:  And that‘s a difficult line to walk.

You want to have the two ends.  You want to be known as the maverick man.  And guess what?  That‘s very difficult to do when you have had some where you have lined up with not only the president, but with those Republican conservatives that are just like him. 

MATTHEWS:  That‘s true. 

PALMIERI:  Yes, I think that—I don‘t know that John Cusack is going to, like, convince everyone in America of this.  But it will contribute to the sense that he‘s just like—that he‘s just like Bush. 

And I don‘t think that McCain could—McCain tried to do an ad today that shows how he‘s different than Bush on global warming, right?  You have seen—have you seen this ad?

MATTHEWS:  Yes. 

PALMIERI:  And it‘s interesting, because he‘s doing an ad about blow the same day that he‘s meeting with oil industry executives to say that he‘s for lifting the ban on offshore oil drilling.  It shows the, like, tension that exists in their campaign.

(CROSSTALK)

MATTHEWS:  Jennifer and Mike, here comes John McCain with his new ad. 

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

NARRATOR:  John McCain stood up to the president and sounded the alarm on global warming five years ago.  Today, he has a realistic plan that will curb greenhouse gas emissions, a plan that will help grow our economy and protect our environment. 

Reform, prosperity, peace—John McCain. 

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  I‘m John McCain, and I approve this message. 

(END VIDEO CLIP)

MATTHEWS:  Reform, prosperity, and peace. 

PALMIERI:  I think that making peace the centerpiece of your campaign, when you support continuing the war that 80 percent of America hates, is probably not a great strategy. 

MATTHEWS:  Mike Paul? 

PAUL:  Well, I think that the bottom line is, this ad is about global warming. 

And Global warming, I think the current study has only shown about 4 percent of Americans think that that‘s the most important issue.  I think he could have had an opportunity here to talk more about energy and oil and some of the things he wanted to from a positive perspective there, instead of leading towards, oh, Al Gore is out right now.  Let‘s get this global warming thing going.  I don‘t think it‘s going to hit as many bodies as he would like.

MATTHEWS:  You think that‘s a me-too ad? 

PAUL:  I think so. 

But there is an area of the ad I like a lot.  I do like seeing John McCain outside of a suit.  I think that‘s important for him to reach middle-class Americans.  And I think he should be doing more of that.

MATTHEWS:  You and I agree on that.  It does seem—there‘s something about our culture, Mike—and, Jennifer, you probably agree—that we—we—I know this sounds phony, but we like outdoor candidates. 

PAUL:  Absolutely.

MATTHEWS:  You know, the Ronald Reagan, Abe Lincoln, whoever else, even Roosevelt in a car.

(CROSSTALK)

MATTHEWS:  We think of Franklin Roosevelt riding around in a car with that cigarette up in the air.  We don‘t think of him as an indoor guy.

(CROSSTALK)

MATTHEWS:  What is—Mike, as an ad guy, what is it that makes us want to go for the outdoorsy guy all the time?

PAUL:  Well, I think we want someone that is kind of like us.  We don‘t always like being in a suit. 

MATTHEWS:  Yes. 

PAUL:  There are times, for example, my family, my friends, even when I let my beard grow through on the weekend, they say, what are you doing?  Well, I want to relax.  I wanted to give it a rest.  And I think that‘s what we‘re trying to see...

(CROSSTALK)

PALMIERI:  You like the rugged individualist, too, right?  You like that. 

PAUL:  Absolutely.

(CROSSTALK)

MATTHEWS:  Well, we never went for the Doles or Dukakises.  We never went for the Deweys, the indoor guys, the Mondales. 

We like—hey, we all agree.  We like the outdoors.  What a country. 

Mike Paul, Jennifer Palmieri. 

Coming up...

(LAUGHTER)

MATTHEWS:  Boy, we‘re deep here, aren‘t we?

The HARDBALL “Sideshow” and the buzz about a potential Obama running mate who comes from the other said of aisle.  We‘re talking a Republican, maybe, for veep for Barack.

“Name That Veep”—coming up next. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Time now for the HARDBALL “Sideshow.”

In bad times, people like to talk about politicians, about them not been trustworthy.  They‘re dismissed as sort of dicey used cars salesman.  Well, there‘s one company that is banking on that.  Take a look at this ad that was aired by a Dallas car dealership. 

(BEGIN VIDEO CLIP, AD)

UNIDENTIFIED ACTOR:  Citizens, I have three questions for you.  Do you have a job? 

UNIDENTIFIED ACTORS:  Yes. 

UNIDENTIFIED ACTOR:  Do you have $199? 

UNIDENTIFIED ACTORS:  Yes.   

UNIDENTIFIED ACTOR:  Do you want $3,000 for your trade? 

Even ordinary folks like you can buy a Kia.  Yes, you can.

(END VIDEO CLIP)

MATTHEWS:  Well, I‘m not sure what that is about.

Anyway, now, I have said many times on this program that, if Obama won Iowa, those Iowa caucuses, it would broadcast a message about this country and race relations around the world.  Well, “The New York Times” reports today that Obama‘s victory has given birth to—quote—“a new black consciousness in France,” where there‘s just one black among 555 national assembly members representing continental France.

Well, when “The Times” asked his black Frenchman what was on his mind, he said—quote—“Barack Obama.  Obama tells us that everything is possible.”

I think that says a lot. 

Anyway, and for the second time in this campaign, Cindy McCain is on the skillet for cooking her cookbooks.  In April, the campaign confessed that family recipes on their Web site were lifted from the Food Network.  They blamed an intern for that. 

Now “The Huffington Post” is pushing another sweet scandal.  Cindy McCain submitted this recipe for oatmeal butterscotch cookies to the July edition of “Family Circle” magazine.  But it‘s nearly identical to this recipe on hersheys.com. 

What‘s the lesson here?  In the age of Google, you can and will be burned.

And now it‘s time for “Name That Veep.” 

The online newspaper “Salon” reports today that there‘s buzz about a potential Obama V.P. from the other side of the aisle, the Republican side. 

They write—quote—“Running with a Republican would reinforce the

message that Obama is serious about changing the way things are done in

Washington.  And [this person‘s] very public split with Bush and the rest

of the GOP on the war in Iraq bolsters Obama‘s case about foreign policy” -

close quote. 

So, who is this Republican senator that has pointedly not endorsed John McCain?  Senator Chuck Hagel of Nebraska chose not to run for president this year.  Could he find his way on to a Democratic ticket?  It‘s Chuck Hagel.  Strange, but this has been a wild year already. 

Now for tonight‘s “Big Number.”

It looks like soaring gasoline prices, record job losses and an ongoing unpopular war have made for a very unhappy electorate.  According to the latest “Washington Post”/ABC News poll, what percentage of Americans now say the country is seriously off on the wrong track?  You won‘t believe this number.  Eighty-four percent.  Eighty-four percent don‘t like where things are headed in this country. 

That—that number will have big implications.  It‘s an all-time high for the poll.  Eighty-four percent don‘t like where we‘re headed—tonight‘s “Big Number.” 

If you‘re happy, by the way, raise your hand. 

Up next:  Why doesn‘t Barack Obama accept John McCain‘s invitation to hold town meeting debates throughout the summer, 10 of them, before the Democratic Convention?  Is he afraid of McCain?

And McCain‘s trying to link Obama to Jimmy Carter.  Is that going to work?  The HARDBALL strategists debate those issues coming up next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I am Margaret Brennan with your CNBC “Market Wrap.”

Stocks fell on Tuesday, as Goldman Sachs predicted that banks will have to raise $65 billion in new capital to cover their losses from the past year.  With that, the Dow Jones industrial average tumbled 108 points, weighed down, as well, by some negative economic data—the S&P 500 also down by nine.  And the Nasdaq lost 17 points. 

Wholesale prices surged a larger-than-expected 1.4 percent in May.  But, excluding soaring energy and food prices, so-called core inflation rose just two-tenths-of-a-percent.  That increased speculation that the Federal Reserve may leave interest rates unchanged at next week‘s meeting. 

Meantime, industrial production fell in May for the second straight month.  Factories operated at just 79 percent of capacity.  That‘s the lowest level since September of 2005, after the Gulf Coast hurricanes. 

And housing starts fell in May to the lowest level since 1991.  Permits for future building also declined.  And that weighed on housing stocks. 

Oil prices fell for at third straight day.  Crude was down 60 cents, closing at $134.01 a barrel. 

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

HARDBALL. 

(BEGIN VIDEO CLIP)

MCCAIN:  I will reserve a day a week between now and the convention, so that Senator Obama and I can give the American people what I think they deserve.  And that‘s the town hall meeting, which is the essence of democracy. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

John McCain ha proposed weekly town—town hall-style debates with Barack Obama leading up to the Democratic Convention at the end of August.  But, so far, Senator Obama hasn‘t accepted his invitation at all.  Should Obama take McCain up on his offer?  And is it a big risk for McCain to do joint town hall meetings with Obama all summer? 

Let‘s bring in our two strategists from each side.  Steve McMahon is a Democrat.  He‘s a media consultant.  And Todd Harris is a former McCain spokesperson. 

Why does McCain want this? 

TODD HARRIS, REPUBLICAN STRATEGIST:  Well, the American people deserve this. 

Look, they have—we have had long primaries on both sides, really long on your side.  Obama, everyone knows there‘s no one who beats Obama at a big speech.  But how—how does he—how does he perform when taking real questions from real voters?  You know, Hillary Clinton said during the primary, all Obama is, is a great speechmaker. 

This is his opportunity...

(CROSSTALK)

MATTHEWS:  Does this have anything to do with the fact that McCain can‘t grab—can‘t draw a big crowd without Obama there? 

HARRIS:  They‘re not looking to draw big crowds at these things.

(LAUGHTER)

MATTHEWS:  Take over, Steve.

It seems to me it has to do with three things, but you do it.  It seems to me that Obama draws big crowds.  If McCain is standing next to him, he will get a big crowd.  McCain is not good with a Teleprompter.  He doesn‘t like giving speeches.  Barack Obama is in love with the Teleprompter.  So, he doesn‘t need McCain standing next to him. 

But the town hall—let‘s get back to the—the skinny here, the reality.  Why wouldn‘t Obama just show up?  McCain is doing all the hype for it, all the promotion.  He wants it to happen.  It was his idea.  What‘s wrong with just showing up and debating the guy?  Why not do it?

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  You know, I actually—I actually think that Senator Obama would win in any context.  He certainly wins giving a speech and he certainly wins in terms of drawing a crowd. 

MATTHEWS:  He hasn‘t been a great debater.

(CROSSTALK)

MATTHEWS:  He has not been a great debater.

MCMAHON:  But you know what?  He‘s got policy...

MATTHEWS:  Hillary beat him a number of times.

MCMAHON:  He‘s got policy and politics on his side.  He‘s the guy who is standing there saying, John McCain is a third Bush term.  He‘s the guy saying, let‘s get out of Iraq, instead of saying there.  He‘s the person who is going to be saying, let‘s change the economic course of this country and get it back on track. 

(CROSSTALK)

MCMAHON:  He‘s the one who is going to be saying, instead of everybody being on their own, everybody ought to have health insurance.  He wins on the merits.  He wins on the rhetorics—rhetoric.  He wins on the politics.  And he will pack in a crowd. 

And he will—I think he should take him every week, every day, if he can get him.

HARRIS:  The reason—the reason why he won‘t do it is because he doesn‘t have the experience to back up all of that rhetoric. 

You‘re right.  He gives great speeches.  But he doesn‘t want to put himself in a setting where voters can say, Senator Obama, you talk a lot about change, but why did you vote for the farm bill that was filled with special interest pork?  You talk about energy policy.  But why did you support the 2005 energy policy, which has given us $4- and $5-a-gallon gasoline?

MCMAHON:  His answer...

(CROSSTALK)

HARRIS:  He has no answer, because he doesn‘t have the experience to back that—he has no positions.

(CROSSTALK)

MCMAHON:  He will say, but I have had the judgment to only be on one side of most issues.  I haven‘t flip-flopped on immigration.  I haven‘t flip-flopped on the Bush tax cuts.

(CROSSTALK)

MCMAHON:  I haven‘t flip-flopped on a number of other things that John McCain has flip-flopped on. 

(CROSSTALK)

MCMAHON:  Why would Senator Obama not want that debate? 

HARRIS:  I would love to see...

MCMAHON:  I think he should go every single day.

HARRIS:  I agree. 

And someone can ask him, Senator Obama, you talk constantly about change.  What have you actually changed in Washington?  Can you name one major, major reform...

(CROSSTALK)

MCMAHON:  John McCain has changed his position on just about every major issue.  John McCain has changed positions, Todd.

(CROSSTALK)

HARRIS:  The largest piece of government reform that we have passed in Washington in the last decade, campaign finance reform, bears John McCain‘s name.  That‘s because he worked with Senator Feingold.

MCMAHON:  The biggest single misjudgment—and the biggest single misjudgment, the Iraq war, John McCain was the principal cheerleader for and has become... 

HARRIS:  No, no, no.

(CROSSTALK)

MCMAHON:  ... a big cheerleader for during the campaign.

HARRIS:  For three years, he was the principal critic. 

MCMAHON:  And then he became a cheerleader when he ran for president. 

HARRIS:  He‘s a cheerleader certainly in the sense that we have to have enough troops in Iraq to maintain—

MCMAHON:  For 100? 

HARRIS:  Not for 100 years.  I am so tired of that.  Everyone knows that‘s not—

MCMAHON:  We‘ve got a little Lincoln/Douglas thing here.

MATTHEWS:  I‘m watching this.  Let me ask you why do you think your guy won‘t do it if it‘s such a great idea?  He‘s pulling back. 

MCMAHON:  I think what‘s going on—

MATTHEWS:  But, but, but, why doesn‘t he do it? 

MCMAHON:  Because he‘s ahead.

MATTHEWS:  OK, takes a little effort, but I got the truth here.  He‘s ahead.  He ahead, therefore he doesn‘t want to give the guy the audience. 

MCMAHON:  It‘s a temptation.  It‘s something that happens to people when they get ahead.  They start to have something to lose.  The reason Barack Obama was such an effective campaigner in the primary against Hillary Clinton, who, by the way, I think was a tougher debater than John McCain will ever be, is because he wasn‘t afraid to go into any setting and make his case.  I don‘t think he‘s afraid.  I think he‘s ahead and he has something to lose. 

MATTHEWS:  If you ask people if they like the way things are going, they say no.  If you ask the people whether they want to try the Democrats out, they‘ll say yes.  We‘re tired of the Republicans.  They‘ll say yes.  If you ask them to look at two guys for a couple hours a night for ten weeks, they‘re going to start judging the two guys, which is the last thing Obama wants.  Obama wants to be judged on the basis of do you want change and do you want a Democrat or a Republican?  Does he really want it to be a choice between two guys? 

MCMAHON:  Yes, he does, because of what one person represents and what one person will do with their policies to this country, and the direction he wants to take it.  The truth of the matter is people need to get to know Barack Obama a little bit better. 

HARRIS:  What‘s a better way to allow that than to have a town hall meeting where real, actual undecided voters can ask him questions? 

MCMAHON:  I think he should do it.  I think he probably will. 

MATTHEWS:  Let‘s look at this.  Senator Barack Obama responded to criticism from the McCain campaign.  McCain called him a September 10th mind set, obviously a mind set of prior to 9/11.  Let‘s watch this. 

(BEGIN VIDEO CLIP)

OBAMA:  Well, let‘s think about this.  These are the same guys who helped to engineer the distraction of the war in Iraq at a time when we could have pinned down the people who actually committed 9/11.  In part because of their failed strategies, we‘ve got bin Laden still sending out audiotapes.  And so I don‘t think they have much standing to suggest that they‘ve learned a lot of lessons from 9/11. 

(END VIDEO CLIP)

HARRIS:  Look, I think we have probably moved as a country beyond this whole labeling that September 10th thinking, September 12th thinking.  That‘s not rhetoric that I would be using.  But there‘s no question that survey after survey shows that the American people are more comfortable with Senator McCain when it comes to fighting the war on terrorism.  Brand new “Washington Post” poll out today showed that exact same thing. 

MATTHEWS:  He‘s up by a point. 

HARRIS:  He‘s up by more than a point.  The McCain guys think that this clearly is—

MATTHEWS:  On Iraq, he‘s up by a point.

HARRIS:  I‘m talking about the war on terrorism.  This is—

MCMAHON:  Sometimes those two things are confused. 

HARRIS:  This is good terrain for them. 

MATTHEWS:  By the way, is he smart, yes or no, to keep tying—is McCain smart to keep tying Barack Obama to Jimmy Carter? 

HARRIS:  A lot of people are voting now who weren‘t around when Carter was president. 

MATTHEWS:  Is it smart or is it stupid in? 

HARRIS:  I don‘t think it‘s that effective.  I‘ll be honest. 

MATTHEWS:  I like the way you guys think.  With your face, Todd, you just go with your face.  Anyway, thank you, Steve McMahon, Todd Harris.  I like the way you guys went at it.  I think you gave a great demonstration.  Not exactly Lincoln/Douglas, more like McCain/Obama. 

Up next, the politics fix.  What exactly does Hillary Clinton want from Barack Obama?  And what might he give her?  I cannot believe Barack Obama has named Patty Solis Doyle, who was sacked from the Hillary Clinton campaign as chief of staff, as the chief of staff to whoever he names his vice presidential running mate.  That is an unwelcome mat laid out for Senator Clinton.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the politics fix.  Our round table tonight, Bloomberg‘s Margaret Carlson, “the Washington Post‘s” Perry Bacon, “New York Magazine,” there he is, John Heilemann, whose cover story makes—I don‘t know whether to believe this or not, except I have written the same thing on a blog this week, so I‘ve got to believe it.  It‘s called Hillary Clinton Superstar.  My initial reaction, having an attitude about New York, was another New York echo chamber story about how great Bloomberg is, how great Hillary is.  Then I thought, wait a minute, I said the same damn thing in a blog this week. 

Hillary Clinton has come out of this campaign how, John Heilemann? 

JOHN HEILEMANN, “NEW YORK MAGAZINE”:  I think a lot bigger than she was when she came in.  Obviously, the objective here is to win and she lost.  Her campaign made a huge number of mistakes.  She‘s a much better politician and has demonstrated herself to be a much, much better politician than anyone expected her to be or than she was a year ago.  She obviously has now a huge and well-defined coalition of voters behind her that she never had before. 

She‘s in a lot of ways politically divorced herself from her husband.  She‘s overshadowed him in an enormous way.  And he‘s diminished himself and she‘s advanced herself.  I think she‘s much more of a hero to women.  She‘s the kind of feminist hero she was back in the old days before Monica.  She‘s beloved by a huge number of women around the country.  None of those things were true 18 months ago and they‘re all true now.

MATTHEWS:  God, you speak in bold, breathtaking language about Hillary Clinton‘s transcendence.  I happen to agree with it.  No, I always get in trouble for words like divorced, messing around.  Divorced her husband politically, that jumped out of there. 

MARGARET CARLSON, “BLOOMBERG”:  Yes, John, thank you for making that safe to say.  John described this trajectory, which is before Monica, Hillary‘s favorability ratings were not high.  She came out of that much higher, able to run for the Senate. 

MATTHEWS:  How come I get in trouble for saying exactly the same thing? 

(CROSS TALK)

MATTHEWS:  OK, go ahead. 

CARLSON:  Yes.  So it launched her Senate career.  Then she goes for president.  By the way, her power was still derivative of the president‘s.  It was related to his.  Now she‘s proved herself.  In fact, she‘s better than he is.  This is what‘s happened towards the end of the campaign. 

MATTHEWS:  I agree with you all.  Perry, I‘m with the advance team here.  I believe Hillary was born in Scranton, Pennsylvania.  I think in the five—how long was that primary campaign up there?  She became Hillary Clinton, Hillary Rodham Clinton on her own, totally on her own.

PERRY BACON, “THE WASHINGTON POST”:  In this period she really did develop herself.  In Pennsylvania and after that, from March to May, she really developed a brand as candidate for women, for older women, particularly, and sort of white working class voters.  She does have a brand she didn‘t have before. 

MATTHEWS:  Where‘s it going to go now, John?  Since you have launched this new notion, this revisionist history?  It‘s probably too quick to revise history.  It is history.  First draft of history, as we say in journalism.  Will this magnificence of Hillary, which I share with you, because I compared it to Barry Goldwater from the other side of the aisle and Adlai Stevenson of the Democratic party, and made the case that a lot of the greatest heroes of our political parties did not win the presidency, but in many ways prevailed over those who did make it to the White House as part of the pantheon of great leaders of the party. 

Will she survive as a great person if Barack Obama goes on and wins the general and is president for a couple terms? 

HEILEMANN:  First of all, there‘s no question in my mind that she goes back to the United States Senate as a much enhanced figure.  She‘s not going a be seen as a loser among her colleagues.  Some of the accusations of rancor that have rained down on her I think are going to fade very quickly.  She is the only United States senator now who has campaigned in 50 states and gained votes in 50 states and has a fund raising apparatus and email lists that extends to 50 states. 

She‘s going a be the person that other members of Congress turn to to come and campaign for her.  She‘s going a be the first among equals in a lot of ways in the Senate.  If Obama does win, she‘s clearly going to be the person who takes the lead on health care reform.  If, in fact, those two together make universal health care happen, that‘s a big place in history for Hillary Clinton. 

MATTHEWS:  Perry, why did the people put the stick in her eye this weekend by saying they‘re going to make Patty Solis Doyle the chief of staff to whoever they pick as running mate?  Patty Solis Doyle being the late, great former chief of staff to Hillary Clinton, who was sacked by Hillary Clinton.  Isn‘t this an unwelcomed mat? 

BACON:  It‘s probably not a great sign for Hillary‘s VP chances.  I think those were low to begin with, to be honest.  I don‘t think—I think Obama‘s staff --  

MATTHEWS:  But this is Hillary need not apply, isn‘t it?  Isn‘t this like a Hillary need not apply sign on the door? 

BACON:  I think that‘s probably not a wrong thing to say.  I still think it was already not going to happen anyway. 

MATTHEWS:  OK.  We‘ll be right back with Perry and Margaret and John Heilemann, who is—I think you‘re going to challenge Joe Klein for the proposition leader in New York journalism, proposing a notion here that hadn‘t been thought of before.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GORE:  In looking back over the last eight years, I can tell you that we have already learned one important fact since the year 2000: take it from me, elections matter. 

(END VIDEO CLIP)

MATTHEWS:  You know, it‘s unbelievable—everybody, we‘re back with the round table for the politics fix.  I want you to start this, Perry Bacon of the “Washington Post.”  You‘re a young fellow.  I don‘t know if you realize how things have changed so much.  Probably in your journalistic career, it‘s been half your career.  These last eight years have been unbelievable.  We went from being Al Gore was too green, he shouldn‘t have talked about Earth in the balance.  He was afraid to talk about it in his campaign.  Now he‘s Mr. Planet.  He‘s like I don‘t know what, the Jolly Green Giant. 

The guy is everywhere.  He won a Nobel Prize, the Peace Prize.  Now he‘s a star.  But is America still inclined towards the green position or towards saving our old industries like autos?  Is he a good guy to have there on the stage in Michigan last night? 

BACON:  To come to the change you‘re talking about, in some ways Barack Obama and John McCain have taken the Al Gore position.  They‘re both talking about how much they want to reduce climate change, how concerned they are about global warming.  I‘m skeptical that voters are going to cast ballots on this issue, one.  Al Gore endorsing Barack Obama is not exactly shocking news for most voters.  I‘m not sure—

MATTHEWS:  What about the Gore connection?  Is It a good connection for that working guy in the middle?  I‘m talk about the college PHD candidate.  I‘m talking about the regular person.  Are they going to like this green push? 

BACON:  I—I don‘t think it‘s a number one issue.  I think they might like it, but it‘s not their number one issue. 

MATTHEWS:  Margaret? 

CARLSON:  Al Gore‘s made it a main-stream position.  Almost everybody now acknowledges global warming, except for the president, who still thinks we need more studies.  As a voting issue, Perry is probably right.  In defense of Al Gore, has anybody been more enhanced by a loss?  Not even Hillary Clinton.  The temperament he showed; has anybody had a better second act, more suited to his gifts?  He could have behaved any number of ways after the loss by the Supreme Court and he didn‘t.  He behaved well. 

MATTHEWS:  Yes.  Let me go to John for an always interesting analysis by John Heilemann.  John, Al Gore, he appears to us so irregularly.  We notice how he gains weight, loses weight, has a beard.  He ought to stick around more frequently so people don‘t notice these things.  He‘s a big guy.  He‘s back.  And he‘s not really a politician, I wouldn‘t say.  Is he a plus? 

HEILEMANN:  I think he‘s a plus, Chris.  Obviously, he‘s a figure now revered in the Democratic party.  To the extent that Obama is still about the business of bringing the party together after what was a pretty divisive primary, I think it can‘t hurt him to have Al Gore out there on his side, trying to tell everybody it‘s time to close ranks. 

I also think it‘s important.  Obama in the early part of this campaign talked about how one of his fundamental selling points was that he was going to tell us what we needed to hear, not just what we wanted to hear.  That‘s what this green position represents, going to Detroit and saying that. 

MATTHEWS:  John, who gets the biggest applause at the convention in Denver this late August?  Hillary Clinton, Bill Clinton or Al Gore? 

HEILEMANN:  I think Al Gore does. 

MATTHEWS:  Margaret, who gets the biggest applause? 

CARLSON:  I totally agree. 

MATTHEWS:  OK, let me go to Perry.  Reporter, you have to make a prediction, sir. 

BACON:  Al Gore, unquestionably.  He‘s a unifying figure for the Democrats now.  Unquestionably. 

MATTHEWS:  A hat trick for Al Gore.  The Jolly Green Giant has struck again. 

CARLSON:  Oh, Chris.

MATTHEWS:  I don‘t mean—I‘m sorry.  No, I don‘t take it back.  It‘s fabulous.  Thank you for giving that analysis about what happened to Senator Clinton in 1988.  Margaret Carlson of “Bloomberg News” with that analysis, thank you Margaret.  Perry Bacon, John—Great cover, John, because I agree with it. 

BY the way, late this afternoon, the United States House of Representatives passed a formal resolution honoring our colleague Tim Russert for his lifetime of work as a public servant, political analyst and author.  We‘ll be back tomorrow on 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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