updated 7/8/2008 11:17:53 AM ET 2008-07-08T15:17:53

Guest: Jeff Johnson, E.J. Dionne, George LeMieux, David Saunders, Eric Kocher, Evan Wright, David Simon, Chuck Todd, Howard Fineman, David Shuster

CHRIS MATTHEWS, HOST:  Who‘ll stop the pain, Obama or McCain?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  Americans back from a gas-guzzling 4th of July weekend know the deepening economic dangers now facing the country.  And today, both presidential candidates are letting voters know they know where the buck stops.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  The choice in this election is stark and simple.  Senator Obama will raise your taxes.  I won‘t.  I will cut them where I can.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  If Senator McCain wants a debate about taxes in this campaign, then it is a debate I am happy to have because if your family is making less than $250,000 a year, my plan will not raise your taxes—not your income tax, not your payroll taxes, not your capital gains taxes, not any of your taxes.


MATTHEWS:  So McCain is debunking Barack Obama as a tax raiser.  You just heard him there.  And Obama‘s calling McCain just another George W.  Bush, perhaps with racing stripes.  Can either of these candidates deal with the economic horror?  That‘s the question voters want to know.  Plus:

What will Barack Obama do about Iraq?  Is he flip-flopping, as the Republicans are charging right now, or does he offer a truly different mindset about war policy, very different from President Bush?

Also, the strategists.  He who wins the average Joe or Jane in this country usually wins the presidency.  We‘re going to talk to two strategists, one Democrat, one Republican, tonight about who has the edge with working voters and maybe the inside track to the White House.  And in the HARDBALL “Sideshow” tonight, a familiar name just might be a possible running mate for Barack Obama—a very familiar name.

But we begin tonight with the economy—and that‘s not good news—and the 2008 presidential race.  Chuck Todd is political director for NBC News.  Chuck, I‘ve been traveling across the country.  I was at a conference out in Hawaii, my first trip, I must say.  What an amazingly beautiful state.  The Dow is down again today.  The stock market‘s down.  Gas prices keep going up.  And nobody tells me they‘re ever going to stop going up, by the way.  The just keep going up.  We have a recession right now, or something worse.  We don‘t know when it‘s going to end because we may be going into a real trough right now, we don‘t know, a long-term economic slowdown caused by bad—highly costly energy prices, which everybody knows—everybody knows what I just said.

Do the candidates really have an answer, like Reagan did—I‘m going to cut taxes 30 percent, I‘m going to do something big?

CHUCK TODD, NBC POLITICAL DIRECTOR:  Well, you know, I don‘t think they do because remember how both of these candidates got their nominations.  They‘re both where they are because of Iraq.  Barack Obama is not a plausible candidate for president if his position on the—original position on the war in Iraq isn‘t what it was.  He is not the chief alternative to Clinton.  And John McCain stakes his entire campaign on Iraq.  All of a sudden, the voters are saying, You know what?  Iraq, we never liked that war.  We hope it stabilizes.  Tell me what you‘re going to do to put money in my pocket.  Tell me what you‘re going to do.  What happens...

MATTHEWS:  But neither guy sold himself as the solution to an economic danger, which, in fairness, wasn‘t as severe as it is now.  A year ago, it wasn‘t as bad.

TODD:  The irony in all this is if you‘re Hillary Clinton and Mitt Romney, the two runners-up, or even Mike Huckabee on the Republican—had this been six months—I mean, timing is everything.  Those three folks would be fighting it out right now for the White House—or two of those folks.

MATTHEWS:  OK.  My hunch is—tell me if I‘m right.  You‘re the political director at NBC, therefore you will have the answer.  It seems to me, when you get into October this year, in the middle of all the debates, we‘ll see who looks good, who has well-spoken words.  But in the end, the cruncher, the deal maker or breaker is going to be self-interest.  The voters are going to say, Hey, a new kid on the block, maybe not a lot of experience.  He‘s African-American.  He‘s from—we didn‘t know him before.  We‘ll take a chance on him because we‘ve got to have a change.  Or they‘re going to say, Things aren‘t that bad.  Let‘s keep it a little soft here.  Let‘s not make too big a radical change.  Let‘s stick with someone we know, McCain.  Is that the way it‘s going to look?

TODD:  I think it‘s going to be more this Bill—you know, what did Bill Clinton and Ross Perot benefit from in ‘92, when they sort of—they sort of touched people personally?  They seemed to actually get that something was wrong, right...

MATTHEWS:  And Bush senior didn‘t.

TODD:  ... you know, and Bush senior didn‘t.  He didn‘t feel what was wrong...

MATTHEWS:  Is McCain able to admit there‘s something tragically wrong in the country under a Republican government and still win?

TODD:  I think there are times when John McCain can be that person.  Today—you read this speech today.  When I read it in the excerpts, he talked about the economy and he says it‘s slowing.  And you‘re thinking,

You know what?  My neighbor who just said it cost him $1,500 to drive from D.C. to Missouri to see his kid graduate from—from a boot camp out there that‘s not slowing, that‘s a hit.  It‘s hitting hard.

So I think—you know what?  There‘s been this worry on the Republican side that you can‘t talk down the economy.  You know, there‘s this theory that somehow...


TODD:  ... if you don‘t talk it down, then it‘ll be OK.

MATTHEWS:  Well, let me...

TODD:  But sometimes people want—just tell them...


TODD:  Look, it‘s OK to tell them it‘s bad right now.

MATTHEWS:  Howard Fineman is joining us right now, from “Newsweek” and also our political analyst.  You know, Howard, how can John McCain say things are going to hell in a handbasket, but George Bush is the greatest thing since sliced bread?  I mean, how can he have it both ways?  George Bush has done a hell of a great job, but this country‘s going to hell economically.  Can he make both cases at once?

HOWARD FINEMAN, “NEWSWEEK,” NBC POLITICAL ANALYST:  Well, having just been here at Denver at the town hall that John McCain had to re-relaunch his candidacy, the message that I took from it, Chris, is, yes, things are bad, maybe, but they would be much worse if you take a risk with Barack Obama because his message here tailored to the West was all about tax cuts, keeping taxes low.  Don‘t go for a big-government guy like Barack Obama.


FINEMAN:  He wants to spend too much money.  He‘ll make things worse.  The worst thing you do when economic times are bad is raise taxes, McCain said.  So it was a really strong, even strident, but very well focused anti-tax message.

So what he‘s basically saying is, Hey, yes, things aren‘t great, but they would be a lot worse if you take a risk on a big government guy like Barack Obama.  That‘s the kind of conservative rhetoric that worked in the past.  I don‘t know if it‘ll work this time around.

MATTHEWS:  That‘s a hell of a campaign song.  I‘ve never—I don‘t know what music you‘d put to that, “Things could be worse”?  It‘s not exactly “Happy Days Are Here Again” or...


FINEMAN:  That‘s basically what he‘s saying, Things could be worse on the economy.  He has a positive message, a more upbeat message on energy, where he‘s for drilling and building and researching and everything.  It‘s much more upbeat.  But on the economy, he‘s basically saying—I just got done listening to him—that, You‘ve got to keep taxes low, you got to cut taxes more.  If you want somebody who‘s going to raise your taxes, vote for Barack Obama.  That‘s what he said on the economy.

MATTHEWS:  Let‘s keep it up.  That would be the theme.

Here he is now, the Republican ad just out now, Republican National Committee ad just out.


UNIDENTIFIED FEMALE:  Record gas prices, a climate in crisis.  John McCain says solve it now with a balanced plan, alternative energy, conservation, suspending the gas tax and more production here at home.  But Barack Obama?  For conservation, but he just says no to lower gas taxes, no to nuclear, no to more production, no new solutions.  Barack Obama, just the party line.


MATTHEWS:  Size that up.

TODD:  Well, I think this is where they have an opening.  This is where McCain is feeling the pain, saying, Hey, you know what?  I know we have an energy problem in this country, and it‘s—maybe it‘s the reason why we‘re at war.  Maybe it‘s the reason why our economy‘s a mess.  So I‘m willing to try anything.  I‘m willing to drill off shore, if we have to.  I‘m willing to build more nuclear power plants.  You know, this guy over here, he—and Obama isn‘t offering anything.  He‘s just saying why he‘s not for the gas tax or why he doesn‘t want...

So I think this is where they have an opening because this is where it gets back to what you opened the show with, which is, Which one of these guys is going to touch Joe or Jane in the pocketbook and make them feel, You know what?  They‘re going to go in there right now and try to fix things.  That‘s an ad that sounds like John McCain‘s going to go in there right now and say, Let‘s build nuclear power plants.  Let‘s drill off shore...


TODD:  ... let‘s figure this out.

MATTHEWS:  Howard, that‘s the big question, having just watched him out there.  You know—you know, voters—we all know voters only have one little crude instrument.  It‘s called the ballot.  They can vote yes or no, keep it going.  Can McCain convince them they‘ve got another option, a different alternative to what we have now, not the Democrat alternative, high taxes, but this other alternative?  In other words, it‘s a brand-new kind of—he‘s almost running as a Bull Moose candidate against his own party.

FINEMAN:  Well, he‘s definitely running against his party in many respects, but not necessarily in this one because most Republican orthodoxy is for more drilling, more building of nuclear power plants, and so forth...

MATTHEWS:  But that‘s Bush policy.

FINEMAN:  I know.

MATTHEWS:  That is everything Bush says.  How can he say that what Bush wants is the solution, if he wants to win in this environment where Bush is so detested by the voters right now?

FINEMAN:  Well, the fact is that it‘s just possible that for enough independent voters, Bush might have been right on energy...


FINEMAN:  ... as opposed to some other things.


FINEMAN:  And the more important thing for McCain is that he wants to portray himself as a fearless, can-do kind of guy.  He wants to be the guy following the old Navy motto, Don‘t just stand there, do something.


FINEMAN:  And that means 45 new nuclear plans, lots of drilling, lots of big prizes for research, and so forth.  That‘s where he thinks he can outflank the sometimes—very eloquent but sometimes professorial Barack Obama.  That‘s what he‘s trying to do.

I agree with Chuck Todd.  This is much more an opening for McCain than the tax policy, which is basically defensive and basically Bushian.

MATTHEWS:  Well, what about a proposition—if we put before the American voter right now, everybody watching right now, a simple proposition—gas prices are going up.  The short-term solution is reduce taxes, drill off shore off Florida, off Alaska, I mean, up in the Arctic Circle, the whole thing, ANWR, do the whole—anywhere we know there‘s oil, go drill it, get it, bring it here cheaper.  Would that sell in an up-or-down vote, Howard?

FINEMAN:  Well...

MATTHEWS:  Get the oil we know exists, drill it, bring it home, get it cheaper.

FINEMAN:  Possibly, if—if—if it would result in an immediate drop in world spot oil prices, which, of course, is what McCain contends.  He says if we make bold, immediate moves to show we want to increase supply here, that‘ll have an effect of bringing down the global prices.  I don‘t know that that‘s the case, though, Chris...


FINEMAN:  ... because the demand from China and India and elsewhere is growing so rapidly...

MATTHEWS:  They‘ll suck it right up, yes.

FINEMAN:  Might suck it right up...


FINEMAN:  ... and we might be left with dirty beaches with no energy independence.



MATTHEWS:  They can pay $20 a gallon over in Beijing.  They can pay all the—because they‘ve got all our paper, right?

FINEMAN:  That‘s right.  They‘ve got trillions of dollars of our paper.  Exactly.


TODD:  And we‘ve got our own refinery issue, as well.  You know, supply hasn‘t been the issue, it‘s been—we don‘t have here in this country, in some ways...


TODD:  We just don‘t have good refineries.  It‘s too expensive to refine what we‘re getting.

MATTHEWS:  So we now got a little news here before we leave.  Apparently, Barack Obama‘s going to speak at the last night in Denver, where you‘re out there.  Howard, give us a sense of that stadium.  He‘s going to do what John F. Kennedy did back in Los Angeles, back in ‘60.  Instead of speaking at the convention the last night, he‘s going to go to an outdoor stadium and risk rain, I guess, and whatever else might happen, and say, I can fill that stadium with 75,000 people and I‘m going to have a nomination acceptance speech like you‘ve never seen.  Big high risk.  What do you think, Howard?

FINEMAN:  Well, I think it‘s completely consistent with Obama‘s whole campaign, his whole philosophy and his whole message, which he can—which is that he can excite a generation.  He can cross lines.  He can bring people out.

And also, don‘t forget Colorado is a swing state.  I‘ve been talking to politicians here.  It‘s a close election.  Part of it will just be to bring out tens of thousands of Coloradans to show other people in Colorado that Obama is their guy.  So it‘s got multiple messages both in a—in a swing state...


FINEMAN:  ... and also—Obama‘s whole campaign is about marrying new communications techniques with rock star celebrity so that you feel directly connected to his campaign through the Internet, yet you see his celebrity on a big stage.  That‘s been his message from the beginning.  It‘s not surprising.  But I think it‘s a brilliant move.  The networks won‘t like it, but it‘s brilliant as long, as you point out, as it doesn‘t rain.

MATTHEWS:  Why won‘t the networks like it?

TODD:  Don‘t get into that!

MATTHEWS:  What are you talking about?

TODD:  Don‘t get into that, Howard!  You‘re going to get us all in trouble.

MATTHEWS:  Why not?

FINEMAN:  Well, the—Chuck would know better than I, but the logistics of it are such...


FINEMAN:  ... everybody‘s going to have to set up for three days at the regular convention downtown...

MATTHEWS:  Oh, I see.

FINEMAN:  ... and then a whole new, very elaborate...


FINEMAN:  ... media setup...


FINEMAN:  ... out at the—out at the stadium.

TODD:  Two quick clever things about it.  One Howard‘s probably going to experience tonight, and that is what‘s the lead on the local Denver news tonight, John McCain‘s event or the fact that Obama‘s going to do this in the outdoor stadium...

MATTHEWS:  So he trumped him.

TODD:  He trumped him.  Just minor.  The other is, any time you get a Kennedy reference in there—remember the Bill Clinton moment when he was able to have that handshake with Kennedy...


TODD:  And here they are, Obama‘s going to be...

MATTHEWS:  OK, watch.  We‘re watching Kennedy speak.

TODD:  Yes, Obama‘s going to be able to...

MATTHEWS:  OK, look, here‘s Kennedy...

TODD:  ... make that Kennedy connection.

MATTHEWS:  ... at the Coliseum in LA.

TODD:  That‘s important for...

MATTHEWS:  I was watching that, guys.  Were you watching that, Howard, that night?

FINEMAN:  Yes.  Yes.

MATTHEWS:  I was watching.  I mean...

TODD:  Seniors.  Senior Catholics, older Democrats, Catholic blue collar Democrats—they need to feel a connection to Obama.


MATTHEWS:  ... Hubert Humphrey, Adlai Stevenson, the guy...


MATTHEWS:  That night, Howard...


MATTHEWS:  That night, Nixon was watching on television.  And because it was outside and they didn‘t quite fill the place, the Coliseum, and the wind was blowing and the voice of Jack Kennedy was blown away a little bit, Nixon said that night, I can beat that guy in debate.  And that was when he decided to debate him on television, a major disastrous decision by Richard Nixon!


MATTHEWS:  So maybe this time, the Republicans will see Barack in the wind and think they can beat him.

TODD:  But Obama‘s also...

FINEMAN:  Well, Obama—yes...

TODD:  ... doing McCain a favor.

FINEMAN:  By the way...

TODD:  Obama‘s doing McCain a favor because he‘s raising the expectation now...


TODD:  ... for his own acceptance speech.  McCain can now actually tone down his convention...

FINEMAN:  Well, but also, McCain...


TODD:  ... knows he‘s never going to top him.

FINEMAN:  The other thing is that McCain isn‘t going to try to compete with that.  You know, I think McCain should even make fun of the whole teleprompter business.  By the way, out here at this town hall, Chris, you‘ll be glad to know that there were—McCain had three teleprompters, not two, so they‘ve increased that by a third.  But McCain‘s not going to compete with any of that.

MATTHEWS:  I know.

FINEMAN:  If McCain‘s going to have a chance, it‘s going to have to be the sort of can-do, unglamorous guy on the bridge while somebody else...


FINEMAN:  ... is doing the style turns.  That‘s the only way he‘s going to have a chance.

MATTHEWS:  As Ronald Reagan once said, Work the difference.

FINEMAN:  Right.  Exactly.

MATTHEWS:  They each have to work their difference.  Thank you, Chuck. 

Howard, I like the style.  I like that Western look out there.


FINEMAN:  It‘s my only clean shirt.


MATTHEWS:  Obviously, you don‘t have a tie.  Anyway, thank you, Howard, Chuck Todd.

Coming up: Where does Barack Obama stand on Iraq, and why did he have to give two news conferences in the same day to explain his position?  Well, you‘re going to find out here.

You‘re watching HARDBALL—I‘m back—only on MSNBC.


MATTHEWS:  Welcome back from HARDBALL—actually, back to HARDBALL.  From the very beginning of Barack Obama‘s campaign for president, he‘s said that he plans to bring the troops home from Iraq 16 months after he takes office as president.  Last week, he appeared to open the door to refine that policy somewhat.  He held two news conferences on one day to explain his position.  Is Barack Obama changing his mind on Iraq?

HARDBALL‘s David Shuster takes a look.


DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Today, while Barack Obama tried to focus on the economy, top newspaper columnists continued to question his approach last week towards Iraq.  “The Washington Post‘s” E.J. Dionne described it as Obama‘s “unsteady moment,” and he added, “Obama needs to be careful” not to cede the high ground on Iraq.

So what exactly did Obama say?  On the tarmac in Fargo, North Dakota last Thursday, Obama was asked whether he might back off his position of withdrawing troops from Iraq in 16 months.

OBAMA:  When I go to Iraq and I have a chance to talk to some of the commanders on the ground, I‘m sure I‘ll have more information and will continue to refine my policies.

SHUSTER:  Those three words—“refine my policies”—immediately created waves.  Anti-war Democrats nervously wondered if Obama was making a change.  The Republican National Committee meanwhile issued a statement, saying, quote, “There appears to be no issue that Barack Obama is not willing to reverse himself on for the sake of political expedience.”

By late afternoon, Obama stepped back to the microphones.

OBAMA:  Apparently, I wasn‘t clear enough this morning on my position with respect to the war in Iraq.  I intend to end this war.  My first day in office, I will bring the Joint Chiefs of Staff in and I will give them a new mission, and that is to end this war—responsibly, deliberately, but decisively.

SHUSTER:  Obama‘s position on an Iraq withdrawal has evolved.  When he first announced his presidential campaign, he pointed to his proposal in the U.S. Senate.

OBAMA:  I have a plan that will bring our combat troops home by March of 2008!

SHUSTER:  Over the past year, Obama has repeatedly declared that as president, he would bring troops home within 16 months, though he has on occasion produced wiggle room, as he did in this exchange last year with Tim Russert.


TIM RUSSERT, NBC WASHINGTON BUREAU CHIEF:  Will you pledge that, by January 2013, the end of your first term, more than five years from now, there will be no U.S. troops in Iraq? 

OBAMA:  I think it‘s hard to project four years from now.  And I think it would be irresponsible.  I believe that we should have all of troops out by 2013.  But I don‘t want to make promises, not knowing what the situation‘s going to be three or four years out. 

SHUSTER:  This past weekend, Obama blamed the media for the frenzy over his comments over refining his Iraq policies. 

OBAMA:  The press—I mean, I‘m not trying to dump on you guys, but I‘m surprised at how finely calibrated every single word was mentioned.  It was—I wasn‘t saying anything that I hadn‘t said before. 

SHUSTER (on camera):  But even Obama, himself, recognized the problem when he quickly called a second news conference last Thursday. 

The lesson is that any modification is going to generate some attention now, especially if it‘s about Iraq. 

I‘m David Shuster for HARDBALL in Washington. 


MATTHEWS:  Thank you, David Shuster. 

So, is Barack Obama actually shifting his position on Iraq or not? 

For more, let‘s turn to Jeff Johnson—he‘s with BET News—and E.J.  Dionne, my friend at “The Washington Post.”  He‘s also with the Brookings Institute.

Let me ask you both, Jeff first, then E.J., simple question.  Is there any doubt that Barack Obama wants to get our troops out faster than McCain does? 


MATTHEWS:  Any doubt, E.J... 


MATTHEWS:  ... about the difference in their directions? 


MATTHEWS:  Any doubt, E.J.—you pick up this—on their mind-set?  One‘s an aggressive warrior who wants to go perhaps to Iran to fight, wants to—he will build up the troops to a maximum level he can get other there.  And the other guy wants to fade out in terms of our military presence in that part of the region.  Any doubt about their difference?

DIONNE:  No, I don‘t think there is any doubt.

And I think that that works to Obama‘s favor.  And I think that he was unsteady this week.  You know perfectly well, when a politician holds a second news conference, it means he didn‘t get it right the first time. 

And when he saw what the press did with those words, “refine my position,” he realized he had a problem.  I think this could be a helpful warning to Obama.

He went up to the edge, but he didn‘t jump off.  And I think that this is was his advantage in the primaries.  And I think it‘s going be his advantage.  And he can‘t just fudge his position on Iraq.  It‘s very dangerous to him if he does. 

MATTHEWS:  You know, Hillary Clinton, Jeff, played that role in the campaign.  Once in a while, she would jump him and he would have to come back and clarify.  And he ended up being stronger the second time because of the rivalry. 

Do you have a sense that he has a problem saying what he means now?  Does he mean, I will be in there a few months; I‘m going to figure out how to get us out, and we‘re getting out? 

JOHNSON:  I think this issue is going to be indicative of all the issues we‘re talking about. 

We‘re dealing with a candidate who, for the first time, is dealing with a legitimate opponent, who has a totally different ideological vantage point.  And they‘re fighting for the middle.  And, so, refine my positions means, I want to be able to back my bags in case I need to be move to the right after I get back from Iraq and see what is on the ground.   

MATTHEWS:  Well, could he come back with a prediction or say, you know what, I was wrong, we were right to go in, we‘re right to stay in force? 

JOHNSON:  Absolutely.  And let‘s not...

MATTHEWS:  You think he could say that? 

JOHNSON:  Absolutely.

Let‘s not forget that...

MATTHEWS:  Do you think he can come back and say, I was wrong about Iraq?


JOHNSON:  ... that this is what McCain told him to do. 

He said, we want you to go to Iraq and then give a position.  This is exactly what McCain said.  And I think he‘s giving himself the necessary wiggle room to come back from Iraq and say, wait a minute, I have got a different position than I did before I went. 

MATTHEWS:  How much can he change from the position, I want to get our troops out in 16 months? 

JOHNSON:  Not a lot of room.  Not a lot of room at all. 

MATTHEWS:  E.J., is that the same way you look at it, that he has—he can refine, but he can‘t change? 

DIONNE:  Right.  I think it would be a disaster for him if he came back from Iraq and said, whoops, I got it all wrong. 

I think the Republicans are setting a trap for him.  It‘s a clever trap.  If he goes there, looks at the situation, and doesn‘t change his mind, then they will say, see, he doesn‘t adjust to new circumstances.  And if he does change his mind...

JOHNSON:  Yes, I disagree.

DIONNE:  ... we‘re already seeing what they‘re doing.  So, I don‘t think Obama has very much room at all to change. 

JOHNSON:  It‘s about being able to make an educated decision. 

It‘s about saying, look, I went on the ground.  I saw that things were different than I knew before. 

MATTHEWS:  Right. 

JOHNSON:  I‘m not changing, but I‘m making a better educated strategic decision than I did before. 

MATTHEWS:  Politically, right now, E.J., as you look at the fight over the war, it looks to me like the economy is catching up and overtaking the war as the central issue of the campaign.  Do you agree?

DIONNE:  I think the economy is overwhelmingly the issue.  But I think these two things link, the earlier discussion you had with Howard and Chuck.  People just don‘t like the status quo.  There was a candidate for the state assembly of New Jersey years ago who ran with a slogan, this year, you have a choice, Peter Shapiro (ph) or more of the same.

It‘s Barack Obama or more of the same.              


DIONNE:  If he highlights the differences between himself and more of the same, he wins.  If he blurs that difference, then he runs into trouble and he gives McCain an opening. 

MATTHEWS:  Do people, Jeff, see the connection between $3 billion a week in Iraq and four bucks for gas? 


MATTHEWS:  Do you see the economy, the dollar getting weaker?  The dollar gets weaker, that means the price of gas goes up.  That‘s a fact, because we‘re paying in dollars. 

JOHNSON:  Absolutely.  Absolutely.

MATTHEWS:  We‘re trading dollars.


JOHNSON:  And I think the American public definitely connects what‘s going on and where we are in Iraq with their gas tanks, whether it‘s reality or not.  They see that as a connection and they continue to be upset about it. 

MATTHEWS:  Let me ask you, E.J., about this fight.  I want to go back to a phrase that Barack used during one of the debates about the mind-set difference, because, when you vote, you‘re not voting over particulars. 

We‘re not micromanagers of war policy.  You pick a hawk or a dove, basically.  And those are crude terms.  But they tell you something.  Most people think—George Will was sitting in the seat where Jeff was sitting a few weeks ago. 

And he said, if you elect John McCain, you‘re going to get war with Iraq—I mean with Iran, because Iran‘s going to proceed with its nuclear program.  And McCain says, I‘m not going to let them go any further. 

Isn‘t there really a sharp difference here in aggressive—between an aggressive foreign policy in the Middle East and something different? 

DIONNE:  Yes.  And I think that‘s what voters now think. 

I think it‘s two things, Chris.  One is your position.  And I think there‘s a clear difference on Iraq.  The other is, do you trust the guy or the woman that you‘re going to vote for?  And that‘s also where this is tricky, because the Republicans are trying to say, aha, Obama‘s moving to the center.  You don‘t really know where he stands. 


DIONNE:  I don‘t think that‘s necessarily a legitimate charge, especially on some of things he was talking about last week, religion, patriotism, service, where he‘s quite consistent with himself. 

But, on Iraq, it‘s a test of character, as well as his position.  And that‘s, again, why I think staying firm is very important to him. 

MATTHEWS:  He did flip on financing of the campaign, though, right? 

DIONNE:  He did, indeed.  He did, indeed. 


MATTHEWS:  Let‘s not deify this guy in any area, because deification is a dangerous move in American politics.

DIONNE:  Amen.  I agree.

MATTHEWS:  Funny you should use that word.  Amen.  We all agree. 

Thank you, Jeff, for joining us.  Thank you, Jeff Johnson.

Thank you, E.J. Dionne.

Up next:  There‘s new buzz out there about an old name becoming Barack Obama‘s running mate.  I‘m not sure he‘s a front-runner, but it‘s amazing the number of names on this growing list of potential running mates for Barack Obama, the new kid on the block. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Back on the merry-go-round. 

Welcome back to HARDBALL. 

Time now for the HARDBALL “Sideshow.”

Looks like President Bush may be learning from his old mistakes.  The president is in Tokyo today for the G8 Summit.  And he took the opportunity to size up the new Russian president, Dmitry Medvedev.  Take a listen. 


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I‘m not going to sit here and psychoanalyze the man.  But I will tell you that he‘s very comfortable, he‘s confident, and that I believe that, when he tells me something, he means it. 


MATTHEWS:  No psychobabble?

Anyway, it sounds like President Bush here is listening to the footsteps, worried that he will be caught making the same much-mocked seat-of-the-pants judgment he made of Vladimir Putin. 

Remember this baby?


BUSH:  I looked the man in the eye.  I found him to be very straightforward and trustworthy.  And we had a very good dialogue.  I was able to get a sense of his soul. 


MATTHEWS:  Love at first sight is not the best way to wage tough post-Cold War diplomacy. 

Well, it may not be the stuff of that Hillary 3:00 in the morning ad, but we got a preview of Senator Obama in crisis mode today.  His campaign plane was forced to make a precautionary landing in Saint Louis this afternoon because of mechanical problems.  We have got cockpit audio now to show you of the pilot‘s announcement. 

Take a listen. 


PILOT:  This is the first officer speaking.  As you are well aware, we are currently descending to an unscheduled landing in Saint Louis.  During the climb out of Chicago, we detected a little bit of controllability issue in terms of our ability to control our aircraft the pitch.  We have full authority of the aircraft.  We will not need to brace.  It will be a normal landing.


MATTHEWS:  Well, the plane wasn‘t in danger at any time.  But what was Obama‘s reaction to the unexpected?  Let‘s take a look.  Well, let‘s take a look.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Everything is fine, guys.  This how we spice things up a little bit, don‘t you think.  Any time a pilot says something is working the way it‘s supposed, you make sure you tighten your seat belt.  Everybody seems under control.  The pilots knew what they were doing.


MATTHEWS:  Looks like the cameraman was a little shook up.  Anyway, grace under pressure or cocky?  You decide.  Now for “Name That Veep.” 

This longtime senator endorsed Barack Obama early in the primaries and has proven a fiery surrogate ever since.  On yesterday‘s talk show circuit, this Vietnam veteran strongly defended Obama and challenged John McCain‘s judgment on Iraq. 

HARDBALL‘s David Shuster says this senator is under consideration for the number-two spot because of the support, the Clintons, both of them, voiced for him back in 2004.  This one-time party leader could be just what Obama needs to bring disaffected primary voters in this November. 

So, who is it?  Believe it or not, Massachusetts Senator and 2004 presidential nominee John Kerry.  Love is wonderful the second time around.  Time now for tonight‘s “Big Number.” 

Barack Obama backed out of his earlier promise to limit himself to public financing this fall, saying his campaign—quote—“already relies on a large base of supporters offering up small donations.”

Well, it ain‘t all small donations.  Obama may have them, but he‘s definitely not foregoing donations from high-rollers, high-rolling Democrats.  Case in point?  At tonight‘s fund-raiser in Atlanta, Georgia, just how much does a VIP dinner ticket cost a guy or woman?

Twenty-eight thousand five hundred bucks to door.  That‘s the top ticket at Obama‘s fund-raiser tonight, $28,500, money that will go to both the Democratic Party and Obama‘s campaign coffers.  It doesn‘t really sound like he‘s changing the way politics is done, anyway, at least when it comes to campaign finance.  That‘s what it costs to go tonight in Atlanta, one of the people, $28,500.  That‘s tonight‘s “Big Number.”

Up next:  They‘re the working-class white voters Hillary Clinton won and Barack didn‘t.  Can Obama now win over the regular folks, white folks, against John McCain?  We will ask the strategists. 

You‘re watching HARDBALL, only on MSNBC.  


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

It was a seesaw day, and we finished with stocks down for the count.  The Dow Jones industrial average gained, then lost, before rebounding to pare its losses, but still down 56-and-a-half points, the S&P 500 just barely out of bear market territory, but down by nearly 11, the Nasdaq off by two points. 

The market was hurt by reports that Fannie Mae and Freddie Mac may need more capital.  New accounting rules could increase the amount of reserves required by those mortgage firms. 

The Federal Reserve and the Securities and Exchange Commission are now planning to share more information.  The goal is to better identify risks to the financial systems, like the collapse of investment banking firm Bear Stearns. 

And Microsoft is talking takeover again, saying it might renew talks if Yahoo!‘s board of directors is replaced.  Yahoo! investor Carl Icahn plans to rally shareholders at the company‘s next annual meeting to dismiss Yahoo!‘s nine directors. 

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

MATTHEWS:  Welcome back to HARDBALL. 

Well, with the economy weighing heavy on voters‘ minds, how does Senator Obama and Senator McCain win the fight for working-class voters? 

Let‘s bring in the strategists.  David “Mudcat” Saunders is the Democratic consultant who helped Jim Webb and Mark Warner both win in Virginia, turned a blue state into a red—well, a red state into a blue state, right? 


MATTHEWS:  How did the Republicans get stuck with the color red, by the way? 


SAUNDERS:  I always wondered that.  I figure it‘s R.

MATTHEWS:  That‘s a communist red.  It‘s a terrible number—color to have. 

George LeMieux is the former campaign manager and chief of staff for Florida Governor Charlie Crist. 

Charlie is getting married?  Is that what we‘re hearing this week?


CRIST:  He is.  He got engaged last week. 

MATTHEWS:  Is this part of the excitement in the buildup to running for V.P. or what?  What‘s going on here, just to create a little celebrity around him?

LEMIEUX:  No, I mean, that‘s—I think there‘s, you know, the political backdrop.  People speculate at that.  But he‘s been dating Carole Rome for quite a while...

MATTHEWS:  Well...

LEMIEUX:  ... and really enjoys her, and he is getting married soon. 

MATTHEWS:  Well, he‘s a good guy.  And I love the guy. 

I don‘t love him.  I don‘t like anybody.  But I like him.  I moderated a debate down once.  I thought it was great.  That was a hell of a debate. 

You work for Republicans.  You work for Charlie Crist.  What‘s the Republican route to the regular Joe or Jane, the person who didn‘t go to college for four years, may have gone to a community college, may be a crafts person, is not an elitist by any definition?  What‘s the Republican trick for getting the non-country club Republican vote? 

LEMIEUX:  What I‘ve learned working with Charlie Crist is it‘s simple; the people want an advocate.  Working class Floridians, working class Americans want someone who‘s going to fight for them on issues that are important.  They want good schools for their kids.  They want a safe neighborhood.  They want good jobs.  They want affordable and predictable health care, a clean environment. 

If you‘re a problem solver, not an ideologue, not a Washingtonian who fights back and forth with partisan rancor, and you try to get the job done, people respect that.  That‘s what Charlie Crist has done in Florida.  That‘s why he has been successful here. 

MATTHEWS:  That sounded a little soft to me.  Give me a harder argument.  Why do working people vote for the Democratic party, which has been identified with the elite so much? 

SANDERS:  Why don‘t they? 

MATTHEWS:  How do you get them to do it?  You‘ve got—you had Gore.  You had Dukakis.  You‘ve got John Kerry and now you‘ve got Barack Obama all tagged with the charge that they‘re elitist. 

SANDERS:  You know, the first thing I‘ve got to say is if Barack Obama gets through the culture, he wins.  If he doesn‘t, he‘s going to lose.  It‘s that simple.  What‘s left out there now are undecided voters.  Most of them are working class, white people.  And as far as the issues, George was talking about the issues—I don‘t think the issues reign right now.  I think it‘s—I agree with James Carville.  It‘s all about Barack Obama.  If he can get through the culture and he can soften, you know, himself in doing that, he‘ll be fine. 

MATTHEWS:  Let‘s take a look at this poll.  It gets to the heart of what you‘re talking about.  Here‘s the latest NBC poll.  It asks voters whether they thought Obama or Barack really cared about people like them.  Look at the numbers.  Hang this number up there a bit, will you.  Look at the numbers.  They‘re not that much different.  Barack‘s got a little edge, 63-56, but 31 percent of people don‘t think he‘s looking out for them.  They‘re the people you‘re talking about, right? 

SANDERS:  Of course.  The elitist argument, as far as if you‘re talking about the Appalachian white male and female, through western PA, soothe eastern Ohio, down West Virginia, Kentucky, they don‘t think of elitism and black people.  They really don‘t.  When they think of elitism, they think of a John Kerry, of an Al Gore that‘s lived a privileged lifestyle.  When they think of black people, they think the converse.  They think that they are oppressed just like we‘ve been. 

MATTHEWS:  I want to ask you about this.  How does John McCain get the regular person who didn‘t go to a fancy school, who may feel that they‘re down trodden, who may feel that they‘ve been screwed, basically, by society, by the economy? 

LEMIEUX:  Is that question for me, Chris? 

MATTHEWS:  Sure is. 

LEMIEUX:  Yes.  John McCain is an American hero.  I think he talks about his experiences.  They know that this is a celebrated man who has zone a lot for his country, served in the armed forces, has been a wonderful senator, been a maverick. 

MATTHEWS:  What‘s that got to do with the price of gas? 

LEMIEUX:  Look, John McCain is the only person who talked about a gas tax holiday.  He‘s talked about issues about cutting taxes.  He doesn‘t want to raise tax when people are suffering with four dollar gasoline. 

MATTHEWS:  He‘s going to make it 3.95? 

LEMIEUX:  You know, Senator Obama wants to raise tax, even for people making 30,000 range.  That doesn‘t help the average American.  I think—

MATTHEWS:  Mudcat, that‘s the argument.  I hear you.  That‘s the argument.  He wants to give a tax break, Barack doesn‘t.  To the working stiff, a tax break is a break, even if he doesn‘t have to pay the same rate as an upper class person. 

LEMIEUX:  In this environment, every dollar counts.

SANDERS:  I don‘t think it‘s about the issues.  I really don‘t.  I think it‘s about the culture right now.  The Republicans are reeling.  You know, you can‘t find a Republican with a search warrant where I live.  You couldn‘t find a Democrat with a search warrant eight years ago. 

MATTHEWS:  There‘s five white guys, working guys sitting around a dinette somewhere, anywhere in America.  They all look the same, these dinettes, no matter where they are.  They‘re drinking coffee, having their bread, eating toast, scooping up the rest of the egg, in walks Barack Obama, right, how does he win them over? 

SANDERS:  What Barack Obama‘s got to do—I was just left over at Mark Warner‘s.  We were talking about Obama.  I told him he needs to do the same thing you did, and I think—

MATTHEWS:  What is that? 

SANDERS:  Well, Barack Obama‘s not from the culture.  He can‘t pretend to be from the culture.  He shouldn‘t be out, you know, with Nascar, with cars floating around.  He shouldn‘t be out hunting.  What he should do is he is ought to take his culture and work his culture.  I mean, if you look at the south, for instance, white people love black culture, Chris.  You go down the beaches, we play all blues music.  If you look at our food, all we eat is black food.  Blue grass, the banjo came from Africa. 

MATTHEWS:  Is that the world that Barack came from?

SANDERS:  It doesn‘t matter.  If Barack Obama would go to where I live in the Appalachians, walk into a place, in this dinner you‘re talking about, and say I‘m a black guy, I can‘t do anything about it. 

MATTHEWS:  This is a work in progress here, this question of how Barack Obama connects with the average white guy, to be blunt about it.  Mudcat Sanders, an average white guy, right? 

SANDERS:  I guess.

MATTHEWS:  And George Lemieux, a Republican white guy.  This is an unusual conversation. 

Up next, on the ground with the Marines who led the invasion of Iraq.  This is a real story about war and action.  We‘re going to meet the team behind the new HBO series, “Generation Kill.”  Real soldiers, real marines; we‘re going to talk about this fight and what they sometimes had to pay for their own equipment.  This is HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back.  The war in Iraq remains one of the main issues of the 2008 presidential race.  HBO is bringing the war home with its new mini series, catch this title, “Generation Kill.”  The fact-based drama is based on the award winning book by “Rolling Stone” reporter Evan Wright, who was embedded with the Marine‘s First Recon Battalion, the unit at the tip of the spear that led the invasion into Iraq.  You‘re watching the action right now.  “Generation Kill” debuts Sunday, July 13, that‘s this Sunday on HBO. 

Joining us right now is the executive producer, David Simon, who is also the creative of the critically acclaimed series “The Wire,” and Marine staff sergeant Eric Kocher, who was a member of the First Recon Battalion in Iraq, and author Evan Wright, who wrote the book “Generation Kill” and the screen play for the series.

I want you all to take a look.  Here‘s a clip from the movie or the HBO program where two of the Marines are telling Evan Wright‘s character about how they had to spend their own money to equip their humvee. 


UNIDENTIFIED MALE:  No maps, no batteries.  You keep trying to get this (EXPLETIVE DELETED) mailed to us, but nothing ever comes.  Cobert didn‘t try to have a shield Fed-exed, not that it will get here in time.  Titanium, 16 pounds, had it custom engineered. 

UNIDENTIFIED MALE:  See, when Marines invade a foreign country, we had to buy all our own (EXPLETIVE DELETED).  Me and Brad spent 500 dollars of our own money just fixing up the humvee.  We bought our own antennas, filters, nets, painted it ourselves.  Yes, Holmes. 


MATTHEWS:  You know, the beeps won‘t be on HBO.  We feature them, obviously.  We‘re regular cable here.  Let me ask you this, do you know for a fact that service people, Marines, have had to pay for their own armor for their humvees with their own money out of their pay check? 

EVAN WRIGHT, AUTHOR, “GENERATION KILL”:  Certainly, Chris.  Thanks for having me.  The Marines were—When I arrived in Kuwait in 2003 to begin this, the Marines were already building up their humvees.  Many of the humvees were actually older or the same age as the kids that were invading the country.  They were also buying their own GPS units, because the military ones were larger.  They bought their own camouflage nets that they put on them.  As we describe in that clip, the team leader of the unit I was with actually had a titanium turret designed for his humvee, but it never arrived in Iraq.  So they were working really hard to create their own gear for the invasion.  Maybe Eric can—

MATTHEWS:  Eric, you were in there.  You were riding around in a humvee? 


MATTHEWS:  Marines like you had to pay for your own armor.  Talk about it.  What was that decision like?  You figure how much it‘s going to cost, how hard it is to get it and you think about whether it improves your odds, right? 

KOCHER:  Even before we left, a lot of things weren‘t anticipated.  We were trying to build the humvees up to better accomplish the mission.  Whatever it took, if we couldn‘t get it through the military channels, we went out and bought it ourselves. 

MATTHEWS:  You‘re facing IEDs.  You‘re facing sniper fire, right?

KOCHER:  At the time, we weren‘t facing IEDs, but sniper fire, everything else.  Guys were trying to build up the armored systems, especially on the turrets.  None of the turrets back then were armored.  So anything we could do.  Colberts specifically had one designed, but it just didn‘t make it there in time. 

MATTHEWS:  David Simon, you‘re the producer.  What‘s the reaction going to be when people watch this series about the war.  Every time I see a war movie, I come away with a very clear impression.  Is this a pro-war movie like “Patton” or a anti-war movie like “Platoon?”  Most war movies are anti-war.  Is this going to leave people the idea this was a good move to go into Iraq or a bad move?  What‘s the average person‘s reaction going to be?

DAVID SIMON, EXECUTIVE PRODUCER, “GENERATION KILL”:  I think this country is so polarized that the average reaction will be everyone brings their own pre-conceptions to the piece and argues not over what they see on screen, but what they were already arguing about. 

MATTHEWS:  I see.  So, if you hated this war going in, you‘re going to hate it going out?  If you thought it was a necessary evil, you would stick with that. 

SIMON :  It‘s hard to think a television show is going to change people‘s political stance.  I will be satisfied if people encounter these Marines, find them to be humanized, not demonized, not mythologized.  And if they come to terms with that and the idea of what these young men experienced in war, that will be victory enough. 

MATTHEWS:  Let‘s come back and talk more about this series.  It really takes a look at what it was like to be in the tip of the spear going into Iraq.  We‘ll be right back with David Simon, Staff Sergeant Eric Kocher, and Evan Wright, the writer.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  We‘re back with some of the team behind the new HBO series about the invasion of Iraq, “Generation Kill,” which debuts this Sunday at 9:00 pm.  Are you part of the Generation Kill, Eric? 

KOCHER:  Yes. 

MATTHEWS:  And proudly so.  What is Generation Kill, the fighting troops?  Why that name? 

KOCHER:  It‘s kind of the generation that‘s over there fighting right now.  Some people might say it‘s the Nintendo generation, desensitized to violence, but this is the generation that‘s fighting our wars. 

MATTHEWS:  How is it different from the Greatest Generation that Brokaw wrote about?

KOCHER:  I don‘t know.  This might be the new greatest generation. 

We‘re defending the country.  We‘re fighting the task that‘s at hand. 

MATTHEWS:  You said, is it a Presto, push button kind of thing?  What do you mean?

KOCHER:  It‘s just the technology now.  You‘re looking through night vision.  Everything is set back.  Everything is at a greater distance. 

MATTHEWS:  We have lost 4,000 guys. 

KOCHER:  Four thousand compared to what we lost in Vietnam; the protective gear, the technology we have, we‘re not losing as many as we were in previous wars. 

MATTHEWS:  You get up in the morning over there and you know you are going to get shot at, or you may be hit by an IED, an improvised explosive device?  You don‘t know when it is going to go off.  Someone‘s got a garage door opener.  What‘s that like?

KOCHER:  Nice thing is, we‘ve already been awake.  People don‘t realize the level of exhaustion there.  We‘ve been up for days on end.  There‘s always anticipation.  Most of us, we don‘t look at it as we could possibly die today.  We look at it as accomplishing mission and --  That‘s what—we‘re mission oriented.

WRIGHT:  I would argue that any generation of troops we send over into a war in harms way on behalf of America automatically becomes the greatest generation of that time.  I named the book “Generation Kill” because that‘s what these guys do.  They are trained to kill and destroy property.  In 2003, when we started this war, I think there was a reluctance to talk about that reality.  I wanted that name in the title of the project, of the book and now the mini series. 

MATTHEWS:  Bottom line, David Simon, the producer, what will be the impact of this series as people watch it over the next several weeks? 

SIMON:  If they watch it, I think they will be a little more reflective about what war is.  The question is whether they will watch it or not.  America has done a pretty good job of opting out of this war emotionally, most of us, except the military community.  They are kind of fighting it on their own.  Aren‘t they?

MATTHEWS:  I agree.  I‘m a movie nut.  I got to tell you, I‘ve seen a lot of them.  A lot of Americans don‘t want to see the reality, even if it‘s cinematic.  Go ahead. 

WRIGHT:  This is one of the first projects, I think, that‘s really told from the perspective of the grunts.

MATTHEWS:  People will watch anyway.  David Simon, thank you Eric Kocher, Evan Wright.  “Generation Kill” debuts Sunday on HBO.



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