Guests: Nancy Skinner, John Harwood, Keith Richburg, Tom DeLay, Chris Van Hollen
CHRIS MATTHEWS, HOST: Rebound. After a very bad day, the stock market bounces back with boffo. Can the politicians do as well?
Let's play HARDBALL.
Good evening. I'm Chris Matthews. Leading off tonight, fighting the hangover. That's what a lot of politicians are feeling after the collapse of the bail-out package yesterday, a bad feeling that comes after a bad night. Our NBC News/"Wall Street Journal" poll shows very little support for the federal government today and even less for corporate America and the financial industry. Don't even mention what they think of the politicians.
John McCain today told NBC's Kelly O'Donnell that politics played too great a role in the collapse.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: I think that Speaker Pelosi's speech was very unnecessary and inflammatory, but that's not a reason for us not to work together and come up with a solution. I think it's time now not to fix the blame but to fix the problem.
(END VIDEO CLIP)
MATTHEWS: Here's and Barack Obama today in Reno.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: To the Democrats and Republicans who opposed this plan yesterday I say, Step up the to plate. Do what's right for this country.
(END VIDEO CLIP)
MATTHEWS: Voters have been fixing the blame mostly on Republicans, and by extension, McCain. Much more on where we go from here in a moment.
And in case you think this $700 billion bail-out is just for Wall Street, I think you should think about this. That 777-point drop in the Dow yesterday cost Americans about a trillion dollars. Today the Dow bounced back, gaining 485 points. We'll take a couple of smart people to come on the show in just a moment to explain to us what the bail-out means to you.
Also, has Sarah Palin's performance in the last two weeks so lowered the bar for her that she almost can't fail this Thursday in her debate? And what about Joe Biden? Can he keep disciplined and humble? We'll take a look at the perils facing both candidates Thursday night.
In the "Politics Fix," how might the financial crisis affect the presidential race? Which candidate wins on this messy track? Who could get hurt? And when it comes to the bail-out, the late-night comedians are getting into the act.
(BEGIN VIDEO CLIP)
DAVE LETTERMAN, HOST, "THE LATE SHOW": (INAUDIBLE) could actually make a profit on this deal.
(LAUGHTER)
LETTERMAN: Well, that's good enough for me! Let's go! Come on!
(LAUGHTER)
LETTERMAN: And if you believe that, I have Yankees and Mets World Series tickets, so...
(LAUGHTER)
(END VIDEO CLIP)
MATTHEWS: We'll have more on that in the HARDBALL "Sideshow."
And before we get started, there are a lot of polls out there, so let's take a look at where they're headed. Pollster.com, which averages all the polls-you can look it up any time you want, Pollster.com-now has Obama ahead by more than 5 points. That's the first time since before the conventions that Obama's lead has been that large.
But first, Tom DeLay was the Republican leader of the House of Representatives. Sir, I am fascinated by your populist views from the right.
(LAUGHTER)
MATTHEWS: Did you folks want this thing to go down yesterday?
TOM DELAY (R-TX), FORMER THE HOUSE MAJORITY LEADER: Yes. Actually, if I were rank and file, I would have voted against it. But if I was the leader, we wouldn't be voting on that bill. The conservatives in the House, represented by the House Republicans, wanted to see more market-oriented principles in this bill, and I think they're going to get it in the end.
MATTHEWS: Your administration, George W. Bush of Texas, has the secretary of treasury. His name is Henry Paulson. He designed this baby. From my understanding, your biggest problem is with what he designed.
DELAY: Absolutely. and I have to criticize my own president and Paulson. If they wanted to pass a bill, this certainly isn't the way to do it. If you're going to design it as he did, then go to where your army is to fight with in passing a bill. Go to the House Republicans. You don't go to the Republicans in the Senate. The Senate can't-you're a House man. You know that the Senate can't lead. The House leads. And House Republicans could have expressed themselves. They could have worked on a package and then unrolled the package. But to unroll a package, and frankly, not even have a communications strategy that-the word "bail-out" was an absolute killer for this bill.
MATTHEWS: Yes.
DELAY: And then lay it out there and say...
MATTHEWS: I think the killer was...
DELAY: Let's all get together...
MATTHEWS: ... the number.
DELAY: ... and pass it...
MATTHEWS: Seven hundred billion dollars was the killer from my end.
Don't you think that's what scared people?
DELAY: Oh, absolutely.
MATTHEWS: The amount of money involved?
DELAY: That's an unheard of amount of money. And give it all to the secretary of the Treasury to do all the work, and no judicial review and no oversight? I mean...
MATTHEWS: Here's what I like to do. I like to do what Bob Woodward says, follow the money. And it seems to me-you know, they put the casualties when we fight a war in the newspapers, which is a horrible thing to do, but at least we know what's going on, people are dying? Why don't we in a much lower case here, a lot-and perhaps less important but important as hell, show the checks the government is going to be writing out of this bill and who they're going to? I'd like to see who they're made out to.
DELAY: Transparency's incredibly important.
MATTHEWS: I'd like to know, if we're going to write $700 billion in checks from the federal government to the-our grandkids are going to have to pay it back at some point-somebody's going to pay it...
DELAY: And that's what the House Republicans are talking about. We can allow Wall Street and these financial institutions to work their way out...
MATTHEWS: Right.
DELAY: ... if we remove some of the restrictions that are imposed upon them by the government, whether it's mark to market accounting principles, all those kinds of...
MATTHEWS: Yes, give me-give me...
DELAY: Transparency is incredibly important.
MATTHEWS: ... a Texas conservative to the right solution. If the markets fail, if the big money guys in New York, who are supposedly geniuses at derivatives and all this stuff we can't understand, if they blow it because they've overextended themselves and made too much money doing it, what's the government do? Does it take away their power? Does it nationalize? What should it do?
DELAY: Well, you certainly don't nationalize and you try to stay out of the market as much as possible. The Republican Study Committee laid out this afternoon a perfectly sensible bill that provides insurance for these mortgage-based securities, that charges premiums to the people that made these stupid decisions...
MATTHEWS: Right.
DELAY: ... that uses the tax policy-if you just lowered capital gains to zero for two years, the capital that would come into this market would...
MATTHEWS: You guys have wanted that forever. This is just another excuse to get capital gains written down.
DELAY: But it's one of the problems that got us here.
MATTHEWS: You're going to reward the people that blew it.
DELAY: No, we're not rewarding...
MATTHEWS: Rich people.
DELAY: No. We're telling...
MATTHEWS: You're not?
DELAY: We're telling people that-there's billions upon billions of dollars out there, ready to buy these subprime bad loans right now.
MATTHEWS: OK, let's look at...
DELAY: Let them buy them, but...
MATTHEWS: Let's look at something I know I understand, which is who wins on this thing. John McCain's been all over the morning shows this morning, first time he's made himself available to all the morning shows, including "MORNING JOE." He was everywhere today. So obviously, he wants to show he's got some skin in the game. Here he is, John McCain today, on what he thinks needs to be done.
(BEGIN VIDEO CLIP)
MCCAIN: First, the Treasury has already used its Exchange Stabilization Fund to back money market accounts. I encourage it to use this fund as creatively as possible to provide backstop for accounts across our financial system, to maintain confidence on the part of savers and investors. And second, the recent housing bill gave the government nearly $1 trillion in authority to purchase mortgages. Housing and mortgages are at the root of this crisis. I encourage Treasury to take action to shore up mortgage values.
(END VIDEO CLIP)
MATTHEWS: Do you think it's impressive when candidates like he read from cards and clearly don't know what they're talking about? I mean, clearly have to use cards to read every word? Do you think that-the president this morning-did you see the president? I'm never personal about the president, but he came out this morning and read a statement. He doesn't know what this issue is all about. It's so clearly over the heads of politicians, isn't it? Do you know anybody on the Hill that understands this thing?
DELAY: First of all...
MATTHEWS: Does anybody understand it?
DELAY: ... the world is watching him and what he says...
MATTHEWS: OK.
DELAY: ... and he wants to make sure that he gets it right. But that's not the point. The point...
(CROSSTALK)
MATTHEWS: Do you think Capitol Hill has the competence to understand what's going on in New York with these complicated financial transactions?
DELAY: I got to tell you...
MATTHEWS: OK, who would you rely on, if you were still in leadership? Who would bring in the room with you? Who are they listening-does John Boehner get it?
DELAY: Yes. I think John Boehner gets it.
MATTHEWS: Does Roy Blunt get it?
DELAY: He's a-he's a business.
MATTHEWS: Does Roy Blunt get it?
DELAY: I think he gets it.
MATTHEWS: Does Nancy Pelosi get it?
DELAY: I don't think she gets it.
MATTHEWS: Does Barney? Barney Frank?
DELAY: Barney-Barney...
MATTHEWS: He knows this stuff.
DELAY: ... understands it. He's smart.
MATTHEWS: So when you're watching these guys on the Hill, do you think they're staff-driven, expert-driven, or they really know what they're doing up there?
DELAY: Well, I've got to tell you, this Congress under Pelosi's leadership has got to be the most incompetent Congress of my career.
MATTHEWS: Are you talking about both sides of the aisle?
DELAY: No, I'm talking about...
MATTHEWS: Just the Democrats.
DELAY: ... the Democrat majority.
MATTHEWS: OK, the Democrats.
DELAY: They got the majority. They're in charge...
MATTHEWS: But (INAUDIBLE) Republican just say-they-why didn't they corral enough of half their delegation...
DELAY: Well, that's just it.
MATTHEWS: ... so they could have come through?
DELAY: Chris, you've been there. You know.
MATTHEWS: They didn't corral them.
DELAY: You don't go to the floor without knowing...
MATTHEWS: That's what I don't get!
DELAY: ... where your votes are.
MATTHEWS: I don't get it~! I mean, afterwards, Boehner said, We had 12 that didn't like the speech Pelosi gave.
DELAY: OK...
MATTHEWS: Well, if they're that frail...
DELAY: OK. If I'm Steny Hoyer, the majority leader, and I'm telling Pelosi, the Speaker, that we've got the votes to go to the floor, this is what I'd have. I'd have enough votes plus 10 percent...
MATTHEWS: Sure.
DELAY: ... over the votes that the Republicans told me they had.
MATTHEWS: And also, you know what else I'd do? In fairness to your side, Pelosi shouldn't have given a political speech, all right?
DELAY: Yes, but I'm not sure that...
MATTHEWS: You don't think that was it? Well, I don't...
(CROSSTALK)
MATTHEWS: I remember once getting advice from Tom Foley years ago. I was writing something for him, and Foley said, Keep it nonpartisan because this...
(CROSSTALK)
DELAY: They should keep it nonpartisan...
MATTHEWS: Yes.
DELAY: Especially when you have a bipartisan effort and a bipartisan bill. You don't want...
MATTHEWS: But you don't believe these guys were frail flowers and offended by her rhetoric, then.
DELAY: Well, I-what I...
MATTHEWS: You don't think, Oh, I was all ready to vote for the bill, but I felt so bad.
DELAY: No, no. They didn't want to vote for the bill, and she made sure they didn't.
(LAUGHTER)
MATTHEWS: OK. She gave them a permission slip to leave.
DELAY: Exactly right, because they saw what was going to happen to them between now and the election.
MATTHEWS: Knowing the Hill-forget ideology for 10 seconds-will we get a bill by the end of the week?
DELAY: I think so.
MATTHEWS: OK. I think the markets think that, don't they.
DELAY: Yes.
MATTHEWS: That's why we had a big rebound today.
DELAY: I think so. I think everybody knows that they've got to get something done, including the House Republicans. But they're standing strong, and I'm very proud of them.
MATTHEWS: As well you should be because they're going to end up getting their mark on this thing, right?
DELAY: That's right.
MATTHEWS: Tom DeLay, still active on the Hill.
Maryland congressman Chris Van Hollen chairs the Democratic Congressional Campaign Committee. Let me ask you, Congressman, do you have the same optimism we'll get a bill to the country by the weekend?
REP. CHRIS VAN HOLLEN (MD), CHMN. DEM. CONGRESSIONAL CAMPAIGN
COMMITTEE: Well, all I can say, Chris, is people are moving very quickly right now. There have been conversations all day today between Democrats and Republicans, between the Congress and the administration, trying to put together something that will get a majority vote. As soon as that happens, whether it's Thursday, Friday, this weekend or next week, it will be brought to the floor. Obviously, we want to avoid a repeat of a bill that doesn't get the votes when it comes up for the final tally.
MATTHEWS: Well, here's one of the points at issue now. It's a question about increasing the amount of insurance we give for people who have money in the bank. Here he is, Barack Obama, talking on that point today.
(BEGIN VIDEO CLIP)
OBAMA: The current insurance limit of $100,000 was set 28 years ago. It's not been adjusted for inflation. So I propose raising this insurance, the FDIC limit, to $250,000, a step that would boost small businesses and would make our banking system more secure and help restore confidence by reassuring families that their money is safe. Now, that's just one idea. If there are others that can help shore up the support for this plan and shore up our economy, I encourage all parties, Democrats and Republicans, to offer them. But we must act, and we must act now.
(END VIDEO CLIP)
MATTHEWS: Congressman, are you with him on that, increasing the amount of coverage that we get when we put money in the bank, if we have large deposits, big-time deposits?
VAN HOLLEN: Yes, I am. I think it's a good idea, and I think it's something that can not just get in the mix. I think that will now be part of any final bill we have. I mean, the question is going to be whether that combined with other things can get us there going forward. And I think-I do believe that will certainly be a piece of it. John McCain came on board with that idea after Barack Obama talked about it this morning, and that's going to be helpful.
You know, John McCain is the one who said he had rounded up the House Republicans. Tom DeLay says you got to start with the House Republicans. John DeLay-John McCain-excuse me-went over there and he announced that he had gotten that group together.
MATTHEWS: OK...
VAN HOLLEN: And then when the time came to vote, they just weren't there.
MATTHEWS: OK, to get this thing passed by Friday afternoon, we need 12 people from either party. Do you think the Democrats are asking the Republicans to come up with all 12, or are you going to kick in some new members you're going to drag into this bail-out bill?
VAN HOLLEN: Well, look, we're going to work again with both sides to try and put together something that can pick up more votes. I mean, the problem is, if you make changes that are supported strongly by one side but not by the other, then you have a problem in the Senate and possibly with the White House.
MATTHEWS: Well, here's an easy way to do it.
VAN HOLLEN: And so as you...
MATTHEWS: With the FDIC, like we just talked about, which doesn't offend anybody, I don't think, then bring in some extended unemployment coverage, which helps the Democratic labor types out there but doesn't offend the Republicans too much. Can't you pull this thing together? I mean, I'm just looking at...
(CROSSTALK)
VAN HOLLEN: Well, no, Chris, those are two ideas that are definitely on the table, part of the discussion. The Democrats, as you know, in the House also passed an economic recovery plan last week. It did not get a lot of attention, given the hullabaloo on all the other issues, but the fact of the matter is we proposed a $60 billion stimulus package because our idea is, Let's not just stop the bleeding from the credit crunch, from Wall Street onto Main Street, let's actually give a boost to the economy. We wanted that money to be invested primarily in infrastructure, building our bridges, roads, getting our transit up...
MATTHEWS: Right.
VAN HOLLEN: ... and running again. And that would have not just, you know, boosted the economy, it also would at the same time gotten a lot of people back to work in the process.
MATTHEWS: Well, maybe you should have done a $700 billion bill like that, instead of this one. We wouldn't be arguing about this one. The federal government had that much investment out there, everybody'd be working, wouldn't they.
VAN HOLLEN: Well, you know, and-exactly. One of our great disappointments was the Bush administration, while it said it wanted to help, you know, protect, you know, Wall Street originally with their $700 billion plan that we had to make dramatic changes to, said no when it came to our proposal to try and spur jobs in the transportation and other infrastructure sector.
(CROSSTALK)
MATTHEWS: ... come up with a new word. Bail-out is a terrible word. I agree with Congressman DeLay. Bail-out's-you know, infrastructure's got to be one of the worst words in American history. It's a nice long word. Why don't you just say renewal, jobs, build stuff, something new? I mean, bridges and roads sounds better than infrastructure. God, you've got to beat that word...
(CROSSTALK)
VAN HOLLEN: Look, you're right. I mean, it's a shorthand...
MATTHEWS: OK, got to go.
VAN HOLLEN: ... but you're absolutely right. This-this-look, we've got problems with congestion that hurts consumers, hurts businesses. We need to get this country moving again.
MATTHEWS: OK. I think we've got to bring back Robert Moses and start building big stuff again with lots of labor guys going to work again. Thank you very much, U.S. congressman Chris Van Hollen.
VAN HOLLEN: Thanks, Chris.
MATTHEWS: Coming up: So how bad will things get? What happens if Congress can't get its act together with a rescue package? Although we think they will. CNBC's Maria Bartiromo's coming here to tell us what could be in store if Congress doesn't get its act together by Friday sundown.
You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. How long before Main Street could begin to feel the real effects of the meltdown on Wall Street yesterday? Maria Bartiromo, as everyone knows, is anchor of CNBC's "Closing Bell." She's at the New York Stock Exchange tonight.
Maria, come save us. What does it mean if this thing continues and the politicians can't get it done?
MARIA BARTIROMO, ANCHOR, CNBC'S "CLOSING BELL": Well, you know, Chris, this is really the story of the availability of credit. And what's happening is banks are not lending. And in order for the economy to move forward and for money to flow, we need to see the system function properly, which means money flowing. That means consumers borrowing, lenders lending, charging interest, and the beat goes on.
And what has happened is because these banks have these black holes on their balance sheets-they have all these toxic assets that they can't dump, they can't sell, nobody wants them-they don't have the capital to do the lending. So why is XYZ bank going to lend Maria Bartiromo and Chris Matthews money when, in fact, they may not have the capital to cover their own expenses? That's what's happening, and that's why this is not about Wall Street fat cats...
MATTHEWS: Yes.
BARTIROMO: But, instead, it's about banks across the country being able to give the guy who needs a home loan a loan, give the gal who wants a car loan a loan, give the person who needs a home equity loan a loan, all that. That's all this is about, not about bailing out Wall Street firms.
MATTHEWS: Well, why couldn't a young couple, where they're both working, one's a doctor, one's a teacher, or has a job, a government job, a safe job, why couldn't they get a mortgage? Why wouldn't that still be a good deal for a mortgage company, to get them the-get them their mortgage? Why wouldn't that work?
BARTIROMO: Chris, look-look what just happened, OK? Over the last two years, the banks and the non-banks, but are call lenders, lent all this money out, and then faced all these foreclosures. And then they were left holding the bag.
Banks are getting much stricter. The family that you're talking about may get a loan if they're up here. But if there's any question about whether or not they're going to pay it back, if they're teetering in any way, they're not going to get the loan.
And, if they do get a loan, the terms are going to be incredibly expensive. It is much tougher today to get a loan than ever before. That's what the issue is. Hank Paulson and-and company in Washington are trying to loosen up the system, so that money flows again, so that this economy can get back on track.
Until the banks recapitalize, that is, get more money themselves, they're not going to be able to be so freewheeling with loans. Try to go and get a loan. It's very difficult today. And, even though home prices have plummeted across the country, it doesn't matter, because people can't get a mortgage.
MATTHEWS: OK. Give me the good news. If the Congress passes something like the bailout bill we have been looking at with some other name on it, and big money goes to the big financial institutions to buy their perhaps questionable, to put it-the word toxic is being used-mortgages they own as assets, how long does that process take to kick the money out the door to the person trying to get a mortgage or the person trying to get a business loan?
BARTIROMO: It will-first off, as soon as we get a bill passed, confidence will return to the market. So, we will get some stability in the market. People will believe that at least we are at the beginning of the recovery. But the recovery is going to take time, Chris.
We are in a sharp economic slowdown, only made worse by this issue for the banks. So, you know, we haven't even seen this banking sector upset really hit the real economy, as it's called, that is, the consumer who...
MATTHEWS: Yes.
BARTIROMO: ... you know, who wants to spend money and go out to dinner and do all the things that helps an economy stay afloat.
The fact is, is, with all the losses that we're seeing with the banks and all the job losses-and we're probably going to see the unemployment rate go higher-that's going to mean a big hit to New York. That's going to mean lower tax revenues in New York and throughout the states.
And it is going to impact the broader economy and it's going to have ripple effects. That means people spending less on goods and services, going out to dinner less, as I said, tax revenues less. That means less construction in-in economies. So, we are going to see an impact to the broad economy.
Most people I have spoken with are not expecting to see these storm clouds pass until 2010. It looks like 2009 is going to be a tough year.
MATTHEWS: Well, is this going to be like every other recession we have lived through? I'm getting somebody to do some research on how many recessions I have lived through and just do it as long as I have been an adult. It seems like four of five of them since '71.
Is this going to be like every other recession, a couple bad years, follow by a recovery, people start hiring again, people start buying again? Does it look like the usual cycle to you, the usual business cycle?
BARTIROMO: Well, there are different-different lessons to be learned.
There's a couple of differences on this one. For example, this one will be different because we're looking at a bill that's going to come out that will include heavy regulation. So, on the other side of this, for the financial companies, when they get out of this, they are going to see tighter regulation, less leverage.
MATTHEWS: Yes.
BARTIROMO: That means lower profitability, smaller industry, with bigger players, Bank of America, Merrill Lynch, et cetera. So, that's one difference.
MATTHEWS: OK.
BARTIROMO: We are going to see probably taxes go higher.
And the bottom line is, though, Chris-I just want to end with this
this is a resilient economy. We will get through this. And I think you're right on the money by saying, is this like other recessions? We have seen this movie before.
MATTHEWS: I know. And what happens is, the president who comes in, in January this year will come sin during a recession, which means times will get better the longer he's in office, which means he will probably get reelected, because, come 2012, things will look a lot better than they do in 2009, which means, once again, the politicians win.
Thank you, Maria Bartiromo. I love figuring these things out.
(LAUGHTER)
MATTHEWS: Up next: The late-night showed some gallows humor over the failure to pass that economic rescue plan last night. Their biggest laughs are coming up next in the "Sideshow."
You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL.
Time for the-for the "Sideshow."
It only hurts when you laugh. By sundown last night, yesterday's poverty of political success-When has Congress looked so bad in front of such a large audience? -- produced a wealth of material for the comics.
(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": I want to warn people in Nigeria who might watching our show in Nigeria, if you get any e-mails from Washington asking for money, it's a scam.
(LAUGHTER)
LENO: Don't fall for it.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP, "THE LATE SHOW WITH DAVID LETTERMAN")
DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": But President Bush now says that the taxpayers could actually make a profit on this deal.
(LAUGHTER)
LETTERMAN: Well, that's good enough for me. Let's go. Come on.
(LAUGHTER)
(CHEERING AND APPLAUSE)
LETTERMAN: And, if you believe that, I have Yankees and Mets World Series tickets. So...
(LAUGHTER)
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
MATTHEWS: It's nice to know that the really creative people are the comedy writers.
Anyway, the stock market rebounded today, like a giant beach ball. So, maybe it's a ritual. Screw up, laugh about it, get to work the next day, get the job done the day after.
Next, Bruce and Billy for Barack. Music lessons-Bruce Springsteen and Billy Joel are teaming up for their first ever joint concert. The cause? Barack Obama. The pair will perform during a Democratic benefit October 16, where the top tickets are going for $10,000 apiece.
By the way, that concert is on the day after the third and last presidential debate. What will it be for Barack? Glory days, if things look good, or moving out, if they don't.
And going to the mattresses. A lot of Americans think Congress shouldn't stop working until the bailout is resolved. Now one man is taking action. The CEO of Classic Sleep Products has offered to donate 535 mattresses to Congress-that's one for every member of both the House and the Senate-to make sure lawmakers can be in session 24/7 until they reach a deal on the financial crisis.
Hey, if things get testy, they can have a pillow fight. Hmm.
Time now for the "Big Number."
Last week, John McCain blew the bugle for Republicans to charge. He wanted them to vote like an arriving cavalry for the bailout bill. Yesterday, of course, a majority of House members, Republicans, headed off in retreat. Not a single member of McCain's Arizona delegation voted for the bill.
But he wasn't yesterday's biggest loser. According to "The Washington Post," President Bush called nearly every Republican member from his home state of Texas to get their support. How many did he win over? Four out of 19. It's no wonder the president looked so defeated yesterday. Just four Texas Republicans got on the Bush bandwagon-tonight's not-so-big number.
Up next: What will we see from Sarah Palin and Joe Biden in Thursday's big vice presidential debate? I say more people watch that than the other one. We will talk debate strategy with MSNBC's Pat Buchanan and a member of the Obama campaign's debate prep team about how they could coach-or would coach Palin and Biden for this week's showdown.
You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
JULIA BOORSTIN, CNBC CORRESPONDENT: I'm Julia Boorstin with your CNBC "Market Wrap."
Stocks surging today, partly in reaction to yesterday's huge sell-off, also on hopes Congress will pass a financial bailout bill as early as this week. The Dow Jones industrials soared 485 points, after plunging 777 yesterday, the S&P 500 up 58 points, and the Nasdaq up 98.
Oil prices also rose on expectations Congress will approve a rescue package. After yesterday's dramatic $10 drop, crude rebounded $4.27 today, closing at $100.64 a barrel.
More bad news from the home front-a closely watched index shows home prices fell a record 16.3 percent in July from a year ago.
And the FDIC is asking Congress for temporary authority to raise bank deposit insurance limits, as the government works to contains the financial crisis. Both presidential candidates called for an increase today. The FDIC currently insures up to $100,000 per depositor and up to $250,000 per IRA account.
That's it from CNBC, first in business worldwide-back to HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
Governor Sarah Palin and Senator Joe Biden face off in just two days now.
Here's Governor Palin on "CBS Evening News With Katie Couric" talking about the upcoming debate.
(BEGIN VIDEO CLIP, "CBS EVENING NEWS")
KATIE COURIC, CO-HOST, "THE TODAY SHOW": You made a funny comment. You said you have been listening to Joe Biden speeches since you were in second grade, something like that.
(LAUGHTER)
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: I think so, since like 72, yes.
COURIC: When you have a 72-year-old running mate, is that kind of a risky thing to say, insinuating that Joe Biden has been around a while?
PALIN: Oh, it's nothing negative at all. He's got a lot of experience, and just stating the fact there that we have heard his speeches for all these years. So, he's got a tremendous amount of experience. And I'm the new energy, the new face, the new ideas, and he's got the experience, based on many, many years in the Senate.
And voters are going to have a choice there in what it is that they want in these next four years.
(END VIDEO CLIP)
MATTHEWS: So, what do each of them have to do Thursday night?
Joining me now is Democratic consultant Nancy skinner, who helped prep Jennifer Granholm, the Michigan governor, who is playing Sarah Palin in Joe Biden's debate preps.
What an interesting role you're playing.
Also with us, MSNBC political analyst Pat Buchanan.
Nancy, tell me why you think Governor Granholm, who is, what, an Ivy League grad, law-what, didn't she go to Harvard law, or something, is a genius?
(CROSSTALK)
NANCY SKINNER, DEMOCRATIC STRATEGIST: Harvard Law School, yes.
MATTHEWS: In her manner, in her background-and she's born in Canada-how does she sort of fit the role of Sarah Palin? Why is she a good sparring partner to play that role?
SKINNER: First an foremost, Chris, she's a great debater. She's one of the best there is, really.
She does have that background. She-she did go to Harvard Law School. She was a federal prosecutor, an attorney general, before becoming governor of the state of Michigan. She's also a mother, governor. And, you know, she is leading quite a different state, a state of 10 million, with a declining auto base and that.
But she's great at what she does. And I think the Biden team really wanted someone to-to scrimmage them, not a play, but a scrimmage. And she's best-the best you can get.
MATTHEWS: Did you watch them scrimmage?
SKINNER: No. I prepped her before. They are now doing their scrimmages-their scrimmages. I prepped her before she left for Delaware.
MATTHEWS: OK.
Well, let's look at some of the game films here. This is the 2006 Alaska governor's debate. The moderator asked Governor-candidate Palin at the time her stance on abortion in the case of a rape.
(BEGIN VIDEO CLIP)
PALIN: You know, with my respect for the sanctity of life and my belief in the potential of life, I know that this aspect of the abortion issue is very sensitive, and, you know, it's a very private matter also. But, personally, I would choose life.
(END VIDEO CLIP)
MATTHEWS: So, I'm not sure where that takes us, Pat. But she's apparently a very good debater.
PAT BUCHANAN, MSNBC POLITICAL ANALYST: I think so.
She did an outstanding job up in Alaska. And what I would recommend the McCain people, who I think have mishandled her, Chris, is really let Sarah be Sarah. Let her get her information down on the issues of Iraq, Afghanistan, the rest of it, and then let her be herself, because I think she's extraordinarily fresh.
I think she set the country on fire. People like and love her. They know she's from Alaska. And I don't think they're expecting to her to really give the details of the Georgia-Ossetia conflict.
MATTHEWS: Well, let's look at Ferraro-Bush. We're talking here about men and women debating each other. And this is something new in American presidential-vice presidential politics.
Here's Geraldine Ferraro going at George Bush Sr. back in '84.
(BEGIN VIDEO CLIP, 1984)
GERALDINE FERRARO (D), VICE PRESIDENTIAL CANDIDATE: Let me just say, first of all, that I almost resent, Vice President Bush, your patronizing attitude, that you have teach me about foreign policy.
(APPLAUSE)
FERRARO: I have been a member of Congress for six years. I was there when the embassy was held hostage in Iran. And I have been there. And I have seen what has happened in the past several months, 17 months, with your administration.
(END VIDEO CLIP)
MATTHEWS: Nancy, is that something for Joe Biden to worry about, just, no matter how he behaves, at any moment, couldn't Governor Palin just pull one of those and say, you're being condescending, and people would hear that quote and not necessarily get the whole picture and just say, well, she may be right?
SKINNER: I don't think so. I really don't.
Looking at her game tapes, as you said-my dad is an old football coach, Chris-we're kind of past that with Geraldine Ferraro, with-he's debated Hillary Clinton now for so long.
But I think what she-what she has done and what the McCain campaign has done brilliantly is, they have inoculated her against any attacks whatsoever. They came out and said, everything was an attack. Certainly, the kids weren't-that wasn't a legitimate attack.
MATTHEWS: Yes, that's what I mean.
SKINNER: But now it's like, all of a sudden, if you question her own credentials, or her policy, even, it's an attack. So, they have set themselves up brilliantly, which is really is a land mine for Joe Biden. Can you not-if it was a man, maybe you could question it.
MATTHEWS: Isn't that true, Pat?
BUCHANAN: No.
Look, first-first, Sarah Palin is not a whiner. She's not going to say something like that. She's a real fighter. And she will come back. And I think she's probably going to come back at Joe Biden.
What Joe Biden's got to watch, I think, is, he can't be a wiseacre. And I don't think he's going to go very hard at her the way he went at, say, Clarence Thomas or Sam Alito. But he doesn't want to be a wiseacre.
But I think she's going to be coming at him. I think she's going to have some good lines. She's a-she's sharp in that sense.
MATTHEWS: So, you would advocate that she go on the attack?
BUCHANAN: Not on the attack. She has a very pleasant way.
MATTHEWS: I think she's very appealing as a person. I think that's not the issue.
BUCHANAN: You and I start laughing when we saw Rudy Giuliani stuck the needle in. That's the kind of needle. You don't want some brutal, frontal attack. Look, Joe Biden has a record of his own.
MATTHEWS: Let's take a look at Rick Lazio going up against Senator Hillary Clinton or candidate Hillary Clinton back in that race in 2000.
(BEGIN VIDEO CLIP)
RICK LAZIO, FMR. GOP SENATORIAL CANDIDATE: I'm not asking you to admire it. I'm asking you to sign it.
SEN. HILLARY CLINTON (D), NEW YORK: Well, I would be happy to when you give me the signed letter-
LAZIO: Right here. Sign it right now.
CLINTON: We'll shake on this.
LAZIO: No. I want your signature because I think everybody wants to see you signing something that you said you were for.
(END VIDEO CLIP)
MATTHEWS: Well, I think he violated her space there, just guessing, Nancy. What do you think? It's like when-who was it-when Al Gore went up and sort of confronted George W. Bush in that debate. People don't like seeing somebody's space being violated.
SKINNER: That's not going to happen. You know what, Chris? The way the McCain camp for and got the format, it really does favor Sarah Palin. Just like her convention speech was very well delivered, and her former debates in Alaska, great debater-this prep session she's going through right now, they're intensively writing her answers out. And she's a great broadcaster. She was a former broadcaster.
MATTHEWS: Are you spinning? Nancy, are you setting up-
SKINNER: No. I'm telling you-
MATTHEWS: Are you sand bagging this person here by saying how she can't lose?
SKINNER: No, I'm not saying that. I'm saying, watch her tapes in Alaska. It was a whole different-this isn't going to be the Katie Couric, shoot from the hip, I'm not prepared thing. They're going to have her so well prepared and scripted.
MATTHEWS: I love what you're doing, Nancy. You are setting this up.
Let me ask you this, bottom line, she can't lose, right?
SKINNER: No, I'm not saying that. Chris, what I'm saying is yes, you made a great point yesterday when you said, OK, let's say she's good at being coached on this and prepped on this. But let's say there's some heavy ideological question that gets thrown at her. That's the question, because she doesn't have the experience and the years. This debate ultimately-if this were the silly season two months ago, it might be about a popularity contest and who is more likable. But with the country in crisis and two wars, people are going to be seriously looking at who's more prepared.
BUCHANAN: Chris, I don't believe-I hope they don't have her memorizing answers to deliver. Remember Reagan's first debate, how bad he did against Mondale? He was stuffed full of facts and figures by Darman and those guys? The second debate he said, get out of the room. He went in there and he was himself. She ought to get fundamental answers, and then go down, let her own philosophy, her own personality come through. Let Sarah be Sarah.
If she loses, then you lose. But you don't lose on somebody else's game plan.
MATTHEWS: You have forgotten the nature of a neo-conservative. They find these-no, no, the people briefing her are in this home-schooling exercise that's going on. It's just like they did with Quale or George W. Bush. They get a newcomer who hasn't had a lot of book learning in the ideology of the right, and they teach them the right words. You don't think that's going on right now? Randy Scheunemann's (ph) not filling her with that ideology right now?
BUCHANAN: -- out of the room. I'll tell you, give her her basic information and then let her be herself. Her philosophy is conservative. It will come through. So will her personality.
MATTHEWS: How does she avoid the repetition that has become a signal of being over-briefed, Nancy? When you begin to repeat the exact same words again and again and again. For example, I don't want to second guess Israel. Well, that's interesting. But when you say it four times in four answers, people might get the idea that Randy Scheunemann has briefed you or that someone with an ideological point of view has given you exact words to use. What do you think about that?
SKINNER: We actually call them key words, absolutely. It's obvious to people. The format is two minutes, two minutes, 30 seconds, 30 seconds. So that's why I do think, Pat, it's not just-she can talk about-she often does speak in first principles or what we call value frames. But it's really hard to make your case-but the format will favor her in this regard: there won't be the free-wheeling exchange back and forth. Biden isn't going to be able to challenge her. If she ever had a weakness, that was it, because she speaks in this general-I believe in freedom and democracy and being a maverick and reform.
BUCHANAN: Wait a minute.
(CROSS TALK)
BUCHANAN: Let me talk, Nancy. What she's got going for her, this is a 90-minute debate, economic policy, foreign policy, social issues. You can't ask one question-
MATTHEWS: I'm rooting for Gwen Ifill myself. I think she's going to be really effective. She'll be a very effective interviewer, I think, and a very effective moderator. We'll see. Nancy Skinner, thank you for joining the show. Pat Buchanan, as always, in your multi-faceted way.
BUCHANAN: I'm rooting for somebody else.
MATTHEWS: I never know who you're up to. Anyway, the debate is this Thursday night at 9:00 p.m. Eastern. Pat's for Sarah. Live from Wash U., as they call it out there, in St. Louis. Watch it right here on MSNBC.
Up next, the politics fix and what the bailout mess means for McCain and Obama. Let's do the politics right now. This is HARDBALL on MSNBC.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
MCCAIN: At this moment, I think I need to talk to America and hear what their solutions are, because we're going to have to get the support of all Americans to address this together.
(END VIDEO CLIP)
MATTHEWS: Welcome back to HARDBALL and the politics fix. Tonight's round table, John Harwood of cNBC and the "New York Times," and Keith Richburg of the "Washington Post."
John, I was taken by that comment we just heard from the candidate for president of the Republican party. Senator John McCain said he wanted to hear advice, like suggestion box kind of stuff, on the most complicated issue of our times, the financial bailout. Is that credible, that we want to hear people to phone in their ideas on how to solve this thing?
JOHN HARWOOD, "THE NEW YORK TIMES": Well, I hope or think he was probably speaking rhetorically, because if he was serious about getting advice, that suggests he does not want to pull back and try to go pass this on the floor very quickly again. I think in reality what the leadership in both chambers of commerce want to do is try to put this thing back together, make some concessions, get a few more votes from both Republicans and Democrats and try to get it over the finish line.
MATTHEWS: Keith, are we to believe that he wants to go on a listening tour to learn what the American people out on the street think? I can't understand this thing. I've been listening to experts for two weeks and I still can't grasp it. I'm not sure if the graspers grasp it. Do you think this is something out there for public, sort of, suggestion?
KEITH RICHBURG, "THE WASHINGTON POST": Exactly. I think we kind of already know what people think. They let their representatives know loud and clear, which is pretty much why it went down in the House. It seems to me this is another example of McCain veering all over the place. First, we had he didn't support the AIG bailout, economies-the fundamentals of the economy were strong. You come after that and he's suspending his campaign until there's a deal and maybe not showing up to the debate.
Then he shows up to the debate. He is all over the map on this thing now. And it seems like one other thing he's tossing out there now, getting public advice. It just seems like he's veering all over the place on this one.
MATTHEWS: Yes, it's fire the head of the SEC, the Securities and Exchange Commission, then bring in somebody-then get advice from people that don't know anything. Here's Senator Obama, by the way, in Reno. There's an interesting place to be talking about the big bet. He went to Reno to make it.
(BEGIN VIDEO CLIP)
OBAMA: For the rest of today, and as long as it takes, I'll continue to reach out to leaders in both parties and do whatever I can to help secure the plan. This morning I talked to President Bush. I talked to Senator Harry Reid, the majority leader. Oh, yes, I forgot, he happens to come from Nevada.
To the Democrats and Republicans who oppose this plan yesterday, I say, step up to the plate. Do what is right for this country. And for all Americans, I say this: if and when I am president of the United States, this rescue plan will not be the end of what we do to strengthen our economy. It will only be the beginning.
(END VIDEO CLIP)
MATTHEWS: John and Keith, we all remember the great Cuban Missile Crisis where one president and his brother were able to handle the most complicated issue and most dangerous time of our existence, maybe, in terms of a possible nuclear war between super powers because they used common sense and political know-how to solve it. Are we in a situation, John and Keith, where the elected officials in our Republican form of government are probably unable to grasp the nature of the challenge they're facing here and this complexity of derivatives and all this leveraging going on in terms of our financial arrangements in this country? They have to trust the people to come in and advise them, people like Hank Paulson.
HARWOOD: Absolutely. There are two questions there. One is do they understand the substance of the economic, financial, credit market problem? There's another question, which I thought you were initially getting at, which is, do they understand the politics of how to get this thing over the finish line? That may be a tougher task at the moment because they are counting on Hank Paulson and relying on his advice.
The one thing I think we ought to say about Barack Obama and John McCain, the differences between the two of them have been principally in the theatrics surrounding this or the optics surrounding this. Obama holding back and McCain injecting himself in last week. The substance of their positions is almost identical. In fact, even the suggestion they added on today, raising the FDIC limit from 100,000 in terms of insured deposit to 250, they were right on the same page, as they were on accountability, oversight, CEO pay and all the rest.
MATTHEWS: We'll come back with you and Keith in a moment. It reminds me of Godzilla, where there is this giant monster movie coming out of Japan. Every once in a while, they cut to an American, Raymond Burr (ph), on a ship somewhere watching the all. That's what the two candidates look like, Raymond burr on a ship watching this monster movie together. They have no control over it. You're watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We're back with John Harwood and Keith Richburg. Keith, you first. Do you think when we look at this debate-here's the latest Gallup poll, by the way, on the presidential candidates. It's a six-point differential on the daily Gallup. That's about what most of the polls are showing now, about six points. It is obviously creeping up, that lead for Barack Obama. Is it your sense covering these debates for vice president or the vice-presidential debate campaign itself-does it have much influence on who we vote for for president?
RICHBURG: Traditionally, no. These debates for vice president are kind of interesting for us. The only thing that is going to be interesting is if somebody makes a gaffe of some sort. The only thing we remember about a vice-presidential debate is probably that zinger that Lloyd Benson got off at Dan Quayle, saying you're no Jack Kennedy.
Barring a zinger of some sort, or barring a major gaffe on the part of either Joe Biden, who is capable of it, or Sarah Palin, it will go down as a question of qualification. I think the one area where it could make an impact is if it raises this qualification question that is hovering around Sarah Palin at the moment. You've got even conservatives saying she's not quite up to the job. She's not ready yet. If she does something, says something to reinforce that, you know, that could end up costing McCain one or two percentage points among independents, especially in a close race. That's the major impact of it.
MATTHEWS: Your thoughts. Gwen Ifill, who is moderating the debate, she must be tempted to ask questions, as she carves these questions, that have an information feature to them, like testing what the candidate actually knows.
HARWOOD: You and I both know Gwen. There is not going to be any cheap shots from her or anything like that.
MATTHEWS: No. But describe like the American relations with the Soviet Union for 50 years.
HARWOOD: There are going to be serious questions. It won't be stump the candidate, but it will be serious questions. I agree with everything that Keith said. There is a burden on Sarah Palin, given what she has gone through over the last couple of weeks, to try to show some fluency about foreign and domestic policy and indicate that she has more on the ball than some people have concluded from watching her with Katie Couric or Charlie Gibson.
MATTHEWS: How does Joe Biden avoid over kill?
HARWOOD: Boy, that's one of the challenges. I got to tell you, I was with one of his colleagues in the Senate over the weekend. I said, what does Joe Biden have to do in this debate? He put his hands out and he pushed them down. He just said, nothing at all. He just needs to keep it nice and sedate. He doesn't have to do very much. Don't try too hard, because when Joe Biden tries too hard in a long-winded answer, it's that fourth or fifth sentence in the paragraph that trips him up.
RICHBURG: I think that's 100 percent right. Joe Biden is going to try to keep this thing on John McCain and try to link John McCain to George Bush. Sarah Palin, I think, is going to try to ignore Joe Biden and keep going after Barack Obama.
MATTHEWS: They'll both be aiming at the heads of their tickets. Thank you very much, John Harwood. Thank you, Keith Richburg. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Don't forget this Thursday night, 9:00 pm Eastern, the vice presidential debate between Biden and Palin live from Washington University in St. Louis. That will be on MSNBC.
Right now, it's time for "RACE FOR THE WHITE HOUSE" with David Gregory.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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