updated 7/2/2008 1:59:15 PM ET 2008-07-02T17:59:15

Guest: Mike Allen, Joan Walsh, Pete Hegseth, Jon Soltz, Margaret Carlson, Tucker Carlson, Chris Cillizza, Chuck Todd, Pat Buchanan

ANDREA MITCHELL, GUEST HOST:  Does Barack Obama have a prayer with evangelical voters?  Can John McCain win over Latinos?

Let‘s play HARDBALL.

Good evening.  I‘m Andrea Mitchell, in tonight for Chris Matthews. 

And welcome to HARDBALL.

Consider it an article of faith.  The more religious someone is, the more likely it is that that person will vote Republican.  Enter Barack Obama, who made a play today for evangelical voters in the battleground state of Ohio.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  We know that faith and values can be a source of strength in our own lives.  That‘s what it‘s been to me and that‘s what it‘s been to so many Americans.  It can also be something more.  It can be the foundation of a new project of American renewal, and that‘s the kind of effort I intend to lead as president of the United States.

(END VIDEO CLIP)

MITCHELL:  And while Obama tries to pry evangelicals away from John McCain, McCain is trying to pry Latino voters from Obama.  We‘ll take a look at two long-shot efforts in a moment.

Also, to paraphrase Sigmund Freud, sometimes a phone call is just a phone call.  And to paraphrase Humphrey Bogart, sometimes it‘s the beginning of a beautiful friendship.  Obama and Bill Clinton finally spoke yesterday.  Yes, they did.  So now what?  Can Bill help Obama?  Will he help him?  And here‘s an interesting question.  Which one needs the other one more?

Plus, does Obama have an Iraq problem?  What seemed like a winner for Obama when he entered the race, getting out of Iraq fast, may not be so popular now that President Bush‘s surge has significantly reduced violence in Iraq.  Could John McCain turn staying into Iraq into a winning policy?

Also, will former secretary of state Colin Powell come out and endorse a presidential candidate?  That and more in our “Politics Fix.”  And could this really be President Bush in an ad for congressional Democrats?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  W. here.  Wanted to thank you for your support of the big oil energy agenda.  Appreciate you voting to give billions in tax breaks to the big oil companies.

(END VIDEO CLIP)

MITCHELL:  Well, no, not really.  So what‘s going on there?  We‘ll let you know in the HARDBALL “Sideshow.”

But we begin with the 2008 race.  Chuck Todd is political director for NBC News.  Mike Allen is with “The Politico.”  First to you, Chuck.  What is going on with Barack Obama and evangelicals?  What does he think he can prove (ph) here?

CHUCK TODD, NBC POLITICAL DIRECTOR:  I think he is comfortable talking about his faith.  That is something that he feels like he almost has to.  He needs to wear it on his sleeve.  He wants to get rid of the rumors about his religious background, the Muslim rumors, so—but he has always been very comfortable talking about it.  And so I think that he wants to prove that, wants to show it a little bit.

And there‘s a—they sense an opportunity.  Evangelicals are not crazy about John McCain.  He has struggled sort of—the guy is a classic Western secularist.  He doesn‘t—he may be a very religious person, but he doesn‘t like to talk about it.  He truly keeps it to himself.  And we‘ve seen in the past that a lot of evangelicals, particularly in the South, would rather see a candidate that is more comfortable talking about their relationship with God in the public domain than with a candidate who‘s not.

MITCHELL:  And it was in Ohio and with evangelicals that Karl Rove did so well in turning out the vote for George W. Bush.  Mike Allen, what does what chance does Barack Obama have, though, of really appealing to evangelicals, with so much suspicion out there in all of the polling about who he is and filling in the biography?

MIKE ALLEN, POLITICO.COM:  Oh, Andrea, I think that‘s a great question, and I think he may not make very deep inroads into hard-core evangelicals, but by doing events like he did today, by, as Chuck pointed out, talking comfortably and frequently about himself, I think he‘s able to reach a larger group of Democrats who are people of faith, maybe Republicans who are, as Chuck so rightly said, still completely unsold on Senator McCain, and I think that he has a real opportunity there.

We saw today at that clothing and food pantry, where he talked about how he was going to get rid of President Bush‘s faith-based office but give it a name and give it new money and he said make it more than a photo op.  So this is his way of saying to people, these people, I connect with you. 

I share with you.

Andrea, over the next 54 days, between now and the beginning of the Democratic convention, there‘s going to be a big contest between the two campaigns to convince people of who Barack Obama is, and Senator Obama today was saying, My faith is a very important part of that.

MITCHELL:  And let‘s listen to him.  This is Senator Obama today in Ohio, where he said that he was going to spend $500 million on that new faith-based initiative.

(BEGIN VIDEO CLIP)

OBAMA:  Now, I didn‘t grow up in a particularly religious household, but my experience in Chicago showed me how faith and values could be an anchor in my life and an anchor in the community.  In time, I came to see my faith as being both a personal commitment to Christ and a commitment to my community.  And while I could sit in church and pray all I want, I wouldn‘t be fulfilling God‘s will unless I went out and did the Lord‘s work.

(END VIDEO CLIP)

MITCHELL:  Now, he‘s trying to fill in the biography.  We saw, for instance with, you know, this group in York, Pennsylvania, where Peter Hart had the focus group, people don‘t know who either of these candidates are really, but there was a lot of misperceptions about Barack Obama, who he is.  The latest NBC News poll found that John McCain leads Barack Obama among evangelicals by 48 points.  The good news, though, Chuck, for him is that he—Barack Obama has a bigger number, at least among this group of voters, than Democrats did, than John Kerry did.

TODD:  Well, look, I‘m still skeptical that he‘s going to be able to somehow to make these incredible inroads.  I think the best chance he has of somehow convincing these voters to maybe stay at home, sit on their hands, not get excited, or maybe they go and vote but they don‘t do a lot of work for McCain.

But I think one of the things that‘s interesting about what he did today, he pledged basically to keep the Office of Faith-Based mission, which a lot of secular liberals are not going to be happy with.  And Obama‘s going to get a lot of criticism from some wings of the Democratic Party for doing this.

But this was a very popular idea among African-American religious groups, and this is something that President Bush, when he announced it, he had had some opportunities to really reach out to some minority religious leaders, and they were listening to him.  They liked this.  And I think this is Obama‘s way of sort of giving a hat tip to a community that has been very supportive of him, particularly African-American churches.

MITCHELL:  Mike Allen, do you think that this can work for Barack Obama?  Can he do two things at once, try to make inroads with the evangelical community and also try to inoculate himself further from the charges about Reverend Wright?

ALLEN:  Well, Andrea, one Republican explained to me that this is like Republicans talking about health care.  They‘re never going to make inroads with hard-core health care voters, but they can be more competitive and they can reassure people that this is a part of their palette.  So I think that‘s what Senator Obama was doing here.

And despite that high number for Senator McCain, I think you‘ll agree he has a lot of work to do there.  I think he helped himself this weekend when he went and visited Billy Graham and his son, Franklin Graham.  But there‘s a lot more like that to be done.  He just doesn‘t talk the language of evangelicals.  Andrea, the fact that when Senator McCain went to church last Sunday, it was news, that shows you he‘s got a lot of work to do in this department.

MITCHELL:  You know, the funny thing is that people like Ronald Reagan didn‘t go to church very often, either, were criticized for it, but he still had the support of...

TODD:  But Mike just brought up a great point.  It‘s speaking the language.  And I don‘t mean to talk about it as if it‘s code, but boy, President Bush and President Reagan was very good at this, President Clinton was very good at this, speaking to people of faith in words people of faith understand.  John McCain just doesn‘t communicate yet very well with evangelicals.  Barack Obama does right now.  So that‘s why you see a lot of leaders in the evangelical community going, Hey, I like what I hear.  But I think Mike‘s right, the rank and file, they‘re still going to be hard-core.

MITCHELL:  Let‘s talk about the flip side here, the Hispanic vote.  And what John McCain did today, really interesting, going after the Hispanic vote and also going to Colombia, South Carolina (SIC).  What kind of play is that, Mike Allen?

ALLEN:  Well, this is that same NBC News poll that you cited, sort of huge advantage for Senator Obama among Hispanics.  And as you and Todd—

Chuck have been educating us, that‘s a group that he had a lot of trouble with during the primaries.  So there should be an opportunity here for John McCain.

And I think you guys can agree this is a tremendous irony because John McCain is getting punished among Hispanics for the position of his party on immigration that he fought against.  The comprehensive energy—immigration reform that he fought for is something that Hispanics favor, but because Republicans were so against it, it‘s really hurt the party with that group.  Depending on what poll you look at, President Bush got about 40 percent of that group at most, and it was a place that he really hoped to make more of a change over his presidency.

MITCHELL:  And the irony here—so many ironies, but one of them is the fact that John McCain really got killed among the conservative base, the Republican base, for the position he took on immigration, where he aligned himself with George Bush, so he‘s not getting credit from the Hispanic community at the same time he‘s getting killed among the base.

TODD:  Well, and part of it, he‘s changed his rhetoric, too, which then some leaders in the Hispanic community say, Ah, see, he‘s kowtowing to his party a little bit.  But look, this trip to Colombia and then to Mexico, where he‘s going to visit some...

MITCHELL:  He‘s going to be in South America.

TODD:  ... a very important religious symbols to Hispanic—to Catholic Hispanics.  he‘s going to get—it‘s going to get saturation coverage with the Hispanic media here in the United States.  This is as much—it‘s as if he‘s courting New Mexico voters and Florida voters and Arizona voters and Colorado voters and Nevada voters by going to Colombia.

MITCHELL:  All states that Barack Obama is trying to put in play...

(CROSSTALK)

MITCHELL:  Now, let‘s listen to John McCain today, speaking in Indianapolis—no accident that he‘s in Indiana, a red state, a state that‘s very much in play this year—speaking in Indianapolis and setting up the trip that he‘s taking to South America.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  Our compassion for laborers who entered this country unlawfully, our understanding of their struggles, even as we act to secure the border, speaks well of America.  But this respect does not extend to criminals who came here to break our laws and to do harm to people.  We will require that the federal government assume more of the cost to deport and detain criminal aliens because this is a problem of the federal government‘s own making.

(END VIDEO CLIP)

MITCHELL:  Mike Allen, this push for Hispanics, could you see an impact here on running mate choices?  Could McCain go for a minority?  Could Obama go for a Catholic?  Do you think that this changes the calculus at all?

ALLEN:  No, I think that that would be smart.  And we‘ve looked around at the possible running mates and the potential states.  There aren‘t a lot of great match-ups.  And so going for a voter group would be smart and would make sense.

But you saw in that sound bite how tangled Senator McCain‘s position is, that he‘s trying to stick with what he said about security but also show that he still cares about this issue and wants to make it—so it‘s a very mixed message that, so far, as you point out, seems to be getting him coming and going.

Chuck‘s right about the groups that will be reached with this trip. 

Also, it reminds voters that he‘s very comfortable on the world stage.  Now, at the end of July, Senator Obama is to be out with his own eight-day trip.  But for now, the McCain folks love him being out there, essentially as one of the nation‘s leaders.

MITCHELL:  Looking presidential.  Chuck Todd, what about Obama‘s play for Hispanics?  Are you at all surprised by the NBC/”Wall Street Journal” poll showing that he‘s doing a lot better than anyone had thought when Hillary Clinton was still in the race?

TODD:  No, and I think that sometimes we over-examine those primary exit polls because we thought, you know, somehow it‘s like—you know, remember, Democrats were going to come home.  They were showing up.  Democrats were still—it‘s the Republican brand that‘s a mess.

But I do—look, I‘m hearing a lot of chatter on the Hill from people that are trying to have influence on Eric Holder, on Caroline Kennedy, the two people in charge of the running mate search for Barack Obama, that they want to make sure he picks a Catholic, that that might be the most important trait they‘re looking for.  National security, yes.  So you know, you hear that and you say, Who‘s Catholic, and who‘s got national security credentials?  And that‘s why Joe Biden‘s name keeps coming back and coming back and coming back because he might be able to check a couple of boxes.

MITCHELL:  Right.  Chuck Todd, Mike Allen, thank you both very much.

And coming up: Barack Obama and Bill Clinton talk for the first time since Obama clinched the Democratic nomination.  Are they putting their differences behind them?  And how will Obama use the former president out on the campaign trail?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MITCHELL:  Welcome back to HARDBALL.  Barack Obama and Bill Clinton spoke yesterday.  Yes, they spoke for the first time since Obama defeated Hillary Clinton and won the Democratic nomination.  They each issued their own statements highlighting Bill Clinton‘s future involvement in the Obama campaign.  How should Obama use the former president on the campaign trail?

Pat Buchanan is an MSNBC political analyst.  Joan Walsh is with Salon. 

They both join me now.  Hey, guys.

First to you.  Joan, why was this so hard?  You know, you had Barack Obama, the presumptive nominee of the Democratic Party, calling Bill Clinton.  He was over in London.  The last time I checked, I think there are telephone connections across the Atlantic.  It took two weeks for them to talk.  What was going on there?

JOAN WALSH, SALON.COM:  Well, you know, I think President Clinton was in a little bit of a no-win situation, Andrea, if you think about it.  You know, I actually give him credit for backing off, giving his wife the center stage last week.  They had a beautiful event in Unity.  And everybody knows the president had his feelings hurt, and maybe it was best that he kind of quietly got over it, took his time, went to London with Nelson Mandela, and came back when he could honestly and sincerely pitch Barack Obama as the nominee.  I didn‘t have a big problem with it, and I think he‘s now going to be an asset to Obama going forward.

MITCHELL:  Pat Buchanan, how should Obama use him, a lot, a little, send him to those rural towns in North Carolina, where he didn‘t seem to do terribly much, but he did do it in Pennsylvania for Hillary Clinton?  What is his value to Barack Obama?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think he‘s got a great deal of value to Barack Obama.  And I think Bill Clinton, probably because he was burned so badly and unjustly accused of various things, of racism and the rest of it—I think he will want to help.  And they both have a vested interest in doing a good job this fall for the party and to make Barack Obama president.

I would use him certainly in fund-raising.  I would use him in areas of the country where Barack Obama is going to win the state but he wants to keep the voters energized and excited that are not swing states.  I would use him in Arkansas.  Bill Clinton and Hillary Clinton are still popular there.  There‘s a lot of places you can use a former president of the United States.  There‘s still a great cachet to Bill Clinton.

MITCHELL:  In fact, he campaigned his heart out in Texas and Ohio.  Ohio is certainly one place where he did rather well for his wife.  Joan Walsh, what about the African-American community?  Now, the conventional wisdom would be Bill Clinton really stepped in it in New Hampshire, in North Carolina, in South Carolina, offending large groups of people.  Jim Clyburn has said he‘s had it, you know, at some point with Bill Clinton.  But at the same time, he could resurrect himself and restore himself and campaign among African-Americans and do something which would take Barack Obama off the hook and free him up to go elsewhere.

WALSH:  I think so, too.  I think Bill Clinton will get his love back in the African-American community, and I think that is something that Barack Obama has to help Bill Clinton do.  I agree with Pat, I think that Clinton said a lot of things that were maybe unwise, but he is not a racist.  That is something that was very unfair that happened to him, and Obama and Bill Clinton both have an incentive to redeem the president‘s reputation on that score also because, if he‘s a racist, why does Barack Obama want him out on the campaign trail?  That doesn‘t make sense.  So I think you will see him in the African-American community, mending those fences, going back to the good times, because Obama kind of owes that to Clinton, and Clinton, in turn, will make those events work for Obama.

BUCHANAN:  The political interests, Andrea, of both Bill and Hillary Clinton lie in being perceived as going all out, doing everything they can to get Barack Obama elected...

WALSH:  Yes. 

BUCHANAN:  ... doing everything Barack Obama asks them to do. 

I think she‘s going to be giving a major speech, I‘m sure, at that convention.  I think it might be a good thing for Bill Clinton to have a speech at that convention, get those out of the way early, and then move forward on the nomination night with the vice president and president. 

So, I think the Democratic Party, I really see it coming together. 

They all have this vital interest in helping each other out. 

MITCHELL:  But, you know—you know something, Pat?  Hillary Clinton and Bill Clinton‘s interests may not coincide here, because I‘m told that the people negotiating her role at the convention, which could be Tuesday night, rather than Monday night, would be a featured role for her.

And, as Chuck Todd suggested earlier on “Meet the Press” on Sunday, you could have Chelsea Clinton introducing her, but not Bill Clinton.  The last time Bill Clinton spoke before Hillary Clinton in a featured role, it was at Coretta Scott King‘s eulogy, at her funeral. 

BUCHANAN:  Right. 

MITCHELL:  And Hillary suffered by comparison.

I don‘t think you are going to see Bill Clinton in a featured role, maybe on videotape, but not live. 

(CROSSTALK)

BUCHANAN:  All right, but let me say this.

As of now, Barack Obama is not officially the nominee.  He‘s going to be.  But Bill Clinton, it seems to me, is the titular head of the Democratic Party.  He‘s a former president of the United States.  And I would not exclude him automatically from my convention. 

MITCHELL:  I agree. 

BUCHANAN:  I know, when I was in ‘92 and I spoke...

MITCHELL:  Don‘t you think that that...

BUCHANAN:  Go ahead.

MITCHELL:  Don‘t you think baton has been passed now to Barack Obama and that Clintons...

BUCHANAN:  It has passed to Barack Obama. 

Thank you—this is the handing of the torch, in my judgment.  What I would look at, Andrea, is, Bill Clinton does—Bill Clinton does represent the past.  If he‘s going to speak, get him out of the way on the first night. 

MITCHELL:  Monday, exactly.

BUCHANAN:  Give him his night.  Hillary Clinton speaks.

And then the next two nights are the vice president and the president of the United States, future, presumably, and that‘s the way to do it.  But don‘t dis the guy.  I think that would be a terrible mistake.

WALSH:  But don‘t put him on with Hillary. 

(CROSSTALK)

MITCHELL:  Joan, I want to get you in here, but—don‘t put them on side by side, exactly.

WALSH:  Sure.  I would just say—I would say don‘t—I would say, don‘t put him on with Hillary.  I would give him Monday, give Chelsea and Hillary Tuesday.  She deserves the bigger role.  The torch has been passed.  And I think he would probably support that.  I certainly hope so.  I don‘t know. 

MITCHELL:  Pat, briefly, before I let you go, what were you going to say about that ‘92 convention in Houston? 

(CROSSTALK)

BUCHANAN:  Well, what we did is, we arranged for me to speak first on the first night and endorse Bush, Reagan to speak the first night.  And then you move on to the themes of the presidential reelection, with the president speaking the fourth night. 

MITCHELL:  Pat, I don‘t need to remind you that that was a little bit controversial with... 

(CROSSTALK)

BUCHANAN:  It was controversial, but that night was—it was a smashing success the first night.  It was after they came—they dropped the bricks on us. 

(LAUGHTER)

MITCHELL:  We‘re going to have to talk about that later. 

Thank you....

WALSH:  Yes. 

MITCHELL:  ... Pat Buchanan, Joan Walsh.  Great to see both of you. 

Up next, who is the billionaire who has left his day job and is now a longshot running mate pick for John McCain?  The answer ahead in the HARDBALL “Sideshow.”

And for the past 10 days, we have been asking you, our viewers, to text-message us your thoughts on the following question.  Will Barack Obama choose Hillary to be his running mate? 

Here are the results.  Sixty-nine percent of you say Obama will not choose Clinton as his running mate.  Thirty-one percent say he will. 

We will be right back.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MITCHELL:  Welcome back to HARDBALL. 

Now the fun part.  Time for the HARDBALL “Sideshow.” 

The Democratic Congressional Campaign Committee is taking aim at 13 Republican districts in a new ad campaign.  And, well, it looks like they have found the perfect person to drive their point home.  The party‘s radio ads feature a sample voice mail message left for incumbent Republican House members.  Take a listen. 

(BEGIN AUDIO CLIP)

UNIDENTIFIED ACTOR:  W. here. 

I wanted to thank you for your support of the big oil energy agenda.  Appreciate you voting to give billions in tax breaks to the big oil companies.  Sure, gasoline is over four bucks a gallon, and the oil companies are making record profits.  But what‘s good for big oil is good for America, right? 

(LAUGHTER)

UNIDENTIFIED ACTOR:  I guess that‘s why they call us the grand oil party. 

(LAUGHTER)

(END AUDIO CLIP)

MITCHELL:  Well, the impression is shaky.  I have heard better here in this very newsroom, but the point is clear.  George Bush will be on the ballot this November, in spirit, if not in name. 

Next: made for Canada.  A new poll shows that Canadians prefer our leaders—well, one in particular—over their own.  Check it out.  When asked which politicians they admired most, Canadians listed two Americans in their top three.  Barack Obama is listed over Canadian Prime Minister Stephen Harper.  Where was John McCain?  Well, he was way behind several other Canadian politicians, with just 3 percent of Canadians saying they admired him most. 

Bottom line, while Canadians may not be fans of our current president, it looks like they, too, have been caught up in the 2008 election fever. 

So, whatever happened to Roberta McCain?  John McCain‘s 96-year-old mother spiced up the campaign trail all last year, showing her son wasn‘t really that old after all. 

Well, remember this delightfully unscripted HARDBALL moment back in November?

(BEGIN VIDEO CLIP)

CHRIS MATTHEWS, HOST:  You don‘t think Romney‘s done much heavy lifting for America, then? 

ROBERTA MCCAIN, MOTHER OF JOHN MCCAIN:  No, I don‘t.  I think being senator—a congressman—a senator—whatever it was, a governor for four years—and as far as the Salt Lake City thing, he‘s a Mormon.  And the Mormons of Salt Lake City had caused that scandal.  And to clean that up, it‘s not even—again, it‘s not a subject. 

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  The—the views of my mother are not necessarily the views of mine. 

(LAUGHTER)

(END VIDEO CLIP)

MITCHELL:  Oh, I wish we could re-rack that and just take a close look at John McCain‘s face while his mom was talking. 

Well, since McCain has clinched the nomination, his mother is nowhere to be found on the campaign trail.  When a “Los Angeles Times” reporter called her to get to the bottom of the missing mom of a candidate, she laughed and told him—quote—“They have got me muzzled.  Now, don‘t you print that.  I really don‘t like to be interviewed.”

I don‘t know.  I think a little straight talk from Roberta McCain wouldn‘t hurt. 

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

Many say John McCain needs an executive type with strong economic credentials to share the ticket.  The Politico Web site profiled one longshot pick that political analysts are calling a dream running mate for John McCain.  This household name will already go down as perhaps the most successful and innovative chairman of our time. 

He‘s already devoted a huge portion of his personal fortune to charitable causes.  So, who is it?  It‘s Microsoft founder and billionaire philanthropist Bill Gates. 

And now for tonight‘s “Big Number.”  

In 2004, the group Swift Boat Veterans For Truth damaged John Kerry‘s candidacy, some say fatally, by distorting Kerry‘s military record in Vietnam.  John McCain was one of the first to stand up and denounce the group‘s tactics.  He said that he deplored their type of politics. 

Well, apparently, the group‘s donors have let bygones be bygones and gotten behind this year‘s Republican nominee big time.  According to “USA Today,” just how much have the top 20 Swift Boat contributors and their families donated to John McCain‘s campaign this election cycle? -- $69,100. 

McCain has now taken $69,100 from the bankrollers of political ads he once called dishonest and dishonorable -- $69,100, tonight‘s “Big Number.” 

And coming up next:  Does Barack Obama have an Iraq problem?  As conditions on the ground stabilize, does he have as strong a case to make for why he should be president? 

Plus, General Wesley Clark‘s comments John McCain‘s military service doesn‘t necessarily qualify him to be commander in chief.  We will hear from General Clark, plus find out what two Iraq war veterans with very different opinions have to say about it all—all of that and more ahead on HARDBALL. 

(COMMERCIAL BREAK)

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

And stocks starting the third quarter on a bit of a positive note—the Dow Jones industrials gaining 32 points today, after sinking into bear market territory, then recovering.  The S&P 500 picked up almost five points.  And the Nasdaq is up 12. 

Stocks turned positive after General Motors reported better-than-expected sales in June, and maintained its U.S. sales lead over Toyota.  But GM sales were still down 8 percent compared to a year ago.  Toyota sales fell 11 percent.  Ford sales dropped 19 percent.  And Chrysler sales plunged 28 percent. 

Oil hit another all-time high of $143.67 a barrel, before retreating a bit.  Crude still finished at another closing high of $140.97 a barrel, up 97 cents for the day. 

And Starbucks announcing it will close 600 underperforming stores across the country.  It had planned to close just 100 stores.  It‘s also going to be laying off as many as 12,000 full- and part-time employees, or baristas, as they‘re known. 

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

HARDBALL. 

MITCHELL:  Welcome back to HARDBALL. 

Getting U.S. troops out of Iraq was a significant part of Barack Obama‘s reason for running and his early success in Iowa.  But has the changing situation in Iraq made it a less potent issue for his campaign in the general election? 

Plus, again today, General Wesley Clark stood by his comments regarding John McCain. 

Joining me now, Pete Hegseth of Vets For Freedom and Jon Soltz of VoteVets.org. 

Thanks to both of you. 

(CROSSTALK)

MITCHELL:  First of all, let‘s take a look at General Wesley Clark.  We know what he said on “Face the Nation.”  He took issue with the qualification of John McCain, saying that being a fighter pilot and getting shot down over Vietnam doesn‘t qualify you to be commander in chief.  He said subsequently that he honored his service. 

This is what he said earlier today at 1:00 with me on MSNBC. 

(BEGIN VIDEO CLIP)

WESLEY CLARK, FORMER NATO SUPREME ALLIED COMMANDER:  John McCain has to be recognized as someone who served his country in uniform.  He served with courage.  He served with commitment.  And I honor that service.  And, as I said on the show, he‘s one of my heroes. 

But the service that he had wasn‘t the same as having been in the White House or in the Pentagon or at a high-level command, and having actually had to wrestle with national policy and national strategic issues. 

(END VIDEO CLIP)

MITCHELL:  OK.  What about it, guys? 

First to you, Pete.  Is this a fair shot at John McCain, that John McCain should not be making as much of his military experience and his record and his life as a POW, his suffering as a POW, that it does not qualify you to be commander in chief? 

PETE HEGSETH, EXECUTIVE DIRECTOR, VETS FOR FREEDOM:  I mean, what General Wesley Clark—he‘s going way over the top.  What did he run in 2004 when he ran for the White House?  He ran on his military experience. 

Indeed, Senator McCain volunteered to go to Vietnam, ran 23 bombing missions over North Vietnam, before being shot down, resisting the enemy, not allowing himself to be let out early, coming back, rehabilitating himself, then leading the largest Navy squadron in the United States Navy. 

Then he went on to be in the United States Senate for 20 years in the Senate Armed Services Committee.  If anyone is qualified to talk on military terms of what it means to be commander in chief, it is Senator John McCain. 

But General Wesley Clark is willing to take political swipes wherever he can find them, taking on—well, you know what?  He led—he did lead a squadron, but it wasn‘t in wartime.  So, you know what?  It doesn‘t really count.  He‘s mincing words.  He‘s taking off his military hat.  He‘s putting on his political hat.  And he‘s basically becoming Senator Obama‘s hatchet man. 

MITCHELL:  Jon Soltz, what about that?  What‘s your response? 

JON SOLTZ, CO-FOUNDER, VOTEVETS.ORG:  It‘s really simple.

The last American general to win a war for the United States of America is General Wesley Clark.  Senator McCain right now supported the policy that‘s going to cost us to lose a war in Afghanistan.  It‘s very simple.

Senator McCain‘s service is honored by General Clark.  Him and I wrote an op-ed in “The Los Angeles Times” saying this, when we discussed about why General—when Senator McCain wouldn‘t support the G.I. Bill. 

But his experience in Vietnam has not led him to have proper judgment in the war on terror.  He has supported a policy in Iraq that has destroyed the armed forces of the United States, made our military unable to project force throughout the world, and supports essentially a policy of retreat against Osama bin Laden in Afghanistan. 

And these are the issues we want to talk about.  Where is John McCain on the war on terror?  And he‘s wrong. 

(CROSSTALK)

MITCHELL:  Well, whether you guys agree or disagree with what Wesley Clark said, he certainly took Barack Obama off-message, when Obama was trying to give his big speech on patriotism. 

HEGSETH:  Absolutely.

MITCHELL:  Take a listen to what Obama said when he was asked today if General Clark‘s comments were like the Swift Boat types of questions back in 2004. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I don‘t think that General Clark, you know, had the same intent as the Swift Boat ads that we saw four years ago.  I don‘t—I reject that analogy. 

But what I have also said repeatedly is that Senator McCain deserves the most the most—the utmost honor and respect for his service to our country. 

(END VIDEO CLIP)

HEGSETH:  And...

MITCHELL:  Yes, go ahead. 

HEGSETH:  Andrea, I would say the only people out here defending General Clark, or defending General Clark‘s comments are guys like Jon Soltz and MoveOn.org types...

SOLTZ:  That‘s not the case at all.

HEGSETH:   ... who are completely...

(CROSSTALK)

HEGSETH:  Senator Obama...

SOLTZ:  The entire...

HEGSETH:  Jon, let me speak.  Senator Obama...

SOLTZ:  The entire blogosphere is supporting Senator—or General Clark.

HEGSETH:  The blogosphere, the DailyKos and the HuffingtonPost and all those.

(CROSSTALK)

HEGSETH:  Let me speak, Jon. 

(CROSSTALK)

HEGSETH:  Jon, filibuster all you want. 

MITCHELL:  Pete, finish your thought.  Jon (inaudible).

HEGSETH:  The fact is the far left is the only ones who have defended him.  Senator Obama himself has said I don‘t stand by these comments.  And you‘ve got yourself standing up here saying, we‘ve got a policy of retreat in Iraq.  If it wasn‘t for Senator McCain we wouldn‘t have the incredible success we have in Iraq.  We wouldn‘t have had the levels of violence—

MITCHELL:  John, John, let me ask you this, though.  From the standpoint of the Obama campaign, is Obama trying to have it both ways?  He is saying that he honors John McCain‘s service?  Yet at the same time, other liberal bloggers and others are joining Wes Clark in taking McCain on here and trying to diminish the value of his experience. 

SOLTZ:  I‘ll say this again, Andrea, because General Clark and I worked so closely.  General Clark‘s helped me a tremendous amount on a personal level about my military experience and my service in the military.  General Clark and I wrote an op-ed.  It‘s in writing.  He said it on CBS. 

He said it on your show this morning.  He said it on Dan Abrams last night.  We all honor John McCain‘s service in Vietnam.  But his experience in Vietnam has not led him to the proper judgment about this war. 

Senator Obama is very clear on the fact that he wants to change our policy and go after al Qaeda where they are in Afghanistan, not in Iraq. 

HEGSETH:  Andrea, General Clark has taught John how to be a left-wing political operative. 

MITCHELL:  Wait.  Without going to labels—let‘s not go there.  Pete and John, let me play for you what Jim Webb, who some have mentioned as a potential running mate—here‘s what Jim Webb said on “COUNTDOWN” with Keith Olbermann last night. 

(BEGIN VIDEO CLIP)

SEN. JIM WEBB (D), VIRGINIA:  John McCain is my longtime friend.  If that‘s one area I would ask him to calm down on, it‘s that.  Don‘t be standing up and uttering your political views and implying that all the people in the military support him, because they don‘t, any more than when the Democrats had political issues during the Vietnam War.  Let‘s get politics out of the military, take care of our military people and have our political arguments in other areas. 

(END VIDEO CLIP)

MITCHELL:  So how about that, Pete? 

HEGSETH:  I don‘t think Senator McCain is saying all veterans or all military folks support his views.  Senator McCain is saying, if you want to talk about judgment, then let‘s talk about 2006 and 2007, when Senator Obama wanted to set a time line and bring all the troops home.  Imagine what Iraq would look like today.  Judgment was calling for a surge when no one else was, calling for more troops when no one else was, standing behind it when it was politically unpopular.  He did so.  Attacks are drastically down.  Things in Iraq are turning around.  Just look at any newspaper, “New York Times,” “USA Today.”  Everybody out there is saying the surge has worked.  It‘s been remarkably successful, despite what John and Wesley Clark and others might want to say that the surge has failed. 

MITCHELL:  Final word, John, what about that, the fact the surge has worked, some say, and certainly the level of casualties has come down and the political stability in Iraq seems to be improving. 

SOLTZ:  I appeared on this show with Pete in July of last year where I said there‘s no doubt you‘re going to have a better security situation. 

HEGSETH:  Give me a break. 

MITCHELL:  Whoa, whoa, whoa.  Pete, let him finish. 

SOLTZ:  The surge is a greater failure than the actual invasion.  In Afghanistan the last month, you have more casualties than you have in Iraq.  In Afghanistan -- 

HEGSETH:  What does it have to do with Iraq? 

SOLTZ:  You have our NATO troops pulling out because our Iraq policy is so unpopular.  The fact of the matter is that if you had taken the surge brigades that are in Iraq today, and you had put them in Afghanistan, you would have doubled the amount of troops on the ground in Afghanistan, take the fight to the enemy.  Instead, John McCain‘s failed judgment, with George W. Bush, has kept us stuck in a civil war in Iraq. 

HEGSETH:  MoveOn.org talking points.

SOLTZ:  VoteVets.org.

MITCHELL:  We are going to have to leave it there.  Thank you very much, Pete Hegseth and John Soltz.  Thank you for joining us today. 

And up next, Republicans for Obama.  Will Colin Powell and retiring Senator Chuck Hagel cross party lines and endorse Barack Obama for president?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MITCHELL:  Welcome back to HARDBALL and the politics fix.  Tonight‘s round table, Bloomberg‘s Margaret Carlson, MSNBC senior campaign correspondent Tucker Carlson, the Carlsons, no relation, and Chris Cillizza of the “Washington Post.”  Chris, you‘ve got the wrong last name. 

CHRIS CILLIZZA, “THE WASHINGTON POST”:  I should have known. 

MITCHELL:  Let me go first to you.  We‘ve talked about Iraq.  We just were debating Iraq.  This is an excerpt from George Packer‘s piece in the “New Yorker.”  It‘s called “Obama‘s Iraq problem; “Obama has won the Democratic nomination and Iraq, despite myriad crisis, has begun to stabilize.  With the general election four months away, Obama‘s rhetoric on the topic now seems outdated,” wrote packer, “and out of touch.  And the nominee apparent may have a political problem concerning the very issue that did so much to bring him this far.” 

Chris, what about that?  Is Iraq now helping John McCain or at the very least hurting Obama out on the trail? 

CILLIZZA:  Well, Andrea, I‘ve done a fair amount of reporting on it, because I think it‘s a really fascinating question.  What I found is actually counter to what George Packer wrote.  I talked to a lot of Republicans and Democratic strategists and they said, this is essentially a win-win for Obama.  If the war continues to look like it is not moving towards a resolution, if things remain unsettled there, Obama can say, look, we need to move out.  John McCain wants to do more of the same. 

If it gets better, if violence continues to drop and stability has arrived, then the war drops off the radar as a national issue and Barack Obama still wins.  And so I think there are certainly any number of ways to game this out and Obama and McCain wouldn‘t be caught dead, frankly, talking about the politics of the war in Iraq.  But I do think that the more that this national debate focuses on the economy, on health care, the more it is focused on domestic policy issues not foreign policy issues, not personality, not resume, the better it works out for Barack Obama. 

MITCHELL:  Let‘s talk about Obamacans for a second.  Tucker Carlson, I‘ve just confirmed that Colin Powell has met with both Barack Obama and with John McCain.  One was June 14th, the other June 18th, in his office.  They came to him.  What would an endorsement from Colin Powell mean?  First of all, Colin Powell was always very close to John McCain, as you know, and was one of his original backers before.  Is it possible, conceivable that he would be going with Barack Obama? 

TUCKER CARLSON, MSNBC SENIOR CAMPAIGN CORRESPONDENT:  It‘s conceivable and judging by things he has said, if you read into statements he‘s made recently, you get the feeling that he is a fan of Barack Obama‘s.  By the way, Chuck Hagel is also on the list of potential Obamacans.  That is a problem, I think, if he were to go for Obama.   He was a close personal friend of McCain‘s.  That‘s a separate question.

I think, however, the former secretary of state has the baggage of Iraq.  His history over the past eight years cuts directly against Barack Obama‘s message on Iraq.  It was his speech to the UN that sold the country, I think we all agree, on the war.  I don‘t know.  It‘s a mixed message for him to be part of the Obama team, were he to do that. 

MITCHELL:  He‘s got foreign policy credential, Margaret.  Is he a plus or minus?  He would, in some ways, validate Barack Obama as someone who could be commander in chief.  He projects all of that.  He has a strong following in the military and foreign policy circles, despite Iraq. 

MARGARET CARLSON, BLOOMBERG:  Number one, it would be huge news.  So that in and of itself is something.  It still matters what he does.  Even though Colin Powell did make a mistake on Iraq, at least I think he did, I think he is still somehow above it, that he remains an iconic figure becoming secretary of state and done what he did.  He‘s almost transcended that mistake. 

I think it‘s a clear win for Obama.  I don‘t think there‘s a real downside to it.  As for Hagel, I actually think the difference is that he‘s an elected official.  He‘s been in the Senate with McCain.  That‘s big, in that here‘s his friend in the Senate, both Vietnam Vets, if he goes with Obama. 

T. CARLSON:  He was one of a very few number of senators who endorsed McCain early in the last time, in 2000.  It was a divide.  But the personal friendship between them, I have witnessed it myself—that would be a profound moment if he were to endorse someone other than McCain. 

MITCHELL:  Chris Cillizza, when I remember at the 2000 convention in Philadelphia, Colin Powell‘s speech to that Republican audience, when he spoke out about affirmative action, the importance of affirmative action—

I was on the floor—there were some Republicans who were actually booing or sitting on their hands.  He‘s always been a little bit of a wrong fit, as much as a Reagan Republican as he is, rather a George Herbert Walker Bush Republican.  He never was a George W. Bush Republican. 

CILLIZZA:  You know, the thing, I think, that‘s interesting and important to remember with Colin Powell, Andrea, is we think of him in a political context.  I‘m not sure he thinks of himself, necessarily, all the time in a political context.  We try to fit political ideologies on to him Bush Republican or an Obamacan.  I‘m not sure he thinks of himself like that.  He strikes me as someone who is much more motivated by personality. 

Remember, he‘s never gotten into a presidential race, despite being courted any number of times to do so by both parties.  I think That speaks to the way he makes decisions.  I do think it gets to Tucker‘s point about it‘s a mixed message if Obama was going to take his endorsement.  I would say, he would gladly take it.  At the core of Obama, even more than the war in Iraq, at the core of his messaging is change, post-partisanship, bringing people together, doing things differently in Washington.  Having Powell on board in any kind of formal or informal role reinforces that core, fundamental message for Obama.  I think that‘s the power of the Obama message at the moment. 

MITCHELL:  I think right you are.  Stay right there.  We‘ll be right back with the round table for more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MITCHELL:  We‘re back with the round table for more of the politics fix.  Let‘s talk about war rooms and fighting the smears.  Tucker Carlson, Margaret Carlson, Chris Cillizza—Chris, first to you, let‘s talk about these websites.  Both campaigns have turned to the Internet for quick responses, rapid responses.  John McCain just launched this website, Truth Squad, and Barack Obama, debunking rumors about him, called Fight the Smears.  Does it work? 

CILLIZZA:  Well, I think there are two things going on, Andrea.  One, even in the last four years, we have seen the ability for these kind of e-mail misinformation campaigns to go viral in seconds.  Youtube clips sent around.  I think they are trying to combat that with their own sites that put up the correct information and try to produce a viral element too. 

Will it work?  I‘m not sure.  People tend to be more drawn to bad news than good news.  So I think that trend in human nature is hard to fight.  But it‘s a response.  I think it all goes back to the Swift Boat Veterans for Truth, 2004.  John Kerry, by his own admission, did not respond, did not take seriously this, at the time, small group that was not spending a whole lot of the money.  It wound up going viral, becoming a huge issue and undermining his credibility at the core of his campaign. 

I think the echoes of that campaign are still very much present in both of these websites. 

MITCHELL:  Tucker Carlson, Peter Hart had a focus group in York, Pennsylvania, and C-Span played it.  It was amazing what people thought about both John McCain and Barack Obama.  They had no notion.  There was so much misinformation out there and a lot of prejudice. 

T. CARLSON:  Without question. 

MITCHELL:  Can the Fight the Smear deal work for Barack Obama to fill in the gaps and tell people he‘s not a Muslim.  He‘s not scared.  

T. CARLSON:  I don‘t see these as defensive weapons.  These are offensive weapons.  In other words, the purpose is not to correct the record.  The purpose is to point out that the enemies of these campaigns are smearing them.  In other words, they are calling me unpatriotic, to which Democratic partisans rise up as one in anger.  They are questioning my war record, to which McCain partisans rise up in anger. 

That‘s the point.  They are, in fact, subtle and not so subtle attacks on the other guy. 

MITCHELL:  Margaret, this is the war room. 

M. CARLSON:  But being aggrieved is a positive thing, in that, as Tucker said, it allows you to go out.  The war room gone viral is fighting the last war, which is all candidates have now learned from Swift Boat and Kerry not responding.  But there always is the danger, especially on Fight the Smear, that you are bringing up things that people haven‘t heard.  You come away and say, wait, you mean Obama might be a Muslim. 

CILLIZZA:  The way you avoid that—Margaret‘s 100 percent right, Andrea.  The way you avoid that is you‘re not going to see Barack Obama going out on television and saying, some people say I‘m a Muslim, I‘m not.  I think you do it on the Internet because people will go to it. 

MITCHELL:  We‘ll fight those smears next time.  Thank you, Margaret Carlson, Tucker Carlson, Chris Cillizza.  Join us again tomorrow night at 5:00 and 7:00 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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