updated 10/14/2008 2:31:01 PM ET 2008-10-14T18:31:01

Guest: Roger Simon, Sen. Joe Biden, Margaret Brennan, Tom Brokaw, Perry Bacon, Clarence Page

CHRIS MATTHEWS, HOST: The two candidates finally agree on something:

Barack's ahead.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Leading off tonight, both candidates read the same polls. Obama sees he's winning. McCain sees he's losing. But still three weeks to go and things happen, things change. So with just 22 days to go until election day, both presidential candidates hit the campaign trail today with new speeches. John McCain was in Virginia, North Carolina and Pennsylvania, acknowledging that he's down in the polls but he's not out yet.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Senator Obama is measuring the drapes and planning with Speaker Pelosi and Senator Reid to raise taxes, increase spending. But they forgot to let you decide. My friends-my friends, we've got them just where we want them.


MATTHEWS: Just where they want them, 10 points ahead of McCain.

Anyway, meanwhile, Barack Obama unveiled a new economic plan in a speech in Toledo.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I'm proposing to give our businesses a new American job tax credit. Instead of giving tax credits and tax breaks to companies that ship jobs overseas, what we're going to do is say to American companies, For each new employee you hire in the United States over the next two years, you are going to get a tax break. That makes sense.


MATTHEWS: We've got the latest from the campaign trail, the newest polls and the latest changes in the NBC News electoral map all in just a moment.

And name that veep. Since Sarah Palin was named to the Republican ticket, Joe Biden has been the quiet grown-up in the race. I caught up with him yesterday after a rally up in Scranton, and we talked about the economy, Obama's image and the harsh tone of this campaign. We'll show you that interview in just a moment.

Also on Wednesday, McCain and Obama meet in the third and last presidential debate. NBC's Tom Brokaw moderated the second debate. He's going to join us to talk about the third debate tonight, and also his book, "Boom!" about the '60s.

And John McCain may be pulling back on some of his campaign's more inflammatory remarks about Obama, but the head of Virginia's Republican Party-this is unbelievable, even this year's tenor of this campaign-he has just-this is the Republican leader of Virginia-he's just compared Barack Obama, the American, the patriot, with Osama bin Laden, the terrorist. You heard it here. He compared the two of them and he's sticking by his word. This is getting ugly. We'll look at that and more in the "Politics Fix" tonight.

And there were a lot of boos but also some cheers when Sarah Palin dropped the puck at a Flyers hockey game in Philadelphia Saturday night.


UNIDENTIFIED MALE: (INAUDIBLE) the best-known hockey mom in the United States, accompanied by former Flyer (INAUDIBLE) (INAUDIBLE) Alaska, Sarah Palin!


MATTHEWS: Don't let it get to you, Governor. Well, have more of that on the "Sideshow." You can measure the boos against the cheers.

By the way, let's begin with NBC News political director Chuck Todd and "The Politico's" Roger Simon. Gentlemen, thank you. Let's look at the newest polls. "The Washington Post"/ABC News poll came out this morning with a 10-point lead for John McCain (SIC) nationwide, which helps push the Pollster.com average of all polls up to an 8-point Obama lead. Your take on that, Chuck? We're looking at the map there of the polling.

CHUCK TODD, NBC POLITICAL DIRECTOR: It does seem a little bit wider than what either of the campaigns would say it is, but that's about where the race has been. Apparently-there's always been a bump for Obama right after the debates, and then there's always this settling down. That's what we saw the last three debates, the two presidential and one vice presidential. So the question is this time for McCain, can he get through a debate without seeing Obama's lead expand again?

You know, if the assumption is this will close a little bit over the next 48 hours, get down to 5, 6, 7, which is where it had been before each of the last two debates, can he stop it from growing again? And if he does then and it starts shrinking again to 3, 4, 5, well, suddenly, at 3, 4 or 5, that's a winnable race.

MATTHEWS: You know, it seems to me, Roger, that this explains why Barack Obama has asked for-is actually paying for 30 minutes of primetime television time later in the campaign because he knows that he has to regularly come on television in primetime, it seems to me, to show that he's better than the PR about him, better than the word of mouth the opposition is putting out about him.

ROGER SIMON, POLITICO.COM: Well, also, he's showing that he is a serious candidate, a presidential candidate, and that he can afford the dough. I mean, he's saying, Look, I can afford 30 minutes. It's nothing to me. It's $6 million, $7 million, $8 million, $9 million, $10 million. Can John McCain afford the dough? Probably not.

I mean, and it's calm. It's cool. It's collected. It's him facing America, presumably from a comfortable setting, talking about issues instead of just talking about himself, which was the biggest difference today between McCain's speech and Obama's speech.

MATTHEWS: Tell me about that.

SIMON: Well, McCain gave a speech and it wasn't bad and he had some good lines. He said, I've been fighting for this country since I was 17 years old and I have the scars to prove it. He said, I'm a fighter who puts all his cards on the table. He said, I know what fear feels like. I know what hopelessness feels like. There are a lot of I's in that speech. It was about him. He talked about some economics, but it was mostly about him.

Barack Obama talked about jobs. He talked about a rescue plan.


SIMON: He talked about having the IRS mail out tax cut checks early, about stop taxing unemployment benefits. It was all about the people...


SIMON: ... the middle class people struggling to make it. It was a marked difference in the two speeches.

MATTHEWS: Well, maybe people are more interested in their own personal stories, their economic stories, now than they are in the narratives of either candidate.

Let's take a look at Senator John McCain in Virginia along those lines.


MCCAIN: We cannot spend the next four years as we have spent much of the last eight, waiting for our luck to change. The hour is late. Our troubles are getting worse. Our enemies watch. We have to act immediately. We have to change direction now, and we have to fight.


MATTHEWS: OK. Let's look at Barack Obama today in Toledo.


OBAMA: His campaign actually said, and I quote, "If we keep talking about the economy we're going to lose." That's what he said. Well, Senator McCain may be worried about losing an election, but I'm worried about you losing your jobs. I'm worried about you losing your homes. I'm worried about you losing your life's savings.

You can't afford four more years of the failed economic theories that say we should give more and more to millionaires and billionaires and hope that prosperity trickles down on everybody else. We've seen where that's led us, and we are not going back. It is time to turn the page.


MATTHEWS: It seems to me, Chuck Todd, you can tell where the battlegrounds are because that's where the candidates are going. I saw Barack Obama all Saturday morning in Philadelphia. Then I saw Biden in Scranton on Sunday. And I'm looking there-he's into Ohio, Virginia. These are the states. How are they moving right now on your map?

TODD: Well, let's take a look. Here's where we were last week. And I want to circle two states for you to take a-to watch when I change it to this week, Missouri and West Virginia. And this will tell you everything you need to know about the economy. Missouri we've moved to toss-up, as you can see. And more importantly, West Virginia has moved from a likely solid McCain state to a lean McCain state.

And take a look at West Virginia, Chris, surrounded by battleground states, Virginia, Ohio, Pennsylvania. Well, what does that mean? That means all of the media markets that Obama has been buying, there's about 60 percent of them bleed into-in these three states-they bleed into West Virginia.


TODD: The economy has hit West Virginia hard, just like it's hit a lot of the northern tier states, these Rust Belt states. And we're starting to see movement in Obama's direction.

Another state, frankly, that I want to see some polling data in, and I guarantee there's probably movement there toward Obama, is Arkansas. And that's, you know, where you see these states that have Democratic tendencies in the state that maybe had some racial resistance, but as the economy has just piled on this race, it has trumped race in this campaign, and that's why you're seeing movement in West Virginia, movement in Ohio, in the U part of Ohio, that's in Obama's direction, movement in Pennsylvania, where you're seeing his lead grow, particularly in some of those rural parts.

And as I talked to one Republican, if you're seeing growth in those parts of Pennsylvania, well, there's no doubt there's going to be shifts in a West Virginia.

MATTHEWS: Well, let me go-let me go to Roger with this. But first, Roger, I want to look at these numbers. Here more from the ABC/"Washington Post" poll out today, Barack Obama's favorable numbers up to 64 percent now. He's 6 points up from a month ago. And by the way, he's about 2 to 1, 64 to 33 positive over negative.

Meanwhile, John McCain's numbers are going bad. You can see them.

His favorables are down by 7 points. His unfavorables are up by 9. Something he's doing out there, whether in the debates or in his advertising or on the stump, is bothering people. He's not as likable as he was a couple weeks ago.

SIMON: That's true. And he's not as likable as he was eight years ago. I mean, he used to be-why did we like him? Why did he do so well eight years ago? He was authentic. He was a maverick. And he was not excessively partisan. Not that long ago, he and Arnold Schwarzenegger were talking about the new era of post-partisanship in America.

Well, that's not the John McCain we've seen in the last few weeks or the last few months, and the American people don't think it's a very likable guy. And when you get right down to it, not only is the economy trumping everything right now, including race, but it's also trumping-people also want a candidate they can like and trust.

And when you go down deeper into the poll, you find out that, you know, on the economy, not only do a majority of the people think it's the number one issue, but Barack Obama wins among economy voters 62 percent to 33 percent. I mean, that is a number that leaps from the page.


SIMON: How does John McCain make up a 62-33 margin on the economy? You know, even though the stock market had, wonderfully, a terrific day today, it's still going to be an issue on November 5. How does he make up that ground in three weeks?

MATTHEWS: Well, Chuck, look at these numbers here. Voters think McCain has spent more time attacking than addressing issues. Of course, he is attacking, and we watched the ad campaign.

TODD: True.

MATTHEWS: But to challenge...

TODD: So is Obama.

MATTHEWS: ... something we just said, both of us there, I think we all agree on, the conventional wisdom is that John McCain was more winsome eight years ago, but he lost. Are we learning now, like Nixon lost in '60, came back, broke bad in '68 but won-I mean, it's almost like that scene in "Lawrence of Arabia," the great film, where the guy is a nice guy in the first half of the movie and turns bloodthirsty at the end and wins in the end. Is bloodthirsty bad or good or what? What are we learning here?

TODD: Well, I do want a word of warning on McCain's favorable ratings. I-we're seeing spike in the negativity for him among voters that were already with Obama, among African-Americans, among Hispanics, where he was already doing poorly. So instead of getting, say, a 20 percent favorable rating from voter who weren't going to vote for him anyway, he's now getting, like, a 2 percent favorable rating. And that's accounting for some of the spike. There's not as much movement...


TODD: ... on the negative side among white voters. So just keep that in mind and so it might temper...

MATTHEWS: But that's a 9-point hike, though, in unfavorable. How do you figure?

TODD: Well, that's the thing. It moves-if you move-the same thing happened to Hillary Clinton. When the minority vote really got angry at the Clintons, it moved in one direction...


TODD: ... so badly against Clinton that it did affect the overall fave/unfave number. I don't want to get into the whole weighting things...


TODD: ... and this or that. But just among white voters, McCain's number hasn't gotten that bad and it hasn't moved as much as it has among minority the voters, who are really upset, more upset about the tone of this, and among some Democratic voters who used to give McCain a favorable rating. So I-just a word of caution on some of those negatives.

MATTHEWS: Yes, I-Chuck Todd, thank you very much. Roger Simon, thank you.

I'm going to talk to Joe Biden. I taped this interview last night up in Scranton. I asked him about this question. Does John McCain himself-and he's been a colleague of his forever-does John McCain himself seem to feel that he's gone too far, gotten too nasty, his campaign's gone too much against the other guy, to the point where people are calling him an Arab and-not that there's anything wrong with being an Arab, but doing it in a negative way? And is that going on to the point where John McCain says, Enough is enough? It's an interesting sort of point in the campaign. We're going to know by Wednesday night, of course.

We're going to have Tom Brokaw to talk about the next debate. But we'll have Joe Biden up in a minute. You're going to find this fascinating. There I am talking up-that's the tape from last night. We'll hear it all when we come back in a minute.

You're watching HARDBALL. And then we'll have Joe from Scranton.



SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL NOMINEE: The problem with John McCain, God love him, as my mother would say, John's epiphany wasn't that he saw the light. What John saw was the presidency receding from his grasp. That's what he saw. That's what he saw!


MATTHEWS: Welcome back to HARDBALL. I was in Philadelphia Saturday for Barack Obama's barnstorming through north Philly, northeast Philly, Germantown and West Philly. He drew big, happy crowds at every stop. His biggest applause came, interestingly enough, when he said Americans want a president who will unite the country, not divide it. He said that if he's elected, things are not going to be easy, which sounds to me like he wants people to have a reasonable expectation of what's coming and what's possible should he win this thing.

On Sunday, I traveled to Scranton, the city local Democratic chair Harry McGrath (ph) calls the "epicenter" of 2008 presidential politics, for good reasons, for the big afternoon rally with Bill and Hillary Clinton and vice presidential nominee Joe Biden. Both Senator Clinton and Biden spent a good part of their growing-up years in Scranton. What struck me in the speeches was Hillary's strong endorsement of Obama and Bill Clinton's willingness to push for the ticket.

Afterwards, I sat down with Senator Biden and pushed him on the Republican efforts, including those by Governor Sarah Palin, to paint Barack Obama as someone who associates with terrorists, someone obviously not to be trusted.


BIDEN: I was talking about that ad on television that says Barack consorts with terrorists. I mean, look, I mean, Barack was 8 years old when this guy was doing the things he was doing in 1969. And yet I think the average person will look at that, would look at that guy's picture and say, Is he al Qaeda? Is he something-I mean, I just think it's-I think it's over edge.

MATTHEWS: What do you make of the sort of pattern with the-these Republican surrogates up on the stage last week referring to him by his full name, Barack Hussein Obama? Do you see that as part of that imprints (ph)?

BIDEN: Yes. Look, I mean, I think this is all about not wanting to talk about what's really bothering people and trying to change the subject. But look, think about it, Chris, real simple politics. You're an old-time politician. Me, too. How do you explain what got us into the spot we're in economically and in terms of our foreign policy without walking away from the last eight years' policies or coming up with another explanation why it's somebody else's fault?

Well, I don't think the McCain/Palin ticket can do either. One, if they do, they lose their base. The other, if they do, there's no legitimate argument. So what are they going to talk about? They're going to talk about Barack and they're going to talk to scare people.

MATTHEWS: Scare people. John Lewis, who I know you respect...


MATTHEWS: ... with the great Civil Rights record that he had, he said that he feels that the rhetoric coming from the other side, from the Republican side, is stimulating, triggering the kind of atmosphere we saw back which led to so much tragedy in the '60s.

BIDEN: Well, look, I just think it's unhealthy, you know? You don't

you don't throw race, terrorism, you know, the "other guy," "Who is this man?"-that's a combustible mix in an environment where people are concerned, angry, some people-where we still haven't been able to deal with the cause of what 9/11 and-you know, I mean, it's just-it's just not a-it's just not a healthy mix. It just-I don't think it's...

MATTHEWS: Are we talking the potential violence here? Is that what we're talking about?

BIDEN: Well, I-I don't-I hope not. I hope not. It's just not a useful time to be running an ad-I'll just stick to that-that says, Look, the guy consorts with terrorists, puts a picture of a guy up nobody knows, doesn't explain Barack Obama was 8 years old when this guy did bad things and this guy's now received all kinds of awards, whether he should or he shouldn't have. I mean, I just think it-it's just-it's just not good.

MATTHEWS: OK. Let's talk about the big night coming up Wednesday night, the last of the debates. You were in one.


MATTHEWS: There's been two presidential debates. It's an interesting thing, because Barack Obama, your running mate, has said, "OK, whatever you have to say, forget the inferences, forget the ads, say it to my face." What kind of a situation will that be Wednesday night, if John McCain does continue with that pattern that the campaign has been following of, as you call them, inferences?

BIDEN: I think John will regret the rest of his life, having an incredible career being cast in what people will remember. I just don't think-I don't think John will do that.

MATTHEWS: You don't think he'll get face-to-face?

BIDEN: No, I don't-I think John's already begun to realize, just by what I have seen on television and a lot of you have reported, that John's sort of pushing back on...

MATTHEWS: Friday night he did.



UNIDENTIFIED FEMALE: I have read about him, and he's not-he's an Arab. He is not...


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: No, ma'am. No, ma'am. He's a decent family man, citizen, that I just happen to have disagreements with on fundamental issues.

And that's what this campaign is all about. He's not. Thank you.



BIDEN: That was the old John McCain. That's the guy you and I-I will speak for myself-that I have known.

MATTHEWS: Yes, well, we saw that all the time.

BIDEN: Yes, I mean, that...

MATTHEWS: You think he had enough of it?

BIDEN: I think he's had enough of it.


BIDEN: Ladies and gentlemen, good to be here. It's good to be home.


MATTHEWS: The states of Pennsylvania, Michigan, Ohio, they seem to be

once again called the battleground states, the states that will decide this

what's your outlook right now, this Columbus weekend, for Pennsylvania?

BIDEN: Very good. I feel very good about Pennsylvania, now, maybe because I am in Delaware, and Pennsylvania has sort of been my market, and I'm from Pennsylvania. You know the state, Chris, better than anybody I know.

MATTHEWS: But you're the third senator from Pennsylvania, everybody calls you.

BIDEN: Yes, well-well, it is. And I think I know the state. I think I know the state.

And, look, if there's ever a time when the things that matter to the people in Pennsylvania, those very people you're talking about, those seniors you're talking about, older population, my God, they just watched $2 trillion of, you know, their retirement just blown away. And these guys are talking about privatization or partial privatization of Social Security?

They're looking out there. And what's the one thing they have always valued, whether in North Philly or up here? Where was it? Education. My kid's going to get educated.

They're looking now and saying, "I'm not going to be able to send Mary back to second semester, let alone get Charlie there the first time going around." So all of these issues are issues that I think are really the kitchen-table issues of-of the people that I grew up with.

I don't know. I feel good about Pennsylvania. I know we're going to do very well in Michigan, and I think Ohio has come along. I also feel good about Florida.

MATTHEWS: Do you think the regular guy, the regular Joe up here, is going to be able to make that leap and say, "That guy out there from Chicago, with the different name, is in my interest. This guy who seems more familiar to me, John McCain, isn't"?

BIDEN: At first blush, no. But now they're getting to know them.

Watch them both at debates. What did they see in those debates? They see

they saw the guy from Chicago connecting more with them.

They saw the guy from Chicago standing there saying, "I can remember my mother when she was dying, having to argue with the insurance company." They get it. They get it.

They see-they see Barack at the debate. They see him steady. They see him cool. They see him-nothing at all about him came across as sort of ethereal. This guy is in a different-and they watched John McCain, the guy-heroes up this side of the-this neck of the woods are people with steady hands, know exactly what they think, know where they want to go. John's bouncing from pillar to post on the issues. He doesn't seem...

MATTHEWS: He's lurching, you said.

BIDEN: Well, I did say lurching. I did.

MATTHEWS: What's that mean?

BIDEN: Well, he's just-well, he's just jumping from one position to another. He just-it's almost like he's-I think-I think John knows...

MATTHEWS: You don't think he's too old, do you?

BIDEN: No, I don't he's too old.

MATTHEWS: Just-when you say lurching, you mean policies?

BIDEN: Yes, I mean policy. I mean, he just is searching for what it is-I think John thought this whole race was going to be about foreign policy. And all of a sudden, it's about things that John-it's-they're not familiar to him.

MATTHEWS: Senator, it's great.

Thank you very much, Senator Joe Biden.

BIDEN: Appreciate it. Thanks.


MATTHEWS: Up next: How much brotherly love did Sarah Palin get when she dropped that ceremonial first puck at the Flyers game this weekend? That's next in the "Sideshow."

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Welcome back to HARDBALL.

Time for the "Sideshow."

Sarah Palin got a taste of Philly this weekend, the kind you get when you stand up at a sports event and people get to say exactly what they feel like saying about you. It's not for the faint of heart, I can tell you.

Here she is, America's self-described hockey mom, heading out there onto the ice to drop the puck on the Flyers' opening game of the regular season. Listen to the love.


UNIDENTIFIED MALE: Flyer fans, please welcome the best-known hockey mom in the United States, accompanied by former Flyer Brian Propp.





MATTHEWS: Don't let it kill you, Governor. People go out there to let off some steam. And South Philly has a lot of guys with a lot of steam to let off, sometimes more soul than they can control.

By the way, on that same night, Joe and Jill Biden took in a football game at their alma mater, the University of Delaware. They stayed in their seats.

Next: Alaska's long-awaited trooper-gate report was released late

Friday night. The verdict? Well, just take a look at these headlines:

"Palin Abused Power"-well, all around pretty bad, right? Well, the governor had a different take.


GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Well, you know, I'm very, very pleased to be cleared of any legal wrongdoing, any-any hint of any kind of unethical activity there, very pleased to be cleared of any of that.


MATTHEWS: Well, that's an unusual reading of the verdict of that commission.

Anyway, nothing like sitting in your own jury box, is there? Even Jay Leno couldn't resist having a little fun with the McCain camp's spin game on this one.


JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Some good news for Sarah Palin. She has been cleared in that trooper-gate scandal. You know who cleared her? Sarah Palin. I was surprised.



LENO: Yes.

Actually, I think it's legitimate, because, apparently, Palin can see the courthouse from her front porch, so, obviously...



LENO: Obviously, she's a lawyer.



MATTHEWS: Speaking of late-night television, David Letterman is still getting a good ride showing his spite at John McCain after the senator recently canceled an appearance on his show, and then did an interview with someone else.

Here are some of the highlights.


DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": When John McCain-and he was nice enough to call me on the phone and said he was racing back to Washington.


LETTERMAN: And our people here were told, it's so serious, he's getting on a plane immediately and racing back to Washington.

And now we have just been told-here, take a look at-do we have it on the thing?

OLBERMANN: This just in?

LETTERMAN: This is going live. This-there he is right there.


LETTERMAN: Doesn't seem to be racing to the airport, does he?


LETTERMAN: John McCain is in favor of the bailout. He loves bailouts. He bailed out on me.



LETTERMAN: This is stunning to me. John McCain blew off Michigan.

Well, I know how they feel.


LETTERMAN: Maybe you noticed that all of John McCain's problems began when he bailed out on this show. Were you aware of that?




LETTERMAN: The road to the White House runs right through here.


MATTHEWS: Well, his poll numbers down now, it seems McCain has decided it's time to make nice. He will be on "Letterman" this Thursday. I will bet you he shows up.

And, by the way, Joe Biden is going to be on "The Tonight Show" that same night with Jay Leno.

And that brings us to tonight's "Big Number."

For the presidential campaigns, these final weeks are mad dashes to reach as many battleground states as possible. So, who's winning that race? Well, today's "Wall Street Journal" reports that Senator McCain, his wife, Cindy, and Governor Palin have made 55 appearances in key states since their convention. Sounds like a lot.

But how many events has Barack Obama, Michelle Obama, and Joe Biden hit in the same time? Ninety-five. McCain and Palin may get big crowds at their joint rallies, but Obama and Biden cover more ground by splitting up. Judging from our map, it's working.

Ninety-five Obama campaign events in battleground states this fall-tonight's "Big Number."

Up next: Will John McCain's new strategy of playing the underdog work? And what will he do on Wednesday night's third and final debate? I can't wait.

The moderator, by the way, of the last presidential debate, Tom Brokaw, joins us in just a minute to talk about the Wednesday night debate coming up.

You're watching HARDBALL, only on MSNBC.


MARGARET BRENNAN, CNBC CORRESPONDENT: I'm Margaret Brennan with your CNBC "Market Wrap."

A historic rebound following Wall Street's worst week in history. The Dow Jones industrial average soared 936 points, its largest single-day point gain ever. The Dow was up more than 11 percent, but it is still down 29 percent on the year. The S&P 500 gained 104 points, the Nasdaq also benefiting with a 194-point gain.

That rally was fueled by the federal government's plans, now being finalized, to buy stakes in banks, also by the governments' decision around the world to take new steps to support the global banking system. After the close of the session, "The Wall Street Journal" is reporting that the Treasury Department will inject $250 billion into banks via equity stakes.

Meantime, oil prices also gained, with crude up $3.49, closing at $81.19 a barrel.

And General Motors announced it will close its metal stamping plant near Grand Rapids, Michigan, by the end of next year, eliminating more than 1,300 jobs. GM shares soared 33 percent today on reports that it has been exploring options, including a merger with Ford or an acquisition of Chrysler.

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

MATTHEWS: Welcome back to HARDBALL.

In just two days, Barack Obama and John McCain will face off in their third and final presidential debate.

NBC's Tom Brokaw, as everyone knows, moderated the last one. He's here to talk about that, and also his book, another big seller from Tom, "Boom!" about the '60s. And I want to ask him a minute about the sense of resonance that may be coming back about what is coming, perhaps, if Barack Obama wins and what he's offering what we saw in the '60s.

TOM BROKAW, NBC SPECIAL CORRESPONDENT: Well, let's show the softcover, because that's the new one that's out. And we just saw the hardcover on.

MATTHEWS: This man knows marketing, right here.

BROKAW: Talk-talking about with the '60s is what we're...

MATTHEWS: Talking about the '60s. It's much less expensive a buy...


BROKAW: Much less expensive, and...

MATTHEWS: ... who feel cramped by the current economic circumstances.

BROKAW: We like-and we like that catchy phrase, talking about the '60s, because a lot of what we're talking about today came out of the '60s, in fact. You think about...

MATTHEWS: You have opened a can of worms. Let's proceed.

BROKAW: Well, the tumult of this presidential election, that we have an African-American at the top of one ticket, never would have happened without the '60s, without the civil rights movement. And traditional feminists may not be happy about it, but Sarah Palin, first a mayor and then a governor in a state like Alaska, and now a Republican vice presidential candidate, she's a product of the women's movement as well...


BROKAW: ... because so many things were opened up at that time.

We were at war in '68. We're at war now. The country is in a considerable amount of turmoil. This time, it's economic. Then, it was cultural. So, there are some issues.

And the boomers, who got the '60s started, now are looking at their 401(k)s. And, back then...


BROKAW: ... they said, we don't care about materialism. But they're wondering whether-how long they're going to have to work.

MATTHEWS: I love the '60s, Tom.



MATTHEWS: Let's take a look at McCain and what he said this week.

I am going to talk about, first of all, and one of you-since you were there, a unique experience, to be on the set with two men...

BROKAW: Right.

MATTHEWS: ... one of whom will be president, and know that conflict. What's the-what's the electricity like there? Is there something that doesn't show on TV, that sense of immediacy?

BROKAW: Well, what I was struck by was that Senator McCain came out filled with energy.

I mean, he was restless as he walked around the stage. And that was clear from the very moment that he arrived there. Senator Obama, on the other hand, stayed in his cool mode. He didn't take notes. He went back and sat on the chair, for the most part, when Senator McCain was talking.

Senator McCain made a number of notes, and he had a lot of nervous energy about him. But-I think I have said this earlier, that I didn't detect any kind of physical hostility between the two of them. It was all at a certain level of politics. Even that phrase, "that one," I think Senator McCain...


BROKAW: ... got himself into a riff, and didn't quite know how to get out of it. And a lot of people thought that he was really...

MATTHEWS: OK. Let's take a look at what-this one.


MATTHEWS: Here's one-well, let's a look at the one about you, because I found that one absolutely-I couldn't figure it out. I still can't figure it out.

Here's when Senator McCain referred to the moderator. I thought it was an interesting point here in debate...


BROKAW: Obviously, the powers of the treasury secretary have been greatly expanded, the most powerful officer in the Cabinet now. Hank Paulson says he won't stay on.

Who do you have in mind to appoint to that very important post?

Senator McCain?

MCCAIN: Not you, Tom.



MATTHEWS: Is that the Irish in McCain? What is that, that sort of a snippy response?

BROKAW: Well, I honestly think that he was caught off-guard by the question. I think both of them were behind the curve on what was going on in the economy and the magnitude of what we were dealing with.

I thought it was a legitimate question, a number of people have said to me, in both parties, we had better have somebody in place for the transition on November 5th in Treasury because they now have control of the American economy in a way they never have before.

So I thought it was a legitimate question. I don't think they expected it and I think McCain turned to Obama, is he going to have to answer this? And he was searching for an answer.

MATTHEWS: Was he thinking that you had exceeded your brief in that moment? Because he seemed like he was saying.

BROKAW: He might have thought that.

MATTHEWS: . you're supposed to follow up. And that's an interesting new question. That's a creative question.

BROKAW: Yes, I think he wanted me to ask about the $300 billion mortgage bailout, which I honestly thought that he would use that opportunity then to launch back into it, I'm going to get a treasury secretary who understands what I have just proposed here tonight and how to get that done. That's how I thought he would answer the question.

MATTHEWS: I don't know about you, but I find it very hard to predict who the public is going to say wins each of these debates, maybe because our expectations are built over day after day of this. And the average person just tunes in occasionally.

Are you a-is there something that goes on this year that seems to prevent McCain or Palin from getting scored the victor in these things? They do well. McCain has done pretty well. Is it just-is it the atmospherics?

Every time they poll in real time and even afterwards, the polling comes in Obama wins, Biden wins.

BROKAW: Well, listen, I think you have to ask the people who make those judgments. What I really have believed after all of these years of doing it, Chris, is that we represent one much smaller group of America, those of us who do what we do, the chattering class, the political pundits, however you want to describe it, we're micro-examining everything that is going on and making judgments about it.

I think the public is out there and they're making different kinds of judgments. It's more tonal, for example. And they have specific things that they're interested in, in terms of issues and how the candidates handle them. And so they have, if you will, a more tempered view of what is going on than we do. And in this case it seems to have worked much more for the Barack Obama-Joe Biden ticket.

MATTHEWS: Chuck Todd was on a few moments ago and he said that every time there's the same pattern. Barack comes out, or at least the two times we've seen, does well for a couple of days, then settles down.

Is he beating the spread every time, coming on and seeming better than the public relations image of him that is fostered by both sides? In other words, is he better than he is advertised and yet the advertisement turns against him two days later, the-sort of the scuttlebutt?

BROKAW: Well, I-in talking to people on the Republican side, both the kind of professional operatives and the people who have been through these campaigns before, they're really impressed by him.

They've watched this guy now for 20 months. He has made very few false steps. There were those times when his own operation and certainly his supporters thought he ought to punch a lot harder, even after the first debate they thought he ought to counterpunch more.

He has got a very good sense of himself and he stayed cool. And, as I believed all during the primary season, Hillary Clinton made him a much better candidate for the fall. I think that's indisputable. He owes her a great debt for staying in the race for as long as she did because he's better now than he would have been without her.

MATTHEWS: I just saw her in Scranton, yesterday. And though she didn't win on points, but she's really good now. She has gotten really-let's take a-I've been waiting to ask you this question because you-I can't-really honestly, I'm curious about what you will say.

Here's John McCain in one of those great moments in a political campaign that really seem to tell you something about the man or the person running. Here it is, John McCain at a town hall in Minnesota on Friday night.


UNIDENTIFIED FEMALE: I've got to ask you a question. I do not believe in-I can't trust Obama. I have read about him, and he's not-he's not-he's a-he's an Arab. He is not.



MCCAIN: No, ma'am. No, ma'am. No, ma'am. He's a decent family man, citizen, that I just happen to have disagreements with on fundamental issues, and that's what this campaign is all about. He's not. Thank you.


MATTHEWS: Tom, tell the world what that moment was.

BROKAW: I think that's a very important moment for John McCain. And that's the John McCain that a lot of people thought we'd see much more of during the course of this campaign. He began nine months ago by saying he wanted to run a respectful campaign.

But, look, he has got a tough brief. He's running in a party in which he is not a natural candidate for what now represents the base of that party. He had to go earn his place with them. And so there's a little bit of an identification crisis going on constantly when he's out there. And that's not unexpected for him.

MATTHEWS: Do you feel he's embarrassed by the tenor of the campaign, by the commentary of Governor Palin, by the advertisements, some of the things he said that suggested his opponent is somehow a security risk even, someone who is really not to be trusted as one of us?

BROKAW: No, I don't know whether he's embarrassed about it or not. I do think there's a little bit of Bob Dole quality. Where's the outrage? I've been in the Senate for a long time. I was a prisoner of war for five-and-a-half years. I've tried to push back against my own party. And this guy who hasn't been around very much is cleaning my clock at the moment.

And not only that, I've got troubles within my own party. We've got Bill Kristol of The New York Times today, who has been a mouthpiece for this campaign, saying, fire the campaign, change everything, and he has been the one who has had this.

MATTHEWS: He should talk.

BROKAW: He has been using his column as a kind of playbook for Sarah Palin. Now suddenly he's coming out and publicly saying, get rid of them all. So that has got to weigh on him as well.

MATTHEWS: I think it's tougher to be in the arena than sitting even at the op-ed page of The New York Times.

BROKAW: It's the single hardest job in the world, Chris, is to run for president of the United States.

MATTHEWS: The author of "Boom!". He did like the '60s. He'll tell you, it's in the book. And I think it's up to you.

Anyway, up next, another McCain surrogate stokes the anger on the right. This time the Democratic-or the Republican chair of Virginia has actually compared Barack Obama to Osama bin Laden, and believe it or not, he's sticking to it.

And now Congressman John Lewis, the civil rights leader, says McCain and Palin are sowing seeds of hatred. It's getting pretty hot, but as Tom Brokaw points out, McCain may be pulling back already.

We'll see about that when we come back with the "Politics Fix" that's next. HARDBALL, only on MSNBC.


MATTHEWS: Coming up, with just three weeks to go until the election, will John McCain's new message that he has got Barack Obama, I love this phrase, right where he wants him, connect with voters? Can McCain narrow Obama's lead this late in the game? HARDBALL returns after this.


MATTHEWS: Welcome back to HARDBALL and the "Politics Fix," tonight's roundtable: Perry Bacon of The Washington Post; and Clarence Page of The Chicago Tribune.

Both of you fellows-let's start with Perry. You know, I have to tell you, I am amazingly surprised at times by politics in this country-given racial politics, as tough as it has been. I cannot believe that the Republican chairman of the party down in Virginia, in the Old Dominion, which is supposedly a changing state, part of the New South, compared Barack Obama with Osama bin Laden, and said they both hang out with terrorists, knowing exactly how inflammatory that comment is.

Perry Bacon, you cover that market, you cover Washington. What do you thin that means?

PERRY BACON, THE WASHINGTON POST: I don't think it is great for McCain. I think he spent part of last week trying to tell his supporters to calm down and to not use that kind of rhetoric. So I don't think it's great for McCain. I suspect it's not something they wanted to hear. It was something that was in their message but sure not something that really helps to reinforce things they're trying to do.

He's trying to focus more on the-McCain is trying to focus more on the economy this week and less on the sort of personal attacks against Obama.

MATTHEWS: Let me read it to you now. According to a report in this week's TIME magazine, it was, the Virginia party chairman, Jeffrey Frederick, who told Virginia volunteers working for John McCain that Barack Obama and Osama bin Laden, quote, "both have friends that bombed the Pentagon."

Clarence, I thought it couldn't get worse, it is getting worse, despite the mild admonition of John McCain this Friday to stop it, basically.

CLARENCE PAGE, THE CHICAGO TRIBUNE: Well, I don't know if McCain word has gotten around. But certainly, there is a lot of frustration out there as well as bitterness, if you will, on the part of a lot of Republicans, as to why McCain is doing so badly.

And I don't think this was a dominant voice in the party, by the way. These are people who are real conservative, folks who weren't paying that much attention maybe in many cases, like the woman who McCain had to tell, you know, Obama is not an Arab. A lot of folks have just started paying attention and woke up one day and said, oh my gosh, there is a fellow who doesn't look like me and who has got a name like Barack Obama who may be in the White House.

And now they're reacting out of fear and ignorance. I mean, it is sad. I ain't mad at him. I feel sorry for them. I feel like, you know, we in the media have a job to try to educate people like McCain did, thankfully, that you don't have to be afraid. You may not agree with the politics, but you don't have to be afraid.

MATTHEWS: Perry, do you agree with that? That it is the recognition by some older, more conservative white people, to be blunt about it, that he may well be the next president? All of a sudden it occurs to them that all of this stuff in the newspapers actually meaning he is going to win that has caused this opportunity for the Republicans, some of the-well, the bad guys, to exploit it?

BACON: I think this particular Virginia Republican leader comment was not sort of representative. I was with Palin and McCain last week at a rally in Wisconsin that was very heated and very sort of negative about Obama. I think there you had sort of more realistic people who weren't-you know, people who weren't following as closely as probably a party chairman was who were saying-somebody said, they woke up one morning, and one of them sort of told me, I can't believe Obama is about to win this election. I'm very frustrated about this. And I can't believe this is happening. Why isn't McCain doing better?

There is some amount of frustration and some surprise on some level about why Obama is so far ahead at this point.

MATTHEWS: Yes. I can't believe America is the country we promised it would be, hmm.

We'll be back with Perry Bacon and Clarence Page for more of the "Politics Fix" to talk about Barack Obama's economic plan for getting people to get hired in this country. You're watching HARDBALL only on MSNBC.


MATTHEWS: We're back with Perry Bacon of The Washington Post and Clarence Page of The Chicago Tribune. The "Politics Fix" continues. We have got a minute and two for each of you. Perry, this Wednesday night we have the final one. This is the final showdown. Do you believe that John McCain will stick it to Barack Obama on this question of whether he is really loyal, that he is hanging around with terrorists, blah, blah, blah, that has been in the ads and been in the words of his running mate? Or will he pull back and be something different Wednesday night than his ads have been the last couple days?

BACON: This is a debate with a moderator instead of the town hall.

So I think he will be asked this question about William Ayers and so on. He will address it and he'll have to be critical of Obama about it. I don't think he's going to focus on it because it looks like in the polling the last few days has not suggested that-is not working.

So I think he is going to focus more on the economy, and more about what he would do to fix the economy and more on sort of general sort of leadership questions, why he is the better leader to fix the economy, he has more experience than Senator Obama.

MATTHEWS: But you think, Bob Schieffer, the moderator from CBS, will basically raise the issue, you would agree with that, Clarence? And once it is raised, Barack Obama-I mean, John McCain has to say something. Doesn't that put his opponent, Barack Obama, in that wonderful position to be able to play defense, which is the position Americans love. You always love the guy that is attacking from a defensive position.

PAGE: Well, Obama can rise above it, which is what he has been doing. He has just refused to get involved, either defending himself against the Bill Ayers rap, or going after McCain for his past associations that you can also see all over the Internet.

And I think that has benefited him. I don't think McCain is going to bring it up himself any more than he brought it up in the last debate. It doesn't work for him. I don't understand why he lets his attack puppy, Sarah Palin, though, go out and do it like he does.

MATTHEWS: What did you call her?


PAGE: His attack puppy. I don't want to call her an attack dog, people will accuse me of sexism.


MATTHEWS: Perry, being a straight news reporter, you can't agree with that metaphor. But let me ask you, Perry, who wins such a battle? If this does get down to a battle of who knew who, and who was hanging around with Bill Ayers 10 years ago, is this going to be something that embarrasses McCain or hurts Barack Obama?

BACON: I mean, the week's polls have suggested that Obama has gained points this week and McCain has stopped talking about these sort of personality things. I think that tells you that it didn't work. So I suspect they'll both sort of focus more on the-you know, McCain will focus more on experience this week.

MATTHEWS: OK. Great. Thank you very much. The week is going to be exciting as hell again. This debate Wednesday night, can't wait. It is Christmas morning again in America, in politics. Perry Bacon-the stock market went up 1,000 points tonight. Everybody is a little happy. Clarence Page, thank you, sir. Darrell Hammond, happy birthday, sir, the guy who does the best impression of John McCain.

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. And once again, on Wednesday, the third and final presidential debate, we'll be live from Hofstra University in New York. Right now, it's time for "RACE FOR THE WHITE HOUSE WITH DAVID GREGORY."



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