updated 10/16/2008 12:43:11 PM ET 2008-10-16T16:43:11

HARDBALL

October 16, 2008

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

Guests: Pat Buchanan, Eugene Robinson, Joan Walsh, John Heilemann, Howard Fineman, Roger Simon, Representative Peter King, Robert Gibbs

CHRIS MATTHEWS, MSNBC ANCHOR: OK. Thank you, Keith.

Well, Democrats sweep the debate-four straight. Let's play HARDBALL.

Good evening, I'm Chris Matthews. Welcome to the midnight edition of HARDBALL.

(CHEERS)

MATTHEWS: Live as you can hear from Hofstra University in Long Island, New York, the site of tonight's final presidential debate.

John McCain started the evening talking about the anger of the American voter but he wound up spending perhaps too much time registering his own anger. And that may have been his biggest mistake tonight in this concluding debate.

It's early but the snap polls taken right after the debate look a lot like the polls after the first three debates. A big win for the Democrat. In a CBS News poll of uncommitted voters, Obama was seen as the winner by 53 percent, while just 22 percent went for McCain.

That a more than 2-1 margin tonight, 24 percent called it a draw.

CNN poll debate watchers and their results were similar, 58 percent for Obama, 31 percent for McCain. And in a group of 27 dial-group debate watchers that MSNBC's Norah O'Donnell was monitoring out in Kansas City, Missouri, 20 people saw Obama as the winner, just 7 call it for McCain.

I'm joined right now by two of the best in the business. "Newsweek's" Howard Fineman and "Politico's" Roger Simon.

Roger, sometimes you are contrary. And I want to give you the full vetting opportunity. Did John McCain do what he had to do, as we say in our (INAUDIBLE), or did he fail to do it tonight, according to-which it seems to be the reading of all these pollings tonight?

ROGER SIMON, POLITICO: The polls got it right. He failed to do it. And he failed not because he was so nasty on any individual point, but he was so negative throughout the debate.

MATTHEWS: OK.

SIMON: He didn't come away with it with a positive feeling about John McCain or that Barack Obama was this risky other than you couldn't possibly.

MATTHEWS: That's right.

SIMON: . waste your vote on.

MATTHEWS: Did you get a sense that he's just frustrated, Howard? Every time he debates Barack Obama, Barack Obama is this cool customer. No matter what he throws at him, he very calmly says, now let me answer that question. And he just takes it apart.

HOWARD FINEMAN, NEWSWEEK: Yes. And he proceeds to take it apart like the constitutional lawyer that he was and is. McCain did a great job tonight stating a case for a debate that might have taken place 20 years ago.

It seemed that he was arguing about the size of government and saying that Barack Obama was a big taxer and a big spender. There are a few problems with that. First of all, Obama's proposals aren't like that, number one. They're very carefully constructed not to be like that.

Number two, Obama as a person, and personally he doesn't come off like a wild-eyed character. And number three, the American people are tired of ideologues. And McCain came off as a very earnest and.

MATTHEWS: OK.

FINEMAN: . and focused ideologue and that's not what the American people seem to want at this point.

MATTHEWS: Did he come across the way that Rahm Emanuel, one of the top Democratic leaders from Illinois, portray him tonight on Keith's show before the debate tonight? He said he's a grumpy old man in slippers.

(LAUGHTER)

MATTHEWS: Is he that guy that Mr. Wilson from the "Denise the Menace" comic.

FINEMAN: "Get your newspaper off my lawn."

MATTHEWS: Is he Simpson?

SIMON: His real problem tonight was the one Howard identified.

MATTHEWS: Homer Simpson?

SIMON: That-well, no, that he's deep into this movement Republicanism now because he has to keep the base close to him, because that's.

MATTHEWS: OK. That's just...

SIMON: . the only people who are close to him.

MATTHEWS: He's talking.

SIMON: So he's talking about, oh, Barack Obama wants to spread the wealth.

That's a bad thing.

FINEMAN: It's like.

SIMON: He wants to save the life.

(CROSSTALK)

FINEMAN: He was speaking to the readers of the "National Review' and not the undecided voters.

MATTHEWS: OK. Well, not to the most recent writers of the "National Review."

FINEMAN: Right.

MATTHEWS: He just stirred out again.

FINEMAN: That's right. Good point.

MATTHEWS: But let's take a look at here. One of-here's a moment where, I think, John McCain scored an early inning's homerun in tonight's debate.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL NOMINEE: One of the things that I think we have to recognize is pursuing the same kinds of policies that we pursued over the last eight years is not going to bring down the deficit.

And, frankly, Senator McCain voted for four out of five of President Bush's budget.

SEN. JOHN MCCAIN ®, PRESIDENTIAL NOMINEE: Senator Obama, I am not President Bush. If you wanted to run against President Bush you should have run four years ago.

I'm going to give a new direction to this economy and this country.

(END VIDEO CLIP)

MATTHEWS: Senator, I'm no-you're no Jack Kennedy.

(CROSSTALK)

MATTHEWS: It's one of those moments.

SIMON: It was a good retort.

MATTHEWS: On a said piece.

SIMON: Set piece by John McCain but it doesn't really address the question as to whether John McCain really isn't George Bush.

FINEMAN: As a matter of fact, I thought Obama scored very well in the comeback to that, because Obama eventually said, you know, I'm sorry if I confuse you with George Bush, because your economic policies are exactly.

MATTHEWS: OK.

FINEMAN: . like George Bush's.

MATTHEWS: Let's.

FINEMAN: That's the main point of the entire Obama campaign.

MATTHEWS: Here's an issue that's been talked about for weeks in the advertisement by the McCain campaign, by his running mate, Governor Palin, whacking the Democratic nominee time and time again for his association in the 1990s with Bill Ayers.

Here it is. Perhaps we can grasp the meaning of this debate at this point.

(BEGIN VIDEO CLIP)

MCCAIN: Yes. Real quick. Mr. Ayers, I don't care about an old washed-up terrorist. But as Senator Clinton said in her debates with you, we need to know the full extent of that relationship.

OBAMA: And in fact, Mr. Ayers has become the centerpiece of Senator McCain's campaign over the last two or three weeks. This has been their primary focused. So let's get the record straight.

Bill Ayers is a professor of education in Chicago. Mr. Ayers is not involved in my campaign. He has never been involved in this campaign. And he will not advise me in the White House. So that's Mr. Ayers.

(END VIDEO CLIP)

MATTHEWS: Let's take a look at here. Along the same lines, here's an exchange over the tone of recent McCain rallies.

(BEGIN VIDEO CLIP)

OBAMA: If we want to talk about Congressman Lewis, who is an American hero, he, unprompted by my campaign, without my campaign's awareness, made a statement that he was troubled with what he was hearing at some of the rallies that your running mate was holding, in which all the public reports indicated were shouting when my name came up, things like "terrorist" and "kill him."

And that your running mate didn't mention, didn't stop, didn't say hold on a second, that's kind of out of line.

MCCAIN: Let me just say categorically, I'm proud of the people that come to our rallies. Whenever you get a large rally of 10, 15, 20,000 people, you're going to have fringe people, as you know-you know that. And I-we've always said that that's not appropriate.

(END VIDEO CLIP)

SIMON: Some fringe people? You know, you can't-

MATTHEWS: Who wins that debate? Fringe people when they're yelling take off his head, et cetera, like that, what do you mean?

SIMON: You can't defend people who are shouting "kill him" when Barack Obama's name comes up. You just can't do it. And by the way, for all the criticism that Congressman Lewis is taking, he absolutely succeeded.

Congressman Lewis said to John McCain, basically, don't you play the race card. Don't you bring up Jeremiah Wright. And that is the one place that John McCain did not go tonight.

MATTHEWS: He didn't bring it up.

(CROSSTALK)

SIMON: He did not bring it up.

(CROSSTALK)

MATTHEWS: That kind of talk led to the church burnings back in the '60s.

FINEMAN: That's why he couldn't go there and he didn't. I thought it was interesting. We knew in advance that he wouldn't do that. He just wouldn't. He wouldn't.

SIMON: So, you know, so Congressman Lewis achieved his purpose.

MATTHEWS: Well, let me.

SIMON: The Obama campaign achieved their purpose.

FINEMAN: Well, it's not because of Lewis. It's because McCain doesn't.

MATTHEWS: It seems to me.

FINEMAN: . dare touch that subject.

MATTHEWS: . that one of the people yelling at one of their rallies was the governor of Alaska who yelled out, he's been palling around with terrorists. And he is responsible for what she says. And she's been the one leading the chorus that there's some lack of patriotism on the part of Barack Obama. That's who's been doing it.

FINEMAN: I thought that Obama was very skillful, though, when asked about whether she was qualified to basically say nice things about her without, in the end, saying whether she was, in fact, qualified.

MATTHEWS: Well, they all skirted around that baby.

FINEMAN: Yes, they did.

MATTHEWS: Let's take a look here in exchange. I caught this. I think there's going to be a hot debate here among pro-choice circles. Here's something that they both were talking about abortion and then, I think, John McCain said something that's going to be troubling for those pro-choice voters out there.

(BEGIN VIDEO CLIP)

OBAMA: With respect to partial birth abortion, I am completely supportive of a ban on late-term abortions, partial birth or otherwise, as long as there's an exemption for the mother's health and life. And this did not contain that exemption.

MCCAIN: Just again-example of the eloquence of Senator Obama. His "health of the mother." You know that's been stretched by the Pro-Abortion Movement in America to mean almost anything. That's the extreme pro-abortion position, quote, "health."

(END VIDEO CLIP)

MATTHEWS: Well, "health."

FINEMAN: Yes.

MATTHEWS: Did you see how he did the health and the quote marks? That is going to cause him more trouble, because here we are at a stage where women are being considered to have a good shot at the American presidency, certainly the vice presidency.

Women are seen as equal to men in rights and respectability and authority, and all the good things in American life. And here he is putting down women who have a health concern along with their doctors for having an abortion.

SIMON: Well.

FINEMAN: Yes.

MATTHEWS: You can't impeach the right of a woman to have a health concern.

You can't make a joke out of it like this.

SIMON: And also, it's not an.

MATTHEWS: "Health."

SIMON: It's not an extreme pro-abortion position. It's the position of the United States Supreme Court.

MATTHEWS: And doctors.

SIMON: Barack Obama is not way off on the left on this one. He's supporting the law of the land.

FINEMAN: Also, this is an example of how ideology can send you right over the cliff. This-McCain was trying to be ideologically perfect for his core constituency.

MATTHEWS: Right.

FINEMAN: Making fun of the "health" exception. It sounded cruel.

MATTHEWS: Right.

FINEMAN: I know what he was saying as a matter of argumentation on the floor of the Senate or when he's talking to a pro-life group. When you say that in public before a bunch of undecided voters, it sounds cruel.

SIMON: Right. Yes.

FINEMAN: It just doesn't sound right.

(CROSSTALK)

MATTHEWS: And one of the issues in this campaign is, and I have been part of it, is getting greater sensitivity to women and their rights and their authority in this society that we share, right?

FINEMAN: Yes.

MATTHEWS: And to put that down as something like-when he says health for a male?

FINEMAN: Yes.

MATTHEWS: A male's health concerns?

FINEMAN: You should be glad that he kept mentioning.

MATTHEWS: I think he's going to.

FINEMAN: . Hillary Clinton all the time.

MATTHEWS: I think that's going to be an issue with not just the organized abortion rights issues people but a lot of voters out there listening right now to this conversation. They're saying here's three guys that noticed it.

SIMON: Well, yes.

MATTHEWS: OK. We're demented enough to put on it.

SIMON: John McCain would say, hey, I put a woman on the ticket. It's off the table.

FINEMAN: But the fact is, that Obama's got all those voters.

MATTHEWS: We're going to hear a lot about this on the pages of the newspapers tomorrow and the days ahead. I think he's going to have to modify what he said about that.

Anyway, Roger Simon, thank you, and Howard Fineman.

Coming up, we're going to go to the spin room-I hate that name-hear, well, all the spin from both sides and we make it some truths.

You're watching HARDBALL midnight edition from Hofstra University, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I don't mind being attacked for the next three weeks. What the American people can't afford, though, is four more years of failed economic policies. And what they deserve over the next four weeks is that we talk about what's most pressing to them.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL, live from Hofstra University for the third and final presidential debate.

U.S. congressman Peter King represents the constituency from very close by here. He's state co-chair of the McCain campaign. He's in the spin room now. Actually, he's right here with me.

You know, let me ask you this. Did you ever hear this Joe the Plumber guy?

We look at the montage now of all the Joe the Plumber references tonight. What an amazing introduction to this personality. He's going to be on "Saturday Night Live," I'll bet you.

We'll have it in a minute here.

Joe the Plumber, do you think this stuff works coming off with these off-stage iconic people?

REP. PETER KING ®, NEW YORK: Yes, I think helps to put a human face on issues. I think what John McCain was doing was showing that not everyone that gets the benefit of the tax cut is a rich guy living on Park Avenue. It could be the hard-working ethnic who's worked his way up, who's put some money together, and is trying to expand his firm, and then people like you and Barack Obama comes along and said.

MATTHEWS: Yes, I'm one of those guys. I was thinking of the guy, the Italian guy in "Moon Struck," who was the plumber, you know, had all that money, lived in the beautiful brownstone. He lived better than the professor.

KING: No, I think-you can overdo some. I thought the important thing tonight was to put a human face on an issue. And certainly Barack Obama picked up on it and Joe the Plumber became a focal point of the debate.

But I think it does give John McCain something to work with for the next 20 days or so that the tax cuts, the guys we're trying to help.

MATTHEWS: Right.

KING: . are the hardworking ethnic guys.

MATTHEWS: Let's take a look. Let's go in.

KING: Sure.

MATTHEWS: Here's-this new figure in American life, Joe the Plumber.

(BEGIN VIDEO CLIP)

MCCAIN: Joe the Plumber.

OBAMA: Joe the Plumber.

MCCAIN: Joe the Plumber. Joe the Plumber.

OBAMA: Joe the Plumber.

MCCAIN: Joe the Plumber. We're talking about Joe the Plumber.

OBAMA: Supporter.

MCCAIN: Joe, you're rich, congratulations. And Joe, you're rich, congratulations.

OBAMA: That includes you, Joe, right.

MCCAIN: I want Joe, you do the job.

OBAMA: And I'm happy to talk to you, Joe, too, if you're out there.

(END VIDEO CLIP)

MATTHEWS: You know I work for Tip O'Neill, as you know. I liked him all those years. He used to talk about this guy from the old Cambridge neighborhood, Joe the Cobbler?

KING: Right.

MATTHEWS: I go to Tip O'Neill's funeral. I'm one of the - one of the pallbearers, and the guy comes up to me in the pew, and says, hi, I'm Joe the Cobbler.

I mean this guy is like nail, like a character out of like-I don't know, one of these old-I was thinking of Beowulf or something, Joe. These characters, you know, I don't have a last name, name is Joe, though.

KING: Joe the Plumber.

MATTHEWS: Let me ask you this about.

KING: Yes. Sure.

MATTHEWS: Do you think your guy had the right mood tonight? I get the feeling he looked a little unhappy. It seems like this other guy drives him crazy. He is casual, calm, debonair. He almost dances past him and this guy tries to land a punch and the guy just smiles and says, let me explain that.

You know? It drives him crazy. John McCain looked angry tonight.

KING: No, I think he looked tough and strong, which is what a leader is supposed to be. He stayed on offense, he kept Obama on his heels. And he dominated the fight. I think if Senator Obama.

MATTHEWS: Why does he keep losing every poll? We have take-we've watched CBS, CNN, God, FOX poll tonight had-FOX had the Republicans going down tonight. What do we make of that?

KING: The real poll is on Election Day. I think what John McCain did was set the tone for the next 20 days of the campaign. He stayed on offense. He kept Obama off his game.

I think Obama-Senator Obama is probably making a mistake of trying to sit on a lead.

MATTHEWS: Yes. yes.

KING: . and you do that and you know, suddenly, the clock runs out on you. You don't get the immediate impact of what happened. But I think what happened tonight is the tone shifted, the momentum shifted.

And it's so.

MATTHEWS: Well, is there enough time in that clock for John McCain to turn this election around?

KING: Yes.

MATTHEWS: "The New York Times" today reported a 14-point spread right now for Barack. 14 points is a hell of a lead in a presidential election.

KING: Yes, also Rasmussen had five. And also, Senator Obama has never been able to close the deal. Against Hillary Clinton he had big leads, too.

MATTHEWS: Rasmussen is a Republican poll, right?

KING: Oh well, listen, MSNBC is a.

(CROSSTALK)

KING: . Democratic panel.

MATTHEWS: "New York Times," you don't trust your guys?

KING: No. I don't trust "The New York Times" at all, no.

MATTHEWS: The average polls are 8 to 9, OK? Let's agree on that.

KING: OK. Let's take eight points. Let's say eight points.

MATTHEWS: All right.

KING: The race would narrow anyway down to 5 for 6. You get a 5-point race over three weeks, and the guy sit on his lead, he can lose the race. Ask Tom Dewey.

MATTHEWS: Oh OK. Thank you.

KING: Thank you.

MATTHEWS: But what do you think about the fact the Republicans just gave up on Wisconsin and Maine today?

KING: I don't think they should give up. I think they're making a mistake. I think they shouldn't have given up on Michigan. I think states like Pennsylvania, Wisconsin, are the type of voters they're going to win. I think they made a mistake.

MATTHEWS: God, it's like the old British Empire, they keep losing outposts.

(LAUGHTER)

KING: Now you pout me in the position of the British Empire of all the things.

Chris, of all the things to say to me?

MATTHEWS: I mean we lose American, now we lose Ireland. What the hell (INAUDIBLE) of an empire is this thing? You know?

KING: Bottom line is.

MATTHEWS: Just kidding.

KING: I think it's going to be a four or five-point race going into the last week or 10 days. Obama keeps sitting on the lead. McCain can run past him. And Joe the Plumber will be the next secretary of.

MATTHEWS: OK, Peter King, is not only a congressman, a man respected by the constituencies in Long Island, but he is great Irish-American writer as well. But how can you fight with that?

Peter King, thank you.

KING: Chris, thank you. Thank you.

MATTHEWS: Let's go right now to Robert Gibbs. He's senior adviser for the Obama campaign.

Your guy, is he sitting on the lead? Is this the old Dean Smythe four-corner offense where you move the ball around but you don't take the shot?

ROBERT GIBBS, OBAMA CAMPAIGN SENIOR ADVISOR: Absolutely not. I think if you saw tonight's debate, you saw he took the shot. That's why, as you mentioned poll after poll, showed him winning this debate. As you said, if even FOX News thinks Barack Obama won this debate that's a.

MATTHEWS: OK. What was his best shot tonight? What did he say tonight?

GIBBS: Look, I think.

MATTHEWS: What did he say?

GIBBS: . he dominated on the issues of-on the economy, I think on health care, looking at that small business owner and saying he's going to get help under Obama administration and provide healthcare for his employees. He's going to get a tax credit for creating jobs.

That's the kind of positive leadership we need to get the economy moving again.

MATTHEWS: Well, you got all the polls tonight but you didn't get Joe the Plumber. He went to bed tonight a McCain supporter. We just got the word. He said I'm with McCain, I'm going to sleep. So I guess you didn't sell him.

GIBBS: Yes.

MATTHEWS: Are you going to get up in the morning and work on Joe the Plumber a little bit? You know work the guy in the morning?

GIBBS: Well, Joe the Plumber was-Joe the Plumber was with McCain when Barack knocked on his door on Sunday. So I'm not altogether surprised we didn't change Joe the Plumber's mind.

But I think millions of independent voters that saw this debate tonight, you've seen this in these polls, thought Barack Obama was more commanding, that he has the judgment and the experience to lead this country.

We're not going to sit on any lead, Chris. We're not going to take anything for granted. We're going to work hard every single day for the next three weeks to bring change to the White House.

MATTHEWS: Let me ask you about Bill Ayers. Do you think this is the last we'll hear of him? Has he being replaced by Joe the Plumber?

(LAUGHTER)

MATTHEWS: Are we going to hear.

GIBBS: That's a good one.

MATTHEWS: It seems like your guy was quite easy-going about-he talked all about his-he didn't quite come clean on the role that Joe-that Bill Ayers played in his race for state office, though, did he? Didn't he have a fundraiser for him in his living room or something?

GIBBS: No.

MATTHEWS: Well, what did he do?

GIBBS: No, he didn't.

MATTHEWS: What exactly did Bill Ayers do? Well, what did he do positively for your candidate?

GIBBS: Well, look.

MATTHEWS: When he went for lower office.

GIBBS: I think what you-what you heard Barack Obama do tonight was-what you heard him say was what he-was characterized the relationship. That's what we talked about for the last two weeks.

MATTHEWS: We he didn't admit that he had a fund-raiser for him, did he?

Did he have a fund-raiser for your candidate or not?

GIBBS: Chris, Chris-no, he did not have a fund-raiser for our candidate like I said 10 seconds ago. He didn't have a fund-raiser for him.

MATTHEWS: Well, what is this thing about.

GIBBS: Barack Obama.

MATTHEWS: . launching his campaign in his living room?

GIBBS: Yes.

MATTHEWS: What's all that about?

GIBBS: Again, that's another myth propagated by the McCain campaign that's been debunked by people both in the Chicago media and the national media. But I think what you saw tonight was a campaign in Senator McCain's that worried about and all they want to do is focus on negative personal attacks.

I think Senator McCain looked angry throughout this debate. He didn't look in command of these issues. And I think that's why Barack Obama came out the winner tonight.

MATTHEWS: Do you think that Senator McCain made a mistake by belittling the health concern women have in terms of abortion rights?

GIBBS: Absolutely. I mean, look, for a lot of women, facing life or health decision in a pregnancy is a tall order. It's a great moral decision to make. And I think for him to belittle the concerns of women like that was demeaning. And I think women will see that-we'll see that in the polling, we'll see that in the focus groups that shows John McCain just doesn't understand what they're doing through on a day-to-day basis.

MATTHEWS: OK. Would you like to have another debate with John McCain or is this it? Would you like to have another one?

GIBBS: No. I think-I think we feel pretty good about the four debates that John McCain and-I'm sorry, that Barack Obama and Joe Biden had.

Quite frankly, I think we won all four of those debates. And now it's off to talk directly to the American people about what we're going to do to get this economy moving again and bring change to the White House.

MATTHEWS: Robert Gibbs, thanks for joining us.

GIBBS: Thank you.

MATTHEWS: Up next, MSNBC's Rachel Maddow is going to join us. She's, of course, the host of "THE RACHEL MADDOW SHOW." She's going to give us her thought, in fact, her take on tonight's debate.

You're watching HARDBALL on debate night, only on MSNBC.

So much fun.

(BEGIN VIDEO CLIP)

OBAMA: Nobody likes taxes. I would prefer that none of us had to pay taxes, including myself. But ultimately, we've got to pay for the core investments that make this economy strong and somebody's going to do it.

MCCAIN: Nobody likes taxes. Let's not raise anybody's taxes. OK?

OBAMA: Well, I don't mind paying a little more.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: The notion that I voted for a tax increase for people making $42,000 a year has been disputed by everybody who's looked at this claim that Senator McCain keeps on making. Even FOX News disputes. And that doesn't happen very often when it comes to accusations about me.

(END VIDEO CLIP)

MATTHEWS: Even FOX News.

Welcome back to HARDBALL. Rachel Maddow is the host of MSNBC's newest and coolest show-who writes this stuff? "THE RACHEL MADDOW SHOW" which airs every night at 9:00 p.m.

Did you write this intro for me? She joins us now from "30 Rock."

Rachel, you and I both spotted the same problem area, I think we can call it, for John McCain tonight, talking in a belittling fashion about the health factor in abortion rights. Your thoughts?

RACHEL MADDOW, HOST, "THE RACHEL MADDOW SHOW": It was as if he was saying, what is this health of the mother? Health of the mother. This is something that the pro-abortion movement has expanded to mean anything. That could mean anything. Dismissive, snide, insensitive and to women, I think on both sides of the abortion rights debate it's going to come across as, I think, demeaning and mean spirited.

I think that that is not going to serve him well. I don't know if the Obama campaign is going to pounce on it and choose to use it. But I think that women's groups certainly will. And I don't think he can run that far from it. He went on about it at length.

MATTHEWS: Yes, (INAUDIBLE) has already gone after. Let's-I noticed it, too. Let's take a look now at that exchange we're talking about, Rachel and I. Here it is from tonight's debate.

(BEGIN VIDEO CLIP)

OBAMA: With respect to partial birth abortion, I am completely supportive of a ban on late-term abortions, partial birth or otherwise, as long as there's an exemption for the mother's health and life. And this did not contain that exemption.

MCCAIN: Just again-example of the eloquence of Senator Obama. His "health of the mother." You know that's been stretched by the pro-abortion movement in America to mean almost anything. That's the extreme pro-abortion position, quote, "health."

(END VIDEO CLIP)

MATTHEWS: Rachel, it just seems to me.

MADDOW: It's worse watching it now.

MATTHEWS: Yes, Rachel, if you make a joke out of the word health, you belittle its relevant and it's also, if you don't have that word and as part of the Roe v. Wade court decision, what do you have?

You have to have it in there. It must be there, it seems to me. And for him to belittle the term because maybe in some case somewhere it was abused puts him in a weak position. I agree with you.

MADDOW: I think that's right. And I think that it's similar actually to -

the way he messed up the ACORN attack tonight. He was-if you're already with John McCain on ACORN or if you're already with him on his side of the abortion debate, then maybe you knew what who he was referencing and that felt he was sort of tossing you a bone.

Maybe it felt like he was-I-saying something that he needed to say to energize those people who already agree with him. But if you didn't already agree with him, those things came across as either-in the case of ACORN-something that didn't make very much sense and then the abortion issue, on something that came across as very insensitive.

He just didn't-he didn't pace his pitches right.

MATTHEWS: Do you have a sense that this just isn't John McCain's time? I mean to say that the environment, the economic environment we're in right now, and the personality advantage that Barack enjoys makes it-it seems like almost impossible for him to win these polls on who wins these debates.

MADDOW: Well, I think that.

MATTHEWS: Just the basic realities of what-what surround him, no matter what he does. If we had 50 of these debates I predict we'd get the same results in terms of the polling from all the organizations that poll.

MADDOW: I think that campaigning matters. I think that the way that you conduct yourself politically matters. I think that, yes, it's true, that the economic factors may be shifting the playing field away and-George Bush's approval ratings may be shifting the playing field a certain way.

But you still get out there on the field and play. An John McCain did not say the phrase middle class again tonight. That means he went 0 for 3 in three debates. He never once used the phrase middle class. But yet he did say ACORN three times, said Bill Ayers six times.

MATTHEWS: Yes.

MADDOW: He whiffed the ACORN attack, he whiffed the Bill Ayers attack. Obama came back to him on that with a, frankly, very unsurprising result, and McCain then angrily retorted by saying I've always repudiated every offensive, out of line thing any Republican has said in this campaign, leaving out there hanging the fact that his running mate has said that Barack Obama pals around with terrorists.

John McCain doesn't have to be losing this bad. It's not the country that's doing it to him. He's running a horrible campaign.

MATTHEWS: You know, Hillary Clinton said something really good up in Scranton this Sunday. I happened to be up there covering it. And she said, stop asking yourself who are you for? And ask yourself who's for you?

I think that's a pretty good way of putting it. And I think the undecided voters in the end are going to say, who's looking out for me?

Anyway, thank you very much, Rachel Maddow, my colleague.

Up next.

MADDOW: Thanks, Chris.

MATTHEWS: . Norah O'Donnell and our focus group of voters out in Kansas City. Who did they think won tonight's debate? But I can't wait to hear more from that. We'll be right back.

You're watching HARDBALL, live from Hofstra only on MSNBC.

(BEGIN VIDEO CLIP)

MCCAIN: I would have, first of all, across-the-board spending freeze, OK? That some people say that's a hatchet. That's a hatchet and then I would get out a scalpel.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS: Welcome back to HARDBALL. We're live from Hofstra University right now. By the way, a couple of personal notes. First of all, to Nancy Reagan, we're wishing you get well. You had a fall. I hope to get out and see you in a couple of weeks out there.

Nancy, get up and go again, you're so great.

And another personal note, the Phillies are in the World Series. OK? I know I'm out here in Mets country. The Phillies are in. First time in 15 years.

Now to find out what some voters thought about tonight's debate, we assembled a focus group of voters out in Kansas City, Missouri.

MSNBC's Norah O'Donnell is with that group right now and she joins us.

Norah, what have you got?

NORAH O'DONNELL, MSNBC NEWS CORRESPONDENT: Chris, it has been such a fascinating night. And we came here, of course, to Missouri because this is the most accurate bellwether in the country. In case you don't know, in the show-me state, voters here have chosen the president every time for the past 100 years except for one election.

I heard you guys talking about many of you thought was John McCain's best moment, was when he tried to separate himself from President Bush. Well, he delivered it well but he failed to convince many of the voters here.

Let's play that soundbite of John McCain first.

(BEGIN VIDEO CLIP)

MCCAIN: Senator Obama, I am not President Bush. If you wanted to run against President Bush, you should have run four years ago.

(END VIDEO CLIP)

O'DONNELL: There it is, Mark. You actually like that. You're a Republican.

MARK, REPUBLICAN VOTER: Yes. I thought it was one of his better statements to distance himself from the current presidency. Yes.

O'DONNELL: Annie, you're a Republican. We saw the line dip a bit with Republicans. Why didn't you like it.

ANNIE, REPUBLICAN VOTER: I just thought it was an irrelevant comment on his part, unnecessary, I guess, is a better word. Cheap shot, first of the night.

O'DONNELL: All right, Mandy, you're a first-time voter and independent. What did you think of John McCain trying to separate himself from President Bush saying you should have run against Bush four years ago if you wanted to run against Bush?

MANDY, FIRST-TIME INDEPENDENT VOTER: I just thought that it came off really rude and-I mean almost-it was unnecessary.

O'DONNELL: All right.

Chris, another interesting soundbite, of course, is Obama. Lot of talk about negative attacks and where this country is headed, whether there's enough focus on the economy. Obama tonight, essentially, reflected the polls that the country is headed in the wrong direction.

Let's show this. Watch the number. See how well he does among independents and Republicans.

(BEGIN VIDEO CLIP)

OBAMA: The American people have become so cynical about our politics, because all they see is a tit for tat and back and forth. And what they want is the ability to just focus on some really big challenges we face right now. And that's what I have been trying to focus on this entire campaign.

(END VIDEO CLIP)

O'DONNELL: Do you see that, Chris, that red line went up? Also among Democrats and independents.

Chris, you're a Democrat. Why did you like that?

CHRIS, DEMOCRATIC VOTER: I think it epitomizes what Senator Obama has been doing during these debates. He's been focusing on the big issues. McCain has been trying to attack him with petty things, in my opinion, and he stayed on the big picture, how do we get things done.

O'DONNELL: Nick?

NICK, REPUBLICAN VOTER: I completely agree. I think that Obama stuck to it. McCain was still trying to attack him but Obama stuck to it which the big issue for me was the economy.

O'DONNELL: And you're a Republican.

NICK: Yes.

O'DONNELL: And first-time voter, and you liked Obama on that. Really interesting.

Let's play, too, you know, Chris, we watched about the attacks. And when McCain brought up William Ayers, which Obama has said, say it to my face. Well, McCain brought it up in this debate. The attacks did not play well throughout this debate among independents and even some Republicans.

Let's play that.

(BEGIN VIDEO CLIP)

MCCAIN: And you launched your political campaign in Mr. Ayers' living room.

OBAMA: That's absolutely not true.

MCCAIN: And-the facts are facts and records are records.

OBAMA: That's not the fact.

MCCAIN: And it's not the fact-it's not the fact that Senator Obama choose to associate with a guy who in 2001 said that he wished he'd have bombed more and he had a long association with him.

It's the fact that all of the-details need to be known about Senator Obama's relationship with them and with ACORN and the American people will make a judgment.

(END VIDEO CLIP)

O'DONNELL: Really interesting, you see those numbers flatline and even the Republican number dipped a little bit into negative territory.

Frank, your thoughts?

FRANK, VOTER: Well, they both drive me to drink.

(LAUGHTER)

O'DONNELL: And why is that?

FRANK: Well, they're both so negative that-it's just wrong. They need to get more positive and talk about the issues.

O'DONNELL: And Mark, do you agree with that? Mark, do you agree with that?

MARK: I think they spent way too much time on debating-on the-on the styling and stance they were taking with one another and not getting to the point enough.

O'DONNELL: And then, finally, we have to do a show of hands here. We'll do a thumbs up or thumbs down because it's really interesting, Chris, on Joe the Plumber.

Thumbs up if you thought it was a good idea to talk about Joe the Plumber or thumbs down Joe the Plumber.

Look at this, mere universal thumbs down. The Republicans, independents, they thought Joe the Plumber was dumb. They didn't like it and they didn't think McCain delivered sort of the line well.

Really interesting, Chris. And then finally, I know you'll like this. Among the independents we polled them coming in-coming in, the independents were slightly more comfortable with McCain as president.

But post-debate, the independents were much more comfortable with Obama as president and less comfortable with McCain. That's what changed tonight, Chris?

MATTHEWS: OK, Norah, I love that stuff. Thank you, Norah.

Let's bring in MSNBC political analyst Pat Buchanan and Eugene Robinson.

Well, Pat, it looks like Joe the Plumber didn't do as well as Joe Six Pack tonight. Joe Six Pack seems to be a popular reference point by Governor Palin out there.

PAT BUCHANAN, MSNBC POLITICAL ANALYST: It looks like a pretty sour focus group to me out there in Kansas City, I'll say that.

(LAUGHTER)

BUCHANAN: They didn't like anything or anybody. I think what this shows, though, Chris, and the polls show, I think it is a real reality. What is it, over 92 percent of the country now thinks we're on the wrong course?

The economy has gone-I mean the market goes down 733 points. I think it's very, very tough with McCain, who's got to go on the offensive and has to be aggressive, he can't sit there and be laid back, I think he's got almost an impossible hill to climb in these debates.

As I said earlier, I do think he won the debate on points. I think old Barack Obama, he is pack-peddling around the ring. He doesn't even want to trade punches.

MATTHEWS: I know.

BUCHANAN: And it's working for him.

MATTHEWS: Let me-Gene, it does seem, though, that every time you go into a town and stay there for two days before an election, all you see are negative ads aimed at turning the undecided voters. And then you see a focus group like Norah just had there and every one of them seems to dislike negative politics.

And yet we all know that the pros know that negative ads works. What gives here? Why do there always people in focus group say they don't like negative politics but all the pros say it works? What's up here?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Well, you know, it's a good question. I think you can argue it's not working very well this year. This is an unusual election year. It has been since January in the Iowa caucuses and we get surprised, you know, week by week and month by month.

So this, I guess, could be seen as another surprise. This tried and true technique doesn't seem to be gaining as much traction this year as it otherwise might. Clearly-independent voters don't like conflict. And they don't like partisanship.

MATTHEWS: Yes.

ROBINSON: They're independent. And-we know that from surveys. And so, I think you could have 50 of these debates or 100 of these debates and every one would probably ratchet up Barack Obama a little bit in the polls and ratchet John McCain down a little bit because of their very different approaches to the debates.

Obama didn't engage and I think that wins him points when he insists on talking about the economy or whatever-some other issue rather than getting involved..

MATTHEWS: Right.

ROBINSON: . in the clench with John McCain.

BUCHANAN: You know, Chris, I think we're going to.

MATTHEWS: Pat, you think these people would rather be sitting in a quiet room with no one else in the room but themselves listening to classical music rather than involved in discussing the campaign with anybody. I mean they don't like any conflict. I mean welcome to America. I mean.

(LAUGHTER)

MATTHEWS: What do they want?

BUCHANAN: But you know-well, I just think-I think they want to get rid of who's in Washington.

Chris, consider this.

ROBINSON: That's right.

BUCHANAN: The Pelosi/Reed Congress has the lowest approval rating in history. It's at 10 percent. She's considered a San Francisco liberal by an enormous numbers of people.

MATTHEWS: Right.

BUCHANAN: Yet their numbers are going to be enhanced enormously. The left - the Congress are going to be moved to the left.

MATTHEWS: Nice try.

BUCHANAN: Moved to the left, whereas the country is center right as you can tell by the fact Obama's been moving to the center as fast as he could.

MATTHEWS: Right. Here's the wrench in that.

ROBINSON: But here's the difference though, Pat.

MATTHEWS: Three or four wrenches in the machinery there, Pat. But the fact is, as you pointed out, Pat, the latest polling shows-in our polling at NBC, there's a 13-point advantage of the Democrats doing well in the congressional races over the Republicans.

BUCHANAN: I know they are.

Look, they're going to get the benefit of this, despite the fact that Congress is being rejected by the country as a whole.

ROBINSON: Well, look, Pat.

MATTHEWS: Right. Gene?

ROBINSON: But, Pat, as you well know, people don't like Congress as a whole. They like their own congressman or congresswoman. So it's difficult to poll nationally on Congress and make it meaningful.

But here's what I think people heard in addition to demeanor and the fact that Obama presents himself so well in these debates and McCain looks a little grouchy and he's older and everything.

But aside from that, people heard Democratic ideas and they heard Republican ideas. And I think they-you know John McCain did all but called himself a maverick. He didn't use the word. But he certainly described himself as one.

Yet his core economic ideas certainly, and the economy is what everybody is thinking about right now are Republican ideas. People heard Obama talking like a Democrat. And I think this is a year-certainly could be a year when the pendulum is swifting-is drifting back in the Democratic direction.

And there may not be much that John McCain can do about it.

BUCHANAN: You know, I-I tend to agree with that.

MATTHEWS: OK, Gene.

BUCHANAN: I really do. I think that there may not be much McCain can do certainly in the debates. I think it's got to close up to about six-it's got to close up and look like there's some momentum in McCain's direction.

MATTHEWS: OK. OK, guys.

BUCHANAN: . for him to get traction and win this thing if he's got a chance.

MATTHEWS: Pat Buchanan, Eugene Robinson, gentlemen, thank you.

Up next, much more from Hofstra University. Our coverage of the third and final presidential debate between Barack Obama and John McCain continues. This is HARDBALL.

(COMMERCIAL BREAK)

MCCAIN: Mr. Ayers, I don't care about an old washed-up terrorist. But as Senator Clinton said in her debates with you, we need to know the full extent of that relationship.

OBAMA: Mr. Ayers is not involved in my campaign. He has never been involved in this campaign and he will not advise me in the White House. So that's Mr. Ayers.

(END VIDEO CLIP)

MATTHEWS: We're back from Hofstra University, site of the third and final debate, presidential debate.

With me is Joan Walsh, my friend from Salon, and John Heilemann from "New York" magazine.

By the way, there's Joan Walsh's daughter over there, Norah, right on-she's a freshman at Fordham.

Let's go to this question. So to use the lingo of Rahm Emanuel, who's highly partisan, we just watched a grumpy old man talk about a washed-up terrorist.

I mean these lines are being thrown around here, pretty rough.

JOAN WALSH, SALON.COM: Yes, they're pretty rough. My favorite part was when he started complaining about how he was trying to watch the Arizona Cardinals football game and that he kept getting interrupted by these negative ads about his healthcare plan?

I mean he tried early on the in the debates to be less grumpy. He'd been listening to Rahm, but he couldn't help himself.

And the air quotes around "health of the mother" will haunt him the rest of his career.

MATTHEWS: They will. Why?

WALSH: They really-because it was so-it was sneering. It was sarcastic. belittling an issue which is a moral issue, which is a horrible issue for so many families.

MATTHEWS: And by the way, the word health has to be in the law. It has to be.

WALSH: It has to.

MATTHEWS: . in the-because if it isn't there, think of what it means if it's not in there.

WALSH: Right, right.

JOHN HEILEMANN, NEW YORK MAGAZINE: And you know-it's funny. It's like we've had 4 ½ hours now of these debates. And it finally occurred to me at the end that what McCain has been in this election is the Al Gore, you know, in a weird and kind of like a reverse polarity way, right?

He is the guy who totally lost all three debates on affect. I mean so much of.

MATTHEWS: And probably would lose 100 of them.

WALSH: Yes.

HEILEMANN: So much of these things are about the visual, about the body language, about what comes across. Tonight, the split screen just killed John McCain, you know, the sneers and the blinks and the winks and the twitches. All that stuff just made him look so irascible, even when he wasn't sounding grumpy.

(CROSSTALK)

HEILEMANN: He looked terrible, right?

WALSH: . uncomfortable, yes.

MATTHEWS: Here's the (INAUDIBLE), even if he heard all of this ahead of time, there's nothing he can do about it.

WALSH: And he did.

HEILEMANN: Do about it, right.

WALSH: He heard it all.

MATTHEWS: (INAUDIBLE), he's going to be grumpy.

WALSH: He's all been saying the same things for all three debates.

MATTHEWS: At some point, they're not actors. You give away your feelings.

WALSH: Right.

MATTHEWS: They're not professional actors out there. They-although Barack is pretty close-to being a skilled performer. I mean, I think if he was really, really furious at his opponent.

HEILEMANN: Right.

MATTHEWS: . you wouldn't see it.

HEILEMANN: Right.

WALSH: Yes.

HEILEMANN: There was only one moment where Obama looked actually peevish for a moment at-when you saw the split screen where Obama looked really peevish. But I thought at that moment, a half an hour in, when McCain kind of erupted, and sort of-like let loose with every negative charge that he's wanted to let loose with throughout the whole campaign, it broke down into kind of incoherence.

WALSH: Right.

HEILEMANN: It was right-kind of connect the dots. You couldn't actually parse the sentences into English.

MATTHEWS: We'll be right back with Joan and John. You're watching HARDBALL from Hofstra, the scene of the event tonight.

(COMMERCIAL BREAK)

MATTHEWS: We're back with Joan and John, two of the most interesting people to ever appear on this show.

Can we have some silence, please? Can we have some silence? OK. Biggest thought tonight. Your biggest thought?

WALSH: My biggest thought...

MATTHEWS: About this end to this-it looks like the end of the TV part of the campaign.

WALSH: John McCain has misjudged the mood of the American people from start to finish. He couldn't get it right and he's going to lose, I think.

MATTHEWS: So the tone is optimism, hope, rather than grumpiness.

WALSH: Rather than grumpiness, not anger.

HEILEMANN: And seriousness about issues. And I thought that throughout

this debate tonight you notice, again, it's happened all throughout, Obama

at his most boring to us, the moments when he seizes to be flattest, you see those dial groups they go through the ceiling.

People want to hear people talking right now at this moment in the country about issues and not about their opponent.

MATTHEWS: OK. Before we get too Pollyanna.

HEILEMANN: And not about their opponent.

MATTHEWS: . have you noticed these TV commercials?

HEILEMANN: People are scared, Chris. You know it's true.

MATTHEWS: They slice and dice McCain's positions night after night after night. And maybe these independents people, these focus groups who call themselves undecided-and I don't know who's undecided at this point-they're saying I'm undecided so they can get on these shows, I think.

WALSH: Right.

MATTHEWS: You know, I want to get on the focus group. And they get in the focus group, they say I'm still undecided. Well, when are you going to freaking make up your mind? OK.

HEILEMANN: Right.

MATTHEWS: The question I have is, do you really believe people aren't moved by the negative TV commercials?

HEILEMANN: I think that in general.

MATTHEWS: They're not moved by them.

HEILEMANN: I think, in general, a lot of times, they are moved by them.

MATTHEWS: I believe that.

HEILEMANN: But at this moment, I think people are much more concerned about fundamental things (INAUDIBLE) economic well-being.

MATTHEWS: OK. You know why I think they're moved by it? Because John McCain was watching that St. Louis-the football game, the Cardinals.

WALSH: Right. He was moved by it.

MATTHEWS: The Arizona Cardinals.

WALSH: Arizona Cardinals.

MATTHEWS: Whoever they are. They're moving around so much. And he's saying, I don't like it.

WALSH: I don't like it.

MATTHEWS: Because he knows those commercials work.

HEILEMANN: Right. Right.

MATTHEWS: Anyway, thank you.

WALSH: Thank you.

MATTHEWS: It's great. One thing about John McCain, you know exactly what he's thinking and feeling. The guy is not an actor.

WALSH: Can't help it.

MATTHEWS: The other guy, well, perhaps a little too much ease and charm.

You don't really know what he's thinking, do you?

HEILEMANN: It's kind of worked for him, though, hasn't it?

MATTHEWS: Yes, OK. Thank you. Joan Walsh-you're Joan, you're John.

WALSH: Yes.

MATTHEWS: Joan Walsh, John Heilemann, great writers. (INAUDIBLE)

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.

We'll see you next time in daytime.

Right now stick around and watch the debate in full. Make your own judgment. It's the third and final debate, coming up between John McCain and Barack Obama.

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

END

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