updated 10/15/2008 10:45:46 AM ET 2008-10-15T14:45:46

Guest: Rep. Janice Schakowsky, Rep. Dan Lungren, Christopher Buckley, Stuart Rothenberg, Chris Cillizza, Ryan Lizza

CHRIS MATTHEWS, HOST:  Sarah Palin says she‘s got nothing to lose by playing rough with Barack Obama.  John McCain may disagree.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: Twenty-four hours before the last presidential debate, will it be the fight at the OK corral?  John McCain says he‘s going to hit hard on Obama for his ties to a ‘60s radical.  Will he?

Also, a new day and a new plan.  Just hours after President Bush announced a new plan to make billions of dollars available to banks to unfreeze the credit markets, John McCain announced his own economic plan.  McCain would eliminate taxes on unemployment benefits and cut capital gains.  Here he is.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE:  My plan for economic recovery does not require guesswork or blind faith from the American people.  You know my record.  You don‘t have to hope I will do what I promise.  When I say I will cut spending, you need only look at my record to know that it‘s true.

(END VIDEO CLIP)

MATTHEWS:  McCain‘s speech comes one day after Barack Obama unveiled his plan to fix the economy.  On Wall Street, the Dow Jones today closed down just 76 points.  We‘ll look at McCain and Obama‘s competing plans and how they might or might not affect the election, which is now just three weeks from today.

Also, the cost of candor.  Look what just happened to Christopher Buckley, the son of William F. Buckley, Jr., who‘s a columnist for the magazine his father founded, “The National Review.”  Buckley wrote a column for the new Web site Thedailybeast saying despite his Republican pedigree, he was going to vote for Obama.  The result?  Well, let‘s put it this way.  The title of his column today was, quote, “Sorry, Dad, I was sacked.”  As Buckley put it, he has been fatwaed by the conservative movement.  Christopher Buckley will join us in a moment.

Plus, with all the attention focused on the presidential race, there‘s something else happening under the radar we‘re not watching.  The Democrats are set to make huge gains in the U.S. Senate.  Could they win the nine seats they need for a filibuster-proof majority and 60 seats?  We‘ll talk about that tonight.

Also, tomorrow‘s debate may be the last chance John McCain has to change the dynamic of this campaign.  He‘s about 8 points back.  He‘s got to make it up.  Can he do it?  And how does he do it?  We‘ll look at that in the “Politics Fix” tonight, 9 points to pick up for McCain.

And it‘s one thing when your opponents criticize you, but when your hometown newspaper calls you, quote, “astoundingly ignorant” or “downright Orwellian,” well, that‘s got to hurt.  Who was the recipient of that rocket?  Find out in the HARDBALL “Sideshow.”

But we begin with the dueling plans to rescue our economy.  U.S.  Congresswoman Janice Schakowsky is an Illinois Democrat and Congressman Dan Lungren‘s a California Republican.

Congresswoman, I want to tell you, what faith do you have in Barack Obama to fix this difficult and dangerous economy we face right now?

REP. JANICE SCHAKOWSKY (D), ILLINOIS:  Well, I have all the faith in the world because I think his philosophy, that the economy is really driven from the bottom up and not from the top down, as John McCain believes, a kind of trickle-down theory that never has worked.  And so I think Barack Obama is focusing on middle class people, a moratorium on foreclosures, helping businesses through tax credits to actually create jobs.  There‘s not a wit of job creation in the McCain plan, and that‘s what Barack focuses on, is putting people back to work, extending unemployment benefits and not taxing them on a temporary basis.  These are all things that are going to put us in the right direction.

MATTHEWS:  Congressman, what‘s your response to that, the charge that Barack Obama offers a chance to put people back to work and that McCain doesn‘t?

REP. DAN LUNGREN ®, CALIFORNIA:  Well, Barack Obama‘s response is the typical “government knows best” response, that somehow we‘re going to stimulate the economy by more government spending or government jobs.  I mean, look, the idea that you would raise taxes in the midst of a downturn in the economy is nuts.  And John McCain has spoken out against that for a long period of time.

If you look at the plan that he just proposed, one of the things he recognizes is that some of these tax policies actually work counter to having an economy that is on the upbeat.  For instance, he suggests that right now, if you reach 70 years and a half, you‘re obligated to start selling some of the stocks you put away for your retirement.  To require people to do that in the midst of a downturn, when the value of their stocks are really down, just doesn‘t make sense.  John‘s taken practical steps to try and address this problem.

MATTHEWS:  Well, it seems to me, Congressman...

SCHAKOWSKY:  You know...

MATTHEWS:  Let me go back to your point here about the difference between the Democrats and the Republicans, Congressman Lungren.  You make a point that was sound a couple of weeks ago, that the Democrats are for a larger role for the public sector, the Republicans for a smaller role.  But under this administration, we‘ve had huge definite deficits and huge, unimaginable growth in the national debt.  We‘ve got now a plan on the table as of today from the president for a $250 billion purchase of equity in the big banks of this country.  How more socialist can you get than the Republicans?

LUNGREN:  Well, come on, Chris.  I mean, let‘s look at what we‘re talking about.  We‘re talking about John McCain, who has an absolute record of criticizing Republicans and Democrats for spending too much.  He knows what he‘s talking about in terms of cutting spending.

Look at what we‘ve got from Barack Obama, billions upon billions upon billions of dollars in new spending, and then you got Nancy Pelosi saying they‘re going to bring us back right after the election so that we can inject another amount of huge spending.

Look, no one likes the idea that we have to intervene now in these financial markets.  But on a bipartisan basis, we came forward and said under these extreme circumstances, we should.  But if you look at the president‘s plan, if you look at what Paulson said today, if you look at what everybody has said today about this new iteration of the plan inside of what we authorized two weeks ago—it‘s not in addition to, it‘s inside of it—you will see they are looking for the shortest term that we have, the government intervening.  You‘re looking at preferred stocks.  That is stocks with a non-voting ownership.  That is different than what they‘ve done in some other countries when you‘re talking about nationalizing these particular industries or nationalizing even parts of the industries.

So there‘s a big difference between what you just said, Chris, and what‘s being proposed, and a big difference between what John McCain would do and what Barack Obama would do, based on their records.  I‘m not just talking about what they‘re saying.  Look at their records.

MATTHEWS:  Well, Congresswoman, let me ask you to respond to this because it seems like the government is intervening in a way we couldn‘t have imagined a couple of weeks ago, and both parties are going along with it.  You say the Democrats are different because you‘re bottom-up rather than top-down, but all the Democrats have joined on more votes by the Democrats for this package, which includes now the $250 billion in purchases of, as the congressman makes the point, preferred stock, rather than common stock.  But it‘s equity in these big banks.  What‘s the difference between the two parties if you‘re both on board these giant bail-outs?

SCHAKOWSKY:  Well, first of all, Congressman Lungren had said that Barack Obama is for tax increases.  They can say it all they want, but the Obama plan would actually reduce taxes for 95 percent of Americans.  And John McCain‘s plan would leave 101 million American families without any kind of tax relief, 97 percent of the senior citizens.

But actually, I think that had Henry Paulson weeks ago decided to do what ideologically he found it so hard to do, to inject liquidity into the markets by actually putting some money, equity stake, into the banks, we may have avoided some of the tremendous downturns that we saw in the economy.

So what really drove his going from one plan to another was really ideology.  And that‘s that ideology that says that we want to always privatize gain and only nationalize risk.  And this way, this plan, does minimize the risk as long as the taxpayers get their money‘s worth from the equity, their ownership of those banks.  And that‘s what Barack Obama has called for.

MATTHEWS:  Let‘s listen now to the governor of Alaska...

LUNGREN:  Hey, one second.  One second...

(CROSSTALK)

MATTHEWS:  Congressman, we have to go to the governor of Alaska.  She made an important statement today on Rush Limbaugh.  Let‘s look at what she said about her commentary about Barack Obama, the Democratic nominee of president.

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  It seems that you are the more forceful in speaking out against Obama and his campaign ideas.  Are they giving you pretty much free rein to attack this campaign as you wish?

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE:  Well, you know, there just aren‘t enough hours in the day, I think, to get out there and—

Rush, I‘ve got nothing to lose in this and I think America has everything to gain by understanding the differences, the contrasts here between Obama and McCain.  So you know, I‘m going out there and I‘m just simply speaking, so be it that I‘m a simple talker, but I‘m just going out there and letting people know the differences and how absolutely paramount it is that voters are paying attention and that voters are understanding candidates‘ records.

(END AUDIO CLIP)

MATTHEWS:  Congressman, are you confident in having that person we just heard from as one of the two top people running this country in these complicated economic times, the person you just heard from?

LUNGREN:  Oh, come on, Chris.  Now, look—look, you let the congresswoman get away with a statement that‘s the same sort of prattle that we heard from Nancy Pelosi when we were trying to do a bipartisan approach to respond to this problem.  On the floor of the House, she went and attacked Republicans, went into this right-wing rhetoric that they always talk about.  The congresswoman‘s done the same thing talking about ideology...

SCHAKOWSKY:  No.  You accused—no, but...

LUNGREN:  Here we are, trying to solve a particular problem on a bipartisan basis.  I didn‘t make any comments with respect to the approach that‘s being used...

MATTHEWS:  OK...

LUNGREN:  ... that was a bipartisan basis.

SCHAKOWSKY:  Yes, you did.

LUNGREN:  No, if you want to talk about...

LUNGREN:  You said Barack Obama wants to raise taxes.

MATTHEWS:  OK.  We have...

LUNGREN:  Well, look, look, look...

SCHAKOWSKY:  You said Barack Obama wants to raise taxes.

LUNGREN:  Look at the record of people—look at...

MATTHEWS:  You know what I‘m concerned about...

LUNGREN:  Look at the record of people.  Look at how they vote.

MATTHEWS:  ... is the election of our president and vice president, Congressman.

LUNGREN:  Look at how they voted.  That‘s what the people ought to look at.

MATTHEWS:  We‘re picking two people to run the country.

LUNGREN:  OK, if you want to talk about...

MATTHEWS:  Are you confident in Governor Palin‘s...

LUNGREN:  OK.

MATTHEWS:  ... ability to help lead this country in complicated times, the person you just heard from in one of the rare moments...

LUNGREN:  Well, if you‘re...

MATTHEWS:  ... we‘ve had where she spoke without notes, without a script?

LUNGREN:  You want to talk about my friend, Joe Biden, who made at least 10 misstatements in the last debate?  I mean, the fact that you‘ve been around Washington a long time doesn‘t mean that necessarily you‘re going to provide the leadership.  Look what she did.  She took on the Republican and Democratic old boy establishment in Alaska.  She turned that place upside-down.  She met the challenges.  She didn‘t take the conventional wisdom and accept it.  She won when people didn‘t think she could win.

MATTHEWS:  Right.

LUNGREN:  She dealt with energy issues that are very difficult to deal with.  And now you‘re saying because she interviewed with somebody, well, she shouldn‘t be capable of...

MATTHEWS:  No, I‘m asking you, sir...

(CROSSTALK)

MATTHEWS:  Congressman Lungren, I got great respect for you  I want to know if you respect her intellectual ability to help lead this country.  Do you actually believe that she has the capacity to help lead this country in very complicated times?  Do you, this person we just heard from?

LUNGREN:  Yes, I do, Chris, based—Chris, yes, I do, based on this -

her experience in government in Alaska.  We‘re not talking about a state the size of Delaware.  We‘re not talking about a state that doesn‘t have true serious issues dealing with the economy, dealing with...

MATTHEWS:  Well, you have more...

LUNGREN:  ... energy, we‘re talking about...

MATTHEWS:  ... constituents than...

LUNGREN:  ... someone who‘s...

(CROSSTALK)

MATTHEWS:  But you have more constituents than the governor of Alaska, sir.  Don‘t you?

LUNGREN:  You want me to be vice president, Chris?

MATTHEWS:  No.  I‘m just asking you to stand behind it this person we just heard from, who has...

SCHAKOWSKY:  Chris?  Chris?

MATTHEWS:  ... a strange way of...

(CROSSTALK)

MATTHEWS:  All right, I‘m not going to get into it.  What do you think?  I‘m asking the question.

LUNGREN:  Well, wait a second...

MATTHEWS:  Congresswoman, this woman was put up there...

LUNGREN:  Chris...

(CROSSTALK)

LUNGREN:  ... send a tingle up my leg like...

MATTHEWS:  OK.  Fine.  That‘s a nice line.

LUNGREN:  ... Barack Obama does for you...

MATTHEWS:  That‘s cute.  Let me just...

LUNGREN:  ... if that‘s what you want to say.

MATTHEWS:  ... as you, Congresswoman, she was put on the ticket because she was a she, clearly, because Hillary Clinton got unfair treatment and maybe she got too tough treatment, and I admit it, even from me occasionally.  But the fact of the matter is, the comparison between her and Hillary Clinton is the comparison between an igloo and the Empire State Building.  There is no comparison from the person we just heard from.

SCHAKOWSKY:  Well, you know...

MATTHEWS:  Your thoughts on the...

SCHAKOWSKY:  You know, the other...

MATTHEWS:  ... capability of Governor Palin to lead us through this complicated economic time.  I‘m just asking your view because the congressman on the other side of the aisle seems to be hesitant to give me his own personal take on Governor Palin and her ability.

SCHAKOWSKY:  Chris, I‘ll tell you two things that really concern me about what Governor Palin is doing.  One, I think she‘s running a campaign against smart, that somehow that that is a negative when someone is a really bright and well-informed person.

MATTHEWS:  Right.

SCHAKOWSKY:  And I think that—you know, that‘s part.  The other thing is, I think that when she says that Barack Obama doesn‘t see the world the way you and I, the way we see it, that she‘s trying to otherize him in a way that, you know—who‘s we?  The United States of America is a very diverse place, and I think she has unleashed something that is really not wholesome for our country.

MATTHEWS:  You think she‘s trying to de-Americanize him?

SCHAKOWSKY:  I do think that.  I think they‘re trying to make people very uncomfortable, even fearful of Barack Obama, who is representative of someone who has lived out the American dream.  And I really resent that part of the strategy of the campaign.

MATTHEWS:  What do you think, Congressman...

LUNGREN:  Well, Chris—Chris, can I respond to that?

MATTHEWS:  ... of her statement today on Rush Limbaugh that I‘ve got...

LUNGREN:  Wait a second!

MATTHEWS:  ... quote, “I have nothing to lose” saying what I do about Barack Obama?  Is that a—is that a—is that a competent statement to say?  Is that a—well, a responsible statement, to say, I have nothing to lose, going after Barack Obama?

LUNGREN:  Come on.  Come on, Chris.  What are you trying to make out of this?  The fact of the matter is she is not part of the inside-the-Beltway gang, nor is she part of the tight-knit Chicago political Democratic machine.  And somehow, you‘re suggesting that if she had done what Barack Obama did, which is attach himself to some of the most radical aspects of the Chicago political machine, that would qualify her to be president of the United States or vice president of the United States.

We come from different experiences, different backgrounds.  And frankly, those of us in the west and people in Alaska are tired of folks in other parts of the country suggesting that somehow we‘re incapable of dealing with issues on a national and international basis.  That dog just won‘t hunt, Chris.

MATTHEWS:  Would you be confident, Congressman, of having her in a room that had to decide our economic destiny?  That‘s all I‘m asking.  Would you be confident of her role in that room, in that tight-knit room, as you describe it, in that inner circle, to use your phrases, that decides our economic destiny?

LUNGREN:  I would be confident that she has shown the judgment in the past to be able to sift through the nonsense and the substantial and come to a proper decision.  That‘s what she did in the state of Alaska, overturning the good old boy network that existed 30 years and...

MATTHEWS:  OK.

LUNGREN:  ... wait a second—overturning the conventional wisdom that you had to go along with exactly what the legislature had done in the cozy relationship with the oil companies, when she went a different way in teams of building that new pipeline.  I mean, that is a specific example of her dealing with an issue and not just accepting the conventional wisdom.  Now, that‘s a test, Chris.  She passed that test.

MATTHEWS:  OK.  It‘s great having you on, Congressman Dan Lungren of California, who thinks I‘m engaged in regionalism, which I‘m not.  Thank you very much, Congressman Lungren.  I don‘t think I‘ve been accused of being anti-Western.  That‘s a new one on me.  But I‘ve been accused of things before.  Congresswoman Janice Schakowsky of Chicago, thanks for joining us.

Coming up: Here‘s a headline you‘ve probably never seen before, Buckley votes Democrat.  Christopher Buckley, son of the late, great William F. Buckley, Jr., joins us next to tell us why he‘s voting for Barack Obama for president, why he‘s not voting for John McCain and what conservatives are saying about him.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  This is going to be a treat.  Christopher Buckley, a conservative columnist and the son of the pillar of conservative himself, William F. Buckley, Jr., endorsed Barack Obama.  He wrote an on-line posting headlined, “Sorry, Dad, I‘m voting for Obama.”  It was on the site of Thedailybeast.  Then “The National Review,” to which he contributes a column and which was founded, of course, by his father, was deluged with angry e-mails and subscribers threatening to cancel.  So thinking it was this stand-up thing to do, Christopher Buckley offered to resign.  His offer was briskly accepted.  And in a posting today, Buckley describes how he left “The National Review” magazine that his father had founded and which he‘s still a part-owner because he‘s voting for Obama.  He‘s also the author of a great new book, “Supreme Courtship.”

Sir...

CHRISTOPHER BUCKLEY, AUTHOR, “”SUPREME COURTSHIP”:  Sir?

MATTHEWS:  Thank you for not smoking.  Thank you for smoking.  I mean, you have done it all. 

So, is it...

(CROSSTALK)

MATTHEWS:  Does it feel unpleasant to be separated from the conservative herd these days? 

BUCKLEY:  Well, sure. 

This is—this is by way, I suppose, of—of a family—family feud.  I went out of my way—look, let me say, I love “National Review.”  I have the fondest feelings for “National Review.”  It‘s the magazine my dad founded. 

And this is—what‘s happened is profoundly saddening to me.  I wrote a posting, I guess they‘re called, on Tina Brown‘s new Web site, “The Daily Beast,” giving what I thought were some—well, anyway, my arguments in favor of Barack Obama and against John McCain. 

What—I went out of my way to do it in “The Daily Beast,” and not in “National Review,” where I have been writing the back-page column, because I didn‘t want to put “N.R.” in an embarrassing situation.  Well, they were quite literally flooded with very angry stuff:  Cancel my subscription.  You know, I‘m not going to give money. 

So, I thought the decent thing to do would be to give “N.R.” the chance to distance itself from me.  And, so, I—I—I tendered sort of pro forma resignation.  I said, if this will help, here it is.  And...

(LAUGHTER)

BUCKLEY:  ... they accepted. 

MATTHEWS:  I think that‘s what Randolph Churchill did once as chancellor of the exchequer, thinking the same result. 

(CROSSTALK)

(LAUGHTER)

BUCKLEY:  Be careful of who you offer a resignation to.  They may just accept it. 

But it‘s—you know, it‘s saddening to me that the discourse has become so calcified, arteriosclerotic, to use a WFB word...

MATTHEWS:  Right. 

BUCKLEY:  ... that it comes to something like this. 

My dad, the late and, as you put generously put it, very great WFB, was a guy who, as an editor, as a columnist, as a host of a TV show, would let you say pretty much anything you wanted, as long as you presented an argument. 

I presented an argument.  But there was a—you know, some sort of profound sense of betrayal.  And let me say, right for—for the record, that the only reason my political opinions are of any interest to anyone is because of my last name, a name which I inherited.  I‘m a hack novelist. 

MATTHEWS:  No, you‘re not.  You‘re a great novelist.  And you have written some great movies now. 

(CROSSTALK)

MATTHEWS:  And I want to say this.  I‘m going to quote to prove that you‘re not a hack.

Here‘s some language from you in this posting—quote—“This campaign has changed John McCain.  It has made him inauthentic.  A once-first-class temperament has become irascible and snarly.  His positions change and lack of—lack coherence.  He makes unrealistic promises, such as balancing the federal budget ‘by the end of my first term.‘  Who really believes that?”

So, you‘re pretty tough.

Here‘s what you write about Barack Obama, which I find fascinating:

“Obama has in him, I think, despite his sometimes airy-fairy ‘We are the people we have been waiting for‘ silly rhetoric, the potential to be a good, perhaps even great, president.” 

Let‘s start with the positive., your innermost feelings as a father, husband, American, about why you prefer to see a President Obama to a President McCain. 

BUCKLEY:  Well, I—among other things, I have read his books.  And this is a first-class temperament and a first-class mind. 

I said in that same posting—I guess I‘m getting the hang of the lingo—that he‘s a lefty, and I am not a lefty.  I‘m a small-government conservative, although those days...

(LAUGHTER)

BUCKLEY:  ... that water is well under the bridge. 

But I sense in him—first, I don‘t think he‘s going to be able to govern as a lefty, because, if he does, then I think he‘s going to reap, as I put it, a whirlwind that will make Katrina look like a summer—balmy summer zephyr. 

But I sense in this guy a—a first-class mind, who will—who might just do very smart things.  And, so, I‘m—I‘m—I‘m putting it all on black, as I guess they would say in the casinos. 

MATTHEWS:  Well, let me ask—I mean, you‘re not your dad.  You‘re not an ideologue that way, a professional ideologue.  You‘re a writer.  You‘re a creative writer.

But let me ask you this about what a conservative thinks today,

because we just have this bailout now of—these numbers are unimaginable

also a trillion dollars of federal money going into bank up—to back up these banks and financial institutions, intervention like we have never seen. 

And, then, we just had Congressman Lungren on, saying, big government is a Democrat solution. 

Well, what do we got on the front pages now?  We have a bipartisan solution which is big government. 

BUCKLEY:  Yes. 

The—so much for the conservative revolution.  I mean, we—look at the last eight years.  Look, I voted for George W. Bush in 2000, on the grounds that he was a—well, a conservative, small-C conservative.  My dad always distinguished between capital—large C and small C.  And he thought W. was a small C. 

He has, in eight years, doubled the national debt, enacted an enormous entitlement, the Medicare drug benefit, has gotten us mired in an spectacular—in an ill-premised and ill-waged war.  I speak not of the brave men and women over there, but of the very arrogant men who got us into this mess.

It‘s—and government gets bigger and bigger.  And he now leaves us with a de facto nationalization of our largest banks.  I think the only good news in this is for the heirs of James Buchanan, frankly, who must be going, yes.

Well, I‘m going to have to study up on James Buchanan. 

(LAUGHTER)

MATTHEWS:  Well, I‘m going to have to study up on James Buchanan, the immediate predecessor of Lincoln.  But...

BUCKLEY:  Well, he‘s—James Buchanan is—is generally considered to be the worst president we have ever had.  So...

MATTHEWS:  Well, let me say, in his defense, he‘s the only Pennsylvanian to be president, sadly enough. 

(LAUGHTER)

MATTHEWS:  Anyway, thank you, Chris Buckley, Christopher Buckley, author of the new book “Supreme Courtship.”

Up next:  One of McCain and Palin‘s rowdiest supporters, Hank Williams Jr., writes a song for the Republican ticket.  We‘re going to hear part of that.  If you want to stick around, we‘re going to show it to you, like it or not, in the next HARDBALL—next “Sideshow.”

By the way, plus, a “Big Number” from some little people that should have Obama supporters very happy. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Come on.  You love it. 

Back with the “Sideshow.”

First up: country homage to the Republican ticket?  At yesterday‘s Palin rally in Virginia Beach, Virginia, country star Hank Williams Jr.  changed the lyrics of his song “Family Tradition” to go after that pro-Obama media. 

(BEGIN VIDEO CLIP)

HANK WILLIAMS JR., MUSICIAN (singing):  The left-wing liberal media have always been a real close-knit family.  But most of the American people don‘t believe them anyway, you see.

(CHEERING AND APPLAUSE) 

WILLIAMS (singing):  Stop and think it over before you make your decision.  If they smell something wrong, they‘re going to come down strong.  It‘s an old McCain/Palin tradition.

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  Wow.  The left-wing liberal media?  Isn‘t that redundant, left-wing and liberal?

Anyway, the original song contained the lyrics: “I get stoned and sing all night long.  It‘s a family tradition.”

I‘m not sure if doing that is left- or right-wing tradition. 

Anyway, meanwhile, it looks like Governor Palin has got fences to mend back in Alaska.  Yesterday, “The Anchorage Daily News” published a scathing editorial. 

Here‘s an sample: “Sarah Palin‘s reaction to the Legislature‘s Troopergate report is an embarrassment to Alaskans and the nation.  She claims the report ‘vindicates‘ her.  Her response is either astoundingly ignorant or downright Orwellian.”

That‘s the local paper up there speaking.  The commission, by the way, found that the governor had abused her authority in that case.  That‘s not a vindication in any language. 

Next: the great schlep begins.  In case you missed it, a few weeks ago, comedian Sarah Silverman—Sarah Silverman debuted a rather unique get-out-the-vote campaign. 

(BEGIN VIDEO CLIP)

SARAH SILVERMAN, COMEDIAN:  I‘m making this video to urge you, all of you, to schlep over to Florida and convince your grandparents to vote Obama.  It can make the difference. 

You don‘t have to use facts.  Use threats.  There‘s nobody more important or influential over your grandparents than their grandkids, you.  If they vote for Barack Obama, they‘re going to get another visit this year.  If not, let‘s just hope they stay healthy until next year. 

(END VIDEO CLIP)

MATTHEWS:  Well, I think that‘s irresistible. 

But this past weekend was the kickoff.  Did anyone show?  Well, according to “The New York Times,” while the video has gotten about seven million hits, only about 100 people have actually so far made the schlep to Florida. 

My hunch is that a lot of kids and grandkids, falling hard for Obama, are still trying to sell their well-tanned grandmoms and a few grandpops by phone.  Come on, split for the ticket.  Your parents will give you their vote just for coming down to visit them. 

And that brings us to tonight‘s “Big Number.”  This year‘s youth vote is in, I mean the real youth vote.  “Scholastic” polled a quarter-million kids too young to vote for this presidential pick.  Since 1940, the kids have accurately chosen the president all but two times. 

So, who came out on the top this year?  The results are in for Obama, big time.  Obama beats McCain 57 percent to 39 percent.  By the way, the first time the kids got it wrong was back in ‘48.  And, by the way, a lot of people got that one wrong.  The other time is in that photo finish between Nixon and Kennedy.  The kids voted for Nixon. 

This time, Obama has got the kids‘ vote.  That‘s the people below 18. 

An 18-point spread for Obama among the kids, that‘s tonight‘s “Big Number.” 

Here‘s another “Big Number”: 60.  That‘s the number of Senate seats the Democrats are hoping to win and perhaps, with it, a filibuster-proof majority in the Senate.  Will they reach that number of 60?  We will look at the key Senate races where Republicans are in trouble.  We‘re talking about coattails here. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Stocks closing lower after a volatile session following yesterday‘s historic gains.  The Dow Jones industrial average finished lower, but just by 76 points.  The Dow was up about 400 points at its high of the day, and down about 300 at its low.  The S&P 500 finished the day lower by five points.  And the Nasdaq dropped a substantial 65. 

Stocks seesawed despite President Bush‘s formally announced plans for the government to pump $250 billion into the banking system by buying stocks in banks, with about half the money going into the nation‘s nine largest banks.  But, instead, investors looked beyond, starting to focus on corporate profits and the damage done by the global economic crisis. 

Meantime, oil prices slid again.  Crude fell $2.56, closing at $78.63 a barrel. 

And Pepsico announced it will cut 3,300 jobs and close six plants because of lagging U.S. sales and a surging dollar, which is hurting international business. 

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

MATTHEWS:  Welcome back to HARDBALL. 

While so much attention is on the race for the White House, the 2008 Senate races have been heating up.  And it now appears the Republicans are in big trouble. 

HARDBALL‘s David Shuster has the report. 

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE:  The Senate will come to order.

DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  The Senate election map favors the Democrats in a big way.  There are two Senate seats that will almost certainly go from Republican to Democratic, five more moving the Democrats‘ direction, two others that are now tossups, and three that the Democrats have an outside shot at.  Some of the changes involve GOP vacancies. 

SEN. JOHN WARNER ®, VIRGINIA:  I thank the—the chairman.

SHUSTER:  In Virginia, where Republican John Warner is retiring, former Democratic Governor Mark Warner, no relation, has a huge lead over former Republican Governor Jim Gilmore. 

In New Mexico, where Republican Pete Domenici is leaving, Democratic Representative Tom Udall is 16 points ahead of Republican Steve Pearce.  And, in Colorado, where Republican Wayne Allard is retiring, another member of the Udall family, Mark Udall, is head of Republican Bob Schaffer. 

In some races, the incumbent Republican is simply in trouble.  Alaska‘s Ted Stevens is in the midst of a criminal corruption trial while facing a tough challenge from Democrat Mark Begich. 

In New Hampshire, John Sununu is down by five points to former Democratic Governor Jeanne Shaheen. 

In North Carolina, incumbent Republican Elizabeth Dole is in a tight race with Democratic challenger Kay Hagan.  In Oregon, Republican Gordon Smith is facing a strong challenge from Democrat Jeff Merkley. 

And, in Minnesota...

(APPLAUSE)

SHUSTER:  ... Democratic challenger Al Franken, the former comedian and radio talk show host, is giving Republican incumbent Norm Coleman the race of his life.  Last week, Coleman pulled his negative ads in an effort to improve his cratering image. 

In other races, Democrats are aiming for payback.  It was six years ago when Republican Saxby Chambliss ran this ad. 

UNIDENTIFIED MALE:  America faces terrorists and extremist dictators. 

SHUSTER:  Featuring the images of Saddam Hussein and Osama bin Laden and questioning the patriotism of Democratic incumbent and Vietnam vet triple amputee Max Cleland. 

UNIDENTIFIED MALE:  The record proves Max Cleland is just misleading. 

SHUSTER:  Now Democrats are pouring resources into Georgia to help Democratic challenger Jim Martin defeat Chambliss.  Democrats would also love to beat Republican Caucus leader Mitch McConnell from Kentucky, a staunch conservative who is facing a tough challenge from Democrat Bruce Lunsford. 

The only state where Republicans can even hope for a pickup is in Louisiana where Democrat Mary Landrieu leads in the polls, but could be vulnerable to Republican State Treasurer John Kennedy. 

SHUSTER (on camera):  But Democrats stand to gain at least five seats or more.  And in the Senate, while a single filibuster can derail anything, filibusters can be broken with 60 votes.  So the question is, how close will the Democrats get to the filibuster-proof majority they are seeking? 

I‘m David Shuster for HARDBALL, in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster. 

Chris Cillizza writes “The Fix for the washingtonpost.com, and Stu Rothenberg is an editor and publisher for The Rothenberg Political Report. 

Stu, we haven‘t had you on lately.  So let me ask you your views of this.  We‘re looking at a map of 10 states where Democrats have a chance to take over Republican Senate seats.  Without getting into all of the details, what are the biggest surprises here, where people we consider heavyweights are in trouble? 

STUART ROTHENBERG, THE ROTHENBERG POLITICAL REPORT:  Well, certainly, Elizabeth Dole ranks up there on the list, Chris.  Even Democrats acknowledged that her early numbers were good.  She was regarded favorably.  People had a good opinion of her. 

But they attacked her, they attacked her strong.  And that was combined with the overall national mood, which favors change, I think has hurt her prospects considerably. 

MATTHEWS:  Does it help to have a woman running against her?  Is that part of the strategy?  They‘re also hitting her on residence, the fact that she spends so much time—aren‘t they saying she lives in Kansas, I heard some of these attacks, with her husband?  Or—what‘s going on?

ROTHENBERG:  Yes.  They said that she actually hadn‘t returned to the state very much over the years.  And they started off with a very effective attack, raising questions about her effectiveness in the United States Senate. 

So, yes, I mean, I think her numbers cratered very quickly and they reflect the larger Republican problem, which is, Democrats running against incumbent Republicans, running for change.  The Republicans are having a problem. 

MATTHEWS:  Let me go to Chris. 

Chris, do you think the Democrats could actually pick up all of these seats, pick up eight or nine and get to 60? 

CHRIS CILLIZZA, THE WASHINGTON POST:  You know, Chris, I think they could.  That doesn‘t mean they will.  But I think they could.  In an election like this, I think you have got two things working.  One is the fact Stu mentioned.  The political environment, just so tilted against Republicans. 

You know, The Washington Post/ABC poll came out days ago, 8 percent of people said they felt the country was headed in the right direction.  And that‘s a stunning number.  President Bush at 23 percent. 

So the Republican brand badly tarnished.  Combine that with the huge spending advantage that this Democratic senatorial campaign arm has over their rivals on the Republican side. 

As Stu pointed out in North Carolina, you‘ve seen that in Oregon, you‘ve see it in a lot of places where the Democratic Campaign Committee goes in there and spends millions of dollars, and the Republicans just don‘t have the money to respond. 

MATTHEWS:  I‘m always impressed, Stu, when good people lose because they go down in a tsunami.  I‘m looking—I‘ll just make two judgments.  John Sununu, Gordon Smith, pretty good—like Jim Talent last time, lost to Claire McCaskill who may have been a better candidate.  But they‘re good senators. 

Is that—what do you think about that as an expert, where good senators go down because they‘re in the wrong—it‘s the wrong time? 

ROTHENBERG:  I think you‘ve picked the two best examples in Jim Talent last time, is a good analogy.  Sununu, if you talk to him, if you know him, he‘s down-to-earth, he‘s smart, he‘s personable. 

I know the Democrats have demonized him, but he has been a pretty good senator.  And Gordon Smith is a conservative Republican, but he certainly doesn‘t froth at the mouth on some issues like gay rights.  He votes with the Democrats. 

But these guys, it‘s the wave.  And I would—Chris, if you look at two years ago, people like Anne Northup and Rob Simmons, House members who normally would be elected nine times out of 10, this could be the 10th time for people like Gordon Smith and John Sununu. 

MATTHEWS:  I agree with you about Anne Northup too, another good congresswoman.  Chris Cillizza, you haven‘t been in this as long as Stu, but let me ask you your hunch about this thing.  You write a column which everybody reads.  And one line in the papering, it looks to me like some of these people, like the big shots even that aren‘t on this list, like Mitch McConnell might get knocked off, the Republican leader might get knocked off.  That‘s big-time. 

CILLIZZA:  Chris, you mentioned big surprises, I think Stu nailed the one that was the biggest surprise to me, which is Liddy Dole.  But I would put Mitch McConnell, it looked about six weeks ago or a month ago that Mitch McConnell had put this thing away.  Polls had closed a little bit between him and Lunsford, a self-funder who has run unsuccessfully for governor twice before.

And then all of a sudden it went from a 10- or 12-point lead to this thing being tied.  I think it‘s directly correlated to the economy.  The collapse of the economy nationally certainly hasn‘t helped McConnell.  The other thing to remember, Stu pointed this out, in a change election it is never good, in Mitch McConnell‘s case, to have been in the Senate since 1984.  It‘s very easy for a guy who has never been in elected office to run against you and run as the change candidate. 

MATTHEWS:  A particular case we‘re watching here, Stu, if Senator Stevens beats the rap, if he wins—if he gets acquitted in that case before the election, can he win? 

ROTHENBERG:  Yes, I think he has a chance to win under that circumstance.  We have the races as leaning Democratic takeover because the trial is obviously a trial and there‘s plenty of evidence against him. 

But if the jury that—if they are unable to convict him, I think he absolutely does have a fighting chance.  And if you look at the polls, the races are close now even though he‘s in the middle of the trial.  That would suggest he would certainly have a chance to survive. 

MATTHEWS:  You know, because every time a guy gets acquitted, they come out and say, I‘m innocent, I‘m exonerated, I‘m the good guy, I‘m the winner.  It isn‘t just that you didn‘t get to be convicted, you‘re innocent as Snow White!  I mean, that‘s the way they sell it. 

Anyway, thank you, Chris Cillizza. 

CILLIZZA:  Thanks, Chris.

MATTHEWS:  Thank you, Stu Rothenberg. 

ROTHENBERG:  Thanks, Chris.

MATTHEWS:  It‘s great to have both on.  Up next, tomorrow night is the third and final presidential debate.  I‘m getting that Christmas morning feeling again.  It just may be John McCain‘s last chance.  We‘re going to talk, will he go for that knockout punch tomorrow night?  Will he try to take down the guy leading right now by 8 points in one night with one swift right cross?  Is he going to take him down or is he going to hold back?  We‘re going to talk about that debate tomorrow night with two pros when we come right back in a moment.  

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, will John McCain bring up ex-Weatherman Bill Ayers, the old terrorist, in tomorrow night‘s debate with Barack Obama?  Is it going to be a knockout punch?  With three weeks to go, can McCain do anything to narrow Obama‘s growing lead? 

HARDBALL returns with the “Politics Fix” next.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for the “Politics Fix” with CNBC‘s John Harwood, also of The New York Times.  And Ryan Lizza of The New Yorker. 

Gentlemen, tomorrow night, we‘re going to do some fighting touting here, tomorrow night is the big fight, the third and final presidential debate.  We‘ve seen them approach each other like sumo wrestlers, John.  Are they going to go for the punch?  Are they going to really fight now? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Well, John McCain is the guy who has got to fight.  And he has got to figure out a smart way to fight.  You swing too hard and you can knock yourself out.  And he‘s way behind.  It‘s very difficult to come from behind this far, this late in the campaign. 

I think what he has to do is try to figure out some way to relate the things about himself that he is trying to convey.  I‘m a fighter, I‘m a maverick.  Relate those to the economic problems that we‘re in and why those would help lead us out of them.  That‘s the connection that he hasn‘t quite made so far. 

It‘s an opportunity for him.  But it is very tough when you‘ve already had two debates and people haven‘t changed their mind so far. 

MATTHEWS:  And stay on the economic course.  How he is going to help the country by being a better president. 

HARWOOD:  Well, it is plain that he got off the personal stuff because he felt it wasn‘t working for him and it was making him look bad.  So the economic story is what everybody cares about.  It‘s what everybody—the entire country is focused about.  It has reshaped the race.  He has got to find a way to get in that game and make it work for him. 

MATTHEWS:  Well, there‘s another person on the stage there tomorrow night, it‘s going to be Bob Schieffer of CBS, the veteran anchorman.  And, Ryan, it seems to me that he, as a veteran, with some interest in show business, will bring up Bill Ayers.  He is going to ask John McCain whether McCain wants to pull back or not, although McCain himself says he‘ll bring it up. 

RYAN LIZZA, THE NEW YORKER:  Yes, I mean, everyone assumes now that Ayers is going to be some part of this debate and that makes it sort of easy for Obama.  He has got a couple of—he has one or two thing to say about that.  And he can move on from it. 

McCain going negative and bringing up Ayers and Wright and Rezko and all of this stuff he can throw at Obama, you know, it only solves half of his problem.  You know, like John said, there was a moment here—there was a week when the country basically didn‘t have a leader. 

You know, nobody, nobody believes in Bush anymore.  The country is 90 percent—the wrong track number is 90 percent.  And everyone was looking to these two candidates when Lehman Brothers failed, when the economic crisis sort of burst on to the scene. 

And Obama seems to have passed that test and McCain didn‘t.  And I don‘t know if you get a do-over now this late in the campaign.  I think the fact that that big moment coincided with that first debate and that Obama is generally seen as winning that debate, passing that test of what to do on the economic crisis, you know, that was the moment in this campaign.  And if McCain loses, that will be why he lost. 

MATTHEWS:  Well, here‘s where the race stands right now.  A brand new poll out today by The Los Angeles Times and Bloomberg shows Obama up 50 to 41 among likely voters.  Pollster.com of all—that‘s a poll of all of the polls, has Obama opening up a 9-point lead.  So we‘re basically centering there, it is not leveling off.  It is growing, John. 

HARWOOD:  He‘s inching up.  He has been—look at the Gallup track, he has been consistently at 50, 51, 52, for the last two weeks.  He doesn‘t need a single more vote in this campaign.  He has just got to hold what he has already got. 

John McCain has got to dominate the undecided who four years ago split evenly between Bush and Kerry at the end, and shake loose some people from Barack Obama.  That‘s pretty tough to do when people have accumulated so much information as they have so far. 

MATTHEWS:  In other words, if even the undecided voter who is really secretly against Obama—or quietly against Obama, even if that person breaks for McCain, he doesn‘t have enough votes. 

HARWOOD:  Well, let‘s assume that 60 percent of the undecideds go for John McCain, that still doesn‘t get him up with Barack Obama. 

MATTHEWS:  All right.  Well, we‘re back with John Harwood and Ryan Lizza to talk about Sarah Palin‘s latest on the Limbaugh radio show today.  She is not afraid.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with John Harwood and Ryan Lizza. 

Gentleman, too, let me start with John and then to Ryan, jump in here.  I‘m amazed—well, not amazed, I‘m unusually bemused again by Governor Palin‘s comment on Rush Limbaugh, which is a huge radio show, and the audience is unimaginable, where she just comes out and says, I‘ve got nothing to lose, I can keep throwing these darts at this guy, it doesn‘t bother me any. 

I mean, it is almost irresponsible.  The stuff she is saying, “palling around,” I never knew how to spell “palling around,” it‘s two Ls.  “Palling around with terrorists.” What an amazing statement in these post-9/11 times. 

HARWOOD:  Well, I‘ve got to say, I feel a little bit for Sarah Palin, sort of the way I did for Dan Quayle years ago.  You take a politician who has some skills and some talents and you elevate them beyond... 

MATTHEWS:  You bring them up too fast. 

HARWOOD:  You bring them up too fast.  It‘s like taking a pitcher in the single A ball and putting him in the World Series for the first time.  That could ruin somebody‘s career.  And, you know, Dan Quayle might have had a more successful long-term career had he not been vice president. 

(CROSSTALK)

MATTHEWS:  If he had stayed in the Senate, nobody would have said he was stupid.

HARWOOD:  . had she been able to build something. 

MATTHEWS:  Can I be tough on the Senate?  If he had stayed in the Senate, nobody would have called him stupid. 

HARWOOD:  Yes, well, true.

LIZZA:  Yes, but you know what, there‘s one—the one argument against that, and I‘m probably the only person that has ever picked this up.  You know, one of the points Dan Quayle makes in his memoir is that he wasn‘t just plucked from obscurity.  He actually positioned himself to get Bush‘s attention.  And Palin did the same thing. 

She wanted this job.  She raised her profile nationally.  She made the case.  You know, you don‘t just get plucked.  You make the case to the campaign.  You have surrogates go to their political people and explain why would you be a good V.P. choice.  So I wouldn‘t feel too bad for her.

HARWOOD:  You‘re right about that, yes. 

MATTHEWS:  But her vision is so narrower than her ambition.  I mean, when you ask her to say what she believes in, if you ask her any wide open question, you get air balls, Ryan.  You don‘t get—I mean, she doesn‘t say anything.  And yet she has this grand ambition to succeed to a V.P.  that succeeds to the presidency, apparently.

LIZZA:  Well, look, every politician, every governor, every senator in this country thinks that they would be a great V.P. candidate.   So I don‘t blame her for wanting to do it and thinking she can do it. 

I blame John McCain for—you know, I hate to say it, but being irresponsible in putting her in this position and if he were president, putting her in a position where she would take over when most—by most objective measures, she‘s not ready. 

MATTHEWS:  I‘m amazed.  But I haven‘t heard yet one serious conservative commentator say this was a responsible pick for V.P.  Anyway, thank you—especially in these incredibly complicated times where it is hard for anybody to figure out what‘s going on. 

John Harwood, Ryan Lizza, gentlemen, thank you.  Tomorrow night it‘s the third and final presidential debate.  The debate starts at 9:00 Eastern.  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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