updated 11/11/2008 11:33:38 AM ET 2008-11-11T16:33:38

Guests: Roger Simon, Michelle Bernard, Eugene Robinson, Howard Fineman, Scott Cohn, Bill Daley, Rich Masters, Ron Christie

CHRIS MATTHEWS, HOST:  The president-elect goes to work Chicago-style. Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Bringing home the bacon.  Tuesday was magic.  We elected the first African-American president.  The country changed (ph) into history.  Today, the man we elected strode into the room surrounded by his economic advisers and began the ritual of leadership, his first press conference.  Reporters rose when he entered the room at a time of economic peril.  Two hundred and forty thousand jobs were lost last month as the unemployment rate leapt .4 point to 6.5 percent, the highest in 14 years.

And here‘s the new leader facing up to the problem he will have to soon begin fixing.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT:  I want to see a stimulus package sooner rather than later.  If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States.

(END VIDEO CLIP)

MATTHEWS:  It‘s no exaggeration at all to say that the whole world is watching to see how the new president-elect will try to deal with what he called today the greatest economic challenge of our lifetime.  How did Mr.  Obama do today?  We‘ll talk to Obama economic adviser Bill Daley in a minute.

Plus: Barack Obama won the presidency Tuesday night by about 6 percentage points, and he won 364 electoral votes and counting.  So how should he govern?  Some argue America is still a center-right country ideologically and Obama needs to govern there in the middle.  Others say this is a transformational moment, that it‘s time for an activist liberal government to take charge.  Who‘s right?  We‘ll debate that tonight.

And forget about forgetting about Sarah Palin.  Nothing the Democrats said about her—and I mean anything the Democrats said about her during the campaign can easily or in any way compare with what the Republicans inside the McCain camp are now leaking out about her, rather cruelly you might say.  Is she some hillbilly running loose in Neiman‘s?  Is she a black belt shopper with a party-paid credit card?  Is she geographically illiterate, not knowing countries from continents?  Well, that‘s what you‘d be led to believe from what‘s coming out of the McCain camp on the former - - and I should say very former now—running mate.

Also: After getting the bum‘s rush from his committee chair by the Democrats angry with his political treason, Joe Lieberman of Connecticut is being, guess what, courted by those on the other side of the aisle.  They‘re trying to get him to become a Republican.  Will he do it?  Well, that‘s a good story we‘re going to talk about tonight.

And also the latest on the transition in the “Politics Fix” tonight.  And other than the economy, the most pressing issue facing the new president-elect will be—just kidding—what kind of dog he‘s going to get for his two daughters.  He has a very funny comment in his press conference late today.  We‘re going to show you that.

First, the economy.  It‘s marked urgent on President-elect Obama‘s to do list and everyone else‘s.  Joining us right now is one of the member of his economic advisory board, former commerce secretary Bill Daley.  Mr.  Daley, thank you for joining us.  Mr. Secretary, it seems to me that we saw a Chicago-style event today, lots of focus on getting things done, lots of action orientation, not so much ideology.  Is that going to be the brand of this new administration, down the middle, job creation, tax cutting to create jobs, stimulus package, construction, sort of a WPA-style approach to creating jobs, spend the money, build some stuff, put people to work?

BILL DALEY, FORMER COMMERCE SECRETARY, OBAMA ECONOMIC ADVISER:  I

think what President-elect Obama indicated throughout the campaign, and reiterated again today not only in the meeting with the advisers but at the press conference, and that is he wants to see action taken when he becomes president that begins to move this economy and help the most and the vast number of American people.  His talks during the campaign about a middle class tax cut, helping small business, helping infrastructure in cities and states—he‘s got to begin in January to start to implement that.

And so I think you‘re going to see a lot of action, no question about it, but understanding that these are very difficult times that did not happen in the last 72 hours.  They took a long time to get to this very difficult spot, and it will take us a long time to get out of them.

But I think what the president-elect showed today is not only a tremendous knowledge of the issues but a confidence in what the American people can do, and therefore the economy can do, as we go through a difficult period over the next number of months, if not years.  But there‘s an optimism about him that I think is contagious.  And I think as he prepares for inauguration and then to govern, I think you‘re going to see an optimism begin to grow in the American people, and that‘s a big piece of where we‘re at, a lack of confidence, a lack of optimism.  But he will begin to turn that.

MATTHEWS:  OK.  Let‘s take a look at the president-elect.  Here is President-elect Barack Obama on the economic stimulus package which he was suggesting as job number one.  If it‘s not done by the time he takes office, he made clear today, he‘s going to get an economic stimulus packaged passed quickly.  Here he is.

(BEGIN VIDEO CLIP)

QUESTION:  Sir, there‘s been some suggestion from the House Democrats that the stimulus package may be in trouble, that it‘s going to be a hard time getting out of a lame duck session.  Are you still confident that you would be able to get something done before you actually take office?

OBAMA:  I want to see a stimulus package sooner rather than later.  If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States.

(END VIDEO CLIP)

MATTHEWS:  You know, I‘m curious, Mr. Secretary, Mr. Daley, is it possible we can see through his words today that he‘s for job creation directly, the old Democratic way, and I mean that positively, of, as David Garth once put it, the Democratic consultant in New York—he said, Replace the smell of decay with the smell of construction, factories—not factories—highways being rebuilt, bridges being rebuilt, subways being refitted, things happening to put people to work immediately.  Are we going to see that kind of job creation directly?

DALEY:  I think it‘s a combination, Chris.  Obviously, the private sector is what is the largest engine of job creation, small businesses especially.  You‘ve got to create the climate that allows them to do that.  At the same time, government has a responsibility, and when you look at some of the infrastructure needs and the needs at state and local governments, the president-has been very consistent through the campaign, and obviously, through today‘s press conference that that is an area that we know must be stimulated to create jobs.

But isn‘t the government that will create the vast majority of the jobs that are needed, it‘s going to be the private sector.  When you look at the jobs that have been lost the last year, you‘re starting to see enormous pain out there amongst the American people, and job creation is what begins to turn that.  It will take a while, no doubt about it.

But you said at the beginning, Is this the Chicago way?  The truth is, excitement and positive attitude about job creation is the American way.  And it is American small business, really, that creates jobs in America, not government programs.  President-elect Obama knows that.  But it‘s a combination of building confidence and making the investments and those things that‘ll bring return short term, but more importantly, long term in this economy to keep a stability to us that is very important to the average American family.

MATTHEWS:  OK, here‘s President-elect Obama on taxes.  You talked about the private sector.  Here he is talking about trying to stimulate economic development in the somewhat slow-moving private sector right now.  Here he is.

(BEGIN VIDEO CLIP)

QUESTION:  Do you still intend to seek income tax increases for upper-income Americans?  And if so, should these Americans expect to pay higher taxes in 2009?

OBAMA:  The—my tax plan represented a net tax cut.  It provided for substantial middle-class tax cuts.  Ninety-five percent of working Americans would receive them.  It also provided for cuts in capital gains for small businesses, additional tax credits.  All of it is designed for job growth.  My priority is going to be, How do we grow the economy?  How do we create more jobs?

I think that the plan that we‘ve put forward is the right one, but obviously, over the next several weeks and months, we are going to be continuing to take a look at the data and see what‘s taking place in the economy as a whole.  But understand, the goal of my plan is to provide tax relief to families that are struggling but also to boost the capacity of the economy to grow from the bottom up.

(END VIDEO CLIP)

MATTHEWS:  Mr. Daley, I was taken with that because it seemed to me that he was sending a message to the middle of the country politically that this is not going to be a redistributive tax cut.  The purpose of the tax cut is not to take from the better off and give to the lower, it‘s to cut the burden of taxation on everybody to get the economy moving.  It seemed to be not an ideological tax cut as much as a pragmatic boost to the economy he‘s talking about.

DALEY:  Well, that‘s exactly what I think he meant, and that‘s what he‘s been saying through the whole campaign, in spite of what his opponents may—or supporters of his opponents may have been saying during the campaign.  He has been very consistent about his desire and his belief that bringing tax relief to a large group of American middle class is the way to stimulate and help this economy grow and help families who are in need right now.

So his tax cuts that he‘s talked about consistently now for a very long time are very broad, and when 90, 95 percent of the American people get that relief, that‘s an important stimulator also to the economy that needs it.  And it‘s also a fairness issue for the American people.

MATTHEWS:  OK.  It‘s great having you on, Bill Daley, the former secretary of commerce...

DALEY:  Thanks, Chris.

MATTHEWS:  ... in the Clinton administration, now on the advisory board on the economy of the incoming president, Barack Obama.

Coming up: The Obama presidency.  Does he have a mandate to govern from the left, center-left, center-right?  Where is he coming from?  Some people think he‘s going to be ideological still.  Some think he‘s going to stick to the center or he should stick to the center.  Let‘s debate that as we come back.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  What kind of a mandate did President-elect Obama get on Tuesday when he takes office 74 days from now?  Should he move left, should he move right?  What did the voters do?  Rich Masters is a Democratic strategist and former adviser to Louisiana senator did I say it right? -- Mary Landrieu, and Ron Christie‘s a Republican strategist and a good sort...

(LAUGHTER)

MATTHEWS:  ... and a former adviser to Vice President Cheney, who‘s about to leave this country.  Oh, I‘m sorry, leave office.

(LAUGHTER)

RON CHRISTIE, REPUBLICAN STRATEGIST:  Oh, don‘t even start!

MATTHEWS:  OK, here we go.  Let‘s go with this thing here.  It seems to me what I heard—and I listened to this intently as I anchored it this afternoon—that Barack Obama came out like, Chicago-style, the city that works, business, we can boost—it‘s like Dick Daley, the hold guy, We can do it together, no ideology.

He made a point of saying his tax cut—this is the new president today—is going to be a net cut of taxes.  In other words, the purpose of cutting taxes is not to take from Paul to give to Peter or the other way around, or take from Joe the plumber and give to somebody else lower down the line.  It‘s to cut taxes to stimulate business.  That‘s what I heard.

CHRISTIE:  I heard that, too.  The devil is going to be in the details, but I think that he‘s moved from campaign mode to president-elect mode.  Obviously, he won.

MATTHEWS:  More booster than populist.

CHRISTIE:  Yes.  But I mean, again, we have a very serious economic crisis going on right now.  He said that he wanted to provide a net tax cut.  Let‘s look at the details of his plan, let‘s see if that‘s true.  But I don‘t want to see a situation occur where he raises a taxes when we‘re in a recession or difficult economic times.  But I‘m not going to bash him now.  Let‘s see what his plan looks like.

MATTHEWS:  Rich, what do you think he‘s talking about?  Because he‘s talking about a lot of things, stimulus package, help the auto industry, help cities and states, a lot of spending there, a lot of spending there, a bigger deficit.  He‘s going to take that risk, it looks like.

RICH MASTERS, DEMOCRATIC STRATEGIST:  Yes, Chris.  And I mean, when he talks about spending—but even in the way he talked about spending today, he talked about spending as a means to an end.  It wasn‘t just government spending in kind of the traditional old-style tax-and-spend liberal kind of think.  He talked specifically about putting money into creating jobs and getting the economy moving, just like he did tax cuts.  And I think that‘s going to be...

MATTHEWS:  You mean not just more hot checks to Wall Street?

MASTERS:  That‘s it.  I mean, we have got to do something.  He talked about small business tax credits.  He talked about capital gains on small business.  He talked about a lot of things that I think are going to help create jobs.

MATTHEWS:  OK.  Let‘s look at where the voters‘ heads are at right now.  This is a poll taken as people were leaving the polls right now.  It‘s how people identified themselves.  Democrats and independents went up a net of 5 points.  That‘s center-left.  Republicans went down 5 points.  Look at these numbers.

Please hold this screen up here for a bit.  If you look on the left, that‘s the 2008 way the voters identified themselves, and on the right was four years ago, not a big shift, a few more Democrats, 2 points more Democrats.  This is saying what you are.  And this includes African-Americans, young people.  Net effect, only 2 percent shift to the left, if you will, using that term loosely.  Republican Party, only a 5 percent shift away from the right, and then only a 3 percent increase in independents.

It‘s a slight movement over, and it may not even be permanent.  Rich Masters, how do you read it?

MASTERS:  Listen, I think...

MATTHEWS:  Are we getting a little more Democrat, a little more independent, a little less Republican, but little is the word?

MASTERS:  I think—I mean, if you look at his campaign, I mean, the one reason I think he won is because he had a solid message, not just in his entire campaign.  The speech he made at the Democratic national convention in 2004, not a red America, not a blue America, United States of America—his entire campaign was based on that premise.  And everything...

MATTHEWS:  That‘s why a fifth of the Republicans voted for him.

MASTERS:  That‘s absolutely correct.  And I mean, I think he changed on tax cuts.  I mean, I think that he now is legitimate.  When we talked last week that you didn‘t think he had changed America on taxes, I think it‘s clear.  He‘s a Democrat who has credibility on saying, We‘re going to deliver tax cuts...

(CROSSTALK)

MATTHEWS:  ... one of those secret Bradley effect guys, were you, that voted for Barack and wouldn‘t tell anybody?

CHRISTIE:  Of course not!

MATTHEWS:  I love that phrase because I really get—I get heartfelt about it because people are afraid to tell their friends that they‘re voting for Barack because they‘ll get mad at them, but they secretly went in there and voted for them.  That‘s the only explanation of these numbers.

CHRISTIE:  That wasn‘t...

MATTHEWS:  That they over—offset everything.  Go ahead.

CHRISTIE:  That wasn‘t me.  But look, Senator Obama, I didn‘t agree with his platform.  I thought he wanted to expand government in ways that would be very dangerous for this country by way of economic expansion.  I thought he wanted to raise taxes in a way that was going to cripple small business.  But now he‘s the president-elect.  I want to see what his specific details are.  He talked today about he wanted another economic stimulus package.  The last one didn‘t work.  How many more billion, $100 billion, are going to pump into this?  Is that going to work?

MATTHEWS:  Well, that‘s the question because the deficit now is so high.  Somebody was—David Brooks was talking about, like, a $1.5 trillion deficit.

CHRISTIE:  Exactly.

MATTHEWS:  The numbers are so high, the government‘s printing money like mad.  We‘re getting to be like Robert Mugabe, you know, in terms of—you know, really, in terms of the deficit.  But everybody realizes this, too, I think, intuitively.  There‘s different ways to spend money.

You can put up construction sites and put a lot of guys and women to work, where you see things being built that should have been put off—or shouldn‘t have been put off a long time ago, roads, highways, bridges that are falling apart, subways that need to be modernized.  Things are getting done.  The smell of construction in the air is a good thing.  Just writing transfer payments and writing checks to somebody in some financial institution doesn‘t seem to be working yet.

MASTERS:  Well, and not only—not only just giving checks to financial institutions.  I mean, I think I will agree with Ron here that the last economic stimulus package, in which we wrote checks to individual American taxpayers, didn‘t work particularly well, either.  We now know that 20 percent of that went to...

MATTHEWS:  Well, there‘s so much crap in those stimulus packages.

MASTERS:  Well—exactly.

MATTHEWS:  Every time they pass one—Marion Berry had 32 million bucks in there for assorting spending in D.C.  Remember that?  Every time they—everybody—you know, Bobby Byrd‘s waiting to—he‘s got forklifts down in West Virginia, bringing the money in there, you know?  He‘s on the Appropriations Committee—yes, Appropriations Committee, I mean, just jamming more money into pork barrels.

CHRISTIE:  Well, $700 billion for the financial bail-out.  We did $300 billion for mortgages earlier in the year.  That‘s a trillion dollars right there.  You mentioned we‘ve got a trillion-dollar deficit.  We need to spend money responsibly, but throwing money because people in Congress want to throw it back to their constituents is not good economic policy.

MASTERS:  As Russell Long said, a trillion here, a trillion there, and eventually, you‘re talking about...

MATTHEWS:  That was Hugh Scott.

MASTERS:  Hugh Scott?

MATTHEWS:  No, it was Russell Long that said, Don‘t tax me, don‘t tax you, tax somebody behind the tree.

MASTERS:  Behind the tree.

(LAUGHTER)

CHRISTIE:  (INAUDIBLE)

MATTHEWS:  There‘s nothing wrong with being old.  The—it seems to me that the country needs confidence.  And as Warren Buffett said to me a couple weeks ago in a conference I was in Los Angeles last—two weeks ago -- he said that the only institution in American life today that‘s capable of leveraging, taking borrowed money and spending it aggressively on investment, is the federal government now.  The states and localities are broke.  Business is chicken.  Banks are chicken.  People are hoarding money.  The hedge fund guys don‘t know where they are.

Everybody‘s sort of pulling back.  Somebody has to start spending money.  And we say we don‘t like spendthrift societies, but we really do.  We like people to spend money at Christmas and the holidays.  If the federal government doesn‘t spend money, nobody does.  So I would argue—well, let me prose it to you, Rich.  You‘re the Democrat here.  Is that smart, to start accelerating public works, all these projects that are behind schedule, get them on line?

MASTERS:  I think absolutely.  And let me tell you why.  I mean, it‘s not just me that‘s saying—this is not just Democrats.  I mean, you got the Chamber of Commerce, you‘ve got pro-business groups that are saying, We have got to have a better infrastructure.

We may live in a virtual society now, but it still takes roads and bridges and trains to get the job done.  We‘re going to have to have a serious, serious look at the infrastructure in this country.  I mean, look what happened in Minnesota.  Look what happened down in Louisiana, frankly. 

I mean, you know, we have got to have a serious discussion about it.  And not only—and that‘s another thing that I liked about president-elect Obama‘s speech today.  When he talked about economic stimulus, it was not just to spend money for spending money‘s sake.  It was behind a purpose, building roads, building bridges.  Also, it creates jobs.  It would—it puts money in people‘s pockets, so they can go out and drive the economy. 

MATTHEWS:  I think people like to see construction. 

MASTERS:  Yes. 

MATTHEWS:  They like to see things going up. 

(CROSSTALK)

MATTHEWS:  What they hate are foreclosure signs. 

MASTERS:  Yes. 

CHRISTIE:  Spending money for the sake of spending money is bad economic policy. 

MATTHEWS:  I know.  We will have to work this out.  But we‘re all turning toward aggressive action.  I think we all agree on that, because...

(CROSSTALK)

MATTHEWS:  ... talking up—boosterism isn‘t working.  Talking it up, jawboning isn‘t working. 

Rich Masters, thank you.

Ron Christie, this has been a very exciting Friday afternoon. 

Up next:  Want to decide a close election?  Here is an idea.  They did it in this town in Minnesota.  They flipped a coin for who is going to be the next mayor, because it was a tie vote, and they didn‘t want to waste any more time.  And, by the way, neither guy really, really, really wanted the job, so they flipped a coin. 

(LAUGHTER)

MATTHEWS:  We will talk about that in the “Sideshow.”

Plus, president-elect Obama—we have got to learn that phrase—he had a funny line today.  In a very serious discussion about economics, he was asked, how you going to pick a dog?  He answered it like he was getting the advice from the Council of Economic Advisers.  These are very funny answers.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.”

I loved the part in president-elect Barack Obama‘s press conference this afternoon when he took a reporter‘s question about what dog he was going to buy his daughters, and turned it into a serious analysis of his method in deciding the matter. 

(BEGIN VIDEO CLIP)

QUESTION:  Everyone wants to know, what kind of dog are you going to buy for your girls? 

(LAUGHTER)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT:  With respect to the dog, this is a major issue.  I think it‘s generated more interest on our Web site than just about anything. 

We have—we have two criteria that have to be reconciled.  One is that Malia is allergic, so it has to be hypoallergenic.  There are a number of breeds that are hypoallergenic.

On the other hand, our preference would be to get a shelter dog, but, obviously, a lot of shelter dogs are mutts like me.  So—so whether we‘re going to be able to balance those two things I think is a pressing issue on the Obama household. 

(END VIDEO CLIP)

MATTHEWS:  Now, here‘s a good way, by the way, to cut down on the cost of political companies. 

Two candidates for mayor in the town of Goodridge, Minnesota, ended up in a tie.  And since neither of them had run for the job—they were write-ins—they decided to forgo a recount and simply settle things with a coin toss.  Talk about good sports. 

Next:  When it comes to President Bush‘s memoir, it‘s, thanks, but no thanks.  The Associated Press reports that interest in a potential George W. Bush autobiography has been, well, underwhelming, with many publishers saying it‘s extremely unlikely he‘s going to pull down the 15 million bucks that Bill Clinton commanded for his memoirs. 

Time now for the “Big Number” Friday night.

Barack Obama could become the baby name of the year, not just in the U.S., but in the world.  Get this.  In the West African country of Sierra Leone on Wednesday, how many boys in the main hospital‘s baby ward were named after America‘s president-elect?  Six in 10.  Obama-mania hits Africa, six in 10 baby names named—baby boys named Barack Obama in Sierra Leone this week.  That‘s tonight‘s “Big Number.” 

Up next: inside the McCain/Palin infighting.  How much truth is there to the latest accusations about Sarah Palin and the things she doesn‘t know?  How much of a liability was she for the Republican ticket?  And what does the future hold for her?  All things Palin—coming up next. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

SCOTT COHN, CNBC CORRESPONDENT:  I‘m Scott Cohn with your CNBC “Market Wrap.”

Stocks rallied, despite today‘s dismal unemployment numbers.  Investors also liked what they heard this afternoon, apparently, from president-election Barack Obama.  The Dow Jones industrials surged 248 points.  The S&P gained 26, and the Nasdaq up 38.  But, for the week, all the major averages were down about 4 percent. 

The economy lost 240,000 jobs last month, and the nation‘s unemployment rate jumped to 6.5 percent.  That‘s a 14-year high.  So far this year, 1.2 million jobs have disappeared. 

General Motors reported a third-quarter loss of $2.5 billion and warned it could run out of cash next year.  It also says it suspended merger talks with Chrysler.  Meantime, Ford reports a quarterly loss of $129 million, and says it will eliminate another 2,200 jobs.  In the face of all that, president-elect Barack Obama promised a new economic stimulus package, help for the auto industry to focus on creating jobs. 

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

MATTHEWS:  Welcome back to HARDBALL. 

Sarah Palin, the governor of Alaska, isn‘t escaping her defeat for vice president unscathed.  McCain campaign insiders are pointing the finger at her for being uninformed, unwilling to study, hard to control, and for harboring ambitions—What‘s wrong with that? -- beyond 2008. 

“Newsweek” reports in the book they‘re putting out—it‘s in serial form this week in the magazine—that—quote—“Steve Schmidt, McCain‘s chief strategist, had been compelled to personally take over Palin‘s debate prep when she seemed unwilling to engage in the drudge work of learning the issues.  McCain‘s advisers had been frustrated when Palin refused to talk to donors because she found it corrupting.”  That‘s to talk to people with the money.

“And they were furious when they heard rumors that Todd Palin, her husband, was secretly calling around in Alaska the rich people, the bigwigs, telling them to hold their money until 2012.  In his concession speech, McCain praised Palin, but the body language”—this is in “Newsweek”—“between the two of them on stage was not particularly friendly.  Palin had asked to speak.  Schmidt vetoed the request.”

Does Palin deserve the criticism she is getting?  How much of a liability was she to John McCain?  And does she have a political future? 

Eugene Robinson and “Newsweek”‘s Howard Fineman are both MSNBC political analysts.

Let‘s all be reporters here.  It‘s astounding to me the amount of stuff being dished by the McCain people. 

Howard, you are at “Newsweek.”  You know how it gets dished.  Are these people being plied for information?  Are they shoving it over the transom into “Newsweek”‘s headquarters? 

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT:  Well, we were first in line because we had two terrific reporters on the project. 

And that way the project works is that they go behind lines for a year, agree not to report anything until after the election is over. 

MATTHEWS:  What, 15 minutes after the election is over? 

FINEMAN:  Well, when it‘s over.  So, Katie Connolly and Holly Bailey, who are our two terrific reporters on this, were first line, OK?  And they were incredibly diligent and they got the stuff. 

But it‘s also true that the McCain campaign, and people like Steve Schmidt and all the others, who picked Sarah Palin—John McCain didn‘t know Sarah Palin—they picked Sarah Palin.  When she didn‘t work out the way they hoped, then they have just opened every closet, literally, and clothes and accusations and everything has fallen out.

(LAUGHTER)

MATTHEWS:  Gene, this story is obviously a sidebar story.  It‘s not the main story.  But here is somebody who hit the American stage with a flash.  I included—I like to reserve judgment occasionally.  And I thought, maybe this is a winner here.  Maybe this is the genuine article, a Republican woman who has a lot of style, who knows how to give a speech, which is rare in American politics today.  Oratorical ability is not common.  She has it. 

She gives a speech that grabs attention.  And even—by the way, we‘re talking about her.  We‘re not talking about Dick Gephardt.  We‘re not talking about somebody else.  We‘re talking about Sarah Palin.  So, she has something...

EUGENE ROBINSON, MSNBC POLITICAL ANALYST:  She does. 

MATTHEWS:  ... a je ne sais quoi.

ROBINSON:  And it‘s—I think it‘s fascinating that—that they‘re going—and, frankly, yes—out of their way to destroy the chance, whatever chance she has, of being a major player in 2012. 

MATTHEWS:  But the bus has left town.  And they‘re bringing her—it‘s like that woman who wanted to get even with her ex-husband, when she drove the car back over him a couple times.  That was—remember that?

(CROSSTALK)

ROBINSON:  Yes.  Yes.  Exactly.  They back up, and then they go, and then they back up over... 

(CROSSTALK)

MATTHEWS:  Why are the McCain people so determined to erase any evidence of their running mate? 

(LAUGHTER)

ROBINSON:  You know, something—either something she did just ticked them off so much, that they can‘t stand her—and I can‘t imagine it‘s just that she‘s a diva.  I mean, she‘s a...

(CROSSTALK)

MATTHEWS:  Oh, forget all that.  Everybody in politics is a diva. 

They‘re divas in our business.

(CROSSTALK)

ROBINSON:  Forget that.  It‘s not just being a diva.  And I don‘t think—they did pick her.  They are the ones who picked her. 

(CROSSTALK)

MATTHEWS:  Did they feel that she didn‘t fulfill the minimal obligations of a running mate, which is to be a running mate, that she was plotting ahead of time?

When she said that very, I thought, authentic comment, “I have got nothing to lose,” that struck me as a statement.  “I‘m going to lose this time, but it‘s a run-up to the next time.”

FINEMAN:  Oh, yes.  But, by that time, the relations had deteriorated beyond all hope.  And she was the one, for example, who went out and attacked Bill Ayers.  She made a bigger...

MATTHEWS:  She came up with that issue. 

FINEMAN:  She made a bigger deal of Bill Ayers, we report in the project, than the campaign at that point was ready to do. 

MATTHEWS:  Was the proof that she read the paper?  Because she came out after she was attacked in that interview with Katie Couric—not attacked.  Katie Couric asked her an obvious question.  “What do you read?” 

(CROSSTALK)

MATTHEWS:  She couldn‘t come up with anything. 

A couple days later, after hanging fire for not being a reader, she said, I was looking at my copy or a copy of “The New York Times” the other day, and I happened to see this stuff.

ROBINSON:  Yes. 

MATTHEWS:  It was like she was sticking it back to the reporters and the hot shots. 

(CROSSTALK)

ROBINSON:  You know, it‘s conceivable that she felt the thing to do was to go after him on that, and she was being held back.  And she said, no, I‘m going after...

(CROSSTALK)

MATTHEWS:  Well, I thought it was a way of saying, I will read your damn snarky “New York Times” and I will find something in there.

(CROSSTALK)

ROBINSON:  How many—how many—how many crowds, enthusiastic crowds of 20,000 and 30,000 people was John McCain drawing without Sarah Palin?

MATTHEWS:  Look at her.  Look at these people.  They‘re not on the payroll.  They love her. 

ROBINSON:  She was the draw.  And she does have that—you know, it‘s not a je ne sais quoi, but she has...

(CROSSTALK)

MATTHEWS:  You know why they liked her?  She‘s not like us.  She‘s not a suit. 

(CROSSTALK)

ROBINSON:  She has charisma. 

(CROSSTALK)

MATTHEWS:  She‘s different.  She wears style—you can say what you want about the clothes.  They look great on her. 

FINEMAN:  Also, she‘s good on the attack, on the political attack, by the way. 

MATTHEWS:  Because?

(CROSSTALK)

MATTHEWS:  Why is she good?  Because she‘s nice about it? 

FINEMAN:  Because she has a fearlessness about her.  You can say she‘s ignorant of a lot of things, which she may well be, but she‘s fearless.  And she went after the powers that be in parts of the Republican establishment in Alaska.  That was oversold a little bit, by the way.  She never took on Ted Stevens and some of the other people.  She played ball with them.

But where she could attack, she did.  And she‘s good at it.

(CROSSTALK)

MATTHEWS:  We have just ventured into the greatest question of the night.

(LAUGHTER)

ROBINSON:  Yes. 

(CROSSTALK)

MATTHEWS:  At some point, Ted Stevens, who was reelected, despite his conviction on those seven counts because he got his roof fixed...

FINEMAN:  Some would argue because of his conviction...

(CROSSTALK)

MATTHEWS:  Talk about show the—stick it to the big government in Washington, the D.C. jury. 

FINEMAN:  Right. 

MATTHEWS:  He gets reelected.  He may get removed, but he may not.  He may retire, which is more probable.  At some point after Christmas, he may retire, with dignity. 

She will call a special election as governor.  She could call a special election, and then announce her candidacy for Senate of the United States.  What would stop her?  Why wouldn‘t she do it?

FINEMAN:  Absolutely nothing.  And I think she might want to do it, although she says she‘s going back to Alaska to achieve energy independence for us by building that—that pipeline.  She would argue that she would take part in energy policy.

(CROSSTALK)

ROBINSON:  Exactly. 

FINEMAN:  She‘s in it...

MATTHEWS:  Bill Clinton said he wasn‘t going to run for president the last time he got elected governor.  And he went back and said, I checked with the people, and they said it was all right. 

(CROSSTALK)

FINEMAN:  I agree.  I agree.

(CROSSTALK)

MATTHEWS:  It‘s not hard to get a reversal opinion, if you want one.

ROBINSON:  So, she will do a tour like Clinton did, right?

(CROSSTALK)

MATTHEWS:  Yes, do a tour.

(CROSSTALK)

MATTHEWS:  He went out to the people of Arkansas. 

(CROSSTALK)

MATTHEWS:  I mean, Bill was good.  He‘s the best politician of our time.  Bill Clinton said, I‘m going to go back and talk to the people of Arkansas, and they said it‘s OK for me to run for president, which they probably did say.

She‘s just going to go to the people, friendly peeps up in Alaska, and she will say, is it all right if I run for senator?  Yes, you show them, girl.  You betcha.

(CROSSTALK)

FINEMAN:  I totally agree with that.

Also, in talking to conservative activists here...

MATTHEWS:  Yes. 

FINEMAN:  ... they don‘t have the same view of Sarah Palin as the McCain campaign now does. 

MATTHEWS:  Right. 

FINEMAN:  And the more that the McCain campaign staffers dump on Sarah Palin—and don‘t forget that McCain was always distrusted by the conservative activists—the more her stock rises with the hard-core conservative activists.

(CROSSTALK)

MATTHEWS:  She carried a lot of counties in Pennsylvania, for example, on the East Coast, where they did much better than George Bush did...

FINEMAN:  Yes. 

MATTHEWS:  ... by her being on the ticket.  So, she has appeal in Appalachia.  Well, we saw the map...

(CROSSTALK)

FINEMAN:  She helped in the places that cling to their—quote—quote—“cling to the guns and their faith.”  She helped in those places.

MATTHEWS:  But we don‘t believe that that‘s why they do that. 

FINEMAN:  No.  We don‘t believe that‘s why.  That‘s why...

(LAUGHTER)

MATTHEWS:  I like the phrase one of my producers came up with, which is, she‘s a hillbilly run loose at Neiman‘s. 

FINEMAN:  Well, that was in the “Newsweek” project. 

(CROSSTALK)

MATTHEWS:  Is that the phrase?

(CROSSTALK)

FINEMAN:  ... staff were saying, Wasilla hillbillies looting Neiman Marcus...

MATTHEWS:  Looting.

FINEMAN:  ... from coast to coast. 

(LAUGHTER)

FINEMAN:  And I love the image of the RNC lawyers in their trench coats going out to Juneau to collect the boots and the...

(CROSSTALK)

MATTHEWS:  Ben Ginsberg is going out there...

(CROSSTALK)

MATTHEWS:  Ben Ginsberg is going out there and saying...

(CROSSTALK)

FINEMAN:  Give us back the dresses. 

(LAUGHTER)

FINEMAN:  Give us the dresses back. 

(CROSSTALK)

MATTHEWS:  By the way, I have this image, Gene, of some suit from D.C., from the RNC...

(LAUGHTER)

MATTHEWS:  ... going in and say, we would like to see the governor‘s wardrobe...

(LAUGHTER)

MATTHEWS:  ... and then grabbing the best stuff that looks the priciest and hauling it out of the house. 

ROBINSON:  Not only that.  They are going to have to take stuff out of the first dude‘s closet, too, right, because, apparently, he got... 

(CROSSTALK)

FINEMAN:  And these people do know how to use shotguns, don‘t they? 

MATTHEWS:  Yes.  Well, “Newsweek” reports—it‘s part of this package.  When does the book come out?  It‘s almost out now.

FINEMAN:  Well, it‘s out. 

(CROSSTALK)

FINEMAN:  The magazine itself has book-length...

(CROSSTALK)

MATTHEWS:  It‘s great stuff, if you love this rich ticktock.

(CROSSTALK)

FINEMAN:  We have done it seven times in a row, seven campaigns in a row.  They‘re terrific.

MATTHEWS:  Well, “Newsweek” reports that, when Palin was being

considered, “Schmidt”—that‘s the top campaign kick for McCain—“and

Salter,” who is his alter ego, John McCain, “probed and pressed”—Can we

move the prompter? -- “probed and pressed and looked for gaffes between her

views and McCain‘s.  Palin shrugged off substantive difference.  ‘What‘s

the darn deal?‘”

What‘s this about? 

FINEMAN:  Well, what it‘s about is—and this is—it just boggles my mind, because these people picked her. 

They didn‘t know what they were getting.  They had done no advance work.  They had no prep.  They didn‘t know what she was really like at all.  They had heard—they knew about her secondhand from some of these same conservative activists. 

They knew some of her press clips.  They didn‘t know that they had a lot more teaching to do and explaining to do than they counted on. Then they got mad about it.  It‘s not her fault. 

ROBINSON:  The other thing they didn‘t know was the assertiveness. 

FINEMAN:  The combination of ignorance and assertiveness was powerful. 

(CROSS TALK)

MATTHEWS:  When I was kid, I bought a ‘57 Chevy about ten years later. 

I really wanted a ‘57 Chevy, with the silver fin on it, the chrome on it.  I bought it.  I found out later the car had duel carbs, a lot of illegal stuff on it.  It had a couple exhaust pipes which are illegal. 

FINEMAN:  You‘re venturing into really dangerous territory.

MATTHEWS:  So bought this and I made the mistake of doing it.  My parents had to trade it in to get another car.  Is this what they‘re doing now, the McCain people?  They went for it because they loved the fins, the action part of her that was attractive to the voters.  They never looked at the other stuff. 

FINEMAN:  They would also like to talk about that rather than the ways that McCain Himself screwed up the campaign by, for example—

MATTHEWS:  Being boring? 

FINEMAN:  -- saying, I don‘t really know much about economics, and by what turned out to be a misbegotten trip to back Washington to rattle the cages. 

MATTHEWS:  What was worse, Sarah Palin or the statement, the fundamentals of the economy are strong? 

ROBINSON:  Which one killed them. 

MATTHEWS:  Why doesn‘t Governor Palin have her own troops dumping on the other side?  Is she being a gentle-lady here and taking this heat so that everybody will know that she took it?  Is this smart?  Could she be smart with this conversation we‘re having here right now?  Everybody is getting a yuck yuck about me now.  Two months later she runs for the Senate.  Three months later, she runs for the US Senate, wins.  Comes back to the Senate.  The Washington press corps think it‘s pretty funny that I‘m kind of a hick.  They think it‘s funny.  But I got elected by hicks and you guys are the bad guys. 

FINEMAN:  I think she‘s very shrewd.  I‘m just saying, she didn‘t know all the foreign policy and domestic policy.

MATTHEWS:  I want to ask you a tough question, my buddy.  I think one of them is pretty clear.  I think not knowing about Africa being a continent, but a continent which has 57 countries on it—She apparently, according to “Newsweek” did not know the difference between a continent and a country.  She thought Africa was a country.  And she thought South Africa this is contradictory—is also a region but not a country.  Is it true that she didn‘t know the difference between Africa and the countries in it? 

FINEMAN:  Well, if we reported it, it‘s true, my friend. 

(CROSS TALK)

ROBINSON:  Rephrase the question. 

MATTHEWS:  I love the way you just did that.  That was Nixonian. 

(CROSS TALK)

MATTHEWS:  Is it plausible that an adult doesn‘t know that Africa is a continent, not—is it plausible that an adult doesn‘t know that Mexico, the United States and Canada share North America? 

ROBINSON:  It‘s implausible to me.  But I want to know how many of “Newsweek‘s” sources resigned in horror from the McCain campaign and came out and said, you know, we‘ve just selected a woman for the ticket who is so unqualified? 

FINEMAN:  They were pleased with the pick.  I wasn‘t working on the project, but I was interviewing these guys in real time.  They were excited about the pick of Palin. 

MATTHEWS:  Can you imagine—

FINEMAN:  At first, they were really excited about it.  Wait a minute, they acknowledged that it was a roll of the dice, but they were proud of it.  They were proud of the risk they took. 

MATTHEWS:  I know.  For a while there, I thought it was wonderful, too. 

FINEMAN:  We all did. 

MATTHEWS:  Can you imagine if a reporter had asked her the question, Katie Couric, for example, governor, is Africa a continent or a country?  Everybody would have said that‘s a foul ball.  You can‘t ask a question like that.  How many countries are in North America? 

ROBINSON:  That‘s one of those gotcha questions, Chris. 

MATTHEWS:  It‘s a gotcha question.  But it turns out the McCain people are the ones hosing her right now.  Anyway, all this stuff comes from “Newsweek.”  As Howard points out, it‘s all true.  Eugene Robinson, Howard Fineman, what a stand up guy.  If she was as much of a stand-up person as you were, we wouldn‘t have this fight going on. 

Up next, what is the new Obama administration going to look like and what will it be?  Will he be able to get it done?  That‘s the big question.  We were talking about that at the beginning.  It‘s the serious business of the incoming administration, not only the history that was made, but the economics that has to be made.  The politics fix is coming up next.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time for the politics fix.  Joining me, two experts, Michelle Bernard, who is our analyst here, and “Politico‘s” Roger Simon.  Roger, is there going to be some blood-letting, some knife work done on Joe Lieberman?  I have to tell you, I think there‘s judgment to be done here.  And I think it‘s hard to say where you cross the line. 

If you‘re going to be a member of a political party, it‘s one thing to disagree on a couple big issues, Middle East politics, wars.  That‘s one thing.  But when you campaign every day with the other party and you—look at this—you stand with the other guy when he calls your guy a socialist and trashes your party‘s nominee every day, does that mean the divorce should be finalized? 

ROGER SIMON, “POLITICO”:  No.  I think you‘re right from a political point of view, from Harry Reid‘s point of view.  If you don‘t have party discipline, why have a party structure at all?  But I don‘t think this is the first message that the new president wants to send, that you have to be a hard-line Democrat or you‘re out.  Joe Lieberman can be arrogant.  He can be self-righteous. 

MATTHEWS:  I think he‘s likable, but he‘s campaigning with the other side. 

SIMON:  He says, I‘m what you‘re supposed to be, someone who puts principle ahead of party.  When I disagree with the Democrats, I go with the Republicans.

MATTHEWS:  Why have a convention?  Why have a primary system, if, at the end of it all, it‘s a free for all?  Michelle, if you can pick any candidate, why have a party selection process? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  Well, a lot of people would ask that very question, like Ralph Nader.  He doesn‘t like political parties.  Bottom line is we‘re in this era now where the American public wants something different.  People are talking about—

MATTHEWS:  By the way, if the Democratic party nominated Ralph Nader, he‘d be happy to run on the ticket. 

BERNARD:  People want change.  People want trans-partisan politics.  There‘s an argument to be had that Joe Lieberman put country first in standing by his beliefs.  And he‘s voted with the Democrats more than some Democrats have. 

MATTHEWS:  You guys depress me.  Why have uniforms if the game doesn‘t matter.

SIMON:  There are some—

BERNARD:  It does matter. 

(CROSS TALK)

MATTHEWS:  Let‘s put your reporter‘s hat on, Roger and you Michelle.  Question, will the Democratic caucus, which now has 57, maybe 58 members if Al Franken wins, will they have the stuff to tell Joe Lieberman, you‘re no longer chairman of Homeland Security?  You‘ll have to have a lesser, maybe small business or something more petty?  You‘re not getting the big jobs anymore? 

SIMON:  They might.  Barack Obama could be really smart and give Joe Lieberman a job in the administration, like Homeland Security, like some national security job. 

MATTHEWS:  You are loony tune.

SIMON:  Out of the Senate. 

MATTHEWS:  Nowhere on god‘s Earth are they going to reward a guy with a major—

SIMON:  They pick up the seat in Connecticut with a Democrat.  We do have elections in this country. 

MATTHEWS:  OK, right. 

SIMON:  Democrats run and win. 

MATTHEWS:  I‘m losing this argument, so I may change the topic.  But I really like—I like a lot of people in politics I don‘t agree with.  Let me ask you about Rahm Emanuel.  I know you‘re going to disagree with me.  I think it is a smart pick, what do you think? 

BERNARD:  I think it‘s a smart pick.  I know a lot of people on the right absolutely are going berserk over this.  But he is effective.  I think Senator Obama is going to need protection from the far left wing of the Democratic party right after he‘s inaugurated.  And Rahm Emanuel is going to run defense or offense, I should say, for him. 

MATTHEWS:  Do you ever watch his eyes?  Look at those eyes.  He has the most intense—it is frightening sometimes.  Look at those eyes.  They are intent. 

SIMON:  I‘m from Chicago.  I‘m for all Chicagoans.  Rahm will actually be very powerful and the potential to be a really good chief of staff.  In the modern era, the presidential staff, the White House staff is far more powerful than the cabinet.  We spent a lot of time—

MATTHEWS:  We learned that.  It started with Nixon. 

SIMON:  It is not just a gate keeper anymore, your chief of staff.  It is policy and the implications that policy has on politics, politics has on policy.  That‘s what Rahm did in the Clinton White House.  He gets that nexus between politics and policy.  He can talk on both.  And he simply is I never know how to pronounce it—indefatigable. 

MATTHEWS:  You know who he reminds me of?  It reminds me of the “West Wing,” where you have the nice, sort of, sunny president played by Martin Sheen.  You have the serious—I don‘t know which character you play, maybe Ron Silver character, one of those characters, you know, serious, driven, pragmatic, ram rod. 

BERNARD:  Effective. 

MATTHEWS:  Gets it done.  Ram rod.  Anyway, we‘ll be back with more.  I want to talk more about this thing with politics.  We‘re going to finish up the week with some fun.  We‘ve got some interesting pictures.  We‘ll be back with Michelle and Roger to finish up the week.  What a week it has been.  I hate to get away from the grandeur of what happened Tuesday night.  It still was the most stirring political event night of my life.  I am so impressed that we‘re not just people who voted, not the usual way, but the people who voted for Barack Obama who wouldn‘t even tell their family members they wanted to vote with him, because they were breaking with so much tradition.  There was a reverse Bradley Effect.  It was stirring to watch.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Michelle and Roger.  Let‘s do something a little different here right now.  Let‘s take a look at some pictures of this campaign.  This is a photographer—the editors of “Photography Trade Magazine” called “Photo District News” chose the five still pictures you‘re about to watch that‘s very important this election.  They‘re part of a photo essay in the “New Yorker.” 

Let‘s take look at this.  We‘re going to look at all these pictures.  Let‘s take a look at the first one.  This is the picture that really encouraged General Colin Powell, former secretary of state, to endorse Barack.  I‘m going to read that to you.  Please keep that up there.  That‘s the grave stone of Kareem Rashad Sultan Kahn (ph), corporal US Army, February 12th, 1987-August 6th, 2007 .  Bronze star, purple heart, Operation Iraqi Freedom. 

There is so much on that tombstone, Roger.  It‘s obviously his religion, his cultural background, which is Middle Eastern.  And that wonderful woman paying tribute to him in death.  That‘s apparently what moved General Powell to say, we have to stop this Islamic bashing, even at a time of fear. 

SIMON:  And this was a very important point, because this was a point that the Obama campaign was not making that Colin Powell made for them.  The Obama campaign was very concerned to get the truth out, that Barack Obama was not a Muslim.  He is a Christian.  But Colin Powell, General Powell took it a step further.  He said, that‘s true, but, you know what, there‘s nothing wrong with being a Muslim.  They give their lives for America, too.  And look at this picture.  It shows you that. 

That was a very important point to make.  If you‘re a Muslim American in America and you want to come out of this election thinking, there is a future for your children. 

MATTHEWS:  There‘s a lot of Muslims in this country.  A lot of people from the Islamic faith and that background.  A lot of them live in Michigan.  A lot of them live in New Jersey.  They‘re all around.  Your thoughts.  I thought that was a very—well, it grabbed me. 

BERNARD:  It grabbed me.  I thought it was a very moving and beautiful picture.  It really says to—whether you‘re Muslim or not, you can‘t help but look at that and remember, whether you were born an America or not, if you die in service to our nation, your blood is no less red or no less American than anyone else. 

MATTHEWS:  Let‘s go to “Rolling Stone,” Jan Winner (ph) -- he‘s a very big endorser of Barack Obama, I must say.  This is from the July 10th issue, a very fetching picture.  But no text.  You see that flag pin there?  Roger?

SIMON:  And it is a great picture.  Photographers are so talented.  This is why still photography will never be outmoded.  He doesn‘t look like the messiah in that picture.  He doesn‘t look like the chosen one.  He has the goofy grin. 

MATTHEWS:  He certainly doesn‘t look dangerous.  Here‘s July 21st, Obama joined General David Petraeus and Chuck Hagel—he‘s a Republican senator from Nebraska—on a helicopter.  For some reason, there was a belief, Michelle, that this showed, even though it is casual, a commander-in-chief, a guy out there on the front. 

BERNARD:  It is presidential.  He looks presidential.  He was sort of proving his military credits.  Also, he‘s with Republicans.  He is reaching out across the aisle on an issue that Democrats and Republicans have disagreed on. 

MATTHEWS:  I think he‘s not going to salute like Bill Clinton did.  I think only if you‘ve serve in the military life should you ever salute.  Anyway, on September 2nd, just days after he was named—she was named McCain‘s—this is another Jan Winner.  But this I would call a hit.  This wasn‘t so nice.  This was captioned, I think unfairly—I‘ll say that—

“babies, lies and scandal.  That was the opening picture a lot of people saw in their Safeway and other supermarkets.  Here‘s a cover on the “Oregonian” newspaper that shows Obama in a sea of people.  Just a mass of people here in this picture.  I think it is meant to be overwhelming.  Roger?

SIMON:  And we often forget.  We think these candidates are so used to huge crowds -- 

MATTHEWS:  Ronald Reagan never got over 50,000. 

SIMON:  And Barack Obama would cite that crowd.  Every politician I‘ve ever interviewed who has run for president has mentioned the power they draw from the crowds. 

MATTHEWS:  People who go to the rallies vote.  Michelle? 

BERNARD:  Man of the people. 

MATTHEWS:  Thank you very much, Michelle Bernard.  Thank you, have a nice weekend, everybody.  An historic week is about to end.  Roger Simon, sir, thank you.  Join us again Monday at 5:00 Eastern for more HARDBALL.  This transition is getting very exciting.  We‘re going to learn who is in the cabinet pretty soon.  It‘s now time for “1600 PENNSYLVANIA AVENUE” with David Gregory.

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

END   

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