updated 11/17/2008 2:45:07 PM ET 2008-11-17T19:45:07

Guest: Michelle Bernard, Jennifer Donahue, Jeb Hensarling, Nate Silver, Roger Simon, Debbie Stabenow

CHRIS MATTHEWS, HOST:  Secretary of State Hillary Clinton?  The world just keeps turning.Let‘s play HARDBALL. Good evening.  I‘m Chris Matthews.  Leading off tonight: Team of rivals?  The story broke last night and heated up today.  Barack Obama is considering Hillary Clinton to be his secretary of state.  It would unite the Democratic Party, would give President-elect Obama a secretary of state with a record a notch to his right on the Middle East.  Plus, he may really like her.  NBC‘s Andrea Mitchell has been out front of this story from the start.  She‘ll join us in a minute. Also, should the government bail out the auto industry, the big three?  Opponents of a bail-out point out that countless well-known companies have been allowed to disappear from the American landscape.  Americans will still build and buy cars, they say, just not necessarily GMs, Fords or Chryslers.  Supporters of the American auto industry say it‘s just too big, too iconic, too American to be allowed to go under.  So who‘s right? Plus, lots of people are guessing what will happen next in the still-unresolved Senate races up there in Alaska, in Minnesota and Georgia.  But a baseball numbers cruncher named Nate Silver is doing more than guessing.  He‘s developed a remarkably accurate tool to predict elections.  And his Web site, Fivethirtyeight.com, has become one of the go-to places for polling and predictions.  We‘ll talk to Nate a later about what he sees happening in those three last races that could add up to 60 Democratic Senate seats. Also, will Barack Obama pick Hillary Clinton as secretary of state?  Would Hillary vote (ph) her own power base if given the job?  We‘ll get into that in the “Politics Fix.” And look who‘s back, my old friend and sparring partner, Zell Miller of Georgia.  Zell‘s back on the road in his home state, campaigning hard for Saxby Chambliss.  We‘ll show you what he said yesterday.  It‘s interesting. Plus, take a little walk down memory lane to show you my favorite scene in the history of HARDBALL. But first: Can you say Madam Secretary?  Sources tell NBC News that Senator Clinton is under consideration to be President-elect Obama‘s secretary of state.  NBC‘s Andrea Mitchell broke the story.  She‘s here now with Politico‘s Roger Simon. It‘s the greatest prize you can be appointed to in American life, some would say better than the Supreme Court, to be the person who represents the United States in the world.  Is it possible?  Is it plausible?  Does your reporting support the possibility, since you broke the story, that Barack Obama could well select Hillary Clinton as his secretary of state?

ANDREA MITCHELL, NBC CORRESPONDENT:  Yes, because it makes a lot of sense politically.  You remove a rival, a potential adversary.  You take her out of politics.  She cannot go out in the midterm elections, she can‘t develop more chits with campaigning for people.  You cannot do that as secretary of state.  You place her in her own territory, a confined territory, if you will, but the whole world is her landscape.  But you know what she‘s doing.  She is doing your bidding because it‘s very difficult as secretary of state to go off on your own.  Colin Powell discovered that.  You really can‘t.

MATTHEWS:  Andrea...

MITCHELL:  Yes?

MATTHEWS:  ... my colleague, you are so political.  Give me the positive reasons to pick her.  Those are restraining reasons of a potential rival, if you believe she‘s still a rival.

MITCHELL:  She is known throughout the world.  She has relationships with all of these leaders.  And from her perspective, she‘s blocked in the Senate in so many ways.

MATTHEWS:  No committee chair, no standing committee.

MITCHELL:  No committee chair, no seniority to speak of.  Max Baucus has already, as Finance chair, come out and said, This is my health care plan.  Ted Kennedy has told her, I am here.  I am well enough.  I am doing health care.  He‘s developing his own plan.  He‘s not going anyplace anytime soon.  Chris Dodd has signaled that if, for some reason, the ailing Ted Kennedy were not to continue with his chairmanship, that those would be the circumstances that Chris Dodd would step down from Banking and take over the health agenda...

MATTHEWS:  Right.

MITCHELL:  ... from Ted Kennedy.  So she has no options there.  She‘s not going to become majority leader any time soon.  These are rivals, former competitors for the presidency, Chris Dodd among them, who are not about, having lost that majority leader‘s post by one vote some years back, going to turn it over to Hillary Clinton.

MATTHEWS:  Roger, what do you see as the competition now?  Because this is an appointment that has to be made in the next couple of weeks.  It‘s the key to our foreign policy, who he names.  We all thought that John Kerry was the frontrunner.  There‘s always Richard Holbrooke, who could be well qualified.

ROGER SIMON, POLITICO.COM:  Right.

MATTHEWS:  There‘s Bill Richardson, who, of course, would like the job and has said so.

SIMON:  Chris Dodd‘s name is often mentioned too.

MATTHEWS:  So is Hillary Clinton now the frontrunner to be secretary of state?

SIMON:  I think, of those names, you would have to say yes, and for the reasons that Andrea mentioned.

MATTHEWS:  If she wants it.

SIMON:  If she wants it.  She is a brand of her own.  And let‘s not overlook the fact that she‘s actually qualified for the job.  That helps.

MATTHEWS:  One way we find (ph) this, sort of the Occam‘s razor of our business, or one of the razors, is if she doesn‘t want it, she will not let her name keep out there for a couple of days and be shot down because then it looks like she wanted it but she didn‘t get it.  So clearly, can we assume—you‘re an expert—can we assume over the next several days, if Hillary‘s name is still up there, she wants it?  Is that a fair assumption?

MITCHELL:  Yes.  And I think this has...

MATTHEWS:  You agree, Roger?

SIMON:  I think we can assume that now because two things are happening.  The Obama campaign is not throwing cold water on Andrea‘s story.

MATTHEWS:  Well, neither...

(CROSSTALK)

SIMON:  And neither is she.

MATTHEWS:  Right, Hillary Clinton.

SIMON:  Senator Clinton.  You know, about a month ago, her name surfaced as a possible Supreme Court appointee should Obama win, and Hillary Clinton immediately threw cold water on it.

MATTHEWS:  Right.  She dumped on—but here‘s the brilliance of this.  The fact that you‘ve broken this story makes it so glistening as a great news story.  It stands up because if it weren‘t true that she‘s serious consideration—in consideration—then it would be in the interests of the Barack people to shoot it down quickly because that would mean they‘d be stuck with their second choice if they didn‘t get her.  If she didn‘t get picked, it would make it look like she‘d been turned down again, not just for president and vice president, but now for secretary of state.  It‘s in the interests of both to get the truth out, if the truth helps both of them.  Apparently, they want this nomination to be considered.

MITCHELL:  But the timing is not perfect, from his perspective.  He did not want this out now.  He wants to wait and develop his entire national security team.

MATTHEWS:  How did you get it, then?

MITCHELL:  I worked on this.

(LAUGHTER)

MITCHELL:  But he really...

MATTHEWS:  You found traitors in the midst?

MITCHELL:  No.  But he wants to have a team.  He wants to have a team to unveil together...

MATTHEWS:  Right.

MITCHELL:  ... which he would do, Defense and State and national security and the intelligence posts.  And he‘s not ready with that yet.  He doesn‘t want to be unveiling this before the summit.  He wants to have all of this on the back burner until after the summit this weekend.  He doesn‘t want foreign leaders wanting to meet prospective appointees.

MATTHEWS:  Yes.

MITCHELL:  My feeling is that she would not have gotten on the plane to go to Chicago and met with him...

MATTHEWS:  To be vetted.

MITCHELL:  ... to be vetted if she weren‘t interested, and I don‘t think...

(CROSSTALK)

MATTHEWS:  I love this in politics!  There‘s no reason to for her to be a contestant for a position, A, she doesn‘t want, or B, she thinks there‘s a heavily likelihood she‘d be rejected for.

SIMON:  But there‘s also—we don‘t...

MATTHEWS:  By the way, can we have some fun?  This is HARDBALL.  Let‘s look at some of the things that were said by Obama...

MITCHELL:  (INAUDIBLE)

(LAUGHTER)

MATTHEWS:  ... the selector, about the possible selectee in the late, great presidential primary fight.  Here they are.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  Senator Clinton‘s been running around telling people that our entire campaign, according to her, is only based on the fact that I gave a speech in opposition to the war in Iraq from the start, that that is the only basis of my campaign and that on the other hand, she has supposedly all this vast foreign policy experience.  Now, I have to say, when it came to making the most important foreign policy decision of our generation, the decision to invade Iraq, Senator Clinton got it wrong.

(END VIDEO CLIP)

MATTHEWS:  Here‘s a tougher one.  Here‘s—the next one‘s even better.  This is another shot directly at Hillary for her vote on Iraq.

(BEGIN VIDEO CLIP)

OBAMA:  I don‘t know what all that experience got her because I have enough experience to know that if you have a National Intelligence Estimate and the chairman of the national—the chairman of the Senate Intelligence Committee says, You should read this, this is why I‘m voting against the war, that you should probably read it.

(END VIDEO CLIP)

MATTHEWS:  And here‘s how he responded to her infamous 3:00 o‘clock in the morning ad knocking him.  Here‘s his response to that baby.

(BEGIN VIDEO CLIP)

OBAMA:  Besides the decision to invade Iraq, we‘re still waiting to hear Senator Clinton tell us what precise foreign policy experience that she is claiming that makes her prepared to make that—to answer that phone call at 3:00 in the morning.

(END VIDEO CLIP)

MATTHEWS:  Sticking with the story now because, clearly, those weren‘t the nastiest shots in the world.  They were sarcastic.  They were shots.  They were not put-away shots.

SIMON:  There were shots from both sides.  But let me tell you what he also said on May 22, when he referred to Doris Kearns Goodwin, our friend‘s, book “Team of Rivals.”  And he said, Lincoln basically pulled in all the people who had been running against him into his cabinet because whatever personal feelings there were, the issue was, How can we get this country through this time of crisis?  That‘s what he...

MATTHEWS:  Well, he‘s already picked one rival, Biden, a minor rival.  Now you think he might—well, your reporting says will consider picking her, his major rival, and bring them into one big tent.

SIMON:  What we don‘t know yet is what Hillary Clinton is demanding to take the job.

MATTHEWS:  Well, let me tell you one thing that she might be demanding, the right to pick all the ambassadors.  She won‘t get that because those are the plums that go to the winning side, most of them.

(CROSSTALK)

MATTHEWS:  Number two, can she pick assistant secretaries, undersecretaries?  If she gets to pick all them, she can create a political army over there.  Would he let her do that, Andrea?

MITCHELL:  I don‘t know that.  She certainly would want to have her...

MATTHEWS:  That‘s extraordinary power.

MITCHELL:  But she would also want to know what is Joe Biden‘s...

SIMON:  Exactly.

MITCHELL:  ... running room and how much foreign policy is he going to do?  And frankly, by choosing Ron Klain to be his chief of staff, he‘s sending the signal that he wants to work on legislation.  He wants to work on domestic issues.  This is Al Gore‘s former chief of staff.  He wants to get into the nuts and bolts of making things happen.  And I don‘t think he‘s going to be such a competitor on foreign policy.  The other thing that…

MATTHEWS:  Oh, wait a minute.  He won‘t want to be or couldn‘t compete?

MITCHELL:  No, I think he‘s choosing not to be.  I think that that is the deal we‘re going to learn is being cut.

MATTHEWS:  He‘s domestic.

MITCHELL:  That he will be more domestic and that he will let a secretary of state—a grown-up be secretary of state.  I also think it‘s very interesting that John McCain is coming to this meeting that Barack Obama...

MATTHEWS:  I find it impressive.

MITCHELL:  ... has been fighting John McCain...

MATTHEWS:  Do you think—now that we‘re into the very rich material here, do you think there‘s a chance that John McCain would accept a position and leave the U.S. Senate?

MITCHELL:  I would find that really surprising.  But I do think that what Barack Obama—what I‘ve been told is Barack Obama wants to work with McCain as a partner in the Senate on things like global warming, climate change, immigration...

MATTHEWS:  OK.  Based upon your reporting, can a person walk away from this program tonight with the assumption that there‘s a good chance that this is for real, that she could get this job?  There‘s a good chance.

MITCHELL:  Yes.

SIMON:  Absolutely.

MATTHEWS:  Well, that‘s another big news story.  I didn‘t think there‘d be any news this week to compete with last week.  But if those two get together sitting around the table and on the phone at night, figuring out together, between these two very competitive people, how to place America in the role, how to settle the Middle East, how to settle Kashmir, how to settle Darfur...

SIMON:  That‘s the key.  She wants to know what kind of access she‘s going to have to Barack Obama.

MATTHEWS:  Yes.

SIMON:  I mean, the vice president gets the weekly lunch.  She wants to know if she gets, you know, chai latte with him every Thursday.  If you don‘t have access to the president, guaranteed access, it doesn‘t matter how high you rank in the cabinet.

MATTHEWS:  OK (INAUDIBLE) does she get to name major people within her department, then he can have his checks on her.

MITCHELL:  And...

MATTHEWS:  Yes.  Like George Bush did to Colin Powell.

MITCHELL:  And some of his advisers are very much against this.

SIMON:  Right.

(CROSSTALK)

MATTHEWS:  You know why they would be against it?  Because she would be against letting him pick someone like John Bolton to work and keep his eye on her.

SIMON:  Nobody is going to get...

MATTHEWS:  You‘re smiling, but you know they wouldn‘t like—they would want that and she would not allow that because she‘s as smart as anybody in this business about bureaucracy. Andrea Mitchell, congratulations.

MITCHELL:  Thank you.

MATTHEWS:  We want her to get the job just so you‘ll be competitive right here!

(LAUGHTER)

MATTHEWS:  Not just be right about the lead.  Anyway—not just the possibility but the fruition.  Thank you, Roger, very much. Coming up, more on Hillary, plus bail-out, bankruptcy or bust.  Should Washington, the taxpayers, step in and bail out the big three auto makers, or should Detroit be forced to sink or swim on its own capitalistic ability?  It‘s a hot debate and it‘s next.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The American auto industry is clamoring for a piece of the bail-out, but Democrats are facing an uphill battle to get it for them.  Those opposed to a bail-out say money would only reward and prop up failure of the American auto industry.  But no rescue package could lead to bankruptcy and up to—no bankruptcy—actually, if you don‘t give them a bail-out, you get a bankruptcy, and that means three million jobs lost.  Should Washington give billions in taxpayer dollars to the American auto makers? Let‘s bring in Democratic U.S. Senator Debbie Stabenow of Michigan.  Senator, thank you.  How do we deal with this problem of inefficient leadership in the auto industry all these years, the failure to be able to compete and to sell cars?

SEN. DEBBIE STABENOW (D), MICHIGAN:  Well, first of all, Chris, in this economy, somebody has to make something.  And indirectly or directly, one out of 10 workers in this country work for the automobile industry.  So this is a basic industry. I would argue that there are so many misconceptions about where they are at this moment because, no question, past mistakes.  Currently, they are rushing to the new innovation.  They have so many more costs than their competitors around the world.  They pay for health care.  Their competitors don‘t.  They pay for innovation.  Their competitors don‘t.  In fact, China owns their automobile makers completely. So our companies are competing with countries, and as they move to these new vehicles to get us off of foreign oil, we now have the financial markets and the credit climate completely collapsed.  People can‘t buy automobiles, can‘t get loans, and they can‘t get credit. So all we‘re saying is, give them a bridge loan to be able to allow them to get into next year.  They are totally focused on the 2010 model, when we‘re going to see major changes.

MATTHEWS:  Do you believe that they could pay back a loan or could support a loan guarantee, the auto industry, that somehow, next year will be better than this year enough to make up for the loan?  Do you believe that?

STABENOW:  Chris, I do believe that things are going to get better.  I think in the short run, it‘s going to be tough.  Just—you know, look at AIG.  They started out $85 billion, now it‘s $150 billion for an insurance company.  Certainly, if they can do that for an insurance company, we can do $25 billion that will help keep three million people working in this country. What is missed in all of this debate about the economy is that the real fundamental is jobs.  We lost four million manufacturing jobs in this country.  We can‘t afford to lose three million more.  Watch how people can‘t pay their mortgages then or go into the marketplace and buy things.  You know, we‘ve had this supply-side economy with nobody paying attention to demand.  Somebody‘s got to work, have money in their pocket so they can buy things in this country.  And I‘m so pleased that we have a president that‘s coming in in January who really understands that.

MATTHEWS:  Well, you point to the cost of health care, and that‘s certainly true because of the UAW contracts and the fact we don‘t have national health care in this country, like Canada does and our competitors do.  That‘s all true.  And you have “right to work” states that can take jobs away from states like Michigan and Illinois that are—that have labor unions and good labor organization.  Are they the reasons?  Because here‘s the problem. Tom Friedman of “The New York Times” just whacked you guys.  He said, “The blame for this travesty not only belongs to the auto executives but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom year after year voted however the Detroit auto makers and unions instructed them to vote.” Do you feel that you‘re a handmaiden or a tool of the auto industry?

STABENOW:  Well, Chris, what I‘m fighting for...

MATTHEWS:  Do you feel you and the other members of the delegation do  yes, that‘s what he‘s arguing, that you do what you‘re told to do by the auto industry and you never tell them, How about smaller cars, lighter cars?  Talk about efficiency, but if the car weighs a huge number of tons, it doesn‘t matter how efficient it is, it‘s going to use up a lot of gas.  And everybody‘s been sold on these SUVs like they‘re some sort of macho machines.

STABENOW:  Well, Chris, first of all, let me say I‘m not going to say there‘s not been mistakes in the past.  We all know that.  But here‘s what we also know.  This is an industry that is racing like crazy to the new energy-efficient automobiles.  CAFE standards have been raised.  We put in place the ability for them to get retooling loans to be able to build these new vehicles.  Then what happens?  The economy collapses in terms of the credit markets. So we‘re at a point where, just as with all of the other businesses—I mean, I‘m amazed, it‘s OK to talk about banks, giving them money when they start buying up other banks, rather than giving out loans to people.  It‘s OK to talk about AIG.  But when we talk about a small fraction of that to be able to keep manufacturing in this country, three million jobs?  And I should also say it‘s not just autos.  It affects aerospace, defense.  How are we going to build those tanks, make that equipment that we need to defend ourselves around the world? It‘s all related to manufacturing.  And, if we don‘t get back on track, and have a focus on advanced manufacturing, the next generation of manufacturing in this country, I believe we‘re going to continue to lose the middle class of this country.  And I think it‘s just as fundamental as that. 

MATTHEWS:  I completely agree with you.  I think this country was built on being able to come out of high school and get a semi-skilled job and support a family. And, if you can‘t do that, we‘re not going to have a healthy society.  I agree completely.   The question is, is—are bailouts the root?  Have they worked in the past?  Are you—is your confidence justified that, in a year or so, the industry will have turned the corner, given the economy we are in right now?  Can they sell to people that don‘t have money to buy?  You know, those are the questions we don‘t have the answer to, do we?

STABENOW:  Well—well, and you know what, Chris?  The reality is, this is a bridge loan, contrary to what‘s happening with other industries.  This is a loan. 

And, secondly, you‘re right.  We have to open up credit, so people can buy automobiles.  I‘m not saying this isn‘t complicated.  Of course it is.  And it‘s all interconnected.  But I do know this.  In a global economy, we have had no manufacturing strategy in this country.  We have not put in place those things that will help our auto industry be competitive.  When South Korea can sell 700,000 automobiles into America last year, and, because of trade barriers, we can only get 6,300 into them, there‘s something wrong.  And we better pay attention to the larger question of supporting them.  Do they have a role?  Absolutely.  Do they need to be paying attention to innovation and moving aggressively?  Absolutely.  And they are. 

MATTHEWS:  Right. 

STABENOW:  UAW—UAW—new contracts go from $28 an hour to $14 an hour.  UAW is assuming retiree health care costs.  So, what is happening is, what people want to have happen in the industry is happening.  It‘s just that there‘s not an awareness it‘s happening. 

MATTHEWS:  Yes. 

STABENOW:  And if we don‘t pay attention and understand, I‘m afraid we‘re going to see a deeper, deeper hole in this country, because we‘re not going to have good-paying jobs. 

MATTHEWS:  OK.  Thank you very much, Senator Debbie Stabenow of Michigan.  Thanks for joining us. Let‘s bring in another voice.  This is Jeb Hensarling, who is Texas—he is from Texas.  He is a Republican.  He has a different view.  Sir, what is your view?  You have got the auto industry on its last legs, apparently, talking bankruptcy.  What do we do? 

REP. JEB HENSARLING ®, TEXAS:  Well, one, Chris, the entire economy is hurting.  I don‘t know anybody, any industry in this economy, that isn‘t hurting.  So, I don‘t know you have Washington picking winners and losers.  That‘s point number one.  Point number two, if we were simply concerned about sustaining jobs and creating jobs, three-quarters of the new jobs in America are from small business.  I have a lot of small businesses in my district.  And, if you‘re looking at putting in $25 billion, on top of another $25 billion, well, at $25,000 -- that‘s the average capitalization for a small business, Chris—you could create two million new small businesses around America. 

MATTHEWS:  Could you create any cars?  Could you create any U.S. cars with small businesses... 

(CROSSTALK)    

HENSARLING:  You probably couldn‘t create any cars. 

(CROSSTALK)

MATTHEWS:  ... to make cars? 

(CROSSTALK)

MATTHEWS:  Or do you like the idea we are dependent on foreign car producers?

HENSARLING:  Well, again, this is the argument, Chris, that you‘re too big to fail, but you‘re not too small to get taxed.  The next point I would make is, you know, these factories aren‘t going to disappear.  Now, I hope they can make it.  I don‘t want to see anybody go into bankruptcy.  But, Chris, sometimes, going into bankruptcy helps you reorganize, get a different set of management in, and maybe it actually saves the jobs.  There are a number of instances where jobs have been saved during that process.  The next point I would make is, a lot of problems in Detroit, unfortunately, they brought on themselves.  Their labor costs are two-thirds higher than that of their competitors.  And, when you look at customer satisfaction, the Big Three score at the bottom.  And, so, you can argue they‘re making a bunch of products that people don‘t necessarily want.  They‘re doing it at a high cost.  And now they want the taxpayer, when they‘re struggling to put food on the table, gas in the car, send kids to college, to bail them out?  You know, it doesn‘t seem smart, and it doesn‘t seem fair.  You know, I think there‘s better ways to get this economy moving than bailing them out.  And where does it start—stop?  I mean, are the airlines next?  Is it Starbucks next week?  Where does it finally end, bailout mania? 

MATTHEWS:  Well, we know where it started.  It started with the president and the Democratic candidate for president and the Republican candidate for president all agreeing on a $700 billion gift to the financial institutions of this country. 

Was—if that‘s a good idea, why isn‘t it a good idea to give it to people who make cars...

HENSARLING:  Well, I didn‘t necessarily buy into the fact...

MATTHEWS:  ... if that‘s a good idea?

HENSARLING:  Well, Chris, I didn‘t necessarily buy into it was a good idea.  I helped lead the opposition against the Paulson plan.  I mean, clearly, we‘re in a financial crisis, but I didn‘t believe that plan was the one that would work.  And, already, they have abandoned the model.  Listen, the federal government does have a responsibility for the money supply in the—in our free enterprise system.  It‘s kind of the—the circulatory system of the economy.  But, once you get past that and start picking winners and losers in specific industries, where does it all stop? 

MATTHEWS:  Yes. 

HENSARLING:  I mean, simply because we have heard of the Big Three, and they have great representatives in Washington...

MATTHEWS:  Yes. 

HENSARLING:  ... why should they get the money, and not the struggling beautician or teacher in the 5th Congressional District of Texas? 

MATTHEWS:  Well, you have got a complete belief in the free market system and a belief in maybe Milton Friedman, it sounds like.  And you believe in all that stuff.  And I wonder whether that‘s been supported by events.  Sir, it looks to me like we‘re going to need something like mixed capitalism again.  It‘s not going to be pure.  It‘s going to be some kind of a deal, it looks like.  But I appreciate you coming on tonight, on a Friday night, sir.  Thank you. 

(CROSSTALK)

HENSARLING:  Thanks for having me.

MATTHEWS:  This is so complicated.  Thank you very much, Congressman Jeb Hensarling of Texas.  Up next:  He‘s back, Zell Miller duelling it out down in Georgia.  It‘s a “Sideshow” tonight you don‘t want to miss.You‘re watching it, HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” First up:  Who‘s more Republican?  Connecticut Senator Joe Lieberman‘s got nothing on old Zell Miller.  Remember him, the Georgian who broke with Democratic presidential candidate John Kerry?  Here he was yesterday whacking Barack Obama. 

(BEGIN VIDEO CLIP)

ZELL MILLER (D), FORMER U.S. SENATOR:  I don‘t like this spread-the-wealth, income-redistribution stuff. 

(AUDIENCE BOOING)

MILLER:  To steal from Peter to pay Paul, even if it gets Paul to vote for you, is wrong, wrong, wrong. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  And that reminds me of this HARDBALL classic from the Republican Convention back in 2004. 

(BEGIN VIDEO CLIP, 2004)

MILLER:  Get out of my face.

(CHEERING AND APPLAUSE) 

(LAUGHTER)

MILLER:  If you‘re going to ask me a question, step back and let me answer it. 

MATTHEWS:  Senator, please.

MILLER:  You know, I wish we—I...

(CHEERING AND APPLAUSE) 

MILLER:  I wish we lived in the day where you could challenge a person to a duel. 

(LAUGHTER)

MILLER:  That would be pretty good. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Those were the days, my friend. 

And ,speaking of classics, remember this can‘t-we-just-forgot-it moment from March in Altoona? 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT:  We‘re just warm—we‘re just warming up.

(END VIDEO CLIP)

MATTHEWS:  Well, the Enterprising Bowling Lane—that‘s the name of it—the owner says he‘s selling eBay—using eBay to sell not only Obama‘s shoes and bowling ball, the ones he used that inglorious day, but also pulling out and selling that entire bowling lane and putting it on eBay.  Anyway, next, here‘s a blast from the past.  Someone tracked down Linda Tripp—Remember her? -- She‘s the woman who outed Monica and her strange deal with a U.S. president—to find out what Linda Tripp thinks about the new Democratic president.  Tripp says—quote—“Obama possesses an instantly recognizable purity of soul that brought quite unimaginable and long-awaited magic to the country, transforming red and blue states, quite literally, into the color purple.”Actually, I like what she had to say, especially her read on Obama‘s purity of soul.  Time for the “Big Number” tonight.  Secretary of state or not, the Clinton connection certainly doesn‘t seem to be a deal-breaker.  According to “The Politico,” 31 of the 47 people named to transition jobs by Obama have ties to the Bill Clinton administration.  The gang‘s all here, at least for the transition -- 31 Clinton associates have been called in to at least temporary service by team Obama—tonight‘s “Big Number.”  Up next: three Senate races still undecided.  Minnesota is in a recount.  Georgia is in a runoff, and Alaska as well just up in the air.  Can the Democrats sweep all three or couple them and take a 60-seat majority in the U.S. Senate?  The latest numbers next. You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I‘m Margaret Brennan with your CNBC “Market Wrap.” Stocks plunged in the final 15 minutes of trading today, with the Dow Jones industrial average lower by 338 points, the S&P 500 closed down 38, and the Nasdaq lower by more than 79 points.  For the week, the Dow was down 5 percent, the S&P 500 down 6 percent, and the Nasdaq by almost 8 percent.   Retail sales fell 2.8 percent last month.  That‘s the largest decline on record.  It was the fourth straight monthly decline, the longest stretch of weakness ever.  And that weighed on stocks throughout today‘s session.  Oil prices dropped, despite signs that OPEC may cut production again.  Crude oil fell $1.20, closing at $57.04 a barrel.   And, among the job cuts announced today, Sun Microsystems says it will eliminate 6,000 jobs.  Fidelity Investments is cutting 1,700 jobs.  And a source says that Citigroup plans to cut another 10 percent of its global work force, or 35,000 jobs.  That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL.  The Democrats have 57 Senate seats right now in the U.S. Senate.  There are three at large right now still in the campaign this year, Alaska Georgia, and Minnesota.  If they win all three, they get 60, which makes them filibuster-proof.  They can do what they want.  Nate Silver is on his blog right now, www.fivethirtyeight.com.  He was about the most accurate predictor of anybody in the country in terms of what was going to happen.  We‘re now going to test his abilities.  Nate, thank you for joining us.  What‘s happening in Alaska? 

NATE SILVER, FIVETHIRTYEIGHT.COM:  Well, thank you, Chris.  Alaska is the one race where it looks to me like it is basically over.  They have to count all the votes.  We have to be cautious.  But the only vote that is still out in Alaska is in the rural areas, where Mark Begich, the Democrat, actually did very well.  There are also some provisional ballots.  They‘re called, I think, questioned ballots in Alaska.  Those always tend to favor Democrats.  Begich pulled ahead.  He will probably finish with, I think, a 2,000- or 3,000-vote win, a lot closer than people anticipated, but Stevens is—is done. 

MATTHEWS:  OK.  Let‘s go to Minnesota, where Al Franken is contesting the incumbent, Norm Coleman.  What‘s happening there? 

SILVER:  Well, Minnesota, I mean, this is going to go on for a long time.  They haven‘t even finalized the count yet.  But it looks like it‘s going to be about 206-, I think, vote lead for Coleman.  You know, Minnesota uses the optical scan ballots.  It‘s kind of the SAT-style ballot, where you kind of fill in the oval.  Well, that‘s actually a pretty good voting system, as compared with the punch cards and the hanging chads that you had in Florida eight years ago.  So, there won‘t be that many votes that get detected during this recount that they missed before.  But, of the votes that are, it‘s usually low-income voters.  It‘s usually minority voters.  There are some minorities in Alaska, not a lot.  It‘s first-time voters who haven‘t voted before, might not know.  They might put an X, instead of filling in an oval, that kind of thing.So, Franken should gain some ground.  Will he gain 200?  I think it‘s going to be really close.  I think he might have to go to the appeals board.  It might wind up in court.  But it could really end up within like 20 votes.  It wouldn‘t surprise me if it‘s really that close. 

MATTHEWS:  Nate, let‘s explain that.  It seems to me, if you have got two options in a multiple choice, and you check off one by accident, and then you fully fill in the one you intend to fill—we have done that in tests, all of us—it doesn‘t get counted.  But then, when the election judges go back and take a book at that ballot, and they noticed that you scratched over both of the spots, but you clearly intended to vote for one of them, what happens in that recount? 

SILVER:  Well, you know, Minnesota has a very liberal voter intent law. 

Some overvotes, which is what you‘re talking here about, if you have a oval or a check by both...

MATTHEWS:  Right. 

SILVER:  ... in Florida, those weren‘t supposed to be counted.  In Minnesota, they are.  It‘s very—anything that resembles any kind of mark... 

MATTHEWS:  Well, that sounds like it helps Al Franken, then. 

SILVER:  It does, yes. And if it—if you had the Florida standard, then he would be in more trouble.  But the fact that you‘re going to have—and, frankly, in Minneapolis, in Hennepin County, you will probably have Democrats looking at these ballots.  He has maybe kind of a home field advantage here, too. The secretary of state, you know, is a Democrat in Minnesota.  So, that‘s why Coleman is a little scared, trying to kind of cut off the recount before it starts, which he can‘t really do legally.  But he knows that those 200 votes mean very little once you start counting, you know, the millions of votes that were cast in that race. 

MATTHEWS:  What about these absentee ballots that were found in somebody‘s back seat, and now they‘re counting them as official?                 

(LAUGHTER)

MATTHEWS:  What is that about?  That sounds pretty squirrelly, or sneaky, or what.  I don‘t know what it sounds like.

SILVER:  Yes. 

MATTHEWS:  What do you make of it?

SILVER:  Well, it doesn‘t look good for the state in general when you have these numbers changing. But this actually happens in every state, where vote counts are finalized over a 10-day to 14-day period.  It happens.  Usually, people don‘t care if Obama wins by 10,008 votes, instead of 10,012, or something.  But, when it‘s this close, people notice stuff like this. Yes, I think it looks bad for—for Minnesota, if you have this happening in some places, but they seem to be isolated incidents, to me, and not any kind of widespread fraud. 

MATTHEWS:  Yes, well, if I lost by 30 votes and somebody found 30 votes in a back seat, I‘d be upset.  Let‘s take a look at the Georgia Senate race.  There you have the runoff situation, where you have to get 50 percent.  Saxby Chambliss is a conservative Republican in a state that‘s elected senators of his persuasion for a while now.  Could he lose a runoff?  Is that possible?

SILVER:  It depends on the turnout.  When they had the runoff in Georgia 1992, after Clinton had won the presidency, Paul Coverdale (ph), the late Republican senator, won that recount, very kind of similar situation.  What Obama needs is for the black vote to turn out again and for the Republicans to be kind of depressed.  They lost the presidency, you know.  They might not turn out.  We don‘t know who is going to turn out, but turnout will be down.  Or maybe Jim Martin, with a few more weeks to appeal, can get those kind of Zell Miller Democrats in Georgia, which there are still quite a few.  There are slightly more Democrats than Republicans in Georgia, but they like Saxby well enough.  It definitely favors Republicans, a lean Republican race.  If Obama has his turnout operation there and there are rumors he‘s going to send his Ohio team down to Georgia, get all those votes out the best he can, then it could be closer than people expect and maybe Martin can win.  If he wins, it‘s going to be 50.5 to 49.5.  Saxby could win bigger, but it is going to be fun to watch. 

MATTHEWS:  Nate, the depressing thing from the Martin point of view is that 80,000 less votes were cast for the Senate line than for the presidency, which makes you think they were perhaps African-Americans, in fact, plausibly African Americans, who went in to vote for Barack Obama and didn‘t care about the Senate race.  How do you get people who didn‘t bother to vote further down the ballot to show up on another day some time and vote just for the Senate line? 

MARTIN:  One thing about Georgia is Jim Martin became the candidate very late.  He had a runoff in the primaries, too.  Georgia has a late primary to begin with.  It wasn‘t until August and a little bit after that when the Democrats started throwing some money into Georgia.  He‘s very new to a lot of voters there.  This is the best argument for Jim Martin, is people like him, but they didn‘t know him.  Now that his name recognition will improve—there will be a lot of national attention on Georgia—then maybe he‘ll be a more persuasive candidate for people, because black voters did skip that race in some case. 

MATTHEWS:  Nate, congratulations on being the best picker out there these days.  Thank you, Nate Silver, of FiveThirtyEight.com.    The politics fix is next.  But before we go to break, this week, we lost a beloved member of the NBC News family, Howard Reig.  He‘s the longtime announcer for “NBC NIGHTLY NEWS.”  He past away at the age of 87.  He spent more than 60 years in this business.  While you may not know his face, his voice was known to millions. 

(BEGIN VIDEO CLIP)

HOWARD REIG, NBC NEWS ANNOUNCER:  From NBC News world headquarters in New York, this is “NBC NIGHTLY NEWS” with Brian Williams. 

(END VIDEO CLIP)

MATTHEWS:  I love those voices.  Howard Reig was 87.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL and the politics fix.  Tonight, we‘re joined by MSNBC political analyst Michelle Bernard and Jennifer Donahue of the New Hampshire Institute of Politics.  Jennifer and I were up at Harvard this week talking with smart kids.  Let me ask you both—you first, Jennifer, away game here.  Hillary Clinton, your bets, will she be secretary of state in the Obama administration? 

JENNIFER DONAHUE, NEW HAMPSHIRE INSTITUTE OF POLITICS:  Well, they‘re certainly leaving it out there.  The olive branch is there.  The olives are growing and she‘s eating them.  I‘m not sure why they‘d want to do that, though, because realistically if anything held her back, other than perhaps her own personal baggage and relationship with Bill Clinton, it was her vote on the war.  This was not where the Democrats were on the war.  Barack Obama got more traction for saying that he had the judgment to oppose the idea of voting for the war.  So I don‘t see how this would benefit him, unless he basically just feels like he needs to hug her, to keep her in line. 

MATTHEWS:  Michelle? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  I saw it on the air this morning and first thing I thought was, this is the most bizarre thing I‘ve ever heard.  I‘m hearing people saying, this is such a great idea.  It will get her out of the Senate.  If he wants her out of the Senate, put her somewhere else.  But why at the State Department?

MATTHEWS:  Here‘s the question, because the very reason Jennifer mentioned.  She is a notch or two to the right of this guy, Barack Obama.  She did vote for the war resolution.  She supported naming the Iranian Revolutionary Guard as a terrorist organize.  She has spoken positively of keeping permanent bases in Iraq.  She‘s a bit of a hawk in the Middle East.  She could give him some cover on any Middle East deal that is struck with Israel and Middle Eastern countries. 

BERNARD:  She could give him some cover, and she could also go around the world acting as if she is not the secretary of state, but the president of the United States.  That‘s a huge danger for him.  It‘s a very, very high level job. 

MATTHEWS:  Jennifer, would you trust her to be a loyal subordinate, or believe that she would be a bit too aggressive as a colleague? 

DONAHUE:  Well, let‘s take past as prologue.  How did she handle herself during the nominating fight?  How did she handle it when Obama was coming up upon her and then lapped her?  She didn‘t handle it very kindly.  She didn‘t allow him to have his piece.  She went negative.  She tried to bury him.  And I think he should take a lesson from that.  I mean, I understand this idea of hug your friends tight, hug your enemies tighter.  I think that‘s often true.  If you look at it—you and I were talking about Machiavelli and “The Prince.”  Absolutely true stuff in there.  And I think it‘s smart to do it.  But what will she do overseas?  Will she be laying out the ground work, should Obama have only one term?  Will she be, in fact, trying to create only one term for Barack Obama? 

MATTHEWS:  You guys are so suspicious.  I think that since she lost the fight for the nomination, Michelle and Jennifer, she has been not just a good soldier, she has sang the tune of this guy.  She‘s been illustrious.  She‘s been admirable.  Her spirit seems to be with him.  Bill is a little more troubled by what happened obviously.  But she‘s been totally with him.  That‘s why he‘s obviously thrown her name out.  Why would he even be thinking of her if he thought she might be insubordinate?  Why would he think of it?

BERNARD:  Because there are a lot of people out there, particularly women, who are saying, we‘ve had Madeleine Albright; we‘ve had Condoleezza Rice, Let‘s have another woman in the top post at the State Department.  There will be people, also, I tell you, who will say, why not Susan Rice?  She was one of his chief foreign policy people throughout the campaign.  

MATTHEWS:  This is so hot.  We‘ll be back and talk more about this.  We‘ll be right back with Michelle Bernard and Jennifer Donahue.  This is the hottest story of the weekend coming.  We don‘t know if it will be resolved by the end of the weekend.  You‘re watching HARDBALL.  It‘s Hillary time, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Michelle Bernard and Jennifer Donahue for more of the politics.  Jennifer, you‘re up there in New Hampshire.  We‘re down here.  I have to tell you, it is amazing to watch how these things develop.  First of all, the word comes out tonight—here we are Friday night—that Hillary Clinton has been offered the job if she wants it.  That‘s the word that‘s floating around.  And then she‘s coming back, the senator from New York, and saying, well, I want to look at a couple of things, like is Joe Biden going to get in my way as vice president?  I would assume that among her other concerns are—which are expressed here in the news reporting—is who is going to get defense?  Who is going to get CIA?  Who is going to get the NSC, the national security adviser?  In other words, she is sort of dictating terms here in what looks to be the proffer of a job.  It is an extraordinary position of power she‘s in, in what normally would be considered one of the great prizes in the world she‘s being given. 

DONAHUE:  Yes.  And I think this reflects how she behaved and the idea who would be the vice presidential candidate that Barack Obama picked.  She has a competition going on with Biden.  Biden is the vice president.  Her strength, HHS, Supreme Court, plenty of places, education, children.  These are things that are near and dear to her.  I just don‘t see where she is a foreign policy expert to the extent of Chuck Hagel.  “Team of Rivals,” Chuck Hagel, Colin Powell, both sides of the aisle, Sam Nunn. 

MATTHEWS:  Jennifer, do you think there is an ingenious Machiavellian streak in Barack Obama who wanted her to hang herself with these public demands?  The fact that they‘re being leaked?  And therefore, he tried to bring her aboard, but she set too many standards, too many conditions.  He couldn‘t do it.  He couldn‘t give away his presidency. 

DONAHUE:  Yes.  I think that‘s a really good point.  This man can think two steps ahead of any opponent, and that‘s what we‘ve seen.  We see it with him meeting with McCain, Lindsey Graham and Rahm Emanuel sort of brokering this big meeting.  This guy thinks way ahead of anybody else.  That‘s how he got here.  He‘ll continue to do that.  He picked Rahm Emanuel not to be someone who could bring people in every party together, but to keep his own party in line.  That‘s what Rahm Emanuel knows how to do.  Are they going to keep Hillary Clinton in line?  Yes.  Are they going to keep watch on her? 

BERNARD:  They are not going to keep her in line if she is secretary of state. 

DONAHUE:  That‘s why she‘s not going to get it. 

BERNARD:  She will run a parallel government.  It will be a huge problem. 

MATTHEWS:  If he hires, he cannot fire her. 

DONAHUE:  She is not going to get it. 

BERNARD:  It would look horrible.  He can‘t do it. 

(CROSS TALK)  

MATTHEWS:  Let me ask you about the John McCain prospect for Monday.  If Lindsey Graham and John McCain are coming out to Chicago to meet with Barack Obama and Rahm Emanuel, and they‘re going to try to have some sort of peace pipe smoking, whatever you want to call it in American lingo.  They‘ll smoke the peace pipe.  To what effect will that be, Jennifer?  Is there something cooking there? 

DONAHUE:  Yes, I think there is.  I think Obama is smart here.  He is moving into a position now where if he looks like he can only get along with Democrats, then he is beholden to a group of people that didn‘t even give him money, didn‘t even support them.  This guy raised 600 million dollars over the Internet.  He is beholden to no special interest, no particular individual group within the Democratic coalition.  That‘s why he is like Clinton when he came in fresh.  For him to go back to the Clinton administration too many times would absolutely alienate the other side, and I think would be a huge mistake.  He knows that. 

BERNARD:  He has to reach out to the other side.  Quite frankly, I think that a lot of Republicans who are not enamored with John McCain before he became the Republican nominee have probably gone back to disliking him once again.  I think it is more than just reaching out across the aisle.  I think he is really trying to appear very presidential as we go into this era of quote/unquote trans-partisan politics.  It is good for McCain.  McCain might not have a home in the Congress anymore and maybe we will see him offer Senator McCain a position in the administration. 

MATTHEWS:  Let the romantic in me now speak this late Friday afternoon.  I believe Barack Obama is thinking about a New Frontier like Kennedy‘s or A New deal like Roosevelt‘s, and he knows he has to have big people of a diverse background to make that possible in his cabinet.  He cannot have second raters, defeated politicians, et cetera, former staffers.  He needs to pick heavyweights.  He started out by picking Rahm Emanuel, right out of the House leadership.  He has to keep up that standard. 

That‘s why he is considering Hillary.  That‘s why he‘ talking to John McCain, so everybody knows he is going for the top drawer.  He will try to pick the highest rated people he can for his government.  And that‘s what he is up to.  Your thoughts, Jennifer.  I think that‘s his pattern here.  He will not accept second best. 

DONAHUE:  That‘s absolutely it.  This guy surrounded himself with people who are not enablers, not yes men, through the campaign, but people who would push him to his outer possibility limit.  That‘s part of how he won.  What is he doing with McCain?  Maybe he wants McCain to be secretary of state.  Maybe he wants him to be secretary of defense after Gates.  McCain is a war hero.  He has acknowledged that.  And why not take Senate seats from the Republicans while you‘re at it?  Why not move Arizona out of the—you know? 

MATTHEWS:  I don‘t know if he‘s going that far.  John McCain would like to end his career the way Barry Goldwater did, a long, long afterglow of presidential politics in the United States Senate.  It is a tradition in the Arizona. 

BERNARD:  I think he‘ll do it.  I think he has a long career ahead of him.  It really just depends—

MATTHEWS:  What about my theory that this guy is going for the best and the brightest.  That‘s why he is interviewing Hillary Clinton, even if he can‘t get her, even if it doesn‘t work out.  He will have made a statement. 

BERNARD:  Or even if he doesn‘t really want her, he has made a statement to women.  He has made a statement to the country that he is reaching out.  He is extending the olive branch and she is impossible to work with, if some of the things that are being leaked out are absolutely true.  It gives him perfect cover. 

MATTHEWS:  Do you think this is torture for John Kerry?  Is this water boarding John Kerry?  I have to wonder.  John Kerry has all the qualifications.  He would be a masterful secretary of state.  He speaks more languages than most foreign ministers in Europe do.  He would be perfect for the job, and yet he hasn‘t got it yet. 

BERNARD:  Not yet.

MATTHEWS:  We‘ll see.  It‘s great stuff.  Michelle Bernard, this is a big story coming up here, how we‘re building this new administration in this country.  Michelle Bernard, Jennifer Donahue, thank you.  Join us again Monday night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it is 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   

Copy: Content and programming copyright 2008 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2008 ASC LLC (www.ascllc.net) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and ASC LLC‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Watch Hardball each weeknight at 5 & 7 p.m. ET

Discuss:

Discussion comments

,