updated 8/11/2008 12:04:56 PM ET 2008-08-11T16:04:56

Guest: Mike Barnicle, Chuck Todd, John Harwood Steve McMahon, Todd Harris, Ron Suskind, Karen Tumulty, Jonathan Alter

MIKE BARNICLE, GUEST HOST:  Can‘t we all just get along?  The Clinton-Obama drama continues.

Let‘s play HARDBALL.

Good evening.  I‘m Mike Barnicle, in for Chris Matthews.  Leading off tonight: Are the Clintons trying to crash Obama‘s convention?  Two months ago, Senator Hillary Clinton ended her campaign and endorsed Barack Obama.  Now, just 18 days before the convention in Denver, she‘s letting rumors swirl that she wants her name included for the nomination and a roll call vote.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), FMR. PRESIDENTIAL CANDIDATE:  I know from just what I‘m hearing that there‘s this incredible pent-up desire.  And I think that, you know, people want to feel like, OK, it‘s a catharsis.  We‘re here.  We did it.  And then everybody get behind Senator Obama.

(END VIDEO CLIP)

BARNICLE:  The Obama and Clinton camps issued a joint statement asserting they are working together, and in a Web chat today, Mrs. Clinton pledged to ensure that Democrats are fully unified.  So why won‘t she tell her supporters to get behind Obama and avoid a nationally televised floor fight?  And why won‘t Bill Clinton just say publicly Obama is qualified to be president?  Could you imagine if the tables were turned?  More in a moment on that.

Plus: Some Democrats are asking, Is Barack Obama tough enough to survive John McCain‘s attacks?  Polls show Obama‘s holding his own, but John McCain is gaining ground every day.  Should Obama shift his strategy and go into attack mode?  We‘ll ask our strategists, Democrat Steve McMahon and Republican Todd Harris.

And did the Bush administration really forge documents to make the case for war in Iraq?  We‘ll talk to Ron Suskind, the author of the controversial book “The Way of the World,” later.

Plus, our “Politics Fix” panel digs into the latest polls.  On the HARDBALL “Sideshow,” an Olympic smackdown between Obama girl and McCain girl.

But first, what are the Clintons up to?  Chuck Todd is political director for NBC News, and CNBC‘s John Harwood also writes for “The New York Times.”  He‘s a double dipper.  And two brainiacs here to discuss this.

The Clintons, this ensuing conflict—first of all, Chuck Todd, do you think it‘s overrated?  Are we making too much of it?

CHUCK TODD, NBC POLITICAL DIRECTOR:  I think we make too much of where the supporters are, the fact that there are, you know, a number of Hillary Clinton supporters not ready to go to Obama.  And so I think as far as the political, you know, voting calculation goes, I think we make too much of it.

But we‘re not making too much of the fact that I think the Clintons believe this is their moment, that they have leverage, that they only have leverage for a certain amount of time, and that is between now and when Obama is the nominee, no longer presumptive.  And I think they‘re taking advantage of the leverage that they have.

I mean, they‘re not happy with the role that they‘ve been given in the party right now.  I think that they are being fed this line of—you know, saying—you know, being pushed to this idea that they‘re not happy a lot of close advisers and supporters, who may not like their own role inside the party these days.  And so I think this is just something that‘s festering.

Obama probably hasn‘t done enough to reach out to President Clinton.  Maybe he can never do enough.  I mean, that might be the riddle here, right, no matter what he does, that the goalposts are going to keep moving.  But it‘s clear right now he hasn‘t done enough.

BARNICLE:  John Harwood, you just heard Chuck indicate that the Clintons weren‘t happy with their role in this process and the conventions.  They‘re not happy.  What do you think, other than the obvious, would make them happy?

JOHN HARWOOD, CNBC, “NEW YORK TIMES”:  Well, I don‘t know what would make them happy.  But just to add on what Chuck was saying and on your question about, Is this overrated, I thought it was overrated, frankly, until I saw that video of Bill Clinton, his answer on Barack Obama.  I think not just unhappy, I think he is deeply, deeply angry about what he thinks was done to him, this idea that he‘d been accused of being a racist.

And a president who had such good relations with the black community when he was a candidate, when he was president, having to defend himself against that charge—you know, we saw John McCain spring up and opportunistically take advantage of a situation last week, saying Barack Obama had played the race card against him.  I think that was a bit of a stretch on his part.  But certainly, Bill Clinton is feeling that, and it offends him to his core, I think.  And I think that is part of what‘s behind this.

It‘s a chicken and egg situation.  Hillary Clinton and Bill Clinton could shut this down, if they wanted to.  But it‘s plain that they‘re of mixed minds on this, and they don‘t want to shut it down right now.

BARNICLE:  Well, I mean, you‘re obviously referring to the interview that Clinton had—Bill Clinton had at ABC earlier in the week, in which he could not bring himself to say, Yes, Barack Obama is qualified to be president.

HARWOOD:  It was stunning.

BARNICLE:  Yes, it was stunning.  And you couple that with another one of these citizen journalists out there with, you know, the cufflink camera or whatever, capturing...

(CROSSTALK)

BARNICLE:  ... capturing Senator Clinton last Thursday.  Take a look at this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Since the delegate count is so close, actually - it really is.  I mean, unless something has dramatically changed that we‘re unaware of—and you are called up for nomination, and what if you do win by a narrow margin?

(LAUGHTER AND APPLAUSE)

CLINTON:  That is not going to happen.  That is not going to happen.  You know, look, I mean—what we want to have happen is for Senator Obama to be nominated by a unified convention of Democrats.  And as I have said, the best way, I think—and I could be wrong, but the best way I think to do that is to have a strategy so that my delegates feel like they‘ve had a role and that their legitimacy has been validated.  And that kind of—you know, it‘s as old as, you know, as Greek drama.  You know, there is a catharsis.  I mean, everybody comes, and you know, they want to yell and scream and have their opportunity, and I think that‘s all to the good because then, you know, everybody can go, OK, great.  Now let‘s go out and win.

(END VIDEO CLIP)

BARNICLE:  Chuck Todd, what do you think she‘s saying there?

TODD:  Well, look, I think we have to sort of empathize with the Clintons here for a moment in this respect.  They‘ve never lost before like this.  You know, they haven‘t really experienced a loss like this.  Yes, Bill Clinton lost the governorship for a short two-year period in 1980.  But they‘ve never really experienced this.

So look, they still don‘t know what they‘re going to do next, all right?  And I‘ve talked to former Clinton staffers who are surprised, frankly, that they never really had a plan B and not sure what to do right now.  You know, she isn‘t sure, you know, what issue is she going to focus on?  What is she going to do in the Senate?  Is the Senate the place that she wants to be?  Does she have any inclination to run for governor of New York?  There‘s just a lot of things out there.  She‘s undecided.

And so at this point, she just sort of wants to continue going through this process.  And this process, at this point, would be to have a moment at the convention.  But I‘ll tell you, you know, I‘ve talked to some folks that sort of know how this delegate thing works.  If there is a roll call, she‘s actually going to lose by a bigger margin than her actual delegate total.  What will that feel like?  Will that be a good thing?  Is that something that her supporters are going to want to hear?  Because so many people now have sort of switched over to Obama because they—you want to be on the winning team.

And you know, what good comes of that?  Does it create a moment where, all of a sudden, Obama feels the need to step on the Clinton—I mean, it‘s just an extra mess that may not be beneficial to Hillary Clinton‘s future and also not beneficial to Barack Obama.

HARWOOD:  Hey, Mike?

BARNICLE:  Yes?

HARWOOD:  I don‘t think you have to go all the way back to Greek drama.  I think you can go to Green Bay Packer drama right now and see what‘s going on here.  We thought Hillary Clinton retired from the field in June when she said she was out of the race and endorsed Barack Obama.  But those feelings are very complicated when you‘re on the sideline.  And you know, Barack Obama‘s a lot better player than Aaron Rogers, but you can see Hillary Clinton saying, Well, we need to be respected.  We need to be honored.  We need to have a catharsis.  Some people thought that there was a catharsis when she gave her speech in June.  And I think, as Chuck said, she doesn‘t know what she‘s going to do next and she‘s doesn‘t know what she‘s going to do probably in the next 18 days.

TODD:  Well, Mike—and one other thing here is that they believe—

I think that there‘s some sort of notion here that the Clintons believe that Obama owes them something, sort of similar to the way a vice president would owe—maybe the same way that Al Gore always is going to owe something to the Clintons because Bill Clinton did pluck Al Gore out of the Senate and put him on the ticket and he became vice president because of Bill Clinton.

There isn‘t that same relationship between Obama and Clinton, but I think the Clintons believe he should be acting in that same way.  And I think that that‘s where there is this miscommunication between the two camps.

BARNICLE:  Look, the fact of the matter, though, gentlemen—and I underline the word “gentlemen” because we‘re three guys talking about this here—whenever this issue is discussed on TV or in real life, Senator Clinton‘s future at the convention, whether her name ought to be put in nomination, I‘m sure you hear from many of the same people I hear from, people who are deeply aggrieved.  They feel she was a victim of gender bias in the spring.  They feel that she has not been given the respect by the Obama campaign that is due her.

And we hear them out and we listen to them and we read their e-mails.  And yet in the back of my mind—and I want to ask you, John, to respond to this and then Chuck.  In the back of my mind, I‘m always wondering, What would have happened to Barack Obama had the Clintons won?  Would Barack Obama be around saying, you know, Well, they‘ve got to respect me some more?  I‘ve got to play a larger role than they want me to play at the convention?  What do you figure would have happened, had that been the case?

HARWOOD:  Well, he might be, and as Hillary Clinton pointed out on that video, you know, some candidates have gone all the way to the convention—many candidates have gone to the convention without having endorsed their rival.  Ted Kennedy in 1980 made Jimmy Carter chase him around the convention podium to get a picture with him.  So you know, this is not all that unusual in historical context.

However, this is a year when Democrats have a tremendous opportunity.  And you can make yourself feel aggrieved and you can—if you‘re a Hillary Clinton supporter, you can say, yes, we got slammed on a gender basis.  I don‘t know that too people are going to cry too many tears when you‘re running against an African-American candidate to say, Oh, yes, bias is what really hurt me and so I—you know, I‘m owed something.  But if that‘s how they feel and if Hillary Clinton‘s not willing to step up and say, Hey, get over it, shut it down, then you‘ve got a potential problem.  And I think this is a significant problem for Barack Obama.

TODD:  And another thing, Mike, as I think—and this is where I think Clinton supporters probably weren‘t treated fairly during the primary process.  They were led to believe that—at a certain point that this thing was a 50/50, a coin flip, that it was truly up for grabs, when really, she—after February 19th, she had about a 1-in-5 shot, at best, and frankly, maybe even less than that, a 1-in-10 shot of getting this nomination.  But there was this—but her supporters were led to believe that this was a lot closer and a lot more possible.  It was always close...

HARWOOD:  It‘s certainly not Barack Obama‘s fault that that happened.

TODD:  That‘s right.  It is the way it was covered, the way the race was covered.

BARNICLE:  You know, Chuck, off of what you said, you know, a couple of minutes ago about, you know, a roll call could impact adversely Senator Clinton‘s future—I mean, victimization is never a very attractive suit of clothes for anybody to be wearing, a man or a woman, true?

TODD:  That‘s right.  And I think that that‘s where—look, that‘s where I think both of them—it‘s almost—both the Obama camp and the Clinton camp isn‘t quite sure—you know, the Obama camp doesn‘t want to -doesn‘t want to seem as if they‘re trying to shove the Clintons out of way, that they‘re trying to do like the old Soviet Union and destroy all the statues, you know, that Khrushchev comes in and says, There is no more Stalin, or Stalin comes in and says, I‘m renaming Leningrad.

BARNICLE:  Ouch!

TODD:  But at the same time, I think that the Clinton campaign also—look, they don‘t want to be seen as somehow hurting Obama‘s candidacy.  They don‘t want to be blamed if he somehow loses.  They want to be able to say, I told you so, if he does lose.  But then if he wins, they want to be part of the winning team.  And I think that that‘s the danger here, is that the Clintons are going to look like they‘re not a part of the winning team.  And if he wins, then he‘s going to have an easier time sort of destroying all the statues.

BARNICLE:  Well, you‘ve just taken us to Leningrad instead of Stalingrad.

(LAUGHTER)

BARNICLE:  Here‘s Senator Clinton talking about some more recent history.

(BEGIN VIDEO CLIP)

CLINTON:  I think it‘s fair to see, if you look at recent history, I have moved more quickly and done more on behalf of my opponent than comparable candidates have.  And you know, most of them didn‘t endorse until the convention.  You know, Teddy Kennedy or Gary Hart or Jerry Brown, you know, just a lot of people held out until the convention, kept their delegates, often waged platform or rules or credential fights.  And you know, I‘ve made it clear I‘m supporting Senator Obama and we‘re working cooperatively on a lot of different matters.

(END VIDEO CLIP)

BARNICLE:  John Harwood, that was last week, and Senator Clinton referred to Barack Obama in that clip we just played as “my opponent” and said that she‘s done more than any candidate in recent history.

HARWOOD:  Exactly.

BARNICLE:  Can you name the top three things that she‘s done?

HARWOOD:  Well, I mean, she did a big thing in early June, when she got out of the race and said she wasn‘t going to keep it open to the convention and she endorsed Barack Obama.  That was significant.  And she‘s got a point.

But on the other hand, I think the Barack Obama campaign is justified in asking, OK, are you in this pool or out of this pool?  Because to describe him, as you said, as “my opponent,” to sort of say, Well, a lot of other people in this situation have taken more aggressive action to sort of get something from the nominee—is she saying she kind of wants to do that but she just hasn‘t pulled the trigger on it yet?

I think that‘s a—she‘s letting her people—she‘s pulling them on a little bit, which is reminiscent a little bit of what Chuck was mentioning in the primaries, when people were led to believe as they were giving money and turning out to vote in these states that maybe she had a little better chance than she actually did.

BARNICLE:  You know, John Harwood, again, you know, raising a truly salient point.  Chuck Todd, when you‘re not pathetically going through Los Angeles Dodgers box scores—incidentally, Manny Ramirez hit another home run this afternoon.  But when you‘re not doing that, you‘re talking...

TODD:  What (INAUDIBLE) being Manny in Spanish, by the way?  I‘m still trying to figure that out.

BARNICLE:  You‘re talking to campaign people, so I would ask you, what is the level of mutual distrust between the two camps, the Obama camp and the Clinton campaign—and the Clinton camp?  And how much has this added to this pending furor?

TODD:  Well, part of the distrust goes to the fact that there‘s isolation, OK?  Chicago has not been the center of the Democratic universe in a—arguably in a very long time, if ever in this form.  So the Obama camp is really sort of isolated from where the Clintonites are in Washington and New York.  So I think part of it has to do with they‘re just not communicating because they don‘t see each other.  They don‘t spent a lot of time with each other.  So I think...

BARNICLE:  Maybe that‘s a good thing.

TODD:  ... when you don‘t do that—well, it could be, but that could be how the distrust is happening.  And I think a lot of the distrust is simply the Chicago folks are in their own bubble, looking forward, trying to worry about the general election, and they‘re sort of—they‘re hating that they have to deal with this New York-Washington Clinton crowd, but they do have to deal with it.  And they probably haven‘t had the best attitude about it because they sit there and say, Hey, wait a minute, we won.  We don‘t owe them anything.  We won.  This is not a president and vice president situation, where the Clintons are, like, Hey, wait a minute, you know, we did run this party for 16 years.  You did tap into incredibly wealthy donors because we did help create a party that attracted these folks to it, so—but I think the Clinton case is just a harder one for them to make right now than where the Obama folks are.

HARWOOD:  And Mike, I would predict for you that at the end of the day, they‘re going to grit their teeth.  They will shut it down.  But it‘s going to be grudging, and that in itself will exact some cost from Barack Obama.  It already has.

BARNICLE:  John Harwood and Chuck Todd, two brainiacs.  Thank you very much for joining us.

Coming up: John McCain has been going negative against Barack Obama and Obama‘s been hitting back.  But is he hitting hard enough?  That‘s the question we‘ll put to our strategists, one Democrat, one Republican.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL. 

Is Barack Obama tough enough to beat John McCain?  Here‘s today‘s “Washington Post.” 

McCain‘s recent attacks—quote—“have raised worries among Democratic strategists, haunted by John F. Kerry‘s 2004 run and Al Gore‘s razor-thin loss in 2000, that Obama has not responded in kind with a parallel assault on McCain‘s character.  Interviews with nearly a dozen Democratic strategists found those concerns to be widespread, although few wished to be quoted by name while Obama‘s campaign is demanding unity.”

So, are the critics right? 

Well, let‘s bring in a couple of strategist.  Steve McMahon is a Democratic consultant who advised Howard Dean in 2004.  And Todd Harris is a Republican consultant who was McCain‘s spokesman in 2000. 

Gentlemen, when I read “The Post” story this morning, my initial instinct was, this is a pack of Washington crybabies whining about the Obama campaign because they don‘t have a piece of it. 

Am I right, Steve?

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Well, I don‘t know if they‘re Washington crybabies crying because they don‘t have a piece of it. 

But I do think they‘re wringing their hands and they‘re learning the lessons of the last campaign.  Remember, David Axelrod and David Plouffe have run maybe the best presidential campaign in—certainly in my lifetime, and they have done everything right so far.  They know what they‘re doing.

Second, Senator Obama is trying to change politics.  He‘s not trying to run the kind of a campaign that we have seen before, that Democrats frankly haven‘t done as well in, the tit for tat, the negative campaigning, the back and forth.

Senator Obama is trying to lift it up to another level.  And I think he‘s been very successful so far in doing it.  Don‘t forget, beating the Clintons wasn‘t easy, and they did it. 

And, lastly, you know, in the general election, if a more aggressive response is necessary, they‘re going to have probably two or three or four, maybe five times as much money as Senator McCain.  And there will be plenty of money and plenty of time if they need to go negative. 

(CROSSTALK)

BARNICLE:  You know, one of the—one of the other—one of the other things that struck me, Todd, in reading the piece this morning was that, I guess if I were within the Obama campaign, or running the Obama campaign, I would be very grateful that the people quoted anonymously in this piece were not part of the Obama campaign, because...

(LAUGHTER)

BARNICLE:  ... the insinuation is that they should be attacking John McCain‘s character now. 

If it‘s one thing John McCain that has going with him with the average voter in this country, not the bloggers, not these nitwits with their computers who blog all day long, it‘s his character, no? 

TODD HARRIS, REPUBLICAN STRATEGIST:  No, that‘s absolutely right.  And that‘s why he has so much appeal to independent voters and—and swing voters. 

I do just absolutely love, though, this whole idea that Democrats across the country are worried that here‘s Barack Obama, this man who is running to be leader of the free world, and they‘re worried that he‘s getting cowed and intimidated by the likes of Britney Spears and Paris Hilton. 

I think what you‘re seeing is that...

(LAUGHTER)

HARRIS:  ... a lot of these Democrats are getting some—they are getting some buyer‘s remorse.  I mean, despite this environment, despite Obama‘s overwhelming cash advantage, he has yet to ever break 50 percent in a single nationwide poll. 

And you look at some of these key battleground states, despite all those advantages, Barack Obama is not performing the way that he should be.  And the reason is because voters are starting to learn that, on things like energy policy, Barack Obama‘s not no plan to lower gas prices.  On taxes, he supports higher taxes, in the mold of Mike Dukakis and John Kerry. 

(CROSSTALK)

HARRIS:  This is the same old thing.  And that‘s why...

MCMAHON:  Todd, Todd, Todd...

HARRIS:  No, Steve, Steve, Steve, Steve, it‘s the same old—same old Democrats. 

MCMAHON:  Todd, where are you going here?  Where are you going here, Todd? 

HARRIS:  And that‘s why he‘s not doing better.

MCMAHON:  No, no, no, this is the same old argument.  This is the same old argument. 

You noted that Senator Obama hasn‘t been able to crack 50.  And I will give you that.  But John McCain‘s been lucky to crack 40.  And do you know why?  Because John McCain is running like a grouch.  He‘s running like your next-door neighbor, the cranky next-door neighbor who is always yelling about you about not mowing his lawn correctly or not mowing it diagonally. 

John McCain was—you‘re absolutely right—the authentic maverick for a long, long time.  But then, in this—this election year, he decided to become George Bush.  He changed policies on just about everything.  He became more conservative.  He wants to continue the president‘s economic policies, the president‘s energy policies.

And the country is ready for a change.  And that‘s what Barack Obama‘s tapping into.  And that‘s why he‘s ahead in every single poll out there, every single poll out there.

BARNICLE:  Let‘s take—let‘s take a look at Barack Obama‘s latest ad and then talk about it.  Here‘s the ad. 

(BEGIN VIDEO CLIP, OBAMA CAMPAIGN AD) 

NARRATOR:  He‘s the original maverick. 

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  The president and I agree on most issues.  There was a recent study that showed that I voted with the president over 90 percent of the time. 

NARRATOR:  John McCain supports Bush‘s tax cuts for millionaires, but nothing for 100 million households.  He‘s for billions in new oil company giveaways, while gas prices soar and for tax breaks for companies that ship jobs overseas.

The original maverick, or just more of the same?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  I‘m Barack Obama, and I approve this message. 

(END VIDEO CLIP)

BARNICLE:  Now, Todd, I‘m sure there are some people out there—maybe a lot of people out there—who view this ad, because of what we talk about each evening on these programs, as, oh, that‘s a really negative ad.  That‘s harsh.  And they talk about the harsh ads of the past six or eight or 10 month. 

Most of these ads are like cream puff things to me. 

(LAUGHTER)

BARNICLE:  I mean, they‘re not tough at all.  I don‘t know what you think.  What do you think?

HARRIS:  Yes, we—oh, we ain‘t seen anything yet.  This is—this is only August.  Wait until October. 

But, you know, I—look, the—Barack Obama‘s best chance to become president is for him to do two things, number one, pass that leadership threshold question in the eyes of voters, and, number two, tie John McCain with a viselike grip to George W. Bush. 

And, obviously, they were seeing something in their polling that—that Senator McCain was breaking away from—from President Bush, that he was establishing his own independent identity.  And he is a maverick, and he is independent.  And the Obama campaign has put this ad on the air to try to pull him back toward President Bush. 

And I think that a threshold question of the campaign is going to be, are they successful?  I think that they won‘t be.  Steve probably disagrees. 

BARNICLE:  Well, Steve...

MCMAHON:  Oh, come on, Todd.  You like that ad, Todd.  You like that ad.  Go ahead.  You can admit it.  Come on.   

(LAUGHTER)

BARNICLE:  Steve, talk about the degree of difficulty—you alluded to a couple of minutes ago—that Barack Obama comes on to the stage of this country, you know, symbolizing, in his own words, talking about it all the time, in his own words, a new era—a new of politics, you know, less partisanship, less attack ads. 

So, talk about the degree of difficulty.  This race is close now.  If it gets even closer in October, what will happen to Obama‘s persona in the minds of some people, you know as a new, fresh face, if they really do begin attack ads, tough attack ads? 

MCMAHON:  Well, I mean, that‘s always the challenge.  And, frankly, it was the challenge in the primary for Senator Obama.  And he—and he handled it quite effectively.

He is trying to offer a different tenor and a different tone in politics.  And he wants to change the old ways of politics as usual, and, frankly, the old ways of back-and-forth negative campaigning in—in elections. 

I‘m absolutely confident that, if David Axelrod, David Plouffe, and company in Chicago decide that they need to turn this up a notch, and take John McCain‘s head off, they are perfectly capable of doing it. 

But I‘m also confident that Senator Obama is hoping to do this a different way.  He‘s hoping to campaign a different way.  He‘s hoping to govern a different way.  He‘s hoping to have an economy that works for everybody, and not just for a few.  He‘s hoping to go in a different direction and change policies. 

John McCain was the maverick that Todd just described, but that was in 2000.  And, in 2008, he had to choose between being a maverick and losing and adopting and embracing just about every Bush policy, which he bragged about during the primaries.  And that‘s what he did.

And he‘s now going to have to live with that.  And he‘s going to wear it, and wear it proudly. 

BARNICLE:  Last word, Todd.

(CROSSTALK)

HARRIS:  I think a lot of this negativity could have been avoided if Barack Obama hadn‘t reneged on his promise to hold a series of town hall meetings with Senator McCain across the country, where the two of them could stand side by side up in front of a bunch of independent voters, and answer real questions from real voters. 

Instead, Senator Obama didn‘t want to take part in that, went back on his word.  And so now you‘re left with this whole back and forth.  A lot of that could have been avoided. 

MCMAHON:  Well, but, Todd—but, Todd, I—I happen to agree with you on the town hall meetings.  I think Senator Obama would do incredibly well and would outshine John McCain in those town hall meetings. 

Obviously, they made a different judgment.  But I will say this.  John McCain promised a different kind of campaign.  He promised a campaign that was going to be hopeful and optimistic and a campaign that wasn‘t going to tear down Senator Obama. 

And the person in the campaign that has consistently engaged in the negativity is not Obama campaign.  It‘s the John McCain campaign.  You have seen it consistently.  And it‘s not exactly a welcoming notion to want to cooperate and go into town hall meetings with John McCain when all he‘s doing is tearing you down on television every single day. 

BARNICLE:  Got to go.  Got to go. 

Todd, next week...

MCMAHON:  OK.

BARNICLE:  ... you can hammer him again, OK?

(LAUGHTER)

(CROSSTALK)

BARNICLE:  Todd, Steve, thanks very much. 

(CROSSTALK)

BARNICLE:  Up next: the HARDBALL “Sideshow” and Comedy Central‘s Stephen Colbert with his new drinking game for this election campaign.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Here‘s the great Stephen Colbert with a new way to cover the Clinton/Obama drama. 

(BEGIN VIDEO CLIP, “THE COLBERT REPORT”)

STEPHEN COLBERT, HOST, “THE COLBERT REPORT”:  Nation, I have been keeping tabs on Barack Obama.  And, by that, I mean beer tabs. 

(LAUGHTER)

COLBERT:  I have a little game where I have to chug one every time he pretends to like Hillary Clinton to win over her voters. 

(LAUGHTER)

COLBERT:  I—I get pretty high. 

(LAUGHTER)

(END VIDEO CLIP)

BARNICLE:  At this rate, his game could get really ugly, too. 

The Olympics start tomorrow, and to celebrate that in their own way, Obama Girl and McCain Girl are at it again. 

Check this out. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The next event is tug of war. 

UNIDENTIFIED MALE:  OK.  Well, let‘s get on to the event.  All right, looks like Amber Lee Ettinger, Obama...

UNIDENTIFIED FEMALE:  Oh, oh, oh, something is wrong here.  She did say something about a carpal tunnel problem earlier.  Her alternate is now coming in to take her place.

UNIDENTIFIED MALE:  So, this is a legal move?

UNIDENTIFIED MALE:  It‘s legal. 

UNIDENTIFIED MALE:  Oh.  Continues the reputation of Democrats as being wimps. 

(END VIDEO CLIP)

BARNICLE:  That‘s ugly.  First medal goes to McCain Girl there. 

Next up: Motown lockdown.  Detroit Mayor Kwame Kilpatrick will spend tonight in jail because of a jaunt last month to Canada.  With his pending perjury trial, the mayor must let the court know about his travel plans.  He didn‘t.  Big mistake.  Ordering him to jail, the judge says he‘s treating Kilpatrick the same way he would treat John Six-Pack, instead of Joe Six-Pack, the actual phrase.

Now for “Name That Veep.” 

After campaigning for John McCain in 2000, this young Southern governor stayed neutral during his state‘s crucial primary this year.  Like McCain, he‘s been called a maverick at times for butting heads with his own party.  But, that said, conservatives love this guy. 

So, who is it?  South Carolina Governor Mark Sanford. 

Time now for tonight‘s HARDBALL “Big Number.”

We don‘t know yet if John McCain‘s celebrity ads are swaying votes, but there‘s at least one group that‘s paying attention, the YouTube crowd.  Keep in mind that, since February, Barack Obama‘s YouTube site has gotten about four times as many hits as John McCain‘s site. 

Today‘s “Washington Times” reports, things are changing.  McCain‘s YouTube hits are topping Obama‘s.  How long has this been going on?  Seven straight days—tonight‘s HARDBALL “Big Number.”  You wonder why?  Two words, Paris, Britney. 

McCain, seven straight days ruling YouTube—tonight‘s HARDBALL “Big Number.” 

Up next:  A new book charges that the Bush administration was told Saddam Hussein had no weapons of mass destruction, and invaded Iraq anyway.  Author Ron Suskind joins us next.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MELISSA LEE, CNBC CORRESPONDENT:  I‘m Melissa Lee with your CNBC “Market Wrap.” 

A sell-off amid negative economic reports and disappointing news out of the financial sector—the Dow Jones industrials plunging 224 points, the S&P 500 down 23, and the Nasdaq shedding 22. 

Oil rose, partly because of an attack that shut down a key pipeline in Turkey—Crude gaining $1.44, closing at $120.02 a barrel. 

Retailers, including Wal-Mart and Target, reporting disappointing July sales—Wal-Mart also said sales will probably slow this month, because shoppers have run out of tax rebate cash.

Meantime, first-time unemployment claims rose unexpectedly last week, jobless claims hitting their highest level in more than six years.

Shares of troubles insurance giant AIG tumbling 18 percent—that after reporting its third straight multibillion-dollar quarterly loss because of mortgage-related write-downs.

And Citigroup agreeing to buy back more than $7 billion in auction rate securities and pay a $100 million fine to settle charges that it fraudulently misled investors. 

That‘s the latest from CNBC, first in business worldwide—now back to HARDBALL.

BARNICLE:  Welcome back to HARDBALL. 

In an explosive new book, Pulitzer Prize-winning author Ron Suskind charges that the White House ordered the CIA to forge a letter by Iraq‘s intelligence chief alleging that 9/11 hijacker Mohamed Atta trained for his mission in Iraq.  The fake doctor was allegedly ordered in the fall of 2003, after no weapons of mass destruction were found in Iraq and after former Ambassador Joe Wilson said the Bush administration twisted intelligence to exaggerate the Iraqi threat. 

Ron Suskind is here with us.  His book is “The Way of the World: A Story of Truth and Hope in an Age of Extremism.”

Ron, I have a great deal of respect for you and your work.  I‘ve loved all of your work.  But let me take you through a little timeline here for people who have not yet purchased the book, not yet read the book.  You allege in the book that in the fall of ‘03, that George Tenet, then the CIA director, who was at the White House, and after a meeting in the White House, returned to the CIA headquarters with a piece of paper, a plain, cream colored piece of paper, White House stationary, handed it to a CIA underling and said the White House wants us to forge a letter from Iraqi intelligence chief, alleging that there was weapons of mass destruction and that Mohammed Atta.  Is that correct?  Is that roughly correct?

RON SUSKIND, AUTHOR, “THE WAY OF THE WORLD”:  Absolutely.  The evidence is indisputable, hour after hour of conversations, many of them taped, you know, in the book all on the record.  The folks saying that, of course, have come under vituperative attacks from various courts.  The White House is worried about that part of it.  Because that, Mike, could end with not only Congressional investigations, but it‘s a statutory violation of the statues founding the CIA.  Of course, that‘s illegality.

So that‘s where the pressure is coming, that little bridge between the White House and the CIA of the many, many allegations in the book. 

BARNICLE:  Let me ask you, because I‘m not nearly as wired as you are into that whole Washington world: in September of ‘03, we would have already have had Ambassador Wilson‘s piece appearing in the “New York Times” in July.  We would have already had Ambassador Wilson‘s wife, Valerie Plame‘s name being mentioned in a column by Bob Novak, who we hope and wish well with his illness.  We would already have had the CIA director, George Tenet, swallowing the 16 words that he gave President Bush in the State of the Union Address. 

We would have already had numerous numbers of anecdotal bits of evidence that the White House distrusted the CIA and particularly the vice president‘s office particularly distrusted George Tenet, the director of the CIA.  So what sense would it make for the White House to have Tenet transport this thing?  

SUSKIND:  It was an order.  It was an order from the White House to the CIA to be carried out, so that there would be, essentially, a refutation, this letter, ostensibly from the Iraq intelligence chief, predated a few months before 9/11 to Saddam, saying that there was a Saddam/al Qaeda connection and that Saddam was out purchasing yellow cake with al Qaeda‘s help.

It was, as one of the CIA people quoted in the book says, it was a check the box issue for all of the White House‘s political troubles.  It is against statute, i.e. it is illegal.  That‘s why folks are focusing in this book on this specific part, and it put pressure on the participants.  It‘s ugly to see.  But, ultimately, this will come out, no doubt, if not in the next couple of days—because, you know, it‘s all indisputable—but potentially in Congressional hearings going forward under oath, with threat of perjury. 

BARNICLE:  But, you know, you‘ve been around a long time.  You‘ve seen a lot.  You‘ve written a lot.  When you were told that someone actually gave the CIA director a cream colored piece of stationary with instructions on it, wouldn‘t your first reaction be my first reaction?  No one is dumb enough to put in writing what they clearly, according to you, put in writing. 

SUSKIND:  It‘s clear they did.  I‘ve been at this for a long time, Mike.  They tend not to, but everyone makes mistakes.  This is a case where they did leave a paper trail, even though Dick Cheney has moved for years to say, make it paperless.  Here‘s a piece of paper.  People remember it quite vividly.  They remember talking about it.  They remember it being passed down the chain. 

Again, there are many, many witnesses to this.  It is clear.  It is true.  It will come out, ostensibly, in its fullness, I‘m sure, in the next days. 

BARNICLE:  Well, it‘s in the book, obviously. 

SUSKIND:  It‘s in the book.  People read page after page of it with people quoted on the record and they‘re like, well, there it is. 

BARNICLE:  It‘s in the book.  I understand that.  I read a huge portion of the book this afternoon.  It reads like a novel.  It‘s a terrific read.  One thing bothers me, you quote George Tenet in the book and you claim that he went back over to Langley with the cream colored piece of stationary.  Did you interview George Tenet while you were writing the book? 

SUSKIND:  I‘ve been with George Tenet a long time.  I have talked to him many times.  I talked to him a lot for the last book.  Tenet is a guy who sometimes gets confused.  He doesn‘t remember Slam Dunk.  He doesn‘t remember testimony before 9/11.  In this case, I went to the participants, the people involved near Tenet, below, around Tenet, who were the folks moving forward, executing the plan.  They have great memories.  They always have.  They keep day books.  They keep journals.  And they, while it‘s indisputable, it did occur. 

People know it all the way through the chain.  It popped up on the other end.  It roiled the global news cycles.  It clearly was a CIA operation, and this is the important part, ordered by the White House.  That‘s what make it so tricky. 

BARNICLE:  You never asked the DCI.  You never asked the director of Central Intelligence Agency point blank, George, did you transport a cream colored piece of paper to Langley after your meeting at the White House? 

SUSKIND:  For a lot of reasons, I went to really reliable sources.  To be frank about it, at this point, George, as reporters in town know, is not the person you call for anything in terms of memory, even a short time ago, much less five years ago.  He doesn‘t remember wide swathes of almost anything.  In this case, we dealt with people handling the situation who remember with great vividness what George say, what they did, the moment of passage and down the chains.

That‘s why the book has such strength, because you can see clearly this was an operation.  And people are quoted fully based on their personal knowledge. 

BARNICLE:  It does.  There‘s no doubt about it.  In reading the book -

I have to tell you, in reading all your stuff, I admire all your stuff. 

But in reading this book and these charges laid out here, and because of my background covering like city stuff and everything for years, I can‘t help but come to the conclusion, and the end of this book, this book is basically charging the president of the United States or the vice president of the United States with being an accessory before the fact of 4,000 murders and more in Iraq.  They lied us into war according to this book. 

SUSKIND:  The book lays out the evidence step-by-step all the way to that point.  In early January of 2003, mind you, this is important, weeks before the president‘s State of the Union Address, and a month before Colin Powell goes to the U.N., that we‘re meeting with the Iraqi intelligence chief in a secret location, a back channel.  He tells us, hey, there‘s no WMD.  Also, here‘s the mind of Saddam Hussein.  Here‘s why he‘s not worried.  He‘s worried about the Iranians and being shown he‘s a toothless tiger. 

All this is clear later, demonstrable to the world.  We know it well before the war.  The head of British intelligence, again, on the record, says, you know, the U.S. was about moving forward like a runaway train.  This was the British version of let‘s stop this thing.  We don‘t stop it. 

We ignore the intelligence chief.  We then, of course, have a real problem.  We put him into hiding, Mike.  We pay him five million dollars from the U.S. government.  We‘ve hidden him for five years.  Of course, he still remains the Jack of Diamonds in Bush‘s deck of most wanted man.  There‘ s a million dollar reward for this follow. 

It has really been the smoking gun, best kept secret of the United States government, and it‘s one that shows clearly a lack of faith in the basic principles of democracy, in terms of transparency and especially accountability on this most august issue of war.  That‘s why, of course, everyone is buying it and reading it.  Everybody is—Congressional investigators are lining up to say this is indisputable.  The evidence is here.  Let‘s get people under oath with subpoenas. 

Let‘s finish this.  The book is actually very hopeful.  It says we need to embrace truth before this era ends if we‘re going to move forward cleanly and with vigor with the kind of moral energy that has been bled away.  You talk about 4,000 deaths.  The fact is what the book is about is how over these years America has lost its moral authority and how people are struggling to get it back now in this year of consent. 

BARNICLE:  Ron Suskind, thanks very much.  The book is “The Way of The World.”  It reads like a novel. 

Up next, the politics fix.  What do the Clintons really want?  Can they stand being on the sidelines and can Barack Obama survive in their shadow?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  OK, time for the politics fix.  In our round table tonight, “Time Magazine‘s” Karen Tumulty, who writes about the Clintons in this week‘s issue, and Jonathan Alter of “Newsweek” and NBC News, author of a new collection of his columns, “Between the Lines,” published by Border‘s Books.

Let‘s start right off by playing a clip from Barack Obama.  Take a listen to this.  He reacted to reports about his relationship with Bill and Hillary Clinton, especially the former president‘s lukewarm endorsement—

I guess we could call it that—of him in a recent interview.  Take a listen.

(BEGIN VIDEO CLIP)

OBAMA:  I spoke to President Clinton this week.  He‘s been very supportive.  I thought he showed extraordinary restraint in a fairly provocative interview while he was on his trip.  I couldn‘t ask for him to be any more gracious than he‘s been and supportive since the campaign ended. 

There hasn‘t been controversy other than what you guys are projecting right now. 

(END VIDEO CLIP)

BARNICLE:  Hey, Karen, you know, do these people running for public office, do they live on the Moon?  He called that a provocative interview with—I mean, that was the least provocative interview that I‘ve seen in months.  You‘ve covered the campaign.  You‘ve covered the Clintons.  You‘ve got a piece in this week‘s “Time Magazine.”  What‘s going on here with this tension convention? 

KAREN TUMULTY, “TIME MAGAZINE”:  I think, yes, when you‘re in a corner, go ahead and blame the interviewer.  The fact is that relations, particularly with Bill Clinton, are not good.  I think the most telling detail, which was still the case as of the last time I checked, which was last night, was the fact that the Obama campaign had still not given Bill Clinton even a hint of what they would like him to do, if anything, at the Democratic Convention.  That is about as loud of a message as you could possibly be sending about the state of the relationship between the current presidential nominee and the last Democratic president. 

BARNICLE:  Jonathan, this is not good. 

JONATHAN ALTER, “NEWSWEEK”:  No, there are a lot of problems.  I mean, there‘s the question of what happens in Denver.  Does Hillary have her delegates vote for her?  Do they do that on the same night that she speaks?  The Obama people don‘t want there to be two Clinton nights, you know, Tuesday and Wednesday, when the balloting takes place.  And for Obama to say that Bill Clinton was gracious in that interview was kind of a joke, because Clinton was asked, is Barack Obama ready to be president?  And he says, nobody‘s ready to be president.  That‘s not exactly an endorsement of Barack Obama. 

So there is clearly a series of issues here that have yet to be worked out, and the Clinton-Obama tension, should Obama be elected, this will extend all the way through the years that Obama is in office.  These two families will be scuffling with each other. 

BARNICLE:  Karen, that clip in that ABC interview, where as Jonathan just pointed out, Bill Clinton says, well, the Constitution says he‘s qualified; I mean, that actually was and remains shocking.  My question to you is the ripple effect in the Obama campaign. 

TUMULTY:  Well, I think that what has happened here is that their way of treating Bill Clinton, which is basically not to deal with him at all, speaks as loud as anything you need to know.  Don‘t forget, when Bill Clinton was out there campaigning for Hillary Clinton, he was saying every moment he could that he thought she would be—she was more prepared for the office than he was when he ran.  So, you know, then to be asked the same question about Barack Obama and turn to the fine print of the Constitution and basically say, well, he‘s the right age, and he wasn‘t born in a foreign country is not exactly a ringing endorsement. 

ALTER:  Mandela told him not to be bitter, but he didn‘t listen to Mandela. 

BARNICLE:  Sorry, we‘re out of time.  Karen Tumulty, Jonathan Alter, thanks very much.  Right now it‘s time for “RACE FOR THE WHITE HOUSE” with David Gregory, after these messages.

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

END   

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