updated 12/2/2008 9:44:57 AM ET 2008-12-02T14:44:57

Guests: Christopher Hitchens, Joan Walsh, Chris Bowers, Jack Reed, Todd Harris, Karen Finney

CHRIS MATTHEWS, HOST: They're united. Can they protect us?Let's play HARDBALL. Good evening. I'm Chris Matthews, tonight in Philadelphia, scene of tomorrow's national governors economic summit with President-elect Obama. Leading off tonight, the team of rivals takes the stage. Think back to last spring, when Hillary Clinton was saying Barack Obama's lifetime of achievement amounted to one speech, or when Obama was saying that Hillary's trips to 80-some countries was more high-profile tourism than diplomacy. It would have been almost unthinkable back then, during their grueling and often nasty, seemingly endless primary fight, that on the first day in December, today, Obama would say this as he chose Hillary Clinton as his secretary of state.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: She's an American of tremendous stature who will have my complete confidence, who knows many of the world's leaders, who will command respect in every capital, and who will clearly have the ability to advance our interests around the world.

(END VIDEO CLIP)

MATTHEWS: In addition to Clinton, Obama, as expected, asked Robert Gates to stay on as his defense secretary. He named General James Jones to be his national security adviser, Eric Holder to be his attorney general, and Susan Rice as his U.S. ambassador to the United Nations with cabinet rank. Was choosing Senator Clinton the right thing to do? My assessment? They have one common interest now, success. The move is deeply and perhaps brilliantly political. We'll see if it's a smart one. Also, just like his economic team, Obama's national security team is more conservative than he is. It's to his right. It hasn't been lost on liberals, who don't think this is change they can believe in. I think Obama's building a team to his right so that he can move to the left. That's my theory. We'll see about that tonight. Plus, I'm in Philadelphia, where tonight and tomorrow, President-elect Obama meets with the nation's governors. Many of those Republican governors are already planning or thinking about running against Obama in 2012. And after another terrible day on Wall Street today-the Dow dropped 680 points-Obama may have a lot of bad economic news to share with the governors tonight and tomorrow here in Philly. Tomorrow, voters in Georgia go to the polls in a run-off Senate election. A win by Republican Saxby Chambliss over challenger Jim Martin would end the Democrats' chances of taking 60 seats. And there's still that nip-and-tuck recount in the Norm Coleman-Al Franken Minnesota Senate race. We'll look at both those test contests in tonight's "Politics Fix." And guess who's got a book out? Joe the plumber. That's right, Joe the plumber is now Joe the writer, though he may have had some help from Joe the ghostwriter. We'll look at that in the HARDBALL "Sideshow." But first: President-elect Obama announced his national security team today, with Senator Hillary Clinton as his choice for secretary of state. Christopher Hitchens is a columnist for "Vanity Fair" and Joan Walsh is editor-in-chief of Salon. I want to ask you both about my theory, which is Barack Obama knows he's going to change foreign policy. He's going to take it a notch or two to the left. He needs people a notch or two to the right to cover for him. That explains General James Jones as his national security adviser, Senator Hillary Clinton as his secretary of state-and who else? -- Robert Gates, the holdover secretary of defense in that same position. Your thoughts, Christopher?

CHRISTOPHER HITCHENS, "VANITY FAIR": Well, I think you have the left-right bit wrong. I mean, General Petraeus isn't a right-winger. He's the guy who's defending secular democracy in Iraq. And I think it's tolerably well known that he hoped very much for an extension for Gates. Susan Rice, who I think should have been nominated for secretary of state-really do think should have been-has a long track record of arguing for political and humanitarian interventionism of the sort that many of us have advocated in Darfur, in Rwanda.

MATTHEWS: But not in Iraq.

HITCHENS: Not in Iraq, no.

MATTHEWS: Why are you arguing over nomenclature here, when I make a simple fact, Christopher, that Hillary Clinton was a notch to the right of Barack Obama during the campaign with regard to her position on Iraq...

JOAN WALSH, SALON.COM: A notch.

MATTHEWS: ... and to some extent with regard Iran?

HITCHENS: I was hoping...

MATTHEWS: Why do you challenge that?

HITCHENS: I was hoping you could ask because Hillary Clinton is, essentially, in this argument, non-political. She only cares about one thing, namely herself and her own prospects, and after that, her impeached, disbarred husband and the many undeclared interests of his and hers that they nurture for the future. Barack Obama has picked someone who will always be thinking about something else as well as her job. That's...

MATTHEWS: OK...

(CROSSTALK)

HITCHENS: ... question.

MATTHEWS: OK, Joan, let me try to ask you to climb through that rubble.

(LAUGHTER)

MATTHEWS: That's very complicated. What do you think of this appointment?

HITCHENS: Rubble?

MATTHEWS: It's complicated, Christopher, because you make the point that this administration's policy hasn't been to the right of what Barack Obama is promising for his administration, which most people would disagree with your view and accept mine, that it is to the left of what we've had for eight years now.

HITCHENS: Is it left or right for Hillary Clinton to get her husband, after a huge Pakistani fundraiser-I'm speaking about something very important to us right now-a few years ago-huge Pakistani fund-raiser in New York, organized for her by Lanny Davis-she got him to change his plan to visit India and to build in a visit to Pakistan on the way, in return for a huge campaign donation. Everyone in Pakistan knows she's open for business. This is not a left-right question. It's a matter of integrity.

WALSH: I think this is ridiculous. I think...

HITCHENS: Do we want such a person as secretary of state?

WALSH: Christopher, your views...

MATTHEWS: Joan, your turn.

WALSH: Christopher, your views on the Clintons' integrity are well-known. I consider them eccentric. I believe that you cherry-pick...

(CROSSTALK)

WALSH: I'm not going to say that they are perfect, but I believe you cherry-pick the worst possible interpretation, as well as facts that aren't necessarily facts, and come up with this analysis.

HITCHENS: Name one.

WALSH: I think this is a terrific...

HITCHENS: Name one.

WALSH: I think this is a terrific...

HITCHENS: Name one.

WALSH: I'm going to step around the rubble today, Christopher.

HITCHENS: One. One.

WALSH: I think this is a terrific appointment. I think it's a terrific set of appointments. I'd like to talk about the whole team up there, Chris. And I'm going to agree with Christopher on one point, which is I'm not sure that the left-right lens is exactly the best lens for analyzing what this team is about. I saw a team of tremendous diversity, not in any kind of cheesy, politically correct way...

MATTHEWS: Right.

WALSH: ... but in terms of ideology, in terms of-you've got Republicans up there, age, gender, regional diversity, as well as race, three African-Americans. That's historic. That's impressive. And then I also saw a team that will clash, will disagree, and a man of tremendous self-confidence who said, The buck stops with me. I want clashing ideas. I want differences. And then I'm going to make the decision. So I think it's a day that people can feel there's going to be a balance-those people on that stage believe in America's military power, but they also believe in diplomacy. And I think you're going to see a rounding back to a balance between those two ways that we operate in the world that should make Americans feel safer.

MATTHEWS: Let's take a look at President-elect Obama today as he announced Hillary Clinton. He had a little tussle here with a reporter, mild-mannered compared to this, though. Let's watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You were asked and talked about the qualifications of the-your now-your nominee for secretary of state. And you belittled her travels around the world, equating it to having teas with foreign leaders, and your new White House counsel said that her resume grossly exaggerated when it came to foreign policy.

OBAMA: Look, I mean, I think this is fun for the press to try to stir up whatever quotes were generated during the course of the campaign. Now, I understand and you're having fun. If you look at the statements that Hillary Clinton and I have made outside of the heat of a campaign, we share a view.

(END VIDEO CLIP)

MATTHEWS: Christopher and Joan, what do you make of his commitment, his renewed commitment today, President-elect Obama, to removing our combat troops from Iraq in 16 months, Christopher?

HITCHENS: Well, he's been rescued by the Iraqi parliament. I mean, he's probably the luckiest politician one's ever seen since Kennedy in any case. But the real luck is that Iraqis are demanding roughly what he's been asking for, for a long time, which is a deadline and a date certain.

WALSH: Right.

HITCHENS: The actual date doesn't matter once you start talking about that. an I just add, though, that I thought Obama's answer just there was incredibly cheap and evasive. I mean, he was right the first time to say this woman doesn't, in fact, have foreign policy experience, and he could have added, which also came up in the campaign, that the experience she has claimed, such as in Bosnia, was fake, was fabricated. And he could also have added that she, like his other nominee, for the attorney generalship, main qualification in politics is being a friend of Marc Rich, which I don't think has changed.

(CROSSTALK)

WALSH: It's a ridiculous thing to say. How is that a main qualification?

MATTHEWS: You make it sound like...

(CROSSTALK)

MATTHEWS: ... got his head together. Why would he make this appointment, the most profound appointment so far...

HITCHENS: The best known decision-the best known-the best known thing Mr. Holder ever did as a government lawyer, shall we-shall we just say, and the biggest intervention in foreign policy made by Mrs. Clinton were both to try and get this crook off in exchange for favors we don't even want to think about.

MATTHEWS: Well, we don't know what they are, do we.

WALSH: I think that's ridiculous.

(CROSSTALK)

HITCHENS: Call it what you like. It's not change. It's a reminder of the most sordid...

MATTHEWS: Why do you-Christopher...

HITCHENS: ... sordid elements-sordid elements of the Clinton era, which was not an era of foreign policy triumph.

MATTHEWS: What's the sordid or any motive behind this appointment, then, Christopher?

HITCHENS: I didn't say this is a sordid (INAUDIBLE)

MATTHEWS: Well, what is-what is the...

HITCHENS: I just think it's very disappointing for those who were hoping for a foreign policy change.

MATTHEWS: Well, what's the motive behind it? What's the motive?

HITCHENS: If you wanted to see a foreign policy change, you should have-you should-consensual, I suppose, it's party unity, that sort of thing, probably a gesture to NOW, that no doubt is involved, and so forth. Nonetheless, it's a terrible missed opportunity. Susan Rice would have made a very good appointment as secretary. You'd have known where she stood, a person who's always approached foreign policy as a matter of principle, who doesn't any baggage, who hasn't been a servant of special interests, is given a relatively unimportant job. It's a major job, of course...

WALSH: It's a major job.

(CROSSTALK)

WALSH: Susan's a terrific person. She's a friend of mine.

HITCHENS: Hillary Clinton is not qualified in any way to be secretary of state!

MATTHEWS: OK, let me-Joan...

HITCHENS: And she doesn't have...

WALSH: I think that's absolutely ridiculous.

HITCHENS: ... any interests but herself and her husband at all!

MATTHEWS: Joan, did you find it interesting, a couple of decisions the president made were sort of modifying his decision to name secretary-to name Hillary Clinton as secretary of state, the senator from New York-he fenced off the role of U.N. ambassador. Susan Rice now has a reporting relationship directly to him, the incoming president, not to her. Both cabinet secretaries...

WALSH: And it was the same...

MATTHEWS: What's that about? Why do you think he did that? And why did he give Greg Craig the job as White House counsel, where he would be completely fenced off from foreign policy? It seems like he separated, segregated the people who agreed with him in the campaign from those who-from the one he opposed in the campaign, Senator Clinton.

WALSH: I'm not sure I see it exactly that way. It may play out that way, Chris. I mean, let's remember, I believe the U.N. secretary was a cabinet appointment under Clinton. I think he wants to send a message to the world, more important than domestic policy, that this woman speaks for him and that he wants her to play an active role his administration and in the world. I don't see it as much as separating her from Hillary Clinton. am sure there were hard feelings during the campaign. I have a lot of mutual friends on both sides. I know Susan. It was-you know, for Clinton people to leave Hillary Clinton and go with Barack Obama was hard, but I would imagine that if, you know, Barack Obama and Hillary Clinton can patch this up, I mean, that, you know, portends great things for democracy in the world...

MATTHEWS: Yes.

WALSH: ... that these two people can learn to get along. I'm sure Susan and Hillary Clinton have already had conversations and that this will be a fine relationship.

MATTHEWS: Do you think Samantha Power...

WALSH: These are people who basically share values.

MATTHEWS: Do you think Samantha Power has a role?

(CROSSTALK)

WALSH: Yes, she's back. I mean, she's back in the transition team, and Hillary Clinton reportedly signed off on that.

MATTHEWS: OK...

WALSH: I think these, you know, problems are enormous and we need the best team of people, and that's what's guiding Barack Obama...

MATTHEWS: OK...

WALSH: ... and that's what I find impressive.

MATTHEWS: Christopher, I want to go back to your point that this is a political move by Barack Obama, naming Senator Clinton to be secretary of state, apart from foreign policy. He must know, and you all know, certainly Joan knows and you and I, Christopher, know, that we're facing a bad couple of years of economic history coming at us, maybe a lot more than two bad years, not just a deep recession, but a prolonged-perhaps something approaching a depression. It could be-does he need the Democratic Party united to weather that storm? Because he's going to get hit like hell by the conservatives and the Republicans within about three months.

HITCHENS: Well, whatever the answer to that question may be, it still divides us as between those of us who think that a job must be found for Hillary Clinton, that the country would be somehow disgraced if she wasn't in an important position, and those of us who could do without her. And neither answer to that question is going to make any difference at all to the way the market performs. However...

WALSH: But that second group is a very small group.

HITCHENS: ... it doesn't-it doesn't help...

WALSH: It's a group of eccentric Clinton haters who've made a career out of trashing the Clintons. It's a small group. It's not an important group in American domestic or foreign policy.

HITCHENS: Which group are you talking about?

WALSH: And I don't think that-the group who would rather see Hillary Clinton off the world stage. I don't think Barack Obama was thinking about that at all because that group of people is eccentric. They are devoted to looking at everything the Clintons do in the worst possible light, and he's trying to solve problems. And to you, Chris, I don't think it was done with domestic politics...

HITCHENS: Christopher.

WALSH: No, I'm sorry, I'm talking to Chris.

MATTHEWS: Well, no...

(CROSSTALK)

WALSH: I did call you Christopher.

MATTHEWS: I'm looking at the 18 million-look, I'm looking at the 18 million people that voted for her, and I'm thinking that if he's looking at Lincoln as a role model, he clearly is looking at bringing in that constituency, not just Senator Clinton or former president Clinton...

WALSH: But Chris...

MATTHEWS: ... but the 18 million working people that voted for her.

WALSH: Sure.

MATTHEWS: I'm just thinking he might be a politician. That's not a knock.

WALSH: But quite honestly, he brought them in. No, and I know you don't mean it as a knock at all, but he brought those people in on November 4. For all that you and I spent a year talking every week about what was going to happen to those Clinton voters-and even I had some-you know, some weeks where I worried about it, the fact is, he brought those people in. He's not worried about that. I genuinely think, if he's got an eye toward politics, it's global politics. And he wants the strength of the Clinton name, the Clinton brand...

(CROSSTALK)

HITCHENS: That's what the secretary of state-that's what the secretary of state is for.

WALSH: Right.

HITCHENS: And what you want as president is to know your secretary of state spends all her time working to make sure your policies stick. With this woman, that can't be said. She's always thinking first about herself, second about her husband.

MATTHEWS: What about her husband? Before...

WALSH: Oh, I trust Barack Obama's opinion more than yours.

(CROSSTALK)

MATTHEWS: Christopher, last question...

HITCHENS: That's never changed! That's never changed, and it's never going to! So he won't have...

WALSH: That's your opinion, Christopher.

HITCHENS: Well, guess what? Guess who's saying it? That's a very clever thing to say. Should I ask would you prefer I uttered your opinion? What a fatuous remark.

MATTHEWS: Christopher...

WALSH: You know...

MATTHEWS: Let me ask you, Christopher...

(CROSSTALK)

WALSH: I prefer Barack Obama's opinion. Barack Obama is a supremely qualified...

HITCHENS: Those of us who care about foreign policy...

(CROSSTALK)

HITCHENS: ... will never be able to relax!

MATTHEWS: Christopher and Joan, I want to ask one objective-one objective question...

WALSH: Yes, Chris?

MATTHEWS: ... which does not have any values attached to it. Will Bill Clinton, with his popularity in South Asia, be brought in as an envoy with regard to Kashmir and the general dispute between Pakistan and India? Christopher, will he be used in that regard, the former president?

HITCHENS: Someone whose main clientele is the Wahhabi royal family of Saudi Arabia, who've paid for the people who just blew up Bombay, I don't think would be an ideal mediator, no. But that's just my opinion, as Ms. Walsh would say.

MATTHEWS: Joan?

WALSH: Christopher, you can call me Joan. I've had dinner at your house. That seems condescending to call me Ms. Walsh. You know, Chris...

HITCHENS: If I had said Joan, you'd have said I was being condescending.

MATTHEWS: Oh, come on!

WALSH: Hardly. Not at all. We've had drinks together. Chris, I actually-I think it's not a great idea to bring President Clinton in right now. I think Barack Obama needs to make some big moves of his own on foreign policy. And I think secretary of state-designate Hillary Clinton needs to make some moves of her own. I am of the opinion-I'm not a Clinton hater, I respect the former president. I'd like to see him find a quiet role for himself and let these two new world leaders emerge without his shadow. So I would, if anybody else-my opinion and it's only my opinion, I would advise against it.

MATTHEWS: Well, I think we've covered every area of concern and happiness about this appointment tonight.

(LAUGHTER)

MATTHEWS: Thank you very much, Christopher Hitchens, for helping me explore all possibilities, and you, too, Joan. You complement each other in terms of American thought on this appointment. Coming up-I mean that in a literal sense, complement. Now that President-elect Obama has brought on a national security team more hawkish than himself, some liberals are wondering what happened to the change they can believe in. Is Obama moving to the center or to the right or just giving himself cover to govern from the left? That's my theory. This debate is next. You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I am confident that this team is what we need to make a new beginning for American national security. When it comes to keeping our nation and our people safe, we are not Republicans or Democrats, we are Americans.

(END VIDEO CLIP)

MATTHEWS: Welcome back to HARDBALL. Does the left feel betrayed by Obama's cabinet picks? And does Obama's hawkish national security team mean that he's moving to the center, or could he be simply repositioning himself to cover an attempt to govern from the left?

Chris Bowers is with Openleft.com. Chris, thanks for joining us. I think it's your first time on HARDBALL.

CHRIS BOWERS, OPENLEFT.COM: It is. Thanks for having me.

MATTHEWS: What-my sense of this-am I wrong? Tell me I'm wrong. I think he does what a lot of smart politicians do. They sort of dress one way, so they can act another way. You put somebody on your team to give you cover with the right or the center, because you're going to try something new in the Middle East, for example.

BOWERS: Well, first, I feel like hiring a bunch of people who are to your ideological right on national security in order to govern from the left would be an unnecessary act of subterfuge on Obama's part...

(CROSSTALK)

MATTHEWS: Why would it be unnecessary?

BOWERS: Well, because there's going to be quite a things that-that will be taking place at-at the Departments of State and Defense that Obama will not be overseeing. They're both vast federal departments. And if you want to govern from the left, you're going to have to have people managing those departments who are on the left. And, so, it's going to be difficult for Obama to micromanage those departments in a leftward manner if he hasn't hired people who are on the left in order to-to run those departments.

MATTHEWS: But isn't he generally shifting our general policy from use of force to-to softer diplomacy, economic and cultural? Isn't he openly stating, "I want to perhaps give money for nation-building, such as it is, to State, rather than Defense"? Aren't there big block movements where he's clearly signaling by his force of his presidency how the policy is going to shift?

BOWERS: There certainly could be. And there have been reports that-that both General Jones and Senator Clinton, soon to be Secretary Clinton, and Secretary of Defense Gates will be engaging in a large-scale shift away from the use of military force towards more diplomacy, nation-building, even-even aid. However, at-at the same time, there's-there's a proposed $400 billion increase, on top of already scheduled military increases currently made by the Pentagon under Secretary Gates, over the next five years.

MATTHEWS: Yes.

BOWERS: And that would be a huge shift of resources away from Obama's domestic programs, and it would basically not only prevent him from governing to the left on foreign policy, but would prevent him from governing to the left basically anywhere.

MATTHEWS: Isn't that subject to change once he gets in?

BOWERS: It certainly is subject to change. And I certainly hope that that...

MATTHEWS: OK.

BOWERS: ... that this is an aspect where Obama's team of rivals is coming to play, and he disagrees with Secretary Gates on this.But if there is that sort of vast increase in military spending, it's going to be extremely difficult for Obama to govern to the left on anything.

MATTHEWS: You know, I-I think I agree with your general position on Barack's foreign policy, as he advertised it in the campaign. Do you think he is betraying it?

BOWERS: I don't think he is betraying it. I think that-I-I-I mean, first of all, he hasn't become president, so it's difficult to see how he's failed to deliver on any of his campaign promises so far. But he-he didn't say he was going to govern from the left during his campaign. He had some-some progressive rhetoric. But he said he was going to govern in a bipartisan fashion. He repeatedly said that throughout 2007 and 2008.

MATTHEWS: Yes.

BOWERS: So, I don't feel betrayed. I feel disappointed. I wish that there was someone more to his left advising him in his senior positions on-national security. But I don't feel betrayed by that. I just wish that, when he talked about wanting to have a lot of diverse voices in the Cabinet, I wish there was someone from-from his left as well. So, I'm disappointed, but I don't feel betrayed, because he didn't say...

(CROSSTALK)

MATTHEWS: Who would have been a good-who would have been a good secretary of-of state? Let's try there. I want to hear your views.

BOWERS: I...

MATTHEWS: Can you venture one?

BOWERS: Sure. Sure.

MATTHEWS: Would you have preferred Bill Richardson?

BOWERS: I would have preferred Bill Richardson, because he's been a strong proponent for no residual forces in Iraq. But the status of forces agreement in Iraq sort of makes that a moot point, because there...

MATTHEWS: Yes. We are not going to stay there.

BOWERS: Yes. Yes. Exactly.

MATTHEWS: And what about-what about Defense? Who would you have liked at Defense?

BOWERS: I would have liked General Anthony Zinni or General Wesley Clark, even though a congressional dispensation would have been needed in order to get Clark in there...

MATTHEWS: Yes.

BOWERS: ... because he's...

(CROSSTALK)

MATTHEWS: Well, I agree with you on Zinni.

BOWERS: Yes.

MATTHEWS: Chris, I agree with you on Zinni. He would have been wild, but maybe too wild for current tastes.

BOWERS: Yes.

(LAUGHTER)

MATTHEWS: Anyway, Zinni would have been perfect.

But thank you very much. We agree on a lot. Let's see. As you said, let's see.

BOWERS: Sure. Absolutely.

MATTHEWS: Senator Jack Reed is a Rhode Island Democrat. Sir, is Barack Obama the man he said he was, in terms of change we can believe in? Is he going to shift away from the Bush policy, the Bush doctrine, or not?

SEN. JACK REED (D), RHODE ISLAND: Oh, absolutely. He's already begun the process, I think, by selecting a team that is pragmatic and realistic and not ideological. And I think that's the first point of departure in shifting away from the policies of President Bush and his colleagues over the last eight years.

MATTHEWS: Can we kill this Department of Homeland Security title? You know, there's something vaguely ideological about homeland, fatherland, motherland. We grew up in this country with the civil defense. Why don't we just call it the Department of Civil Defense, instead of this implicit notion that we don't just defend this country, we defend areas that we gather or occupy through this forward-leaning foreign policy? Why do we call it the "homeland"? I never heard that phrase in my life until this crowd came along.

REED: Well, I think it's less important what we call it than to make it work right.

MATTHEWS: No, I think it's very important.

REED: I don't.

MATTHEWS: It suggests, Senator, that we're somehow defending other territory besides our own. We've got the homeland islands, and then we've got this other area we defend. It suggests a very aggressive territorial foreign policy, I think. You don't agree?

REED: No, I don't. I think what it suggests is that, after 9/11 particularly, we recognize that the threats were-could be inflicted upon us here in the United States. And I think we reorganized. The key issue here is not what we call it, but making it work better. And I think Senator Obama and soon-to-be President Obama will make it work better.

MATTHEWS: Well, I think "Civil Defense" is what we should call it. Let me ask you about the appointments. Are you surprised at the fact that Hillary Clinton, who voted not like you-you voted against the war authorization-supported the war in Iraq, has had a relatively hawkish position with regard to Iran, that she was picked as the-as the agent of Barack Obama's foreign policy?

REED: I wasn't surprised. I think both individuals came to respect and to judge each other very clearly during the course of the campaign. And I think one thing that was demonstrated is President- elect Obama's confidence that he's going to be the leader of foreign policy, but he's going to get a very adroit, very sophisticated, and world-renowned personality to help him carry out American foreign policy.

MATTHEWS: Well, it did sound that way today. Senator Clinton, in accepting the announcement today, said-in responding to what she said, "U.S. foreign policy shouldn't be by force alone, and it shouldn't be by America alone." That sounded like Barack, not Hillary Clinton. What did you think?

REED: It sounded a great deal like President-elect Obama. He's emphasized a multinational approach to problem. He's emphasized diplomacy. But he's also, I think, quite willing, when necessary, particularly against terrorism, to deploy discreetly our forces, both intelligence, law enforcement, and, if necessary, military forces.

MATTHEWS: Do you think it's hard for someone who's been a principal like yourself to become an agent? Is it hard for someone like Senator Clinton or President Clinton, former President Clinton, anybody who's been their own person for all the years that Senator Clinton has been that, to be someone else's-and that's really the word. Besides being a cabinet minister, which is sort of a collegial relationship, she's basically the point person for his foreign policy, Barack's foreign policy. Is that a hard adjustment? Is it a believable, probably, plausible adjustment?

REED: I think it will be a-a very plausible adjustment. I know both of them. I have traveled with them. I have worked with them. I have seen them. They're extremely bright, disciplined, dedicated people, and they work very well with their colleagues. And I think this will be not a relationship like a senator to a senator, but it will be a relationship of two people that respect each other. But clearly President Obama, after January 20th, will be the commander-in-chief and the president of the United States.

MATTHEWS: What will be the relationship and division of authority between the vice president, Joe Biden, and the secretary of state? Joe Biden advertised the fact during the campaign he would play predominantly a foreign policy role. He's been chairman of the Foreign Relations Committee. Does he cede all that authority now to Senator Clinton or Secretary-designate Clinton or what? Where does that stand between the two of them now?

REED: My sense is what happens is that Joe will be a part of the discussions at the very highest levels. He'll be someone who President-elect Obama said he wants in the room when the hard decisions have to be made. He'll be a catalyst for discussion. He'll raise questions. I don't think he'll in any way attempt to undermine either the secretary of defense, the secretary of state, or anyone. I think he'll add to the conversation, not distract from it. I think he's a very good choice.

MATTHEWS: OK, thank you very much, Senator Jack Reed of Rhode Island.

REED: Thanks, Chris.

MATTHEWS: Up next, the HARDBALL "Sideshow," and Joe the plumber's new occupation, if you believe it, Joe the writer, or Joe's got a ghostwriter, whatever. We will tell you about that and his new book, such as it is. Plus, just how big was Barack Obama's victory? We have a "Big Number" for you that puts Obama's win in some very exclusive company, in terms of what percentage of us voted for him.

You're watching HARDBALL, only on MSNBC.

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MATTHEWS: Back to HARDBALL. Time for the "Sideshow." Laura Bush greeted the arrival of the White House Christmas tree on Sunday. But check out this year's invitation for the annual White House Hanukkah reception. That's right. The White House put a Christmas tree on the invite. Laura Bush's staff said the Christmas Tree slipped through the cracks. nd if you're looking for a gag gift this holiday season, look no further than Joe the plumber's book. It's out. Remember Joe the plumber, John McCain's iconic working stiff? He's got a book out. It's called "Joe the Plumber: Fighting for the American Dream." It hits bookstores today. And, by the way, talk about the American dream. Three months ago, no one had heard of this guy. He was an unlicensed plumber who was plucked out of obscurity by McCain because he asked Obama a question about his tax plan. So, how-so, now he's Joe the author, or he has got Joe the ghostwriter writing for him. And now for today's edition of "Final Daze"-D-A-Z-E-a daily look at what President Bush is doing as his time in office slips away. On a day when Barack Obama announced his national security team, and when the National Bureau of Economic Research confirmed officially that we are in a recession, President Bush was awarded the first International Medal of Peace by, guess who, Pastor Rick Warren of the Saddleback Church. The medal was for his contributor to the fight against HIV/AIDS in Africa. And there's a certain irony, of course, here to be giving an International Medal of Peace to the president, who took us into a war of choice with Iraq. Time now for the "Big Number." Barack Obama won nearly 69 million votes on Election Day, the highest total number of popular votes in American history, the highest total number of votes, 69 million. What percentage of over 300 million Americans cast votes for Barack Obama? Twenty-two-point-six-two percent -- 22.6 percent, it doesn't seem like much.

Well, as the Web site fivethirtyeight points out, that's the second highest percentage of Americans voting for a presidential candidate ever, trailing only Ronald Reagan in 1984 -- 22.62, the percentage of us as a whole people who voted for Barack Obama, that's tonight's "Big Number." Up next, I'm here in Philadelphia, where president-elect Obama will be meeting with the governors of all the states. In fact, 40 governors are showing up tonight in Philadelphia. And we will be talking about-they will be talking about the economy. And with the Dow down another 680 points today, we are going to have a lot of bad news to sort through. So will the president when he meets with the governors, who need bailouts across the country, all the way to California. Schwarzenegger is looking for some help, too, with some bench-pressing on the budget-next, when HARDBALL returns.

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JULIA BOORSTIN, CNBC CORRESPONDENT: I'm Julia Boorstin with your CNBC "Market Wrap." confirmation of a recession triggers a stunning sell-off on Wall Street-the Dow Jones industrials suffering its fourth biggest one-day drop ever, the Dow falling nearly 680 points, to 8149. The S&P 500 lost about 80 points, to 816. And the Nasdaq fell 138 points, to 1398. he National Board of Economic Research today declared that the U.S. is in a recession, and has been since last December. The group's economists believe the recession could last through the middle of next year. The oil market continues to sink, especially after today's report showing a 26-year low in manufacturing in the country-the price of oil closing just below $50 a barrel on the New York Mercantile Exchange. And California Governor Arnold Schwarzenegger today declared a fiscal emergency in his state, citing an $11.2 billion budget deficit. That's it from CNBC, first in business worldwide-now back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

President-elect Obama will meet with 40 governors in Philadelphia here tonight and tomorrow to discuss the toll that the economic crisis is taking on their states. The question is, what can he do to help? For more on this meeting and the dire state of the economy, we turn to MSNBC political analysts Pat Buchanan and Howard Fineman. Pat, it looks to me like the days of subsidiarity are over. We don't rely on local governments to solve economic problems. When there's a big one, the federal government has to bail out states and localities. Everybody has got the tin cup out now.

PAT BUCHANAN, MSNBC POLITICAL ANALYST: I think they do, Chris, but I'm not sure Obama is going to fill up that tin cup.

These states, and the cities, as well, Chris, are facing enormous deficits. They have got to slash up and down the line. I don't think Barack Obama is simply going to ship out money to the states to balance their budget. I think he's going for a $600 million to $1 trillion, generally a stimulus package, where we are going to decide here in Washington where the dollars are spent. So, I don't think they're going to get direct funding from Washington to balance their budgets. I mean, the days of revenue-sharing died with Richard Nixon.

MATTHEWS: So, Howard, the president of the United States is going to decide which sewers to fix, which bridges to repair? Is Barack going to do the micromanagement of our bailout here, our economic bailout?

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT: No, he's not. But I-I think he does know that the states and localities are desperate. And they're becoming increasingly desperate. I spoke to one governor on-on his way up here today who said, even in his relatively well-off state, he's going to have to have budget cuts. That's a drop in the bucket compared to places like California, and New York, and New Jersey, and Illinois. A lot of states that also have huge municipal bond indebtedness, in other words, state and local and bond indebtedness, they're going to have trouble paying the interest on those. The value of those bonds is going down. They could be called. It could be a cascading kind of catastrophe that Obama is very aware of. He's getting a lot of explanations about that from the Daley family back in Chicago. Don't forget, Barack Obama comes out of the South Side of Chicago. He knows a little bit about local and state finance.

MATTHEWS: Pat, let me ask you this. I always like to tell young people that maybe they're going to see what the '60s were like-the early '60s, the New Frontier by watching this guy in action, the new president. I'm getting a feeling we may be looking at what the '30s are going to look like again. I'm wondering, are you worried? Are you worried as a person about this economy?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: I'm worried for this reason, Chris. I know what Barack Obama is going to do. He has read the history of the Depression. He has come away with two lessons. One, the Fed did not respond, it did not save the banks, it did not re-flate the currency and put the blood back in the system. And, two, FDR was too timid with the New Deal. He didn't do enough. So Barack Obama is going to have a gigantic stimulus package, enormous spending, and the Fed is going to go all out. However, that was tried in Japan in the 1990s, Chris, and it did not work. They've got a national debt that is twice the size of their GDP, and it did not work. And they have enormous savings. So I'm very concerned that we're going to try this. It's not going to work and you're going to see the last hurrah of the American dollar.

MATTHEWS: Do you buy that theory that he's going to print money, Howard?

BUCHANAN: I think they're printing right now.

FINEMAN: Yes, sure.

BUCHANAN: Excuse me. He's printing it right now.

FINEMAN: Yes-no, of course.

MATTHEWS: Just start printing money, just start saying, you monetize the debt. It's a nice way of saying, print the money. The government runs a big deficit, the new dollars are paid for by printing more money-creating more money.

FINEMAN: Well, Chris, we've been doing it for a long time. Alan Greenspan started doing it right after 9/11. We've been doing it to a fare-thee-well. The problem is, we've done it practically to the extent that we can. The world is pretty much full up of dollars. At some point there's going to be too many dollars. And that's the risk of inflation or the collapse of the American currency.

MATTHEWS: Well, when do we go to Mugabe? When do we become Zimbabwe and start looking like.

FINEMAN: We don't, we don't, let's calm down.

MATTHEWS: We don't get that way?

FINEMAN: No, we don't, because we are the last big player on the planet. Europe is not going to be able to carry it, even Japan or China, with their growth rates-or China with its growth rates is not going to cannot carry it. There's still residual value and credibility in the stability and productivity of American society. The problem Obama has is he's going to have to push that credibility and that stability to the limit while trying to bring us back here in kind of a bungee-jumping kind of thing where we hope we don't hit bottom. That's the only choice he has at this point. But there is no better country-no other country in the world that could do what we are going to have to do over the next few years. It depends on the quality of his leadership.

BUCHANAN: Chris, we have got about $70 billion in reserves, cash reserves. The Chinese have $2 trillion. Now, the Chinese could lend it to us, but the Chinese are looking at the United States and they're saying, that isn't that good an investment anymore, and if we're going to lend them all of this money we got from moving our stuff in there, we may need a higher rate of interest. You can only borrow the money or you can print the money and create it. And right now we're creating it. Now I think-I don't see any way out if this doesn't work. This is the last roll of the dice.

MATTHEWS: Do we agree that the biggest danger to America right now is deflation? Nobody is spending. The consumers aren't buying anything in terms of big products, houses, cars. Investors are not investing. So the only institution in America, according to Warren Buffett, that can actually invest and borrow and invest is the federal government. Do they have to inflate the economy, they raise the price of real estate so people will begin to invest in real estate again? Howard first.

FINEMAN: Well, what Obama is going to do is classic stimulus of the economy and he's going to try to target it through things like green technology and rebuilding Detroit in a way that they can build fuel-efficient cars and making infrastructure investments that will have a long-term payoff. The problem with that is, we're not living in the long term now. With the market gyrations we're seeing, we have to survive in the short term as well. And that's why he's both printing more money and looking at long-term stimulus at the same time. He has got to do everything simultaneously in hopes that something catches at this point. And all he has got to rely on are two things, the inherent strengths and resources and creativity of the United States, and his own leadership ability. That's really what's going to matter here. And one of the problems we have at this particular point is that-as he keeps saying, you know, we only have one president at a time. And what that means is we have no president right now.

MATTHEWS: John Maynard Keynes said "we're all dead in the long run," Pat, is anything justified right now? Do we have to risk on the inflationary side?

BUCHANAN: We are already doing it. I mean, the Fed-I don't know, someone said they had guaranteed $7 trillion in debt sitting out there somewhere. I mean, we don't have to say what the $700 billion bailout, AIG, Citibank, all of the rest of it, all of that is out there. That is a done deal. What we're doing, Chris, is basically it's the last card ready in the deck, the rollover. The Fed is doing what it's supposed to do, all of those things. And they're going to come up with a gigantic stimulus package which is going to be a monster deficit, between $1 trillions and $2 trillion at least. If that doesn't work, I don't know what does. And one of the problems America has got, look, this isn't the 1930s where we produced everything we consumed. We depend on China. We depend on the world now for all of our manufactures, our consumer goods, all of the rest of it. This stimulus package, if we borrow from China, consumers are going to take the money, go to the mall and buy the goods that are made in China.

MATTHEWS: So, Pat, how many Krugerrands have you got in the basement?

(LAUGHTER)

BUCHANAN: They're not. It's in solid gold bars. I wasn't allowed to buy them and I didn't break the law.

(LAUGHTER)

FINEMAN: The point is, Chris.

MATTHEWS: OK, guys, I'm just kidding. Thank you very much, Pat Buchanan, Howard-gold may look pretty good. Up next, Sarah Palin campaigns for Saxby Chambliss down in Georgia in that Senate runoff tomorrow. We'll get the latest on that race to be decided tomorrow, and that Minnesota recount between Al Franken and Norm Coleman, the incumbent, both coming up here in the "Politics Fix." Plus, we're going to go back and talk about this amazing decision to pick Senator Hillary Clinton as secretary of state and her amazing decision to say yes. We'll be right back with HARDBALL, only on MSNBC.

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MATTHEWS: Coming up, Obama's "Team of Rivals." Can he keep the top on this big list of personalities in his cabinet? HARDBALL returns with the "Politics Fix," coming up next.

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MATTHEWS: We're back. Now time for the "Politics Fix." We're joined tonight by two strategists: Republican consultant Todd Harris; and DNC Director of Communications Karen Finney. Thank you both for joining us. This fight tomorrow, is this basically a lock-in already for Saxby Chambliss, Todd?

TODD HARRIS, REPUBLICAN CONSULTANT: Well, you know, you never have a lock-in. But I think it is as close to a lock-in as you can possibly get. The minute Barack Obama turned down Jim Martin's request to go to Georgia to campaign for him was probably the moment that every one knew that the Democrats had all but written off this seat. I really don't see any way that Saxby Chambliss doesn't win tomorrow.

MATTHEWS: Karen, there were 80,000 undervotes in that state, people who didn't vote for the Senate line who had voted for president. We can-I assume a lot of them were African-Americans who were big Obama supporters that didn't have a personal interest or inclination in the Senate race. If they're not going to vote for a Democrat for the Senate in a race that they participate in, how can we expect them to show up and vote in a runoff?

KAREN FINNEY, COMMUNICATIONS DIRECTOR, DNC: You know, actually, Chris, according to the latest polls that we've been looking at in term of the early vote, overall, Martin actually happens to be up. So I think that shows that the grassroots enthusiasm and support actually continues to be there and continues to be strong. I know we had armies of volunteers out over the weekend, knocking on doors and making phone calls. So obviously it comes down to turnout at this point and I think we're going to have a good one tomorrow.

MATTHEWS: But isn't there a much lower turnout among the voters who are voting early who are African-American? Only 23 percent this time compared to 35 percent in the general?

FINNEY: There were lower numbers, but again, overall, according to the numbers that we're looking at, the overall numbers in terms of the early vote, Martin is looking good. I think that's a promising number. But, you know, look, it comes down to tomorrow.

MATTHEWS: Yes. What do you think, Todd? I know you're enjoying this one because you think you're going to win one. And by the way, about time.

HARRIS: It's about time. We're due.

(LAUGHTER)

MATTHEWS: About time you pick up one in Georgia, which has always been a tough state for Republicans. But let me ask you this about Saxby Chambliss, are you sort of chuckling at the fact that Barack Obama doesn't want to risk his winning record this year by going down there?

HARRIS: Well, I'm not chuckling about it. I just think that it's very.

MATTHEWS: Yes, you are. I watched you chuckle. I know what a chuckle looks like when I see it.

(LAUGHTER)

FINNEY: I think he was chuckling at me, actually.

MATTHEWS: I think you were chuckling-well, c'est la vie.

HARRIS: Yes, well, Karen, as always, is doing an admirable job. But the fact is, if the Obama political operation thought that Jim Martin had any kind of chance of winning tomorrow, they would have Barack Obama down there in Georgia, because he would be able to declare another victory.

FINNEY: Now come on-come on, Todd, that's.

MATTHEWS: OK. Let's let.

FINNEY: Wait a second, Chris. That's a little bit ridiculous. You know, President-elect Obama did a radio spot. He and Michelle have both done robocalls. You've had Al Gore down there. You've had Clinton down there. I mean, we're definitely in the hunt on this one. I think we've got see what happens tomorrow.

MATTHEWS: OK. Karen-Karen, you help me out, I'll help you out. Here is what I want to know. I have a sense that Barack Obama is deeply political. Now whatever he does publicly, he does publicly like all politicians. Deep down in his soul, he thinks about politics relentlessly, like most successful pols do. I think he put Hillary on his team today-at the front of the team, because he knows he's going to tough times the next couple of years, I mean, really tough times. We have got an official recession as of today. It has been made official by the experts. He knows we're not going to be out of it for probably a couple of years, if he's lucky. He needs a united Democratic Party, especially working people who didn't get four years of college, most of them voted for Hillary Clinton. Is that what this is about, get her on the team, keep her on the team, the times are going to be tough?

FINNEY: You know, I think what it's about, Chris, is really putting together.

MATTHEWS: It's not (INAUDIBLE) ask me, is that it?

FINNEY: No, it's about putting together the strongest.

MATTHEWS: It's not it?

FINNEY: . team possible. And I think it is admirable that President-elect Obama has reached out to, you know, a lot of different voices. And I think that's what we need. And, frankly, Chris, I think that was the message of the election. The message of the election from the voters was, stop fighting and get together and start getting something done.

MATTHEWS: OK. Todd, do you think the reason Hillary Clinton is on the ticket has something to do with the economy as well as the world?

HARRIS: You know, I think part of it has to do with-frankly, with Obama's sort of inflated sense of self, where he keeps encouraging people to compare himself to Abraham Lincoln. Look at my "Team of Rivals" that I've made. But I will say this, Chris. I think Republicans need-on these Obama appointments, need to chill out for a little bit. There is going to be a time when Barack Obama is sworn in where we will be able to make real and substantive contrasts on Obama's actual record. But all of these little rhetorical hand grenades that are getting thrown now, the public, frankly, isn't all that interested in it. Let them get into office. Then we will have plenty of time to go after their actual record.

FINNEY: Well, and at least they're coming into office.

MATTHEWS: OK. And you make a good point.

FINNEY: . without yes men.

MATTHEWS: Well, you make a very good point, Todd. No one has ever accused George W. Bush of being Abraham Lincoln.

We'll be right back with Karen Finney and Todd Harris with more of the "Politics Fix." You're watching HARDBALL only on MSNBC.

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MATTHEWS: We're back with Todd Harris and Karen Finney.

Karen, do you think Senator Clinton, in giving up here Senate seat today, which seemed to be an emotional decision on her part, retains political ambitions?

FINNEY: Well, she might. But I think she is-I think this is going to be a great role for her. And I think she is obviously going to-you know, she has got a tremendous amount to contribute. Certainly it was hard for her to, you know, give up her Senate seat. I mean, she worked very hard for it. I know she loved being Senator of New York. You know, I think this may-we'll see what her future ambitions are, but obviously she has got a lot ahead of her in the next few years.

MATTHEWS: That's for sure. What do you think, Todd? Do you think Senator Clinton has political ambitions beyond the appointment she just got today?

HARRIS: Oh, I think political ambition runs in the DNA of the Clinton family news. And it is only something that is cured by embalming fluid.

(LAUGHTER)

MATTHEWS: Oh, can you be nice? Thank you, Karen Finney. I knew this show would end on a rock like that. Thank you, Todd Harris. I know you're chuckling in your soul even though you're grim in your appearance. Anyway, thank you. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now it is time for "1600 PENNSYLVANIA AVENUE WITH DAVID GREGORY."

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