updated 7/3/2008 10:52:23 AM ET 2008-07-03T14:52:23

Guests: Eugene Robinson, Richard Wolffe, Michelle Cottle, John Harwood

JOE SCARBOROUGH, GUEST HOST:  Tonight, it‘s disorder of the Straight Talk

Express.  John McCain shifts his top players, but is a bigger shake-up coming?  And how concerned is the Republican Party that the McCain campaign is going off the rails?

THE RACE FOR THE WHITE HOUSE rolls on.

And welcome to THE RACE.  I‘m Joe Scarborough, in for David Gregory. 

Happy to have you with us.  This is, of course, every night your stop for the fast-paced, the bottom line and every point of view in the room. 

Tonight‘s lineup: Inside the McCain war room.  Are today‘s staff changes a sign of serious trouble ahead? And veepstakes: The Obama pick that could be a nightmare for Republicans.  We‘ll give you a hint—he‘s a former presidential candidate.  And later, in “Three Questions,” is the left‘s love affair with Barack Obama over?  Well, as you know, every night the bedrock of our program is a panel that always comes to play. 

And with us tonight, Michelle Cottle.  She‘s senior editor of “The New Republic.”  We‘ve got Richard Wolffe, “Newsweek” senior White House correspondent.  He now covers the Obama campaign full time, and he‘s with us from Denver, where he was with Barack Obama in Colorado Springs earlier today.  Also have Eugene Robinson.  He‘s associate editor and columnist for “The Washington Post.”  And, of course, Richard and Eugene are both MSNBC political analysts.

And then, of course, there‘s John Harwood, CNBC‘s chief Washington correspondent, and he‘s a political writer for “The New York Times.” 

Now, we begin as we do every night, with everybody‘s take on the most important political story of the day, “The Headline.”

Richard, you‘re in Colorado today with Barack Obama.  What‘s your headline? 

RICHARD WOLFFE, SR. WHITE HOUSE CORRESPONDENT, “NEWSWEEK”:  My headline, “Purple Rains Over Obama‘s Red White and Blue.”  I‘m not talking about Prince, I‘m talking patriotism, the kinds of speeches he‘s been giving in this July 4th week. 

And take a listen not just to what he says, but where he said it.  Today, in Colorado Springs, talking about national service.  Let‘s listen to the tape. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Just as we must value and encourage military service across our society, we must honor and expand other opportunities to serve, because the future of our nation depends on the soldier at Fort Carson, but it also depends on the teacher in east L.A.  or the nurse in Appalachia. 

FDR not only enlisted Americans to create employment, he targeted that service to build our infrastructure and conserve our environment.  JFK not only called on a new generation, he made their service a bridge to the developing world and a bright light of American values in the darkest days of the Cold War. 

(END VIDEO CLIP)

SCARBOROUGH:  All right.  Michelle—go ahead, Richard. 

WOLFFE:  I was just going to say, Joe, he‘s talking about military service and Appalachia.  That‘s no coincidence. 

He was in Appalachia yesterday talking about faith.  This is the kind of stuff he needs to do.  As you know, Joe, after Pennsylvania and the whole primary there, he cannot talk about these subjects enough.  And while McCain‘s out of the country, he‘s doing it in the purple states, in the red corners of those purple states. 

SCARBOROUGH:  Pennsylvania, Ohio, West Virginia, Kentucky.  You‘re exactly right, Richard. 

Now, Michelle, what‘s your headline?  Is it a warning for John McCain? 

MICHELLE COTTLE, SR. EDITOR, “THE NEW REPUBLIC”:  It is a warning for John McCain.  He needs to keep a closer eye on his religious lock.

Just as he‘s in Colorado Springs today, home of Focus on the Family, he‘s also been reaching out.  He‘s made this announcement that he thinks we should expand President Bush‘s faith-based initiative. 

This is his continued play for those religious voters that are so staunchly voting Republican over the years.  But if he can just eat away a little or even convince them that they don‘t need to be frightened of him, he could do great damage to John McCain.  John McCain is not doing anything to kind of combat this. 

SCARBOROUGH:  You‘re exactly right.  Here we are in the middle of the summer before the election, and Bush‘s own evangelical expert, Michael Gerson, a former Bush administration official, said McCain has a tin ear when it comes to conservative Christians.  Of course, McCain met with Billy Graham this past weekend, but leaders like James Dobson are still unimpressed and seem uninspired. 

Now, Gene, you‘re also talking about the McCain campaign.  What‘s your headline? 

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  My headline tonight, Joe, is “Who‘s Driving the Straight Talk Express?”

We learned today that Rick Davis, who has been managing the McCain campaign, is apparently stepping aside or upstairs, where he‘ll deal with big-picture issues from now on.  And the actual management of the campaign will devolve to Steve Schmidt, who is a long-time Republican operative.  He ran Governor Schwarzenegger‘s reelection campaign.  He was also involved in the Bush/Cheney campaign, and he‘s been working with the McCain campaign. 

This can only be seen as an attempt to bring some kind of order and consistent message to the McCain campaign.  Republicans have complained that it‘s kind of hard to tell what the McCain campaign is going to be talking about from day to day.  And there isn‘t really a consistent message that—and disciplined message that they are trying to get across. 

Now...

SCARBOROUGH:  Well, you know, Gene, you‘re exactly right.  Republicans have been complaining that McCain‘s campaign has been reminiscent of Bob Dole‘s failed run in ‘96.  You had former Reagan campaign manager Ed Rollins on “MORNING JOE” last week saying Republicans are depressed by the campaign‘s direction.  They‘ve brought in this tough guy, but is it too little too late? 

ROBINSON:  Or is it going to have impact and does McCain thrive on a certain amount of chaos and randomness?  He seems to do pretty well, you know, despite a kind of dysfunction that would throw other campaigns for a loop. 

SCARBOROUGH:  Yes.

ROBINSON:  Nonetheless, you know, the sense is that they are following behind and they‘re not taking advantage of the time that they have. 

SCARBOROUGH:  Well, there‘s no doubt.  There‘s always been chaos around John McCain.  When things are comfortable, he does very poorly.  Of course, we saw that in the primary campaign.  We saw him fire a guy who was with him for a very long time, bring in Rick Davis.  Now it‘s Rick Davis who may be shown the door, and here comes Steve Schmidt. 

Only time will tell if the chaos will actually work out for John McCain.

Now let‘s go to another John, John Harwood. 

What‘s your headline tonight? 

JOHN HARWOOD, CHIEF WASHINGTON CORRESPONDENT, CNBC:  Joe, first off, you saw that shaved head picture of Steve Schmidt.  I think John McCain‘s bringing a little Kojak to his operation.

But look, my headline...

SCARBOROUGH:  No doubt about it, baby.

HARWOOD:  My headline is “Better Half 2.0.”

In the 1990s, Hillary Clinton reinvented the role of political spouse for the baby boom generation, and her former president husband broke a new barrier in this year‘s primary campaign, for better or worse.  Now, Cindy McCain and Michelle Obama have taken charge of those roles, and a new poll suggests both could use some better marketing. 

Nearly six in 10 Americans have no opinion about Cindy McCain, while Michelle Obama‘s personal ratings are in the red with 35 percent, more than a third of all Americans, viewing her unfavorably.  And if you want to know whether the campaigns consider this important, check this—the ex-communications director for John Kerry, who headed the entire Democratic ticket in 2004, has been hired as Michelle Obama‘s chief of staff—Joe. 

SCARBOROUGH:  Now John, the first rule for first ladies, do no harm. 

I know last week Michelle Obama told “USA Today” that she didn‘t want to be a distraction to Barack Obama.  But right now, is she a distraction? 

HARWOOD:  Well, she‘s there.  She is going to be a distraction, as is any spouse of the candidate.  And the challenge is simply to make her as appealing as possible. 

I think she has tremendous potential as a campaigner, as somebody who can inspire Democratic women.  Certainly some of those woman who supported Hillary Clinton.  They have just got to work it and make sure that the rumor grapevine doesn‘t take off against her and the sort of attacks don‘t hurt her.  The same with Cindy McCain on the Republican side. 

SCARBOROUGH:  All right.  Stick around, guys, because coming up next, we go inside John McCain‘s war room and the GOP‘s three biggest worries about his campaign. 

And later in the show, it‘s your time to play with the panel.  And who in the world wouldn‘t want to do that.  Call us at 212-790-2299, or e-mail us at race08@msnbc.com.

Stick around, friends, because RACE FOR THE WHITE HOUSE will be right back.

(COMMERCIAL BREAK)

SCARBOROUGH:  Welcome back to RACE FOR THE WHITE HOUSE.  Now let‘s head inside McCain‘s war room, which is apparently still under construction.  We‘re going to get to that, but first, let‘s get back to our panel: Michelle Cottle, Richard Wolffe, Eugene Robinson and John Harwood.

First up, McCain‘s trip way down south.  He was in Colombia today promoting a free trade deal.  How many electoral votes do they have in Colombia?  It‘s the same type of deal that President Bush supports and wants Congress to approve.  And John McCain said this in a press conference earlier...

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  We who support free trade have to emphasize time after time that we are committed to providing education and retraining to displaced workers in newer and better and more innovative technologies.  And I am committed to every single American who has been displaced from his or her job by foreign competition to get them a new job and a better future. 

(END VIDEO CLIP)

SCARBOROUGH:  Boy, that just jumps off the screen, doesn‘t it? 

Now, the Obama camp saw this as another opportunity to link McCain to Bush, sending this e-mail to reporters: “Senator McCain‘s trip to Mexico and Colombia just underscores his insistence on continuing George Bush‘s failed economic policies that have left nearly 2.5 million more workers unemployed, including unfair trade deals that have been written by lobbyists.” 

Now, Richard Wolffe, does anybody outside of Wall Street or Bogota really care what a president‘s position is on Colombia trade tax? 

WOLFFE:  Yes, you‘re right.  He‘s talking to Wall Street, he‘s talking to the elite of the Republican Party, not to Main Street. 

If you‘re going to talk about jobs going to foreign countries, don‘t do it in a foreign country.  Do it in Ohio, do it in Michigan.  I don‘t understand the politics of this. 

SCARBOROUGH:  What was that about?  Why is he in Colombia, for god‘s sake? 

WOLFFE:  Maybe he likes the food.  I don‘t know.

SCARBOROUGH:  That‘s a good question.

Now, John Harwood, let‘s turn it to you.  Anybody on this panel that feels free to answer that question on why the hell he‘s in Colombia, you can do it. 

ROBINSON:  Joe, he‘s right.

SCARBOROUGH:  What, to food?  Is it the food? 

ROBINSON:  He‘s right on the—no, no, no.  The Colombians are—you know, they don‘t deserve to be in the middle of this.  The Colombian Free Trade Pact will have no impact on the U.S. economy, and the Colombians are getting a raw deal. 

So, on the substance, I think he‘s right.  However, on the politics, he couldn‘t be more wrong.  There are no electoral votes in Colombia.  They might build a statue to him in Bogota, but it‘s not going to help him get elected president.  And I can‘t imagine why he would choose to make this trip and make it a big deal right now. 

SCARBOROUGH:  Yes.  You know what?  They never built statues to Michael Dukakis or Walter Mondale in foreign lands.  You have got to actually win the presidency first. 

John Harwood, I think most of us on the panel agree that he‘s probably right on the substance of this, but don‘t all presidential candidates...

HARWOOD:  And I‘ll bet Barack Obama agrees too. 

SCARBOROUGH:  Well, he does.  And that‘s what I was going to say.  Even though you have Barack Obama sending out that e-mail message saying how this Colombia free trade agreement would be the end of the economy as we know it, don‘t all presidential candidates cynically play to the crowds during their campaigns, but always, and I underline that, always, support these free trade pacts once they are in the White House? 

HARWOOD:  Yes, they do.  And in fact, they also—those free trade pacts almost always pass despite the populist resistance that they play to in the campaign. 

So this is one of those things that‘s kind of a tricky issue for Barack Obama.  He got in trouble in Ohio when his economic advisor said something to Canadian diplomats that was interpreted by the diplomat as suggesting maybe he wasn‘t quite as hard on the NAFTA deal and other free trade pacts as Obama was saying in on the campaign. 

We‘ve seen Obama take a different tact on this issue.  So they‘ve got to be careful how much they go after John McCain. 

They are going to say every time John McCain breathes and opens his mouth and takes a step forward, that that‘s reinforcing his support for George Bush‘s policies.  But on free trade, the difference between these two, I‘m guessing, in the end of the day is smaller than they are making out right now. 

SCARBOROUGH:  Yes, minimal.

COTTLE:  Joe, I think...

SCARBOROUGH:  Go ahead.

COTTLE:  There has got to be something going on here where he‘s—John McCain is thinking, you know, I‘m going to show everybody.  I‘m going to go out there and say the most unpopular thing I can possibly think of again and again and again to prove that I am a—you know, I‘m a straight-shooting guy.  And that‘s great, but I just think he‘s crazy.  I‘m just not sure that that‘s a great approach.

SCARBOROUGH:  Well, you know, the thing is, actually, we had a joke about it in the primary campaigns where he went to Michigan and he said, your jobs ain‘t coming back, and then he would go somewhere else and say, we‘re going to have wars, we‘re going to have more wars.  And the bumper sticker for the primary season was, More Wars, Less Jobs, and he won because he was different, he was a straight talker.

I think you‘re right. 

COTTLE:  But he didn‘t win in Michigan. 

SCARBOROUGH:  I think he—no, I know, but he ended up winning overall.  And you know, again, maybe he‘ll win the special election in Colombia over the next couple months. 

HARWOOD:  Hey, Joe—Joe, have you forgotten—Joe... 

SCARBOROUGH:  It does—hold on one second.  It does underline and reinforce though that John McCain will do it differently.  He will be a straight talker, and that‘s what‘s got him elected all these years. 

Go ahead, John. 

HARWOOD:  Joe, you remember, there‘s a few Spanish-speaking voters in the United States, right, who probably get some Spanish language television that‘s covering this trip to Colombia?  This is not entirely as foolish, I think, as some of my colleagues think it is. 

SCARBOROUGH:  Well, thank you so much for clueing me in on that.  You‘re exactly right. 

(LAUGHTER)

SCARBOROUGH:  It‘s very interesting, because we actually saw a new poll that came out today that said John McCain was not doing as well among Hispanic voters.  And you‘re exactly right.  We live in a different era with satellite TV.  It‘s a wonderful world we live in, a magical world.  Only John Harwood, though, has picked up on what John McCain may be doing.

Next up...

HARWOOD: Thank you, I appreciate you noting that. 

SCARBOROUGH:  Yes.  If the rest of us can keep up with Harwood on this next issue, I would appreciate it.  We‘re going to retool the McCain camp.  News today that Steve Schmidt is taking over the day-to-day operations and communications, scheduling, and basic political strategy.

Campaign manager Rick Davis will focus on more “long-term operations.” 

Yes, like where his next job is going to be. 

This comes as the Politico is reporting that GOP officials are becoming increasingly frustrated with McCain‘s game plan because of inconsistent messaging, sluggish fund-raising and a lack of organization. 

Gene Robinson, what was the deciding factor, do you believe, in John McCain pushing Rick Davis aside for Steve Schmidt? 

ROBINSON:  Well, I think he‘s just heard from—you know, almost every Republican I‘ve talked to in the last couple months has said the same thing.  Just that, inconsistent messaging. 

Where are they going and what are they doing?  And, you know, time is a wasting. 

I mean, you know, we‘re going to be on the convention soon, and then it‘s the sprint to the finish line.  And there‘s a real sense that John McCain had a big block of time in which to make up ground on Barack Obama, define himself, define Obama, and get his message out there, and that he hasn‘t really done that.  Especially the message part. 

It‘s kind of hard to put your finger on, you know, this is why John McCain is running for president, this is what he‘s going to do, this is his message.  And that‘s what you don‘t get from that campaign. 

SCARBOROUGH:  And Michelle, let‘s go back.  I mean, over the past 25, 30 years, think about it.  With George Bush in 2004 and 2000, it was run by Karl Rove from the very beginning.  Bill Clinton, ‘96, ‘92, Carville from the very beginning.  ‘88, George Sr., run by James Baker III.

You can go back Reagan ‘84, Reagan ‘80.  They had the same team in place.

Isn‘t July terribly late to be rearranging the deck chairs on your campaign crews? 

COTTLE:  Well, I guess it would be except that, unless he does it, he‘s going to be stuck with those same clowns who have been doing all of this.  Although the question is, I mean, it‘s not like he‘s...

SCARBOROUGH:  Ouch.

COTTLE:  ... brought in somebody brand-spanking new.  It‘s not like Steve Schmidt hasn‘t been there. 

I mean, we were talking about this earlier.  Has he been big-footed?  Is that the problem?  And what exactly are we expecting to change now that he‘s gotten kind of a bump in promotion?

I mean, they had to do something.  Maybe they are hoping that this will look like a watershed moment and everybody will take a breath and it will all fall into place. 

HARWOOD:  But guys, hey...

COTTLE:  They‘re going to have to do something.

HARWOOD:  ... I think we ought to cut the McCain team a little bit of slack.  Let‘s face it, this is the year that is so bad to run as a Republican, I‘m not even sure Joe Scarborough could win an election in this environment. 

SCARBOROUGH:  Hey, you know what?  You just crossed the line.  You made one good point, John Harwood, it went to your head.  Now you‘re engaging in hyperbole.

Just, you know, what?  Take a shower.  Come back when you cool down. 

(CROSSTALK)

SCARBOROUGH:  Just about anywhere, I can win.  OK, Harwood?  Get that through your head.

Now, let‘s move on.

John McCain has said he would not attack Barack Obama on foreign soil.  But he did launch some zingers on his plane trip down to Colombia, including calling Obama out for not doing more to reject Wesley Clark‘s recent comments about McCain‘s military experience. 

(BEGIN VIDEO CLIP)

MCCAIN:  I think it‘s up to Senator Obama now to not only repudiate it, but to cut him loose.

(END VIDEO CLIP)

SCARBOROUGH:  Now, Richard Wolffe, four years after John Kerry‘s military service was questioned, do you think Barack Obama should move more aggressively—and not your opinion, but just, is it a good political move for him to move more aggressively to distance himself from what Wesley Clark said? 

WOLFFE:  Well, first off, great audio on that new plane of John McCain.

SCARBOROUGH:  Wasn‘t that awesome?

WOLFFE:  Well, all those microphones they put in there are really useful. 

Look, he went out there and gave that speech on Monday saying he totally backs off anyone.  He wants anyone in his campaign or the other campaign to not do this kind of thing.

Remember, Wes Clark is not part of his campaign if anyone was paying attention.  Wes Clark was part of the Clinton campaign.  So cutting him loose from what is the question. 

I think he‘s been pretty clear about this.  And I know that from Wes Clark‘s point of view, there‘s been a lot of upset that he hasn‘t been defended by the Obama campaign. 

So, you know, look, this is manufactured very usefully, very politically smart for the McCain campaign.  But why would Obama want to play ball like this? 

HARWOOD:  And Joe, wait a minute.  Let‘s make clear that there‘s a distinction here.

John Kerry—the integrity of John Kerry‘s military service was questioned four years ago.  In this case, Wes Clark was not questioning the integrity of McCain‘s service.  He was just questioning whether it prepared him for the White House.  It‘s an arguable point, but it‘s not the same thing. 

SCARBOROUGH:  Well, but at the same time, though, here you have the guy that was beaten for five, six year ins a prison of war camp, he was told he could go home.  He refused to go home, and he said, “I will not leave until all of my men leave with me.”

If that doesn‘t suggest leadership, if that doesn‘t help you in a time of crisis when you‘re in the White House, I don‘t know what would. 

HARWOOD:  I agree with you.

SCARBOROUGH:  I would like to know what Wesley Clark did during his military career that would more prepare him for a stressful situation in the White House than that. 

HARWOOD:  I think it was a stupid argument for Wes Clark to make, but all I‘m saying is, for this to be equivalent to what happened to John Kerry four years ago, Wes Clark would have had to say that John McCain sort of staged some of this or made it up, or something like that, and that‘s not what he was doing. 

COTTLE:  And Joe, right now this argument we‘re having on the air is exactly why McCain brought it up again.  He wants this discussed as much as possible. 

SCARBOROUGH:  All right.

Well, coming up next, we‘re not going to discuss that anymore, Michelle, but we are going to discuss Obama‘s veepstakes, the number two pick that some Republicans fear the most. 

And is there a silver bullet for vice presidential choice for John McCain? 

Stay right with us.  THE RACE returns right after this.

(COMMERCIAL BREAK)

SCARBOROUGH:  And we‘re back with THE RACE and our mini version of the veepstakes, the nightmare ticket edition. 

Here again, Michelle, Richard, Eugene and John.

First up, the Obama ticket that keeps Republicans up at night is Obama/Gephardt. 

A top GOP strategist told “U.S. News & World Report” that former Congressman Dick Gephardt is the Republicans‘ nightmare pick.  Why?  Well, let‘s look at Gephardt‘s resume.

He served 14 terms in the House, 15 years as a Democratic leader.  He‘s a two-time presidential candidate with strong labor ties.  He was co-chair of Hillary Clinton‘s presidential campaign.  And his home state, Missouri, one of Obama‘s prime targets. 

Gene, do you agree with this top Republican strategist that Gephardt would be a nightmare scenario for Republicans? 

ROBINSON:  I‘m not feeling that one, Joe.  I don‘t see this as the ultimate nightmare scenario. 

You know, Gephardt gives you the kind of economic populism, maybe, but, you know, he‘s not exactly consistent with the kind of, you know, change, new politics look to the future, let‘s change the world kind of theme of the Obama campaign.  And you know, I don‘t see why he would be more of a nightmare for the Republicans than a number of other people you could pick. 

SCARBOROUGH:  Well, Gene, you know, I‘m kind of with you too. Let‘s show the whole panel now.  And we‘re going to do this like a debate. Just a show of hands, who thinks Obama picking Gephardt is a nightmare scenario for Republicans?  Me neither.  All right. 

The question, what‘s the nightmare ticket for Democrats? 

Michelle, what do you say? 

COTTLE:  You know, I don‘t think there is basically a silver bullet.  But, you know, I think that the talk of Governor Tim Pawlenty was pretty solid.  He‘s a social conservative, his wife is big with the Evangelicals. 

SCARBOROUGH:  Oh please.

COTTLE:  He‘s good on pocketbook issues.  You know, he‘s in the middle of -

what do you want me to say?

SCARBOROUGH:  You don‘t like that, John? 

HARWOOD:  Well, I just don‘t think it reaches silver bullet status.  I mean, I think Dick Gephardt would be a great pick for Barack Obama for a lot of reasons, if he could get over the lobbyist issue, which is the biggest stumbling block there.  But I don‘t think it‘s a nightmare for Republicans.  And Pawlenty, that would be fine. 

SCARBOROUGH:  What‘s McCain‘s pick? 

HARWOOD:  Well, the best—if you want to know the closest thing to a nightmare pick, it would probably be Colin Powell.  But I don‘t think that‘s going to happen.

COTTLE:  No way, absolutely not.  Absolutely not. 

SCARBOROUGH:  All right.  OK, we have got to go to break, but I want to hear from you, Gene, really quickly.

Who should McCain pick?  The “nightmare scenario?”

ROBINSON:  McCain/Reagan.  That‘s my scenario. 

(LAUGHTER)

COTTLE:  There you go.  I‘m with Gene. 

SCARBOROUGH:  Darn right.

Richard, I‘ll ask you the same thing.  What‘s the nightmare for Democrats? 

WOLFFE:  Bloomberg.  It gets into that—

SCARBOROUGH:  Bloomberg? 

WOLFFE:  Yes.  It gets into that independent status that McCain has been lacking. 

SCARBOROUGH:  I like it.  Plus, he gets a couple billion dollars to spend.  There is actually—I‘m going to play Mclaughlin here, wrong!  There‘s no nightmare scenario for Democrats.  This is there year.  Ronald Reagan could rise from the west and hold up John McCain‘s hand at the convention and it would still be a Democratic year. 

HARWOOD:  The whole year is a nightmare. 

SCARBOROUGH:  The whole year is a nightmare and the next four will be nightmares for any Republican that want to do anything in Washington D.C.

Coming up next, will it be the economy, stupid in ‘08?  Plus, the other surge that could help John McCain.  THE RACE comes back in a minute.

(COMMERCIAL BREAK)

(NEWS BREAK)

SCARBOROUGH:  Welcome back to the RACE FOR THE WHITE HOUSE.  Great to have you with us.  We‘re heading back inside the war room.  This time, it‘s the economy edition.  Back with us, Michelle Cottle, senior editor of the “New Republic,” Richard Wolffe, “Newsweek‘s” senior White House correspondent.  He, of course, covers the Obama campaign full time.  He was with Obama in Colorado earlier today.  Eugene Robinson is associate editor and columnist for the “Washington Post.”  Richard and Eugene are both MSNBC political analyst.  And John Harwood is cNBC‘s chief Washington correspondent and a political writer for the “New York Times.” 

First up, McCain sells himself on the economy on “Good Morning America.”  Watch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  You have admitted that you‘re not exactly an expert when it comes to the economy.  Many have said  --

MCCAIN:  I have not.  I have not.  Actually, I have not.  I said that I am stronger on national security issues because of all the time  I spend in the military.  I was very strong on the economy.  I understand it.  I have a lot more experience than my opponent. 

(END VIDEO CLIP)

SCARBOROUGH:  We‘ll let you judge for yourself.  Here‘s what John McCain said in 2005 to the “Wall Street Journal,” quote, “I‘m going to be honest, I know a lot less about economics than I do military and foreign policy issues.  I still need to be educated.”

John Harwood, will this quote become the 2008 equivalent of the I voted for the 87 billion before I voted against it?  One of these quotes that we are going to hear time and time again throughout the fall? 

HARWOOD:  Yes, we‘ll hear it time and time again in the fall.  We certainly heard it.  Mitt Romney used it in the Republican primaries.  Look, I don‘t think there‘s that much of an inconsistency.  He did say in that quote that you put up on that full screen that he knew less about the economy than he did about military and foreign policy. 

(CROSS TALK)

HARWOOD:  Of course, yes, he did need to be educated.  Democrats are going to use it.  Honestly, I think this is one of those things where the other side is going to try to exploit this to hurt John McCain.  I think it doesn‘t means as much as Democrats are going to make it out to be. 

SCARBOROUGH:  Richard Wolffe, could there have been a worse possible year, other than possibly 1980, for a major presidential candidate to make such a declaration on the economy? 

WOLFFE:  Look, I pay homage to John Harwood‘s economic skills, and I wish he could educate me on the economy, but you don‘t deal with this kind of problem by denying that you ever said.  It wasn‘t just the interview with the “Wall Street Journal.”  It‘s been part of his schtick on the campaign trail.  He throws questions to Phil Gramm and says he‘s the expert.  He could have said he was joking around or it was taken out of context, but to deny it and to look flat footed on this issue, which has risen very quickly to the top of the agenda for voters, I think it‘s a major, major problem for him. 

(CROSS TALK)

SCARBOROUGH:  John, we‘re going to have to ask you to play nice.  Play with the rest of the team or, again, we‘re going to send you to the showers.  When I say next up, that means you stop talking.  Let‘s practice it.  Ready, John.  Three, two, one, next up, rising gas prices drive voters to support offshore oil drilling, an energy policy that McCain supports, but Obama opposes.  According to a Pew research poll released today, the percentage of people who favor off shore drilling has spiked from 35 percent in February to 47 percent in June, while the percentage of those who support energy conservation dropped from 55 percent in February, to 45 percent in June. 

Michelle, does being green pay off less when voters are paying 4.50 at the pumps? 

COTTLE:  Sure, when people are having to sell their SUVs because it‘s expensive to go on vacation—it‘s summer.  Gas prices are high.  People are feeling the pinch.  This is the worst time.  What usually happens whenever we‘ve had these panics in the past is by the time the fall election rolls around, the prices have dropped a little and people have stopped freaking out so badly.  But sure, when people start having to pay a lot of money to fill up their cars, they will do anything. 

SCARBOROUGH:  No doubt about it.  You‘re right, every time Washington finally starts responding, gas prices go down, everybody forgets and there‘s another missing girl story.  Gene, finally, ad wars in key battleground stakes and pocket book issues are on front lines.  The RNC announced today that it‘s going to be running anti-Obama ads focusing on energy security this weekend in Pennsylvania, Wisconsin, Ohio and Michigan.  Meanwhile, Barack Obama already has been running his second general election ad in 18 battleground states.  It‘s called “Dignity,” and it focuses on job security.  Watch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  He worked through college and Harvard Law, turned down big money offers and helped lift neighborhoods stung by job loss, fought for workers‘ rights.  He passed a law to move people from welfare to work, slashed the rolls by 80 percent, passed tax cuts for workers, health care for kids. 

(END VIDEO CLIP)

Gene, is it 1992 all over again?  Is it the economy, stupid? 

ROBINSON:  I think it is.  That‘s certainly—right now, you would have to say that‘s the most important battlefield on which the election is being fought.  We don‘t know what‘s going to happen in the next few months.  We could be sitting here in a couple months talking about Iraq or talking about something that we don‘t know we‘re going to be talking about at this point.  Right now, you have to talk about the economy.  You have to appeal to—you have to make a more or less populist appeal, I guess, and talk to people about their pain, their suffering, their experience of this downturn or recession, or whatever it is, and how you are going to make their lives better.  This ad and McCain‘s coming ad will be an attempt to do that. 

SCARBOROUGH:  I think you are exactly right.  Now, when we come back, we‘ll have our three questions and also, we‘ll see if we can keep our cNBC and “New York Times” hooligan in his box.  That‘s straight ahead on RACE FOR THE WHITE HOUSE.  Stay with us.

(COMMERCIAL BREAK)

SCARBOROUGH:  We‘re back.  20 questions?  Don‘t have the time.  So, we‘re going to stick to three questions.  In fact, they are the three biggest questions of the ‘08 race now.  Still with us, Michelle Cottle, Richard Wolffe, Eugene Robinson and personal friend of mine, John Harwood. 

First up, Osama bin Laden may still be on the run, but al Qaeda and it followers, the cold hearts behind the September 11th attacks, aren‘t the terror titans they once were believed to be.  Yes, we are still very much involved in wars in Iraq and Afghanistan, but we‘re not exactly at war anymore all over the world.  So does that change what we are looking for in a president this year, as opposed to what we were looking for four years ago?  Our first question of the night: is this the first true post-9/11 election?  Richard Wolffe? 

WOLFFE:  Yes, I think it is.  I think people are going to be looking for America—look, Americans like to be feared and respected around the world.  But they like to be liked.  I think one thing that‘s been very alarming for people, for regular voters, is this idea of Bush being unpopular around the world.  They want to see America‘s ideals respected, and have a president who can carry that forth when he travels. 

So, yes, these factors are important.  Of course, voters aren‘t going to decide based on what people in Paris think.  But they do want to see a popular president out there. 

SCARBOROUGH:  But as Luxembourg goes, so goes West Virginia.  Michelle Cottle, is this the first 9/11 election? 

COTTLE:  I think that, in part, it‘s got to have to be, because the economy is going to be such a big deal.  Obviously there are issues that are going to have to be addressed.  Al Qaeda is sitting around in Pakistan rebuilding itself, and we have all these troops in Iraq.  But a lot of it is going to be about the message that Obama sends or McCain.  You can‘t do much worse than George Bush has done for the last few years. 

SCARBOROUGH:  Gene Robinson, is our credibility across the globe so bad that we need, as Americans, to look for a leader that will unite the world? 

ROBINSON:  I think a lot of voters, including a lot of Republicans that I have talked to, are looking for a leader who can restore America‘s image around the world, and feel that we have suffered so much in the last eight years.  But I actually disagree.  I don‘t think this is a post-9/11 election.  I think the bar is still higher than it ordinarily would be for Barack Obama to demonstrate that he can be a wartime president, even though we‘re not in a hot shooting war of the kind that we were a few years ago.  You know, there‘s still casualties in Iraq, obviously.  It‘s not as intense as it was. 

Nonetheless, I don‘t think the atmosphere is completely cleared from 9/11, from the Iraq war.  I think that presents a higher hurdle for Obama. 

SCARBOROUGH:  Gene, I agree.  What‘s so ironic though, for the Republicans, just like in 1992, Bill Clinton was elected because the Soviet Union broke up in 1991.  You didn‘t have the same tests that you had for presidents before.  The fact that things have calmed down a bit in Iraq actually may help Barack Obama and hurt the Republicans, as the focus turns away from Iraq and national security, and towards the economy. 

Next up, is Obama‘s literal base cracking up?  Almost 10,000 of Barack Obama‘s most ardent supporters are protesting his support for FISA.  They are doing it on a social networking site that lives in Obama‘s own campaign website.  It seems as though the Internet, the campaign‘s not so secret but ultra-powerful grass roots organizing tool, may be on the verge of back-firing on team Obama. 

John Harwood, our second question of the day, is it possible that the left could fall out of love with Obama if he fades on FISA, if he fades on interrogating, and if he seems siding with Cheney-Bush and the NSA on wiretapping? 

HARWOOD:  You want me to talk now, sir? 

SCARBOROUGH:  I knew you would have to make a point.  I can very easily go to Michelle. 

HARWOOD:  Don‘t you want to know what Michelle thinks. 

COTTLE:  Don‘t drag me into this. 

SCARBOROUGH:  Three, two, one. 

HARWOOD:  No, it is not a problem for Barack Obama.  This is one of those things that sounds like a problem, but if you really look at it, getting attacked from the left on national security issues is good news for Barack Obama, because it tells mainstream voters that he‘s not out on the far extreme and helps him counteract the attacks he‘s getting from John McCain and the Republicans. 

SCARBOROUGH:  But, you know, Richard Wolffe, changes are very good that Barack Obama—he‘s backed down on FISA.  He‘s going to back down on Iraq.  Everybody knows we‘re not getting out in 14 months.  That‘s absolutely ridiculous.  Chances are good he‘s going to back down on interrogation to a degree.  On these national security issues, where he went far left, at least by today‘s standards, far left to win the Democratic primary, he is going to bolt back to the center in a Nixonian sort of way.  Will the left stay with him come hell or high water? 

WOLFFE:  Joe, look, one of the raps against Obama is that he‘s never bucked any part of the liberal base and he‘s doing it right now.  I‘m sorry, I hate to break this to you; I‘m with John on this one.  I think when it comes to Iraq, actually, he‘s going to stick with withdrawal.  It‘s not going to be the same kind of ambitious, fast paced withdrawal, but there is a real contrast there with McCain.  In the end, elections are about choices.  The people on the left are going to look at McCain and they‘re still going to vote with Obama. 

SCARBOROUGH:  You really believe, Richard Wolffe, that we‘re going to get out of Iraq in 14 months? 

WOLFFE:  No, I said it would be slower.  He‘s still going to start withdrawals.  That‘s going to be an important message for his base.   He‘s not going to even do it all by the mid terms, but he‘s going to start it.  That‘s what‘s important to these people.

SCARBOROUGH:  You watch.  We will have troop in Iraq, a significant number of troops in Iraq—we‘re still in Bosnia ten years after Bill Clinton said we‘d be out after one year.  It‘s just not going to be that easy. 

Finally, president of the world.  John McCain, of course, en route to Mexico City after his visit to Columbia.  Barack Obama‘s heading to Europe and the Middle East this summer.  President Bush is going to Japan next week for the G-8 summit.  Everybody is going international.  It‘s the thing to do this July.  Even the magazine “The Economist” is getting excited, saying we have two good choices in McCain and Obama.  But it‘s time for the two to hunker down and talk policy.  Why does the world care so much about who is going to be our next president?  The third question, how will the world change with a President McCain or Obama? 

I want to start with you, Michelle.  “The Economist” says is the best of America.  Will they still love us in December? 

COTTLE:  Well, I‘m sure we will do something to offend them.  That said, we‘re talking about comparing what we‘ve been through for the past eight years to what we‘re looking at.  Yes, in either case, you‘re going to have an improvement.  It‘s not necessarily only what George Bush did.  It was his attitude and his positioning and the message he sent, which is very cowboy-ish.  Either way, we‘ll be in better shape, automatically, seen as a break from the past. 

SCARBOROUGH:  Gene, we‘ve been hearing for some time that America is more isolated than it‘s ever been before and that everybody hates us in Europe, or as Donald Rumsfeld once said, the chocolate makers, old Europe.  The bottom line is this, we have a French president that is more pro-American than ever before.  We‘ve German chancellor that‘s pro-American, a British prime minister that‘s pro-American.  As far as our European allies go, this is about the most pro-American group of European leaders we‘ve had in a decade, or actually a generation. 

ROBINSON:  Joe, let me mention two issues that most people in the world really disagree with George Bush on.  One is climate change.  Both McCain and Obama promise to take a position much closer to that of European countries on climate change.  And Guantanamo, and the whole nexus of issues that you could sum up as Guantanamo.  Both say they will close Guantanamo.  Those two things, different position on climate change and closing Guantanamo, would make Europeans, South Americans, a lot of people around the world feel a lot better about the United States. 

SCARBOROUGH:  Gene, when we come back, your chance out there in TV land to play with the panel, when we return on RACE FOR THE WHITE HOUSE.

(COMMERCIAL BREAK)

SCARBOROUGH:  Welcome back to THE RACE.  Let the word go forth that the torch is being passed to you.  It‘s time for you to play with the panel.  Back with us, Michelle, Richard, Eugene and John.  Chantelle in Virginia has a question about a female VP for Obama; “could someone explain why everyone brags about Hillary Clinton cracking the glass ceiling into 18 million pieces, yet everyone is afraid to recommend a woman VP for the Obama campaign.  For example, why is Kathleen Sebelius being written off as a possible running mate, just because Hillary didn‘t win the Democratic nomination.”

John Harwood, take a shot at it. 

HARWOOD:  Can I just say first, to Chantelle in Virginia, I‘m glad somebody wants to play with me tonight.  Now, on the question of the female running mate, I think the reason that most people dismiss the idea of a female running mate for Barack Obama is that he‘s ahead.  He doesn‘t want to take risks.  When you try to elect the first African-American president, you wonder, how many firsts do you want the American people to come to terms with in a presidential election? 

It‘s not being written off entirely.  Certainly, Sebelius is a possibility.  If you accept the fact that you‘re not going to pick Hillary Clinton, if you pick another woman, a lot of Hillary supporters would see that as an insult. 

SCARBOROUGH:  Very good.  Less in New Orleans has a question about voter turn out; “Obama reportedly has predicted a 30 percent increase in African American turn out.  Record numbers of first time voters showed up during the primaries.  Some of the most disgruntled conservative voters may still be sulking and stay home in November.  What purple and red states could swing Obama‘s way simply due to a large disparity in turn out?”

It seems appropriate to go to you, Richard, in a purple state, Colorado.  What do you think? 

WOLFFE:  Colorado and some of these western states are up for grabs.  But I think, actually, you really have to focus first on places like Virginia and North Carolina.  If he can drive turn out in those two states, then the electoral map changes completely. 

SCARBOROUGH:  Michelle, what about you? 

COTTLE:  I expect him to do really well in Virginia, in part because the Virginia Republican party is in such shambles, between Jim Gilmore and the Mark Warner race.  They‘re just having a hard time there.  I think he‘s got a good shot at it there. 

SCARBOROUGH:  Gene, what about Virginia?  Is it possible? 

ROBINSON:  I think Virginia is almost a done deal.  Nothing is done until it‘s done.  Virginia has been trending blue for several elections now.  It‘s about to have two Democratic senators, if Mark Warner wins.  I think Virginia—Obama can‘t count on it, but I think he‘s likely to get it.  The state I think everybody should keep on eye on is Georgia.  Obama can give McCain fits in Georgia. 

SCARBOROUGH:  All right.  If Georgia and Virginia go Obama‘s way, it‘s time for the Republicans to duck.  That does it for RACE FOR THE WHITE HOUSE.  I‘m Joe Scarborough, in for David Gregory.  We want to thank our great panel, also John Harwood.  Thanks for you for watching.  We‘ll see you back here tomorrow night.

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

END   

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