updated 8/25/2008 12:11:25 PM ET 2008-08-25T16:11:25

Guests: Eric Egland, Jon Soltz, Bob Shrum, Del Walters, Charles Mahtesian, Jon Soltz, Chrystia Freeland, Larry Kane

CHRIS MATTHEWS, HOST:  Tonight, the Wilmington one.  Little old Delaware is ready for its close-up.  So is its favorite son, Senator Joe Biden.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading of tonight: Biden his time?  It could be any minute now that the text messages fly and Obama announces his running mate.  But has this rolling disclosure been a good campaign strategy or just too dandy of a striptease?

And one person we know is not in the running for Obama‘s VP slot.  It‘s Hillary Clinton.  Today, NBC confirmed that Hillary Clinton was never even vetted for the ticket by the Obama campaign.

And McCain VP buzz grew today with speculation that Mitt Romney is the pick.  There was a serious wind chill between these two candidates during the primary.  Could the prospect of victory warm things up?  Plus, housing surplus, day two.  The Obama campaign gets more mileage out of McCain‘s house gaffe with a new ad titled “Out of touch.”

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Call it country club economics.  How many houses does he own?  John McCain says he can‘t even remember anymore.

(END VIDEO CLIP)

MATTHEWS:  And the McCain campaign goes back to the well, ridiculing Obama‘s celebrity with this ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  Celebrities don‘t have to worry about family budgets, but we sure do.

(END VIDEO CLIP)

MATTHEWS:  Have the campaigns each found the opponent‘s Achilles heel?

And Iraq and the U.S. have agreed now on a 2011 withdrawal date.  Is this vindication for McCain or Obama?  Does it mean the surge worked or that the reality on the ground is closer to Obama‘s way of thinking?  In the “Politics Fix” tonight, we‘ll begin with a report from the Biden stakeout on the comings and goings and what it all means about who will be Obama‘s VP pick.

And in the HARDBALL “Sideshow” tonight, Robin Leach, of all people, enters the fray.  Remember him?

(BEGIN VIDEO CLIP)

ROBIN LEACH, “LIFESTYLES OF THE RICH AND FAMOUS”:  I send you all champagne wishes and caviar dreams.

(END VIDEO CLIP)

MATTHEWS:  Hear what he has to say about the lifestyle of a candidate so rich and famous that he can‘t remember how many houses he owns.

And here‘s your first look at the Pepsi Center out in Denver, site of next week‘s Democratic national convention.  As you can see, it‘s an all-American red, white and blue color scheme.  There it is, your first look.  It‘s going to be really busy later next week.

And a program note.  I‘ll be joined by my colleague Keith Olbermann tomorrow afternoon from 1:00 to 4:00 Eastern time for a report on the new Democratic ticket.  We should know by then.  Then at 7:00 PM tomorrow, we‘ll have a special edition of HARDBALL.  And on Sunday from Denver, there‘s a special two-hour edition of HARDBALL starting at 4:00 PM Eastern.  Actually, that stage looked rather green to me.

Anyway, let‘s begin with what we know right now about Barack Obama‘s running mate.  And for that we turn to NBC‘s Andrea Mitchell.  Andrea, it looks like it‘s not Evan Bayh because in a report on “Nightly” tonight, it says, “It‘s not mine to report,” quoting him.

ANDREA MITCHELL, NBC CORRESPONDENT:  Right.

MATTHEWS:  And then you‘ve got Clinton saying, I‘m not even in that arena.  So what do we know?

MITCHELL:  We know that it‘s probably Joe Biden.  I mean, all signs are pointing to that.  We should hedge that by saying that there could be some last minute change.  There was a flurry of mis-announcements and false announcements.  There were some people reading tea leaves.  There were some fake bumper stickers printed out in Kansas, and so a local station out there, TV station, got all excited that perhaps it was an Obama buy, but they weren‘t even in the font or the graphic style used by the Obama campaign.  And the Obama campaign did go so far as to make arrangements for several different roll-outs, not knowing beyond a small circle of people who the actual person is.

I have it on very good authority that a number of the candidates have been told that they have not been chosen, and that includes Kaine and Bayh.  And that means Biden, who as of 4:00 o‘clock this afternoon—an aide of Biden‘s was telling Widener (ph) University in Wilmington, Delaware, that they still had not heard.  So they‘ve not been getting the wave-off yet.  And they didn‘t know whether he was going to be in his classroom tomorrow at Widener University, teaching the law students he‘s taught for 17 years.

MATTHEWS:  OK...

MITCHELL:  So they may get a substitute professor.

MATTHEWS:  Andrea, I always get in trouble when I say, Let‘s be brutal here, but the fact is, he‘s either being picked of he‘s being dissed because they‘re hanging him out there with the paparazzi and everybody as if he is the nominee.

MITCHELL:  Right.

MATTHEWS:  If he doesn‘t get it now, won‘t it look like they dumped on the guy?

MITCHELL:  Well, it‘ll look pretty bad, and that is not the way they do business.  I mean, this is an organization that is very disciplined.  They very much want for the official announcement to come in that text message.  And the text message, you know, could come late tonight or tomorrow morning, more likely tomorrow, and that will...

MATTHEWS:  OK, when should I...

MITCHELL:  ... leave a few hours.

MATTHEWS:  ... set my alarm, Andrea?  I‘ve got to be to work at 8:30, so what time should I set my alarm, 7:00?

MITCHELL:  I would say that would be a good one.  I don‘t know how long it takes you to get to the office, Chris, but...

MATTHEWS:  Oh, well...

(CROSSTALK)

MITCHELL:  If you want, I‘ll call you.

MATTHEWS:  Oh, you will.  You are there.  Anyway, Andrea Mitchell, thanks for that update.

MITCHELL:  Sure thing.

MATTHEWS:  Bob Shrum‘s a Democratic strategist, of course, and Pat Buchanan is an MSNBC political analyst.  Let‘s go to Bob Shrum because, Bob, you‘ve worked with Democrats for so many times.  This walk-out, this roll-out—I mean, it reminds me of the 1950s, when you get the new car model coming out, you know, next week, and it was such a hype.  It‘s got to be Biden, right?

BOB SHRUM, DEMOCRATIC STRATEGIST:  I would predict with confidence that it‘s Biden.  I think this is a smart roll-out.  They‘ve involved people.  They‘ve dominated the news cycle.  They‘ve got people all over the country checking their beepers and their cell phones all the time.  And I think it‘s been a pretty clever move.

Look, when you do this—I‘ve been on both sides of this.  The last two cycles, I was sort of inside looking out, and I actually had some idea what was going on.  And I was amazed at the stuff that was written.  The fact of the matter is that there‘s been a lot of speculation by people who don‘t know anything, but I think we have reached the point where it‘s very clear, at least to me, that it‘s Biden.  And if I‘m wrong, I‘ll come back on the show and say, Boy, was I wrong.

MATTHEWS:  You know, Bob—well, you can‘t book yourself that easily.

(LAUGHTER)

MATTHEWS:  But let me ask you this question...

SHRUM:  Well, if you ask me, I might come.

(LAUGHTER)

MATTHEWS:  Let me ask you this.  You‘ve had two pretty weak running mates last time around, Lieberman, who‘s now acting like a Republican, and Edwards, who turned out to be a pretty weak sister in that—he turned out to be a weak candidate, I think, as a running mate.  Will Biden do the job of a running mate, which is take the fight cleanly to the opponent?

SHRUM:  I think Biden will be a terrific running mate.  I think he will take the fight to the opponent.  He‘s got these working class roots in Scranton.  As you know, Chairman is, he‘s one of the most persuasive speakers.  Sometimes he talks too long...

MATTHEWS:  Yes.

SHRUM:  ... but he‘s one of the most persuasive speakers in the Democratic Party.  And he really does reach that blue collar base.  He also brings that foreign policy, national security credential.  I think he‘s a terrific choice, if he‘s the choice.

MATTHEWS:  Yes, it reminds me of that old joke about the Nazi that captured Hubert Humphrey, and he says, We have ways of making you stop talking.

(LAUGHTER)

MATTHEWS:  Your thought?  Is he too vociferous?  But he looks right. 

He looks like—look at them together.  They look like they‘re partners.

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think he‘s the best choice.  If you‘re not going to take Hillary Clinton, I think it‘s the best choice for the Democrats.  But I don‘t think this roll-out has been very good for Obama.  He‘s wasted a week with, you know, who gets kicked off the island game.

(LAUGHTER)

BUCHANAN:  We‘ve all been speculating.  How does that advance the game?  How does that down John McCain?  He should be going after McCain.  If he‘d introduced this guy and go after McCain for a week—instead, we‘ve all been playing this guessing game.  Everything we‘ve been saying is thrown out.  It‘s meaningless.  All the talk show hosts and the columnists and the commentators, we‘re all speculating this.  How does that advance Barack Obama?

MATTHEWS:  Well, here‘s—that‘s done one thing.  It‘s drawn out David Brooks, one of the smart columnists in the country, at “The New York Times.”  He‘s a conservative, but he says today, “Biden tells you exactly what he thinks before he tells it to you a second, third and fourth time.  Presidents need someone who will be relentlessly direct.  Obama, who attracts worshipers, not just staff members, needs that more than most.”  He needs a Dutch uncle.

BUCHANAN:  Look, I agree...

MATTHEWS:  Will he accept him in that role?

BUCHANAN:  Look, I agree that—if you‘ve got someone in the—across the street in the OB (ph) or down the hall, Joe Biden‘s probably about as good an individual as you can get.  I think he‘s a steady guy.  He‘s a solid guy.  He‘s respected.  He‘s got good credentials.  He will help in the Philadelphia area.  Other than that, I think he‘s very strong in Rehoboth Beach (ph), I think, Chris...

MATTHEWS:  No, I think he‘s...

(LAUGHTER)

BUCHANAN:  They don‘t know—nobody in the country knows who Biden...

(CROSSTALK)

SHRUM:  Yes, but they‘re all going to find out.

(CROSSTALK)

MATTHEWS:  ... up in Scranton, I can tell you that.  That‘s what...

BUCHANAN:  They‘re going to find out.  That‘s your problem.

SHRUM:  They‘re going to find—they‘re going to—they‘re going to

no, no.  I don‘t think it‘s a problem, Pat, you know?  And for about eight or nine months, you‘ve thought everything the Obama campaign has done has been pretty uniformly wrong.  You‘ll probably think he‘s wearing the wrong suit to the inauguration.

BUCHANAN:  Well, look, there‘s no doubt that Obama ran a fantastic campaign.  But let‘s face it.  This is not a triple, this is a single that he‘s hit here.

MATTHEWS:  OK, well, let‘s (INAUDIBLE) Isn‘t the most important thing, Bob Shrum, for this candidate in his first real executive decision not to get it wrong?  In other words, should he go for a single or even a bunt to avoid the mistake that he really can‘t take?  I think if he gets this wrong, if he picked a VP that got him in trouble and he had to withdraw, he‘d be losing.  Automatically.

SHRUM:  Oh, sure.  That‘s certainly true.  But I don‘t think this is going to prove to be a single.  I think the country is going to get to see Biden.  You know, he ran for president this year, and there was just no room for him on the stage.  And we talk about how long he goes on.  He proved in a couple of those debates that he can be pretty brief and succinct, and we‘re setting him up, I think, to be a really terrific candidate.  I think he‘s going to get a lot of great notices the next few days.

BUCHANAN:  I think he‘ll get good notices.  Chris, let me ask you this, though.  Is this what Nixon used to call “big play,” though, that somebody...

SHRUM:  You mean like Agnew?

(CROSSTALK)

(LAUGHTER)

SHRUM:  Is Agnew the big play?

(LAUGHTER)

BUCHANAN:  Yes.  We whipped Humphrey and whoever—your friend, Muskie, two of your losers, Bob.

SHRUM:  Oh, come on!

(CROSSTALK)

MATTHEWS:  ... lose half our audience when we talk about this old stuff here.  You know, I hate to bring it up, but you know, this has got long teeth on it, some of these discussions.

Look, let‘s go to the Republican side.  Pat, you‘re on the right side of the aisle here.  Is it going to be not anybody on the outside, it‘s going to be not Tom Ridge, not Joe Lieberman, it‘s going to be one of the usual suspects, Mitt Romney or Pawlenty -- (INAUDIBLE) Italian food.

BUCHANAN:  Got it right the first time.

(LAUGHTER)

MATTHEWS:  “Polento” means “boring,” right?

(LAUGHTER)

BUCHANAN:  Right.  But here‘s the thing.  He‘s not going to take Lieberman.  You‘d have a—the whole explosion there.  I thought that was cover for Ridge, but Ridge is—I mean, he‘s pro-choice.  The Catholics are fighting with him, the bishops up there.  Evangelicals—what are they going to say about a pro-choice Catholic?  I think Romney‘s the best choice because just what you said about Pawlenty.

I mean, where‘s the excitement in this guy?  And it‘s Minnesota.  Can he really bring Minnesota?  I think the strongest guy, and somebody really standing up in the debate, I mean, alongside Biden—I think it‘s a very good exchange between those two.

MATTHEWS:  Does he want—hey, Shrum, you know all about politics and the psychology of these guys.  Is he going to be comfortable, this man who bears the scars of war, who‘s been beaten down by life, who looks his age, standing next to the man from Glad?  I mean, is he going to be happy in that role, standing next to Mr. Perfection?

SHRUM:  Well, presidential nominees have usually done well when they picked somebody who was a strong running mate but they weren‘t particularly comfortable with—Kennedy with Johnson, Reagan with Bush.

But I do want to add one thing to what Pat said.  I want to endorse Joe Lieberman for the Republican nomination for vice president.

(LAUGHTER)

SHRUM:  He was a bad nominee for us and I think he ought to be a bad nominee for them.

(LAUGHTER)

BUCHANAN:  I think Lieberman could be defeated on the floor of a Republican convention.  If McCain threw his name out there, I would be there are conservatives who would get together, try to get another name and defeat him on the floor.  You remember Agnew had some problems down there in 1968 when we picked him, and he was believed then to be a moderate Republican governor but not of the stature...

MATTHEWS:  OK, not that I believe in religious tests...

BUCHANAN:  ... of Rockefeller.

MATTHEWS:  ... for candidates.  I wasn‘t happy with the Rick Warren thing.  I don‘t think people should be asking people about when they believe life begins.  I think that‘s a metaphysical question.  I don‘t think it‘s a political question.  But is a guy named Pawlenty from Minnesota, who used to be a Roman Catholic, who switched to something else -- does that work with people, somebody who‘s changed religion that dramatically?

BUCHANAN:  I think Pawlenty doesn‘t work for this reason.  Nobody knows who he is.  From what I have seen, he does not make a dramatic impression or appearance.  He does not seem to be a great speaker.  I don‘t know what the reason to take him—that would be the same, in my judgment, as you know, Barack Obama taking Bayh.

MATTHEWS:  (INAUDIBLE) Mitt Romney.  Mitt Romney, Bob, what do you think, Mitt Romney and Joe Biden, the running mates?

SHRUM:  Listen, I—Mitt Romney?  Listen, two years ago, he was pro-choice.  Two years before that, he was pro-gun control.  So he‘s kind of—you get all sorts of things in that package.

MATTHEWS:  He is, as you said one time, a multiple choice candidate.

BUCHANAN:  He‘s a change candidate.  Look...

SHRUM:  Yes, Senator Kennedy had the best line.  He said, You‘re not pro-choice, you‘re multiple choice.  But...

BUCHANAN:  But Pawlenty was a Catholic and he‘s now an evangelical. 

So he‘s changed...

SHRUM:  Yes, but Pat, I don‘t want...

(CROSSTALK)

SHRUM:  I don‘t want any religious tests for public office.

MATTHEWS:  OK.  Do what you want.  That‘s the Bob Shrum rule, Do you want you want.  Thank you, Bob Shrum.

SHRUM:  You‘re welcome.

MATTHEWS:  You can come back, if you were wrong.  You can come back if you were right, too, of course.  Pat Buchanan.

Coming up: When John McCain couldn‘t say or count how many houses he owns, did that give Barack Obama a winning line of attack?  Is this the supermarket scanner moment of this campaign?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The fallout from McCain‘s gaffe on how many homes he owns roared on for a second day today.  Here‘s the interview that started it all, John McCain‘s interview with Politico.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  How many houses do you and Mrs. McCain have?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  I think—I‘ll have my staff get to you.  I‘ll talk to you about that (INAUDIBLE)

(END VIDEO CLIP)

MATTHEWS:  Got to get back to you on that one.  Here‘s Charles Mahtesian.  He‘s national politics editor for Politico.  And Del Waters is a columnist at Ebonyjet.com and author of “The Race.”  Let‘s take a look right now at what comes out of this.  The genesis of it was his comment where he didn‘t know how many houses he owns.  I assume that question dealt with how many he lives in.  Today, the Obama campaign came out with this ad called, classically, “Out of Touch.”

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Call it country club economics.  How many houses does he own?  John McCain says he can‘t even remember anymore.  Well, it‘s seven.  No wonder McCain just said the fundamentals of our economy are strong and anyone making less than $5 million a year is middle class.  Maybe McCain thinks this economy is working for folks like him, but how are things going for you?

(END VIDEO CLIP)

MATTHEWS:  OK.  Now I want to get tough.  It‘s Friday afternoon.  That ad wasn‘t just about a guy who‘s out of touch economically.  That‘s an ad about a competency test.  When a person comes to after a stroke or something, or they‘re getting on in years, they say, What‘s your name, where do you live, right?  How many houses do you own is in the category of a competency test.  And they knew what they were doing in that ad.

DEL WALTERS, EBONYJET.COM:  What‘s sad about that...

MATTHEWS:  Do you agree?

WALTERS:  Oh, yes.  And I think they were also trying to tell you in that ad, by showing him with George H.W. Bush, that he is older than Obama, that he is not only, you know, stumbling on the issue of how many houses that he has.  And think about what we‘re saying when we say in that ad—everybody knows how many homes they own.  Everybody should know how many homes they own.  Everybody should know how many investment properties they own.

MATTHEWS:  So, but that‘s right.  That‘s a separate question.  If you‘re a guy with a lot of bucks, like their family, and you‘ve got homes you‘ve—places you invested in, that‘s one thing.  When you ask how many houses you own, that‘s a particular question.  How many places do you live?

CHARLES MAHTESIAN, POLITICO:  Well, that‘s why it‘s so deadly, I mean, and that‘s why it‘s lasted for 10 days and it‘s why it happened Wednesday and now we‘re still talking about it on Friday because...

MATTHEWS:  Well, we love the story because we can understand it.

MAHTESIAN:  Well it‘s...

MATTHEWS:  This is a story that we can get our brains around.

MAHTESIAN:  Right, and it‘s very—and that‘s what makes it so toxic for the McCain campaign.  I mean, think about all the traction that he was getting, great traction in different states, in swing states.  He had finally found his sea legs, stopped the bleeding, getting momentum.  And all of a sudden, boom, he‘s stopped by this story because it plays into the kind of argument...

MATTHEWS:  OK, does this play into more subtle questions, like he didn‘t know there‘s no longer a country called Czechoslovakia, he thought there was an Iraqi-Afghanistan border, when, in fact, there‘s a country called Iran in the middle.  There‘s things that he doesn‘t know that seem to be evidence of inattentiveness.

WATERS:  No.

No.  I think what is happening is, we‘re finally seeing—and I have to give hats off to “Politico” on this—we‘re finally seeing reporters vet John McCain. 

(CROSSTALK)

MATTHEWS:  On knowledge?

WATERS:  On knowledge?

Bear Bryant always said, the best defense is a good offense.  And what we have seen in this campaign so far is John McCain being on the offense with regards to Barack Obama.  Now we‘re seeing reporters say, well, wait a minute.  What are his leadership capabilities?  How good would he be on the economy?

MATTHEWS:  What‘s next?  What are the names of your children? 

We used to ask questions—that guy up in Boston—I forget his name now—would say, name the heads of the following country.  And there would...

(CROSSTALK)

MATTHEWS:  It would be Taiwan, Pakistan, a few other countries.  And he got one right.  He said that the head of Taiwan was Lee, which is automatically like saying Smith is the head of England.  It wasn‘t that hard a reach. 

But is this where we‘re headed, knowledge questions, “Jeopardy”?

MAHTESIAN:  This is not really about competence, though.  That‘s only a small part of this.

What this is really about is the elitism issue.  That‘s much more deadly.

MATTHEWS:  Why is it elitist not to know how many houses you have?

MAHTESIAN:  Well, because...

(CROSSTALK)

MAHTESIAN:  Who doesn‘t know how many houses they have? 

MATTHEWS:  Well...

(LAUGHTER)

MAHTESIAN:  How can you not answer that question?  It‘s a very tough question. 

In fairness to McCain, though, technically, he doesn‘t own any of his houses.  And maybe...

(CROSSTALK)

MATTHEWS:  So, if he calls up Cindy and says, where are you, she says, I‘m home, well, where‘s that?  You mean, he doesn‘t have any idea where they live? 

MAHTESIAN:  Well, no, the problem is...

(CROSSTALK)

MATTHEWS:  No, homes mean where you live?

MAHTESIAN:  Right. 

MATTHEWS:  So, if you call home, where are you going to be tomorrow?  I will be home.  Well, which house?  There‘s seven of them.  Do they actually—what, are they bedouins?  Do they move around among their seven houses? 

MAHTESIAN:  Actually, there‘s not seven, even though...

MATTHEWS:  I heard there‘s 10.  There‘s another...

(CROSSTALK)

MAHTESIAN:  We found that there was eight when we looked.  The campaign said it was four, the Obama ad seven.  We found eight.  Maybe there is 10. 

WATERS:  But here‘s the bottom line...

(CROSSTALK)

MATTHEWS:  But they all have pajamas in them and toothbrushes in them and coffee cups and coffee makers, the stuff you live on?  Are they those kind of houses?  Are they investment properties? 

(CROSSTALK)

MAHTESIAN:  Well, they are condos, many of them, except for the ranch. 

But I haven‘t been in them.

(CROSSTALK)

MATTHEWS:  You have just spoken with authority here.  You believe he has eight houses, different houses he stays in periodically?

MAHTESIAN:  I don‘t know how often he stays there.  Our records of—

“Politico” analysis, property tax records and other records show that there were eight properties that they own, at least five of them condominiums. 

(CROSSTALK)

WATERS:  But, Chris, here‘s the bottom line -- 22,000 people lost their homes in Prince William County, Virginia, this year alone because of foreclosure. 

If you‘re one of those 22,000 people who lost your home, who may have had a job, and then face foreclosure, and you hear a candidate say, I don‘t know how many homes I still have, that is not a popular...

(CROSSTALK)

MATTHEWS:  OK.  I think you and I agree that they are working on the senior moment stuff here, too.  This is a little more treacherous, a little nastier, because obviously John McCain has not got a competency question.  Do you agree? 

WATERS:  I think that is probably the best ad that the Obama campaign has run. 

MATTHEWS:  Well, because you like it because it puts teeth right in the guy‘s neck.

WATERS:  Oh, it‘s...

(CROSSTALK)

MATTHEWS:  OK.  Let‘s look at the other side.  We think we have got the Achilles‘ heel of John McCain, an inattentiveness to things most people know for sure.

Here‘s the McCain approach to going after Barack.  It has a pattern now.  He‘s a big shot.  The world loves him, but he‘s not connected with what you have to worry about.  Here it is, like celebrity is all of a sudden a bad thing. 

(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)

NARRATOR:  Celebrities don‘t have to worry about family budgets, but we sure do.  We‘re paying more for food and gas, making it harder to save for college, retirement.

Obama‘s solution?  Higher taxes, called a recipe for economic disaster.  He‘s ready to raise your taxes, but not ready to lead. 

(END VIDEO CLIP)

MATTHEWS:  Well, that‘s the old Republican strong suit.  It‘s always been their strength.  It‘s the reason they have been a competitive political party for 50 years.  They don‘t raise your taxes.  That‘s their argument. 

(CROSSTALK)

MAHTESIAN:  The other strong suit is the elitist, the business about the affluent snob, the eggheads that they use very effectively against Democratic nominations, going all the way back, as you know, to Adlai Stevenson.  And that‘s why this is such a problem for McCain, because, all of a sudden, it stops him in his tracks as he tries to portray Obama as a Hyde Park liberal. 

(CROSSTALK)

MATTHEWS:  What is John—Barack Obama‘s net worth, compared to the Bush family, compared to the McCain family?  They are not in the same league. 

WATERS:  Right.  They‘re saying $4 million compared to $100 million for Senator McCain...

(CROSSTALK)

MATTHEWS:  They are not even in the same league, financially, if that what you mean by elitism.  Do you mean celebrity, as opposed to money elitism?

(CROSSTALK)

MATTHEWS:  George Bush comes from another family with old money. 

WATERS:  And they are not playing to those of us that know what the net worth is.  Those ads are designed to the people that are sitting at home saying...

MATTHEWS:  Yes. 

WATERS:  ... well, he must be a rock star, because John McCain says he is a rock star.

But the bottom line is, you‘re right.  The -how many houses do you own debate has now cut through that. 

MATTHEWS:  He must be rich.  He‘s skinny, right?

WATERS:  No, I have never heard that one before.

(CROSSTALK)

MATTHEWS:  I think they are working on that.

(LAUGHTER)

MATTHEWS:  Anyway, thank you, Mahtesian, Chuck.  It‘s Charles. It‘s not Chris. 

Thank, Chris.  Thank you, Charles Mahtesian. 

He‘s Charles.  I‘m Chris.

Del Waters, my old friend, thank you.

Up next, in the HARDBALL “Sideshow,” wait until you see what Barack Obama had to say to a guy who was talking on his cell phone while Barack was trying to make a pitch.  It‘s great.  I love these guys.  Don‘t let the audience blow the show.

You‘re watching HARDBALL, only on MSNBC.  

He goes right after this guy.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Time now, as you can see, for the “Sideshow.” 

Turn off your phone!  Barack Obama was at a town hall yesterday in Virginia when he had to stop his stump speech because some guy was blabbing on his cell phone. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  The American people are hurting.  They are having a tough time. 

Now, this gentleman is on the phone here. 

I‘m pointing right at you. 

(LAUGHTER)

OBAMA:  Get off the phone, now. 

(APPLAUSE)

OBAMA:  I can hear him having a conversation.  That‘s all right.  Just don‘t be talking to your wife. 

Oh, he said she wasn‘t his wife.  That‘s worse. 

(LAUGHTER)

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  I love it when a speaker demands that his or her audience show some respect. 

Remember Robin Leach from “Lifestyles of the Rich and Famous.”  He was famous for this sign-off. 

(BEGIN VIDEO CLIP, “LIFESTYLES OF THE RICH AND FAMOUS”)

ROBIN LEACH, HOST:  I send you all champaign wishes and caviar dreams. 

(END VIDEO CLIP)

MATTHEWS:  Well, it‘s no small surprise that the luxury guru says McCain‘s housing gaffe is nothing to—quote—“get into a kerfuffle about.”

He tells “The L.A. Times”—quote—“McCain probably was confused as to which homes are in his name, his wife‘s name, or corporate names.  In his attempt to be honest, he put his foot in his mouth.”

How would you like to have Mr. “Lifestyles of the Rich and Famous” out defending the fact that you don‘t know how many houses you own?  Could this be a case of, if you have to ask, you can‘t afford it? 

And talk about sitting on the fence.  Republican Congressman Chris Shays of Connecticut has a new advertisement out there where he‘s laying claim to both mantras, both talking points from the two presidential candidates. 

(BEGIN VIDEO CLIP, SHAYS CAMPAIGN AD)

NARRATOR:  The hopefulness of Obama, the straight talk of McCain, it‘s what Christopher Shays has always stood for. 

(END VIDEO CLIP)

MATTHEWS:  Hope and straight talk.  What is this, Archie Andrews playing Betty off against Veronica, the old pyramid play?

Now for tonight‘s “Big Number.” 

The presidential nominating conventions are time-honored traditions, but in the years since September 11, they have also become huge security hells. 

According to “Bloomberg News,” just how much money, in total, is the federal government spending this year to safeguard both conventions?  One hundred million dollars.  By the way, “Bloomberg” reports, those costs roughly equal the amount the host committees plan to raise to meet the total of all other convention costs. 

One hundred million dollars on Denver and Saint Paul security—tonight‘s “Big Number.”

Up next:  Now that the U.S. and Iraq are close to setting a timetable for withdrawal by 2011, who benefits more politically, Obama or McCain? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

CHRISTINA BROWN, NBC CORRESPONDENT:  I‘m Christina Brown.  Here‘s what‘s happening. 

Tropical Storm Fay is drifting slowly westward across Northern Florida, dumping heavy rain on the state for a fifth straight day.  It‘s also expected to bring heavy rain this weekend to southern Georgia, southeastern Alabama, and southern Mississippi.  Meantime, Fay is being blamed for at least six deaths in Florida. 

A small plane crashed into a house in Las Vegas shortly after takeoff and burst into flames.  Authorities say the pilot was killed, along with the two people inside the home. 

Detroit Mayor Kwame Kilpatrick rejected a plea deal in his assault case.  The deal was to resign by September 3, and one of two assault charges would be dismissed.  The mayor is also charged in a separate case with conspiracy, perjury, and obstruction of justice. 

And Russia is pulling its forces out of parts of the former Soviet Republic of Georgia.  But the U.S. says it is not enough to comply with the cease-fire agreement Russia and Georgia signed—now back to HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Here‘s the front page of today‘s “Washington Post,” dateline Baghdad:

“U.S. and Iraqi negotiators have agreed to the withdrawal all U.S. combat forces from the country by the end of 2011.”  That‘s two years into a new administration, two-and-a-half years.  “And Iraqi officials said they are very close to resolving the remaining issues blocking a final accord that governs the future American military presence in the country.”

Eric Egland is the founder of Troops Need You.  He‘s returning to Iraq later this year.  And Jon Soltz is the co-founder of VoteVets.com. 

I want you both to give your heartfelt views about this.  But, first of all, let‘s talk about this fact that now it looks like the U.S. and the Iraqi government have agreed that, some time at the end of 2011, which I guess, if you go from all of 2009, all of 2010, to—it‘s basically at the end of the third year of a new administration in this country, our combat troops would have been cleaned out that country, if the agreement holds and conditions hold. 

But, first, let‘s take a look at what John McCain and what he has said about this very tense issue of a timetable. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  I don‘t think Americans believe that we should cut and run out of Iraq, by any stretch of the imagination. 

My friends, if you withdraw, if we set a date for withdrawal, just listen to what the president of Iran said last week.  The president of Iran said, when America leaves Iraq, there will be a void, and we will fill it. 

What I‘m saying is that, if we set a date for surrender, we will pay a very heavy price. 

If we do what Senator Clinton said the she wanted to do night before last—and that is wave the white flag of surrender and set a date for withdrawal, then we will have expenses, my friends, in American blood and treasure, because al Qaeda will then have won. 

The point is that, if we do what both Senator Obama and Clinton want to do, and that is to set a date for withdrawal, al Qaeda will announce to the world that they have defeated the United States. 

And, by the way, I will never surrender in Iraq, my friends.

(CHEERING AND APPLAUSE) 

MCCAIN:  I will never surrender in Iraq. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  Well, let‘s go to Eric Egland. 

I think it gets trickier.  Time has passed.  But, over the months, John McCain has stuck to his argument that the establishment of a date of departure for U.S. troops out of the country of Iraq is itself a death sentence to our campaign and to our mission there, because it alerts our enemies when it‘s clear for them to begin their attack and attempt a government takeover. 

Eric, your thoughts? 

ERIC EGLAND, IRAQ WAR VETERAN:  Hey, Chris. 

This is good news for Americans.  I mean, Iraq has been a tough war.  This timetable that‘s being hammered out, this is based on conditions on the ground.  And that‘s what people who have supported the mission all along said, is, hey, let‘s get the right strategy.  We had the wrong strategy. 

And a year ago, 13 months ago, we started the surge strategy, got some troops, took a smarter approach.  And it has paid off tremendously in the last year.  So—so, that‘s the key, is making sure that it‘s based on favorable conditions on the ground.  And we have seen dramatic increases in security.  And we have also seen dramatic increases—or progress with the political reconciliation that‘s going on. 

And, so, those are the conditions under which we—we want to start moving out. 

(CROSSTALK)

MATTHEWS:  Are you saying that the timetable isn‘t as important as the conditions? 

EGLAND:  Well, the conditions precede...

MATTHEWS:  It sounds like that‘s what you are saying, that the timetable depends on conditions; therefore, it‘s not really a timetable, that we will stay as long as we are needed, period.  So, why even talk about a timetable? 

EGLAND:  Well, the conditions are favorable.  And it looks like we can we can hold this. 

The Iraqi security forces have—have become much stronger in the last couple years.  And, so, they are able to take—to bear the load, just like they did down in March down in Basra. 

MATTHEWS:  Yes. 

EGLAND:  You had mostly Sunni fighters being welcomed by the Shia population in Basra to eject the Mahdi army down there.  So, I mean, that‘s a real favorable development. 

And that shows, that‘s evidence that the Iraqi security forces are—are strengthening.  And those were led by the—the strengthening government, that you are seeing increased reconciliation.  Those are the factors.  I mean, those are the conditions of success that have been talked about for years...

MATTHEWS:  Yes. 

EGLAND:  ... as, hey, once that happens, then we can start pulling our brigades out and bringing the troops home.

MATTHEWS:  You know, I was shocked today to pick up the paper and read another story related to this, Jon, which is that, at the same time we have been very happy at these successful local agreements we have made with some of the Sunni insurgents over there to play on our side against al Qaeda, and now I have seen that the American government is now standing back and letting the Iraqi government, our government over there we have supported, going around arresting the leaders of the people that have been working with our side.  Is this coming apart, the arrangement that seems to have been working these last several months? 

JON SOLTZ, IRAQI WAR VETERAN:  Look, I don‘t believe there‘s been any progress on the ground. 

MATTHEWS:  Answer my question.  Why are we allowing the arrest our allies over there by the government we helped stand up? 

SOLTZ:  Well, look, what goes on on a regular basis from a tactical stand point with General Petraeus is, to be honest, something that I don‘t have, you know, knowledge on a daily basis.  I think some of the larger political issues in Iraq are very contentious because of the way the government is set up.  Maliki is a very—not a very strong coalition, in a sense that he‘s got Shia elements in there.  He‘s got Kurdish elements in there. 

From a political standpoint, it‘s very delicate.  There isn‘t a very stable government in place because of the way a parliamentary system is set up overall.  I think there‘s a tremendous amount of concern that we don‘t have an agreement with regards to the oil law and we don‘t have an agreement on what‘s going to happen in Kirkuk.  So I think—you know, I‘m not willing to say that some of the Sunni awakening stuff is falling apart.  I‘m not privy to that, per se.  But I don‘t necessarily think that‘s the case.

I think there‘s other larger issue that led to this debate that we‘re having today, specifically in regards to the Shia in Iraq, the radical Shia militias that don‘t want a long term American presence.  Maliki can‘t keep his coalition without it. 

MATTHEWS:  Sooner or later, you have to leave the country.  It‘s sounds like we‘re at a point now where it‘s hard to find the difference between the two sides, because both sides share the benefit of the surge having worked to some extent.  It‘s given confidence to the Iraqi government over there that they can win this war on their own now, eventually.  It seems like the debate is over.  We‘re there.  We‘re going to leave there fairly soon over the next two or three years.  We have allowed a government to be set up effectively that believes it can defend itself.  Is that right, Eric? 

EGLAND:  Yes, I think it is. 

MATTHEWS:  The government over there is confident now that it can defend itself without us there? 

EGLAND:  Based on what‘s already been achieved and then forecasting into the future that a few more years before troops are out of there?  Yes, I think it‘s very realistic. 

MATTHEWS:  We‘re coming home?

EGLAND:  Yes, that‘s why I think, before we dive into the politics of this, this is a great success for America.  We lost in Vietnam not because we lost on the battlefield, but because we lost our will at home.  Iraq was really tough.  We had the wrong strategy for a few years.  I came back from Iraq.  I firmly believed we were going to lose the war. 

MATTHEWS:  Nobody believes we should still be in Vietnam fighting, by the way, Eric, nobody. 

EGLAND:  In the last year, we took a new approach and we‘ve seen the tremendous progress that we needed to have had years before.  But hey, wars are tough and complicated and we had the right strategy and the American people kept -- 

SOLTZ:  This is not about—this isn‘t about progress on the ground.  This is about domestic Iraqi politics.  The Iraqis—I mean, this time line—

(CROSS TALK)

SOLTZ:  Look, this is—this timeline is not the same Maliki—basically, Maliki endorsed Senator Obama‘s plan.  So it‘s some kind of compromise clearly with the Bush administration.  I think the key issue to come out of today, though, besides the fact the Shia government in Baghdad does want us to leave, is the fact that Senator McCain has been absolutely silent on this issue and the Bush administration isn‘t going to execute this plan. 

Where is McCain on this issue?  McCain has said timelines are basically a policy of retreat, surrender to al Qaeda.  Do you really expect

--

(CROSS TALK)

SOLTZ:  I have to tell you, McCain hasn‘t even released a statement on this issue.  Is it really a timeline?  Sure, they set it politically, but obviously Senator McCain doesn‘t have a policy to execute this plan.  

(CROSS TALK)

MATTHEWS:  My thought is this, that no country has ever given another country more in terms of treasure and blood than the American people gave the government and people of south Vietnam.  Say what you will.  No country has ever given as much in lives and limbs and money as we gave that country.  You could say we could still be there if we want to be, but you‘re wrong.  Anyway, thank you Eric Egland.  Thank you, John Soltz. 

EGLAND:  Nobody is saying we should still be in Vietnam.  We need to keep our will. 

MATTHEWS:  Will to what?  To stay forever in a country where the war is not achieving the goals we set for it, which is a Democratic government in South Vietnam? 

EGLAND:  No, to have a smart strategy that works and then to implement it, which we didn‘t have at the beginning of Vietnam, and we never did, and we didn‘t have at the beginning of Iraq, but we changed with the surge and it worked.  So that‘s driven the success that we‘re seeing.  Looking at the political side, Senator Obama is going to have a tough time explaining how did—he said the surge wasn‘t going to work. 

(CROSS TALK)

MATTHEWS:  This is ridiculous. 

(CROSS TALK)

EGLAND:  -- is so afraid of what this is going to do to Senator Obama that he doesn‘t even want to let me finish one sentence. 

MATTHEWS:  I‘ll tell you one thing: nobody wanted to stay in Vietnam after 1972.  No one was unhappy when we brought our troops home.  Nobody.  Eric Egland, thank you very much.  Jon Soltz.  Up next, the latest on Obama‘s running mate pick.  We‘re going to check in at the home of the man who may be the leading contender, Joe Biden.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  All week long, it‘s been a media circus at the driveway of the home of Senator Joe Biden, who has emerged as the leading contender, at least, to be Barack Obama‘s running mate.  NBC‘s Mike Memoli is standing by on the phone in the Biden driveway.  Mike, you‘re one of the reporters in that camp out there, right? 

MIKE MEMOLI, MSNBC CORRESPONDENT:  That‘s right.  We‘ve been here since Tuesday.  We have seen the senator every day except today.  It has been a quiet day.  We have had a lot of silliness going on.  We‘ve had some pizza pranks and some local campaign—some state Senate campaigners trying to come and get some coverage.  Just in the last half hour, there seems to be a little bit of activity worth noting.  Senator Obama‘s state director came and went just a short time ago.  Also, his niece, Missy Owens (ph), who has worked on all of his political campaigns, just pulled in, as did his daughter. 

So after a day in which we thought we would have some news, but none came, perhaps something happening here at the house. 

MATTHEWS:  Let me ask you, putting it all together, you‘re standing out there, your stake out, as we call it in journalism—is it possible that Barack Obama is inflicting this much potential humiliation on this friend of his if he‘s not going to pick him? 

MEMOLI:  I don‘t want to read too much into what the senator may be thinking, but, based on conversations a lot of us have been having, based on the fact that earlier in the week when were here, Senator Biden was very open, joking with us, handing us bagels, seeming to enjoy the attention, and then yesterday he was very closed lipped.  He stopped talking to us.  He drove in and out without talking to us.  And today we haven‘t seen him at all.  There seems to be—perhaps he‘s getting some marching orders to be a little bit quieter and to not be in a position where he‘s giving any signals about what may be going on. 

MATTHEWS:  Yes, I think he‘s modulating.  Anyway, thanks Mike Memoli, who is out there on the driveway, getting the bagels and the coffee.  Let‘s bring in the round table for the politics fix.  Larry Kane is the host of “Voice of Reason” on Philadelphia cable network CN8, and Chrystia Freeland is on the cover—there she is, right here on the cover.  Let me show it to everybody—of the international but—there it is, the Times, the “Financial Times.”  There you are. 

What does it take to get a key—what does it take to get a key like that at the very top of the banner there?  How do you get that? 

CHRYSTIA FREELAND, “THE FINANCIAL TIMES”:  I guess my friends in London like the column that I wrote. 

MATTHEWS:  OK. 

FREELAND:  Russia‘s kind of a sexy subject right now.  Don‘t you think? 

MATTHEWS:  I think it‘s an enigma wrapped in a whatever.  Churchill used to say  -- let me go to Larry Kane to start with, because he‘s a long-time Joe Biden watcher.  How do you read the almost  Zen-like behavior of Joe Biden, the usual peripatetic fellow we‘ve known for years? 

LARRY KANE, HOST, “VOICE OF REASON”:  He‘s very quiet right now, and that‘s a big key here.  I was one of the few people that traveled with him when he announced for president back in 1987.  I want to tell you something, I don‘t know if he‘s the choice.  Andrea Mitchell says he‘s probably the choice, he‘s probably the choice.  If you say he‘s the choice, he‘s the choice. 

But here‘s the reality: the reality is Barack Obama is a smart guy.  He‘s going to make the smart choice.  The smartest choice in this election, regardless of who he picks, is Joe Biden.  He‘ electrifying.  He‘s bright.  He‘s intelligent.  He‘s a family man.  He cares about the country.  And he‘s got an awful lot of experience.  That says to me that when you compare him to the other—the governors of the states, the senator from Indiana, almost anybody but Hillary Clinton, this man has got electrifying experience. 

So from a standpoint of smart choice—and I‘ll say that about John McCain if you ask me who I think his choice should be—the question is, is it Joe Biden?  I don‘t know if it is.  It should be Joe Biden, because there‘s no question, he‘s the best chance for Obama to win. 

MATTHEWS:  Can he nail down the 21 electoral votes of Pennsylvania where he grew up? 

KANE:  No question that this will help in Pennsylvania.  It will also have a dramatic impact on the state of New Jersey and a pretty decent impact on portions of Maryland as well.  Joe Biden is a national figure.  I can tell you from traveling with him when he first announced for president, he electrified crowds, Chris, in New Hampshire.  This guy is an order of the first-degree and he‘s also, by the way, a very nice person. 

MATTHEWS:  Yes, we know that.  Let me go to Chrystia Freeland on that.  Looking at it from the wide perspective, does he bring enough of the map with him? 

FREELAND:  Well, I think that Larry‘s made a very persuasive case for Joe Biden.  And I think Joe Biden would be a really good choice.  I think the other thing that he would bring to the team is he has a pugnacity.  He‘s really willing to go out there.  And I think that Obama could really benefit from having a teammate that‘s willing to go after the Republicans and after McCain.  But Larry did say he thought that anyone other than Hillary Clinton doesn‘t have as much experience as Senator Biden.  I think that‘s a revealing comment.  I think there‘s still a dark horse chance that he could pick her.  And that would really electrifying choice. 

MATTHEWS:  OK, we‘ll be right back with that dark horse chance that Hillary is still in the race.  We want to know more from Chrystia Freeland.  You saw her on the front page of “The Financial Times.”  We‘ll be right back with the round table, with more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table for more of the politics fix.  I‘m going to ask you both a values question.  I‘m disturbed by it.  I watched Rick Warren, who is not a bad guy, obviously, question both candidates on questions of religious belief, when does life begin, which really is a metaphysical question, a question of moral philosophy, not science, when does a life begin.  Are you happy having a sectarian religious leader grill our candidates for president?  Larry Kane?

KANE:  I don‘t know if I‘m happy or unhappy.  But I‘ll tell you, as a journalistic question, it‘s inappropriate.  The question is—the big question among so many millions of Americans is when you talk about god and spirituality, whose god is it?  That‘s the big question.  As far as the question—there was a question there about when does an unborn child have rights?  Rights to what?  An education?  To be born?  that‘s a spiritual religious question. 

But I think Americans, for the most part, a majority are turned off by those kind of questions.  As a journalist, I think it would have been inappropriate, but he‘s not a journalist. 

MATTHEWS:  Yes, I know.  I wonder whether one of the candidates should say, what matters is how we honor the law in this country and not what our moral cosmic notions of metaphysics are, because we don‘t know the answers to those questions, except what we hear from the alter.  Let me go to Chrystia on that.  Are you comfortable in an environment where we have a religious test for the presidency?  That‘s what we‘re talking about here, what are your religious beliefs. 

FREELAND:  No, absolutely not.  I think you‘re really right, Chris, to be zeroing in on this.  I was really surprised that not very many people did.  In fact, the play back from that discussion was what a great discussion it had been, what a great moderator Rick Warren had been.  And I thought a lot of good stuff came out of it, but there was definitely that strongly religious angle. 

MATTHEWS:  Can you imagine the Sunni and the Shia sitting up—and the Kurds up there in Iraq having these kind of discussions about the nature of the deity?  This is where you get in trouble.  Thomas Jefferson would not have sat at that table.  Thank you very much—John McCain—

John McCain sounded the alarm.  Let‘s talk more about this.  We are going to close the show right now.  Larry Kane, Chrystia Freeland.  Great show tonight.  Join me, along with Keith Olbermann, tomorrow at 1:00 Eastern for live coverage of Barack Obama and his yet to be named running mate in Springfield, Illinois.  They‘re both going to be there side by side. 

And then at 7:00 Eastern for a special edition of HARDBALL.  And Sunday 4:00 Eastern, live from Denver.  “COUNTDOWN” with Keith Olbermann starts right now.

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

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