updated 7/17/2008 1:19:46 PM ET 2008-07-17T17:19:46

Guest: Chuck Todd, Howard Fineman, Eric Egland, Jon Soltz, Joan Walsh, Clarence Page, Michelle Bernard

CHRIS MATTHEWS, HOST:  Barack zooms to 24 points ahead in California.  Enthusiasm for Obama is three times as high as for McCain.

Let‘s play HARDBALL

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL from San Francisco.  What are the polls telling us about the state of the race right now?  Well, three new polls out today have what appears to be good news for Barack Obama.  His recurring challenge is to sell himself personally.  If he can do that, he could better ride this tide of disappointment with the economy and the Republican record generally.  But things are looking up for the Democrats.  A new poll here in California suggests that Obama has got this state in the bag.  We‘ll pick the polls apart in just a minute.

Plus, the last of the combat brigades that constituted the so-called surge in Iraq have now left the country.  But did the surge succeed in creating a political settlement, which was the goal in the first place?  Senator John McCain says the war in Iraq has taught us how to win in Afghanistan.  Obama says the war in Iraq is hurting our efforts in Afghanistan.  Who‘s right?

Also, the NAACP gave John McCain a standing ovation.  We‘ll get into all that with our “Politics Fix” tonight.  Plus, think political humor can‘t be wickedly witty anymore?  Check this out.  Love those things.  That‘s the latest JibJab video.  We‘ll show you the whole thing.  And let me tell you, it‘s great.  And we‘ll also take a look at what‘s in and what‘s out of bounds in political humor altogether these days.  And speaking of political humor, wait until see What Jay Leno saw that none of us did.  That‘s in the HARDBALL “Sideshow” tonight.

But first, the latest polls.  Chuck Todd is political director for NBC News and “Newsweek‘s” Howard Fineman is MSNBC political analyst nonpareil.  We have the two best.  We really do.  Chuck, it‘s good to see you again.

CHUCK TODD, NBC POLITICAL DIRECTOR:  How‘re you doing, boss?

MATTHEWS:  Howard, speaking of sports (ph), it‘s good to have you both.  Let‘s look at the...

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  You never get tired of that joke.

MATTHEWS:  Never get tired.  It‘s good for me.  I hope it‘s good for you.

(LAUGHTER)

MATTHEWS:  Let‘s look at the latest national polls of registered Democrats (SIC).  Senator Barack Obama leads McCain by 8 points in the ABC News/”Washington Post” poll.  Barack Obama leads by 6 in the CBS News/””New York Times” poll and leads by 4 in the latest Gallup poll.

Chuck Todd, how come he‘s only leading by a little bit more than the margin of error in the national polls, but if you go state by state, it seem like he‘s creaming the guy?  How‘s this fixed (ph)?  How‘s it work?

TODD:  Well, don‘t forget, a small general election victory of 4 of 5 points, which would look small, would be an electoral landslide, Chris.  It would be 300, 320 points.  So I think what‘s interesting about those polls 4-point national victory by Obama would probably mean a very narrow Electoral College win.  Six points, like “The New York Times” says, you‘d be seeing a more comfortable win.  Missouri probably comes.  Virginia probably comes.  Then if you go to 8 points, then that‘s suddenly how Montana comes, how North Carolina comes.

So I think that that‘s—that‘s something we have to remember when we look at these general election numbers, is that a—anything 4 points or above—I mean, Bush sort of set the mark.  He won the popular...

MATTHEWS:  Yes.

TODD:  ... the popular vote by 3 percentage points.  So that tells us 3 percentage points is sort of the mark of where it‘s a close race.  Anything above 3, and you‘re looking at a fairly comfortable electoral vote victory.

MATTHEWS:  Howard, the only problem with that argument—and I agree on the bottom line, if it is 6 points on November, whatever, the first Tuesday after the first Monday, sure, that‘s a strong victory.  But I‘ve been through so many -- - the challenger, at this point, in an economy that sucks, in a world situation which is very unpleasant, where nothing really looks good, whether it‘s the dollar, it‘s the price of gasoline—everything is bad news, the stock market, everything is terrible.  And yet this guy is only leading by an average of 6 points.  I‘m just asking, shouldn‘t he be up to where, say, Michael Dukakis was back in July of ‘88, 17 points ahead?

FINEMAN:  Well, that‘s certainly what the McCain campaign thinks.  I was just over across the river, Chris, at the McCain campaign headquarters.  They‘re hardly popping champagne corks at these new polls, but they don‘t dispute them.  And they say exactly what you just said, which is, Hey, given not only the factors that you mentioned, Chris, but their own admitted screw-ups running the campaign so far, which they now hope that they are behind, Obama, in their view, should be way, way ahead.

MATTHEWS:  Yes.

FINEMAN:  And they take some comfort from that fact, except for the fact that if you look at the McCain‘s numbers, I mean, he‘s in the low 40s, high 30s.  That‘s not a good place to be, either.

MATTHEWS:  Let‘s take a look at this new “Washington Post”/ABC News poll.  By 2 to 1, voters think Obama would better improve the U.S. image in the world.  I think we all know why.  The world‘s out there rooting for Barack all around the world.  But also by 2 to 1, voters think McCain, John McCain, has a better knowledge of world affairs.

Chuck, that seems to get to this seasoning issue.  He‘s more seasoned, more common sense.  He looks like a veteran.  He is.  Barack may be—is he seen as naive or what?

TODD:  Well, I think that‘s the purpose of this trip abroad next week, that (SOUND DROP-OUT) you know, when he goes into Iraq and he goes into Afghanistan, that the generals come away and they whisper, Oh, wow, this guy, you know, seemed to listen to what I had to say, seemed to understand the issues.  That, I think, is whatever this—whatever that line is.

Remember, he doesn‘t have to prove that he‘s as experienced as McCain, he only has to prove...

MATTHEWS:  Yes.

TODD:  ... that he has enough experience.  That‘s what Reagan had to do with Carter.  It‘s what Clinton had to do with the first Bush.  It‘s what Dukakis didn‘t prove in ‘88, when you wonder, why did he—that whole big lead get blown.  Well, the Bush campaign successfully at that time painted Dukakis in that sense as sort of not one of us, not really ready to be the face of America.

MATTHEWS:  The other night—here in California, by the way, this new Field poll just came out today.  It was in “The Chronicle today out here, a 24-point spread.  That is even a bit higher than the other polls, isn‘t it, Chuck.

TODD:  It is.  But you know, California, I mean, you can‘t—you know, this is a state that doesn‘t have a history of racial polarization in its politics, a recent history.  It‘s also just the Republican Party brand is a mess.  And don‘t forget, Arnold Schwarzenegger—his approval rating is below 40.  He‘s not exactly—so even a moderate Republican like Schwarzenegger is not viewed very friendly in California.  So in some ways, it‘s not surprising that the polls are that bad.

FINEMAN:  And Chris, the significance of that, tactically, over the next few months, is that except to go raise money, which he‘ll have to keep doing, Obama doesn‘t have to spend a whole lot of campaign time in California.

MATTHEWS:  Right.

FINEMAN:  There had been lots of brave talk by Republicans months ago, and even the McCain people, that, Hey, we can carry the battle to California, force the Democrats, you know, spread the field in that way.  It‘s not going to happen, and that‘s a strategic—or a tactical blow to the McCain campaign.

MATTHEWS:  So the people like Jerry Parsky (ph) out here, the moderate Republican leader out here in southern California, people like that—are basically—they must be dismayed by all this, right, Howard?

FINEMAN:  Yes, well, they—yes.  I mean, I think in earlier, different circumstances, they could argue—they could call the McCain campaign over there in Pentagon City and say, Hey, you got to come out here.  We can give the Democrats a real race.  Let‘s use McCain out here.  Let‘s use whoever the veep candidate is.  Let‘s really make a run for it.

They‘re not going to be able to do it because—as Chuck says, partly because Schwarzenegger has not been so popular lately.  The Republican brand is nowhere.  McCain may be liked to some extent personally, but he‘s just not registering in California.  And don‘t forget also, age matters in California, perhaps more than elsewhere.

MATTHEWS:  You‘re right.

FINEMAN:  It‘s the ultimate youth—it‘s the ultimate youth-oriented place.  It‘s the place where all trends begin.  And whatever else you might want to say about John McCain, a youth trend he isn‘t.

MATTHEWS:  You know, it‘s interesting, Chuck.  You made the point about the older and newer states and the states where there‘s not much black-white turf fighting, or what do you call it, friction of any kind, like there is in the big cities and the surrounding areas we all grew up with.  Here‘s an interesting way of showing that, the gap in California in terms of enthusiasm.  And this would be, of course, where Barack would like to be nationwide and where McCain would fear to be nationwide.  Fifty-one percent of Obama supporters, according to today‘s poll, are very enthusiastic about him, more than half very enthusiastic.  Only 17 percent of the McCain support is very enthusiastic.

So is it age, generation in California that seems to be more in tune with younger thinking, younger people, and also the lack of any racial or black-white sort of problem, like you see in the older cities?

TODD:  Yes.  It‘s all of that.  But you know, this enthusiasm gap we have seen everywhere.  And this is McCain‘s great challenge.  You know, on one hand, they‘ve—the campaign has accepted this idea that, Look, this is going to be a full-fledged referendum on whether Obama is, one, ready to be president, and two, quote, unquote, “one of us.”  They‘ve accepted that that‘s the premise of this campaign.  However, they do need to figure out how to get some people excited about being for McCain.

MATTHEWS:  Yes.

TODD:  What was the big problem John Kerry had in 2004?  His support network was basically anti-Bush.  He didn‘t give compelling reasons to be for John Kerry.  And I think that that‘s what McCain needs to figure out, how to do just enough of that to sort of get that enthusiasm number up a little bit.  He doesn‘t have to be—have his supporters as enthusiastic as Obama.  I don‘t think he‘s ever going to match that.  But he needs to get it better than it is.

(CROSSTALK)

MATTHEWS:  Howard, I want you to size up this whole thing right now.  Here‘s the way I look at it.  I want you guys both to check me.  Take a minute each.  It seems to me what‘s going on is, across the country, despite all the bad economic news for the Republicans, bad war news, bad everything, that McCain isn‘t that far behind, behind the margin of error.  He‘s within striking distance of winning this thing in November.

His way to win it would be not in California, perhaps not in New York or the coastal states, but to go back to the old states of Michigan, Ohio, Pennsylvania, try to get behind Barack where Hillary did well against Barack, hope that those people were simply in a parking place when they voted for Hillary, that they‘re ready to vote for  him, let Barack do his wide open scramble offense, running around the Rocky Mountain states and down South, and steal his bacon at home.  Is that the Republican strategy?

FINEMAN:  Well, I think that probably should be the Republican strategy, Chris.  I don‘t know if they put it in that way, but they should.  And I totally agree with Chuck, who‘s absolutely right on this.  McCain‘s got a great story.  And in a way, it‘s so old-fashioned as to be new again, if he can do it.  He‘s got to say, Look, George Bush wasn‘t really what my brand of Republicanism is about.  I‘m a Teddy Roosevelt Republican.  I‘m a “God and country” Republican in a way, given my own biography, he can say implicitly...

MATTHEWS:  Yes.

FINEMAN:  ... even somebody like George Bush can‘t match.  And Chuck and I were talking about this off camera.  You know, Barack Obama‘s going to go over to Europe.  Everybody‘s going to cover the thing.  It‘s a great story.  Well, if you look at McCain‘s life, the stories of sacrifice and heroism are there.

MATTHEWS:  Right.

FINEMAN:  They‘re great stories.  They‘re laudatory stories.  They‘re the kind of stories that the people in that heartland of America would love.

I think all the people in Washington think that these stories are known by everybody.  The fact is, they aren‘t known by everybody...

MATTHEWS:  Yes.

FINEMAN:  ... and the McCain campaign should tell them over again if he‘s going to have any shot at this.  There is glamour there.  There is worthiness there.

MATTHEWS:  Yes.

FINEMAN:  They‘ve got to sell it.  They‘ve got to do something because right now, Obama has the sizzle factor by about 99 to 1.  It can‘t stay that way if McCain‘s going to have any chance.

MATTHEWS:  You know, I loved the John Wayne movies and I loved the Audie Murphy movies growing up in the ‘50s, like you did, Howard.  I just wonder...

FINEMAN:  Yes.

MATTHEWS:  Chuck, when I go to the movie theater today, I don‘t see any John Wayne movie or Audie Murphy movies playing.

TODD:  Well...

(CROSSTALK)

TODD:  Wait a minute.  Harrison Ford is the one that the people want to say, Hey, you know, Harrison Ford can come back and be the hero again and—you know...

(CROSSTALK)

MATTHEWS:  Tom Hanks, too.

TODD:  ... going to be Harrison Ford.  But going to your theory, look, I absolutely believe if McCain wins three of the following four states— Ohio, Pennsylvania, Michigan, Florida—two of them were Bush states, Florida and Ohio, two of them were Kerry states, Michigan and Pennsylvania.  He‘s got to win three of those four.  He wins three of those four and Obama‘s path to 270 is tough.  And what do all four of those states have in common?  They‘re older states.  They have older voters in it.  It‘s going to be the voters that are going to be the least...

MATTHEWS:  Right.

TODD:  ... impressed by the youth and sizzle factor of Obama.

MATTHEWS:  And the most impressed by John Wayne and Audie Murphy, by the way.  I just remember...

TODD:  Hey, a little Harrison Ford, too...

(CROSSTALK)

MATTHEWS:  OK.  I‘m with you.  I‘m with you.  I‘m with you.  I‘m with you.  And Tom Hanks.  I just want you to remember something.  Back in ‘96 - we were talking about heroism, and you guys—certainly, Howard and I agree on heroism.  We root for these guys.  They are our heroes, the guys that won the wars.  But I remember this sad story about the great Bob Dole in ‘96.  Young people were saying, What war did that guy fight in?  Was it World War II or was it World War I?

(LAUGHTER)

MATTHEWS:  I mean, it just—time passes too quickly and too cruelly.  Anyway, thank you, Chuck Todd.  Thank you, Howard Fineman.

Coming up: Barack Obama and John McCain have stark differences over the war in Iraq.  And as Obama heads to the Middle East for his big trip over there, whose strategy will the American people back?  And if the surge worked in Iraq, is it time for us to leave?  We‘ll talk to two Iraq veterans with very different opinions.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The surge of U.S. troops in Iraq is coming to an end.  Those brigades that were sent over there a couple years ago are coming home.  Did it work?  Did it create a strong Iraqi government?  That was the purpose.

Jon Soltz is an Iraqi war veteran and co-founder of Votevets.org.  And Eric Egland is a veteran of both Iraq and Afghanistan.  He‘s the founder of Troops Need You.

Gentlemen, here‘s the story.  Back two years ago, this country was on the verge of getting out of Iraq, and the president made the case, Before we leave, let‘s make one big last hoorah.  Let‘s go in there in strength.  Let‘s go in and clear the streets of Baghdad and let those politicians—

Sunnis, Shia and Kurd—get their act together and form a strong government so that we can then leave.  Has that succeeded, Jon Soltz?

JON SOLTZ, VOTEVETS.ORG:  Look, it‘s never succeeded.  I mean, from a tactical level, sure, you put the best American troops on the ground and you take names and you clear streets.  But the Iraqis want us out of Iraq.  And so the major reason it failed is—Afghanistan‘s, you know, a two-brigade mission, now a three-brigade mission.  If you had taken those five combat brigades that you sent to Iraq for the surge and you‘d sent them to Afghanistan, you would have, you know, upped your brigades by five, from two to five.  You got seven brigades on the ground in Afghanistan, taking fight to the enemy.

So the surge is a policy of retreat that Senator McCain and George Bush have supported against al Qaeda and bin Laden.  And Senator Obama‘s always been right about Iraq, not to go, not to support the surge and to take the fight to the enemy in Afghanistan.  So it‘s been a failure.

MATTHEWS:  So we have failed to establish a strong central government in Iraq that‘s capable of defending itself.

SOLTZ:  I think the priority is to protect America.  And the enemies that attacked our country are in Afghanistan and...

MATTHEWS:  OK, you‘re not answering the question.

SOLTZ:  ... Iraq is (INAUDIBLE) to that fight.

MATTHEWS:  I just want to know if the stated goal of the surge, which was sold to the country in late 2006, after the big political defeat in the elections of 2006 here in America—the goal was to give them a breathing space to create a strong central government so that we could begin to leave.  Has that goal been achieved, Jon, yes or no?

SOLTZ:  It hasn‘t.  There‘s been no political reconciliation at all.

MATTHEWS:  OK.  Let‘s go to Eric Egland.  Your verdict on the goal of the surge.  Has it been met?

ERIC EGLAND, TROOPS NEED YOU:  Yes, Chris.  We‘ve made tremendous progress in the last 16 months at...

MATTHEWS:  At what?  At what?  At giving the government in that country a chance to form itself?

EGLAND:  Sure.  Yes.  That‘s why, you know, we‘ve seen that 15 out of the 18 benchmarks for the Iraqi government have been met.  And security gains have been improved dramatically.  And so when you combine that, an improved security situation and improved political progress...

MATTHEWS:  OK...

EGLAND:  ... the strengthening local government—remember, Iraq‘s a tribal society.  The political progress on the ground at the local level has been tremendous, and that has bubbled up with the counterinsurgency strategy to the national government.  So that‘s why we‘re seeing real progress and that‘s why it‘s a little hard for people to answer that question who sort of do answer it out of ideology, to not be able to admit that, Hey, we have made tremendous progress out there.

MATTHEWS:  So where do we stand now in Iraq in terms of our ability to ultimately leave that country?  You first, Eric.  Where do we stand in Iraq in terms of our ability to ultimately leave that country?

EGLAND:  Yes.  I think we stand in good position to continue to—we‘re bringing home the surge troops now.  We‘re going to do that at a methodical pace, at a pace that‘s dictated by events on the ground.  Remember, we face dynamic battlefields in Iraq and Afghanistan.  The policy needs to be dictated by the truth on the ground.  And with those gains, political and security, we‘re able to continue to draw down those troops. 

And I see that, you know, that will continue.  And, again, what I like is - is, having been on both battlefields, these are dynamic situations.  We need to do it not out of ideology, but our policies need to be driven by facts.

MATTHEWS:  No, but I‘m just asking—look, I‘m trying to get to the facts here. 

EGLAND:  Yes. 

MATTHEWS:  You believe that we are gradually able to leave Iraq now over the next several years?

EGLAND:  You bet.  Yes.  I think we were going to lose—I think there‘s—in my mind, there is no question we would have lost with our old strategy.  With the new strategy, we have demonstrated tremendous progress.  We‘re on the verge of winning.  We—this will go down...

(CROSSTALK)

MATTHEWS:  But, in other words, define—just get away from these cliche words like winning. 

EGLAND:  Yes. 

(CROSSTALK)

EGLAND:  OK.

MATTHEWS:  Winning means leaving behind a government that can stand up by itself, right? 

EGLAND:  And defeating al Qaeda in Iraq.  That‘s right.  Those are the two main things.

MATTHEWS:  Well, Iraq wasn‘t even there when we got there, so, how can you say defeating al Qaeda in was our goal? 

Is our goal to leave behind a government that can defend itself?  What is our goal? 

EGLAND:  Yes, absolutely.  A goal is a government that can defend itself to rout al Qaeda in Iraq, which I‘m not saying they were there before we went in.  I‘m saying that, in ‘05 and ‘06, they made a strategic decision.  You can look at bin Laden‘s quotes and all the manpower shifts. 

MATTHEWS:  OK. 

(CROSSTALK)

MATTHEWS:  So, you both agree...

(CROSSTALK)

EGLAND:  But, yes, we are on the road...

MATTHEWS:  To getting out of there?  We‘re going to get out of there?

SOLTZ:  Wrong.

EGLAND:  We‘re going to succeed.  And then we‘re going to come home.

(CROSSTALK)

SOLTZ:  Iraqis don‘t want us there.  American troops shouldn‘t fight and die wanting security more than an indigenous population wants it for themselves.

The Iraqi government asked us to leave.  If that‘s not—hey, the Iraqi government asked, we‘re gone, bottom line.  We have an enemy to fight in Afghanistan that John McCain and George Bush don‘t care about.  If they had, they would have sent the surge brigades to Afghanistan. 

MATTHEWS:  OK. 

SOLTZ:  And they would support Senator Obama...

(CROSSTALK)

MATTHEWS:  Let‘s—look, I‘m just trying to reach some sort of consensus here.  You both seem to be saying that there we‘re in a strong enough position to get out of Iraq right now.  Is that right?  Eventually.

(CROSSTALK)

MATTHEWS:  OK.  Let‘s take a look at Obama. 

(CROSSTALK)

MATTHEWS:  Here‘s Senator Obama on Afghanistan yesterday. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  It is unacceptable that almost, seven years after nearly 3,000 Americans were killed on our soil, the terrorists who attacked us on 9/11 are still at large.  If another attack on our homeland comes, it will likely come from the same region where 9/11 was planned.  And, yet, today, we have five time more troops in Iraq than Afghanistan. 

(END VIDEO CLIP)

MATTHEWS:  Let‘s take a look at what Senator McCain said yesterday as well.  Let‘s get them both together here. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  It is by applying the tried-and-true principles of counterinsurgency used in the surge, which Senator Obama opposed, that we will win in Afghanistan. 

With the right strategy and the right forces, we can succeed in both Iraq and Afghanistan.  And they are not disconnected.  Success breeds success.  Failure breeds failure.  I know how to win wars.  I know how to win wars.  If I‘m elected president, I will turn around the war in Afghanistan, just as we have turned around the war in Iraq, with a comprehensive strategy for victory.  I know how to do that. 

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Of course, the question holds there right now, Eric.  If we have won the war in Iraq, we ought to be coming home.  He didn‘t win the war in Vietnam.  We lost the war in Vietnam in terms of our ambitions over there.  So, what wars have we won under John McCain?  I‘m curious what he means by won the war.

You could argue that the surge has left an environment over there where maybe that government can get its act together, but that‘s not done yet.  We don‘t know that yet. 

EGLAND:  I agree.  No, I agree.

It is premature to put it in the past tense.  But it is also denial to not acknowledge all the tremendous gains on the national political level, at the local political level, and on security all around the country will. 

SOLTZ:  John McCain is a man who has caused this country to lose the war in Afghanistan by being obsessed with Iraq.

His plan yesterday that he released to counter Senator Obama‘s plan, it was like amateur hour at the McCain campaign.  You can‘t increase the size of the Army, stay in Iraq 100 years, and send three more combat brigades to Afghanistan without the draft or adopting Senator Obama‘s position, which is to get out...

(CROSSTALK)

MATTHEWS:  OK.  Well, that‘s the question. 

(CROSSTALK)

MATTHEWS:  I‘m sorry.  Jon, that‘s...

(CROSSTALK)

SOLTZ:  ... Iraq and go to Afghanistan.

MATTHEWS:  I hate to interrupt.  But I want to put the same question to both of you, exactly the same.  Give me the answer. 

Jon Soltz, can we fight the war in Iraq on the level we‘re fighting it and fight the war in Afghanistan at the level we have to, both at the same time? 

SOLTZ:  Absolutely not.  You can‘t do it.  And that‘s why Senator Obama has a realistic plan.  And the McCain campaign has amateur hour that leads us to the draft.

MATTHEWS:  OK, same question to Eric.  Same question to Eric. 

EGLAND:  Yes.  With the current facts on the ground, I think we can. 

Gains in Iraq mean we can continue to bring home those surge forces, which will free up forces that we can use in Afghanistan.  The important thing is to remember that we—these are dynamic battlefields, and we need leaders who are open to the facts on the ground as they change.  So, we don‘t want ideology driving these decisions.

SOLTZ:  The McCain campaign is not committed, though.

MATTHEWS:  Just a minute.

(CROSSTALK)

MATTHEWS:  Jon, let him finish. 

EGLAND:  Jon, let me finish.

So, you want it to be driven by facts on the ground.  Last year, security was pretty solid in Afghanistan.  And McCain said, well, I would be up for more troops, but I don‘t think it‘s necessary.

SOLTZ:  It was not solid in Afghanistan. 

MATTHEWS:  Jon, let him finish.

EGLAND:  Security—security has worsened in Afghanistan.  And now Senator McCain is saying, hey, we need to—we need more troops there. 

In contrast, Senator Obama seems to have these rigid policies that don‘t address the changing nature of the fight on the ground. 

MATTHEWS:  Last word from you now, Jon. 

SOLTZ:  Look, the bottom line is, the McCain campaign—the McCain plan doesn‘t add up.  You either have to have a draft or adopt Senator Obama‘s decision. 

That‘s why, yesterday, they—they backtracked from sending three combat brigades there to sending NATO troops.  It is amateur hour at the McCain campaign. 

MATTHEWS:  OK. 

SOLTZ:  They have supported a policy of retreat from bin Laden for the past six years with George Bush.

MATTHEWS:  OK.  We will do better with dealing with facts than assassination talk. 

Anyway, thank you very much, Jon Soltz. 

Thank you, Eric Egland.

(CROSSTALK)

MATTHEWS:  Up next:  What did Jay Leno see in President Bush‘s news conference yesterday that nobody else did?  That‘s next in the HARDBALL “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for the HARDBALL “Sideshow.”

Last night, Jay Leno caught something we all missed here during President Bush‘s news conference.  Check it out.

(BEGIN VIDEO CLIP, “THE TONIGHT SHOW WITH JAY LENO”)

JAY LENO, HOST, “THE TONIGHT SHOW WITH JAY LENO”:  Boy, Dick Cheney, is he—his reaction when he heard, boy, the oil companies could drill just about anywhere they wanted?  Take a look.

One of the most important steps we can take is to expand American oil production is to increase access to offshore exploration on the Outer Continental Shelf... 

(LAUGHTER)

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  So, when will the Democrats nail Cheney for those secret meetings with the oil companies? 

What is that saying, out of sight, out of mind?  Well, that may be what the city of Denver is thinking as they prepare for the nomination of Barack Obama on the 45th anniversary of Dr. King‘s “I Have a Dream” speech. 

Throw in star power with the likes of musician Kanye West, Ben Affleck, and actress Scarlett Johansson, and you‘re going to have a real media circus us out there in Denver.  So, what about the city‘s less-than-camera-ready types?  Taken care of.

“The Rocky Mountain News” reports that Denver‘s homeless will be getting movie tickets and zoo passes during the convention.  So, while the Democrats are picking their leader, the city will be feeding popcorn to the homeless, offering peanuts to feed the elephants. 

Hillary Clinton exits stage left again.  News broke today that “Saturday Night Live” star Amy Poehler may be leaving her gig at the comedy sketch show.  Poehler of course nailed that impression of Hillary Clinton throughout the long Democratic primary race. 

You can see her there going toe to toe with the senator herself back in March.  Yes, we will miss Amy.  We would miss her if she goes.  So, who is going to play Michelle and Cindy?  Time now for “Name That Veep.”

Today, this campaign McCain surrogate came out swinging on the morning talk shows, saying Obama‘s plan for Iraq would leave the country to extremists.  While this senator may stand with McCain on the war, his stance on social issues could pose a problem with the party‘s conservatives. 

So, who is it?  Connecticut Senator Joe Lieberman.  Senator Lieberman is putting his committee chairmanships on the line by standing behind Republican McCain.  Will it pay off?  I wouldn‘t bet on it. 

Now for tonight‘s “Big Number.” 

In the new CBS/”New York Times” poll, a whopping 73 percent of Americans say they think John McCain is very patriotic—not too surprising.  McCain is widely known as a war hero.  But just how many say the same of Barack Obama?  Thirty-seven percent.  That‘s right.  Just 37 percent think that Obama is very patriotic, a clue, perhaps, as to why the Obama camp reacted the way they did to that “New Yorker” cover a few days ago -- 37 percent, tonight‘s “Big Number.” 

Up next:  What is funny in politics?  That “New Yorker” cartoon with Barack and Michelle?  Well, it backfired big time.  But what about this? 

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MATTHEWS:  Humor and the 2008 presidential race—when HARDBALL comes back.

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

Major rally the , as oil prices plunged for a second straight session, and financial stocks soared on better-than-expected earnings by Wells Fargo Bank.  The Dow industrial average surged ahead 276 points.  The S&P 500 saw a 30.5-point gain.  And the Nasdaq added on 69 points.

Oil prices fell another $4.14 after tumbling more than $6 a barrel yesterday.  Today‘s drop followed news of a surprise increase in U.S.  inventory last week.  Crude prices fell closed today at $134.60 a barrel. 

Consumer prices shot up in June by 1.1 percent.  That‘s the biggest increase in 17 years, in part, due to those higher energy costs.  And that‘s really oil taking most of the blame. 

Fed Chairman Ben Bernanke told Congress that troubled mortgage giant Fannie Mae and Freddie Mac are in—quote—“no danger of failing.” 

And after the closing bell, online auctioneer eBay reported quarterly earning that beat analyst estimates.  But it‘s outlook was below forecast.  The shares are trading in after-hour session down 7 percent. 

That‘s it from CNBC, first in business worldwide—now back to Chris and HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

When you run for public office, especially the highest office, it helps to have a sense of humor.  Take a look at the latest video from the great group called JibJab.com. 

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MATTHEWS:  Joining me now, “The Washington Post”‘s Dana Milbank.

Dana, these guys are so up to date on their stuff here.  They have got Lieberman hanging on the campaign trail with Barack.  They have got Hillary in there.  They got old Monica and the cigars, the whole gross story thrown back at us again.  I guess they got the caricature right. 

DANA MILBANK, NATIONAL POLITICAL REPORTER, “THE WASHINGTON POST”:  I think so. 

And you know why this works so well for them, and I think why we saw this backfiring on “The New Yorker” campaign was that they were very much equal opportunity here, so they were...

MATTHEWS:  Yes. 

MILBANK:  In a way, they were playing it safe.  They don‘t want to offend any particular group.  But they were careful to go after all of them. 

And—and I think they were pretty good at sort of picking out the designated character flaws in each one, sort of McCain the warmonger, and Obama sort of this head-in-the-clouds kind of peddler of change. 

MATTHEWS:  You know, I think that—I guess I agree with you on both those points.  It seems to me that there‘s a Bob Hope level of political humor, which is bipartisan, take a shot at both sides and don‘t destroy. 

MILBANK:  Yes, it is true, and particularly for a politician, some of the funniest guys in politics—you know, I think of Bob Dole and this time around I think of Mike Huckabee—are not necessarily—have been the most successful of them. 

MATTHEWS:  That‘s true.

MILBANK:  It is perhaps no accident that the remaining candidate are somewhat humor challenged.  McCain can be a funny guy.  But I don‘t understand it for the life of me, but he seems to be trying to suppress that.  And Obama, while said to be possessive of a funny bone in private, seems also—

MATTHEWS:  The only successful funny, truly witty politician, it seem, was Kennedy, who had a real sense of humor.  Clinton was flat as a pancake when it came to—he was he would slap his knee when he thought he was supposed to see something funny.  He had no spontaneity.  Hillary is OK but her husband was terrible.  I got to ask you this, is Barack Obama funny?  If he is an elitist like Stevenson or Gene McCarthy, shouldn‘t he be funny? 

MILBANK:  He should have a biting sense of humor.  The people close to him say that he does.  You have to be a bit skeptical since you don‘t see it in public, and because the public persona is so earnest.  You have to be able to laugh at yourself.  And I think what you saw with that furious reaction that they had to the “New Yorker” jihad cover was saying that it shows a certain thinness of skin and an unwillingness to laugh at himself.  When you go on the late night shows, and are willing to lampoon yourself, it seem to go a long way. 

MATTHEWS:  Take a look.  Here‘s Barack Obama and John McCain.  They all appeared on “Saturday Night Live” this season.  Let‘s take a look at how they did. 

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MCCAIN:  Good evening, my fellow Americans.  I ask you, what should we be looking for in our next president?  Certainly, someone who is very, very, very old. 

SEN. HILLARY CLINTON (D), NEW YORK:  Do I really laugh like that? 

OBAMA:  Hello, Hillary.  Hello, Bill. 

UNIDENTIFIED FEMALE:  Nice to see you, Barack.  So you dressed as yourself. 

OBAMA:  Well, you know, Hillary, I have nothing to hide.  I enjoy being myself.  I‘m not going to change who I am just because it is Halloween. 

UNIDENTIFIED FEMALE:  Well, that‘s great. 

(END VIDEO CLIP)

MATTHEWS:  OK, “American Idol” comedy division.  Dana Milbank, you‘re the judge. 

MILBANK:  I‘ll give it to McCain for going with the age thing right up front, and Hillary on the laugh.  Again, you saw Obama sort of playing a little bit on the earnestness, but not really willing to really go the self-deprecating route there. 

MATTHEWS:  I agree with you.  Win, place, show, McCain, Hillary, Obama in that order.  Sir, we agree.  Dana Milbank, the one truly funny guy at the “Washington Post.”  Up next, the politics fix, with Barack Obama leading big on the coast.  That‘s out in New York and out here in California.  Why isn‘t his national lead over John McCain higher?  We have a mathematical problem here.  Why is he doing so well in so many places but not doing well overall?  He is just barely above the margin of error.  This is HARDBALL.  Why isn‘t this guy on the left winning bigger if he has the numbers?  We‘ll be back with that on MSNBC‘s HARDBALL.

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MATTHEWS:  Welcome back to HARDBALL and the politics fix.  Tonight‘s round table, Salon‘s Joan Walsh, Clarence Page of the “Chicago Tribune.” and MSNBC political analyst Michelle Bernard.  Let‘s take a look at these national numbers.  I want Clarence to lead the band here.  Let‘s take a look at these numbers.  Latest polls here, Obama ahead by eight in the ABC New/”Washington Post” poll.  He‘s ahead by six in the CBS poll.  He‘s ahead by four in the Gallup.  It seems to me it averages out to about six, and I‘m wondering why it is so low.  Clarence? 

CLARENCE PAGE, “THE CHICAGO TRIBUNE”:  Well, it is low because he has had to battle against ignorance, being the fact that a lot of people don‘t know him well enough yet.  He has also had to battle against rumor mills and the negatives of having that long primary contest.  It will probably be to his good in the long run that he had that long primary contest, because he knows how to battle and come back.  I think he learned from it. 

MATTHEWS:  Michelle Bernard, that‘s good news in a way, because it says that when he goes before the national audience, not just cable, or program like this where people who are politically interested watch all the time, but when he reaches that general audience that‘s out watching “American Idol” most nights or something else in the commercial area, the entertainment area, he finally goes from 20 million people knowing who he is to 60 more million people knowing who he is.  Does that mean he has to gain?  He can gain there in terms of explaining who he is, where he came from, explaining what he is like? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  Absolutely.  I think that the more Barack Obama gets out and is able to introduce himself and actually continue to reintroduce himself and his family to the American public, the better we may see him do in the polls.  I have to tell you, though, I think the polls are really close not just because the American public doesn‘t need—doesn‘t know who he is yet, but I also think that we may be beginning to see a little bit of backlash within his base.  I think that a lot of the anger we saw last week—

Joan, you and I were on the air together.  And I know you were very angry at Barack Obama last week.  And I think we‘re seeing—might be seeing a little backlash within his base over people who feel he has either flip flopped or somehow have betrayed him by going to the center on certain issues. 

MATTHEWS:  I have no idea who those people are, except that if they vote, they‘ll have to vote for him or McCain.  I guess you‘re saying that they‘re saying no comment at this point.  Let me take a look.  I want you to respond to the Field Poll, which you know so well.  Field‘s been covering this poll out here for years, doing the poll out here.  It‘s the best poll in California, 24 point-spread for Obama.  That is celestial.  It does seem to take this state out of touch for the Republican, the biggest state. 

JOAN WALSH, SALON.COM:  Absolutely.  It‘s totally out of touch for the Republicans.  I think Maria Shriver actually said something very smart when she endorsed him, which is he looks like California.  If he were a state, he would be California.  People love him here.  They loved Hillary, too.  She won the state, but it wasn‘t about not liking Obama. 

MATTHEWS:  You‘re so right.  You know why you‘re so right?  Because I have the new numbers.  Have you seen them?  Among Hillary voters who voted for Senator Clinton, men and women both, the number has gone to 80 to eight; 80 percent of them are going to vote for Barack Obama and only eight percent say they will vote for McCain. 

WALSH:  You‘re not seeing that in other states.  You‘re not seeing those people flock immediately to Barack from Hillary.  So I think that‘s one thing.  I think it also speaks to the point you opened with, which is he has this strange surprisingly narrow margin nationwide, because the places where they love him, they love him.  The places where they‘re not so sure, there might be more of them.  But I think he has a lot of time to close the gap—excuse me, to widen the gap. 

MATTHEWS:  Clarence, is that a danger for him, that he might waste his votes in California and New York, in the liberal states, where they really love him?  Waste the votes meaning huge pluralities, and then lose squeakers in Pennsylvania, Ohio and Michigan. 

PAGE:  Sure, that‘s always a danger to stick if you just stick with your base and don‘t expand it.  That‘s why he has been moving to the middle.  He wants to win over people in Ohio, Pennsylvania, all those rust belt states that he lost to Hillary Clinton, all those places where the folks just don‘t know him that well yet, and wonder if it‘s worth voting for him instead of McCain.  He‘s got time. 

MATTHEWS:  How can you say rust belt?  You‘re from Illinois and I‘m from Pennsylvania.  You‘re making fun of our state. 

PAGE:  I‘m originally from Ohio.  Unfortunately, Ohio is pretty rusty right now, which is why Democrats have been doing so well there, a state that was traditionally Republican.  As soon as Obama can get his message together for those folks who are out of work in those places, I think he‘ll do very well. 

MATTHEWS:  Actually, the point is they ought to do something about infrastructure in those states.  They ought to be looking at—those states ought to use the leverage they have right now.  Clarence, you and I agree, I think.  Those are the states that both sides need.  They ought to be using their leverage and saying, let‘s sand off some of the rust.  We‘ll be right back with the round table and more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.

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MCCAIN:  Let me begin, if I may, with a few words about my opponent. 

Don‘t tell him I said this, but he‘s an impressive fellow, in many ways.  He‘s inspired a great many Americans, some of whom had wrongly believed a political campaign could hold no purpose or meaning for them.  His success should make Americans, all Americans proud. 

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MATTHEWS:  Clarence, it‘s great to see magnanimity in politics, to see a little class.  There you saw some, I think. 

PAGE:  Yes, you did.  It‘s really part of what makes John McCain so charming.  If you didn‘t have this historic first of the first viable black candidate—first black nominee from the Democrats, I think you would see a lot more black votes out there waiting for John McCain to take them away. 

MATTHEWS:  It‘s stunning to see that percentage, the latest Quinnipiac poll, nationally, Clarence—I‘ve never seen a number like this among an group -- 94 to 1. 

PAGE:  That‘s right.  That‘s because this is a historical moment.  It‘s like, you know, John McCain is in trouble—I mean, the audience was very cordial.  Black folks are delighted if you show up, number one.  They will treat you like nice and neighborly.  But his biggest applause line was when he complimented his opponent.  You know that this is not a crowd you have much chance of winning.  But, it was important for John McCain to speak past the camera, past this crowd to the folks watching at home, especially in Ohio, which is where the NAACP was having their convention, a very important swing state, as you just mentioned, for both these candidates. 

MATTHEWS:  Joan, I‘m a little bit Machiavellian about this, although I do completely salute that performance.  I think it‘s great that he did that.  I think he wants to make sure that he seems like a person who has no ethnic problem in this race, that he‘s not going to exploit in any way the differences in their backgrounds.  I think that helps him with white voters, to be blunt about it. 

WALSH:  I think it does too.  I think that a lot of Republicans were really irritated by the failure the Bush administration to go to the NAACP regularly to meet with black leaders because it plays well with whites, to be honest, independents who want to believe we‘re a society with a lot more racial harmony than we have.  So I think he did a great job.  It was probably Machiavellian.  He is running for president.  He is a politician.  But it was a nice moment.  It was a nice thing to see. 

MATTHEWS:  Are you talking about my hero, Machiavelli? 

WALSH:  Yes, nothing wrong with that. 

MATTHEWS:  The greatest genius in prose history, anyway—Shakespeare being the poetic genius, Machiavelli the prose.  I know it sounds awful to say this, but he really is a genius or was.  Let me go to you, Michelle. 

PAGE:  I knew Machiavelli, Chris.  You‘re no Machiavelli.

MATTHEWS:  Well, if I was, I‘d be ruling the world.  Michelle Bernard, your feelings and thoughts.  I always like feelings when I talk to people. 

BERNARD:  It warmed my heart to see John McCain today.  First of all, his oratory skills were on.  We know he‘s been lacking in that area.  I thought, if he could speak like this all the time, he would probably be doing so much better in the polls.  But also, the fact that he went, he spoke before the NAACP; they have had a very antagonistic relationship with President Bush.  We‘ve seen other African American groups meet with President Bush, but the NAACP.  I think it took a great deal of courage for John McCain to do some of the things we have seen him do in the African-American community this year. 

He apologized for initially voting against Martin Luther King‘s birthday being made a holiday.  He showed up today.  He‘s done interviews with the black press, “Essence Magazine,” for example.  I just think this is wonderful.  I have always strongly felt African-American‘s need to be in a position where Republicans and Democrats are competing strongly for their votes.  John McCain is out there and he‘s saying, I‘m not taking your vote for granted.  Please vote for me. 

MATTHEWS:  John F. Kennedy once said that an error only becomes a mistake when you refuse to correct it.  We should all remember that.  I try to remember that myself.  By the way, congratulations to our new president of MSNBC, the great Phil Griffin, who has been building this network for 12 years.  Now he gets the title, president of MSNBC.  Phil Griffin, congratulations, buddy.  Thank you, Joan Walsh.  Thank you, Clarence Page.  Thank you, Michelle Bernard.  Join us all again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for RACE FOR THE WHITE HOUSE with David Gregory.

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

END   

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