updated 12/4/2008 1:00:21 PM ET 2008-12-04T18:00:21


Guests: Jim Warren, Julia Boorstin, Clarence Page, Chris Cillizza, Paul Krugman, Richard Cohen, Joan Walsh

CHRIS MATTHEWS, HOST: The gang's all here, Richardson at Commerce, Clinton at State, Obama leads the band.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Leading off tonight, rules of engagement. When we first learned that Barack Obama was likely to appoint Bill Richardson as his commerce secretary, a lot of people wondered aloud whether it was a consolation prize for a man who really wanted to be secretary of state. What made that especially interesting was that that job went to Hillary Clinton, and one of her supporters called Richardson a "Judas" for supporting Obama over her in the primaries. So does this make another addition Obama's team of rivals? Here's Richardson.


GOV. BILL RICHARDSON (D-NM), COMMERCE SECRETARY NOMINEE: There are some who speak of a team of rivals, but I've never seen it that way. Past competitors, yes, but rivals implies something harder-edged and less forgiving.


MATTHEWS: Great guy. But when it takes a problem to be solved, it takes two to untangle it. Will the Clintons forgive and move on? We'll look at that and that latest appointment and all its implications in a minute.

Also, everyone can agree that Obama is inheriting a terrible economy. On one side, conservatives are warning that his proposed economic stimulus program could create a sea of red ink. Then there's "New York Times" columnist Paul Krugman, who says even Franklin Roosevelt was too timid in dealing with the Great Depression, and he says Obama needs to go even further than Roosevelt. Well, a trillion here, a trillion there, before you know it, you're talking real money.

Plus: Nixon, now more than ever. We've got some of those newly released Nixon tapes tonight again, including the president talking about his sworn enemies, Hanoi and the media.

And speaking of tapes, President Bush is giving the first of his exit interviews. What's his latest regret as president? We'll hear about that in the "Politics Fix." And we'll hear the latest installment of our newest feature, "Final Daze"-as in D-A-Z-E-a look at what the president's doing as his office time draws to a close. By the way, what did Mr. Bush do today? Let's just say it would have made a perfect "Seinfeld"' episode. It was about nothing.

But first, President-elect Obama formally named Bill Richardson as his commerce secretary. Clarence Page is a columnist with "The Chicago Tribune" and Chris Cillizza writes for the Washingtonpost.com.

Gentlemen, I am thrilled at the way that President-elect Obama has sort of given everybody time on the beach, or let's put them all in the sandbox, but has drawn lines between them so they don't fight. Like, You don't cross the seat in the back seat to fight with the other kid.

Now, let me start with this one. Clarence, you first. He makes Hillary Clinton, his chief rival, who won 18 million votes, his secretary of state. But then he takes Susan Rice, who he really trusts on foreign policy, and makes her the ambassador to the U.N. and says, She doesn't have to report Hillary Clinton, she's going to report to me directly. Two cabinet secretaries sitting next to each other at the cabinet desk (ph). Explain. It seems that that's how you deal with rivals, you keep them separated.


CLARENCE PAGE, "CHICAGO TRIBUNE": Well, this is a case-to torture what's becoming a cliche-keeping your friend, Susan Rice, close and your former enemy, Hillary Clinton, closer. As secretary of state, she's got the higher position...

MATTHEWS: But not close to each other.


PAGE: Not close to each other, but you know, reporting directly to him, which is not that unusual. In the past, you know, national security adviser's always been kind of a rival to the secretary of state, as well. So it's going to be interesting. One thing about having Hillary Clinton there (INAUDIBLE) as we know, her and her husband, to be drama people...


PAGE: ... and we got "No drama Obama" as the chief executive.

MATTHEWS: Well, how's he going to keep the drama at bay?

PAGE: Well, do we want that? We're journalists.


MATTHEWS: Chris Cillizza, your thoughts? I want to take these one at a time. I was so impressed when it came to Susan Rice, who's the much respected former assistant secretary for African affairs, who was one of his chief advisers, got the post in the U.N.-by the way, the greatest post there is, I'm told. People like Bill Richardson said you not only get the nicest apartment in New York, you get the greatest, well, hospitality opportunity in New York. You're the coolest person on the block, and you live at the Waldorf- Astoria, the Waldorf Towers, and you live like a-well, in this case, a queen. He lived like a king.

Question. How is this going to work out between the two of them, Hillary Clinton, Susan Rice?

CHRIS CILLIZZA, WASHINGTONPOST.COM: Well, I think it's-I think it's going to be, Chris, I think one of the flashpoints. Everything is hunky-dory right now. I saw a Gallup poll yesterday. It said, basically, 8 in 10 people think Barack Obama has handled the transition well. But there going to be disagreements. And I think that's potentially one of them.

You know, Barack Obama clearly believed that Hillary Clinton could be a team player. But he also, as you point out, put someone in who-I don't want to say is a check against Senator Clinton, but certainly someone who is going to be influencing policy, as well, who is more near and dear to his heart, at least was during the campaign.

So I think he is-and I keep returning to this. People paint him as an idealist. In a lot of ways, he's a political pragmatist. I think he understood the symbolism of putting Senator Clinton in as secretary of state, but I also think he understands that, on a practical, day-to-day basis, he wants to have someone who is ultimately loyal to him first in a job where he can influence policy.

MATTHEWS: I'm just looking at the clever way he's done this stuff. It seems to be artistry. You talk about an elegant man in his manner, not just in his language. He takes Larry Summers, who's brilliant, but he's also difficult to deal with, and he made those comments about potential women inaptitude-lack of aptitude in math, which cost him his job at Harvard, may have cost him his job, again, as secretary of the Treasury. What's he do? He gives him a job as head of national economic affairs at the White House, so he doesn't require Senate approval. So he doesn't have to go up there and deal with the groups like women's groups who are going to pound him. It seems like that was a deft move. What do you think, Clarence?

PAGE: Well, it's true. I think Larry Summers kind of got a bum rap. It wasn't what he said but how he said it. It's his manner that's a problem. And that's what really cost him at Harvard. It wasn't just that one episode that made the big headlines. But he's a great inside player, in the sense that he is an expert on the economy...

MATTHEWS: And now he doesn't...


MATTHEWS: ... before the senators, men and women...

PAGE: That's right.

MATTHEWS: ... representing women as well as men, who have a problem with his observation or his curiosity about the difference in IQ, basically.

PAGE: That's right. And they're going to have a good time, you know, pounding him just for the TV cameras...


MATTHEWS: ... of course, we avoided that. Look at this one, Chris Cillizza. You follow this very well in your column in "The Washington Post." Greg Craig-he's one of his top foreign policy people and a really smart foreign policy guy, former head of policy review at the State Department under President Clinton, put over as White House counsel, far away from foreign relations so that he won't get into a fight with Senator Clinton, who's now secretary of state-designate. It seems to be another case where he's grooming (ph) the White House with people who disagree with each other but fencing them off from each other.

CILLIZZA: Oh, absolutely, Chris. And I think one thing to think about and to remember-and the Obama people make this point privately and a little bit publicly-is they have been doing this for quite some time now. Remember that John Podesta was named sort of to head up the transition. Republicans attacked it as presumptuous. But Obama wanted to make sure that he was sending a message, but also on a literal level, that he was putting into places-pieces into place that, if he happened to be elected, he would not-and I think we're always fighting the last campaign or the last Democratic president...


CILLIZZA: ... he would not repeat what Bill Clinton did, which was widely seen as a chaotic transition. This has been going on for a while, so I do think it is well thought-out. It is well orchestrated. And that's because they've been doing it with a number of people dedicated to it for quite some time. It may be new to us, but it's not new to them.

MATTHEWS: Well, it's elegance of manner again, as well as words. Let's take a look now at the selection of Bill Richardson. By the way, Bill Richardson, to be honest, is one of the most popular people in politics. Everybody likes him. He's just a real fun, good guy in so many human ways.

Here he is, President-elect Obama, describing why he picked the governor of New Mexico, Bill Richardson.


SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Commerce secretary is a pretty good job. Bill Richardson has been selected because he is the best person for that job. His mixture of diplomatic experience, hands-on experience as a governor, experience in the Cabinet, experience in Congress means that he is going to be a key strategist on all the issues that we work on.


MATTHEWS: What do you think of this? Is it a consolation prize?

PAGE: Yes.



PAGE: ... but you know, depending on what they do with it, this is that kind of a job. I mean, Ronald Reagan wanted to get rid of the Commerce Department until he realized it was a great place to park people you owe favors to. But look what Bill Clinton...

MATTHEWS: Well, Ron Brown had a big job...


PAGE: I was going to say...

MATTHEWS: ... big job on trade relations.

PAGE: That's-exactly. I was going to say, Ron Brown really did something with it under President Clinton. And trade is important these days, and Bill Richardson's the kind of guy who can go out there and work on it.

MATTHEWS: And it is a great patronage opportunity to take preferred business people, including those who contribute to the campaign, and pack them up and take them on overseas trips to promote their businesses.

PAGE: Perhaps a little vacation in Kosovo. That's right.

MATTHEWS: And you have a first-class trip.

Let's take a look at former president Bill Clinton, who is really playing team ball here the last couple weeks. He here is, talking on CNN about his potential role as spouse of the new secretary of state.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I think my involvement will be what our involvement with each other's work has always been. That is, all the years I was a governor and president, I talked to her about everything. And I, you know, found her advice invaluable. And I'm sure that we'll talk about all this. I mean, I really care about a lot of these profound challenges that our country and the world are facing. But the decisions will have to be, ultimately, President-elect Obama's decisions. I'll just try to be a helpful sounding board to her, but I don't think I will do any more than that unless he asks me to do something specific, which I'm neither looking for nor closed to.


MATTHEWS: That's fascinating. I mean, there's one of the great politicians of any time, laying out his role in a very passive way there, Chris. I mean, it was very diffident, passive again, an interesting role there for a very aggressive personality in our lives.

CILLIZZA: Well, I was just going to-two things, Chris. First...

MATTHEWS: That's not the old Bill Clinton right there!

CILLIZZA: I was going to say I agree with you. And I just-I think Bill Clinton is sort of endlessly fascinating as a political figure. But secondarily, I do think-look, I think Barack Obama knew this. When you pick one of the Clintons, you get both of the Clintons. There's good in that because Bill Clinton-I don't think even biggest detractors, I don't think they would argue that this is not a man who is well versed on both domestic and international policy, who carries passionately about it, who, you know, sees the big picture. But there's also the down sides, too. So I mean, I think Barack Obama understands this.

What I think Bill Clinton was saying there is, Yes, I am going to clearly play a role in this. I envision it as a private role. If Barack Obama wants to envision it as a public role, I'm open to that, too. He's a good politician, Chris. He leaves all his options open.


MATTHEWS: He is fascinating. Here we are again on a Tuesday-no, it's a Wednesday night, talking about the Clintons.

PAGE: I love the little hints he was dropping in there. You know, No, I don't expect to have a role to play, but of course, I'll be over here, you know, just waiting, all my expertise and my wonderful contacts and...


MATTHEWS: I think the guy could be elected president of Ireland tomorrow, first of all...

PAGE: Yes.

MATTHEWS: ... just picking one country...


MATTHEWS: We've all said that for years, that he could win over there, if you're allowed to pick somebody out of the country with some roots over there.

PAGE: That's right.

MATTHEWS: The South Asians, for some reason, love him, the Pakistanis, the Indians...

PAGE: They love him in Africa.

MATTHEWS: They love him in Africa. I thought he was running for general secretary of the U.N. there for a while.

PAGE: Yes. Well...

MATTHEWS: And now he's back. Chris Cillizza, your bet, the role he'd play? I would say special envoy in South Asia with regard to the Kashmir dispute. I would say backing up any effort to try to pull together a peace deal with regard to the West Bank, bringing his political capital, as well as his foreign policy chops. I think there's going to be a role there for this fellow, and he's not about to retire, but he is playing, you know-what's that-who was that quiet lion in the movies, in the Disney movies, the-anyway, he seems to be that quiet guy...


PAGE: ... eating the flowers, yes.

MATTHEWS: Ferdinand the Bull, just very quietly playing the Ferdinand the Bull character.

CILLIZZA: You know, Chris, just to further bolster the argument-and I do agree with you, I think there is going to be some kind of public role for him. But remember towards the end of the primary season, when it became clear his wife wasn't going to win, he was clearly wistful about the fact that he would not be in politics anymore, saying, This may be my last campaign. I mean, this is a guy who lives for this. You can like him or you can hate him, but he is a political animal who lives for this, who lives to be in the mix. And I just can't imagine a former president who also happens to be married to the new top diplomat of the Obama administration will sort of shyly retire to the sidelines.


MATTHEWS: I leave you with that brilliantly stated thought there. Clarence Page, Chris Cillizza, we are all, Mr. President, if you're watching, fascinated with you, sir.

Coming up: How today's economic crisis looks eerily similar to the start-well, I'm not going to say this. This is in the script. It's not as bad as the Great Depression. It's 6.5 unemployment. The Great Depression was 25 percent unemployment. But let's bring on an expert, Nobel Prize-winning economist Paul Krugman of "The New York Times." He's going to be here to tell us what we need to do, what Obama needs to do. And here's the guy that thinks you better not do it on the cheap. This guy's no conservative, Krugman. He believes the biggest mistake Obama can make is to be squeamish and do little stuff instead of big stuff. It's time to show you won the election, President Obama.

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Welcome back to HARDBALL. Joining me now, "New York Times" Pulitzer-oh, Nobel Prize-winning columnist Paul Krugman, whose new book is called "The Return of Depression Economics: The Crisis of 2008." Just tell me, sir-congratulations, by the way, on winning a Nobel-are we going into a Great Depression again? Is it that bad?

PAUL KRUGMAN, "NEW YORK TIMES": I don't think so, but you know, I'm not 100 percent sure of that. It's certainly going to be the worst thing since the Great Depression. This is going to be-this is really bad. It may not be-you know, I don't know if we're going to have guys selling apples on the streets, but it's going to be really very bad, and much worse if we don't have an effective response.

MATTHEWS: How long's this deflation going to work, where-are we going to reach the point, like they did in the Great Depression, where it was more expensive to make something than you could sell it for, you had the prices were so low, they didn't even reach the cost of production, and that's why you did throw things on the ground?

KRUGMAN: Well, that's happening already in some-you know, some resource sectors. It's-there's a lot of manufacturing where they don't cut the prices so much but where stuff is piling up. You know, we've got luxury cars landing at the docks in Los Angeles and then just sitting there because no one could buy it.

So look, this is a lot like-this is functionally a lot like the Great Depression. You know, the thing about the Depression was they couldn't cut interest rates because they were already at zero. And guess what? You know, three-month Treasury bills are 2 one hundreds of 1 percent interest rate right now. We're basically in those kind of conditions.

MATTHEWS: What do you have to do to sell a car now? What do you have to do to sell a house? I mean, it seems to me if you've got a Great Depression, what you want is consumption to go up, investment to go up, or government spending to go up. Is there any chance we can get consumption to go up? Because the only three ways people spend money, either consumers spend it, you and I, business spends or the government spends. That's how spending works.


MATTHEWS: Is there any chance the consumer's going to start spending? This Christmas holiday season apparently down, even with all the bargains out there. Is there any way to juice it up?

KRUGMAN: No. The thing is, we were running on empty in terms of consumers anyway. We had a near zero savings rate. We had people living by using their houses as ATMs, and that's not going to work anymore. So consumption-I mean, consumption should not go up. People should be saving more. It was-we were not in a good state. Investment won't go up until people see the demand, until businesses see that they're-you know, with the shopping malls going vacant and with manufacturers having their plunging sales, who's going to invest in new factories? So it really is up to government. We're in a situation now where...

MATTHEWS: OK, that's what-that's what Warren Buffett said a couple weeks ago. If consumption is zero, is flat, and investment is zero, the only person or the only institution in American life capable of over-leveraging, of getting this economy rolling again, pumping the prime, priming the pump, is the federal government.

Now, I've looked at some numbers. I've heard about them. You know, we have a GDP in this country of $13 trillion. That's our economic activity in this country. You put it over three years, that's still only -that's $39 trillion. What good is a goose of a trillion-dollar stimulus package against that kind of economic weight that's being held down, our economy?

KRUGMAN: No, but the economy...

MATTHEWS: One trillion, is it enough?

KRUGMAN: I'd say $600 billion for next year is probably at least most of the way there. It's-we're probably going to have a deficit of a trillion dollars. Look, I mean, we're not talking about an economy-as you say, we're not in the Great Depression, not yet. So we're not talking about 25 percent unemployed economy. We're talking about an economy that's going to be operating maybe 7 or 8 percent below what it should be producing, and that-government spending can make a big dent in that gap. It can fill a lot of the hole, and then maybe we can have some investment, consumers at least won't plunge as much as they otherwise would. No, it makes a huge difference if we can get that spending going.

MATTHEWS: One of the knocks on Franklin Roosevelt is, he took office in March of 1933. And because it was the lame duck period still then, it had not come into becoming January 20 yet, it was 25 unemployment when he came in. Unemployment was still about 19 percent in '38, five years later. It took him a long time. It took World War II. It took Hitler and Tojo to get us out of war-the Great Depression.


There's a-there's a lot of-there's a lot of cherry-picking going on there. Unemployment actually came down a lot from '33 to '37. And, then, in '37, Roosevelt listened to the wrong people...

MATTHEWS: Yes, we're looking at it.

KRUGMAN: ... who said, we should-we should-we should balance the budget. And he-you know, he cut back, cut the WPA in half.


KRUGMAN: He raised taxes. And unemployment went back up again in '38.

So, people say, oh, look, in '38...


KRUGMAN: ... he hardly made any progress.


KRUGMAN: He was actually doing pretty well up to '37.


MATTHEWS: OK. Let's suppose...


MATTHEWS: Suppose-let me just ask you the bottom line here, because we are trying to avoid a Great Depression, not relive one.


MATTHEWS: Hitler and Tojo forced us to spend a lot on production.

And America's greatest-we became the arsenal of democracy...


MATTHEWS: ... in-in Roosevelt's words, and we really saved the world from evil.



MATTHEWS: ... economically, if we had spent that kind of money in '33, rather than '41 or '40, would we have been able to get out of the Depression? In other words, was it within the government's ability to end the Depression in, say, '33, and not wait for the war to get us out of it?


KRUGMAN: Oh, sure. Sure. There is nothing special that says that spending...

MATTHEWS: Well, that's a big answer.


No, I mean, there is nothing special that says that-that-that buying weapons, you know, buying shells and explosives is more stimulative than-than building roads and-and repairing bridges. You know, any kind of spending would have done it. It was only under wartime conditions, though, that you could get the political will to do what amounted to the giant stimulus package that was needed.

So, the question, right now, I think, is not, can we do this, but can we persuade Congress to do it. Can we persuade Obama that he needs to go really big? That's the issue.

MATTHEWS: Well, one of the advantages, it seems to me, Paul, from a political perspective, is that, when you have a really big problem, most people intuitively believe you have to have a big solution.

And although there were some governors the other day in Philadelphia arguing what we need to do is balance the budget, the Hoover position...


MATTHEWS: ... it seems to me that moderate Republicans will join Democrats in-in giving the president the power he needs to actually do something really big, because we have a really big problem.

The unemployment rate this coming Friday-it's at 6.5 -- what do you think it's going to get to? I mean, if it gets 7, are we going to be scared to death and start doing big stuff already?

KRUGMAN: Yes. I don't know if it will get over 7 this Friday, but that 6.5 was the unemployment rate for October.

What we're going to hear about on Friday is the unemployment rate for November. And this thing-this economy is falling like a stone. This is really-so, we're going to go over 7, if not-if not this week, four weeks later. It's-it's going to happen.

And I think that will concentrate people's mines, but it is still-I mean, I have-I'm still finding that even people you would think would be really pro-big economic recovery package says, so, let's spend a lot of money. Let's spend $400 billion.

And I say, $400 billion is not a lot of money, I'm sorry to say, given the kinds of problems we face. So, it's still hard for people to wrap their minds around the scale of the thing we need to do.


Well, I hope you give a...


KRUGMAN: I hope you-Paul, Paul, I hope you give a Nobel speech like William Faulkner, which is, we will not only survive, but we will prevail. Something that optimistic about America, I think, is called for.

So, check back and see what Faulkner said when he got his Nobel Prize.

I hope it applies to the experts like you.

Thank you very much, Paul Krugman. Congratulations again...

KRUGMAN: Thanks a lot. Thanks a lot.

MATTHEWS: ... Nobel Prize-winning economist and-and-and columnist for "The New York Times," Paul Krugman.

The name of the book is "The Return of Depression Economics and the Crisis of 2008."

Thank you, Paul Begala.

Up next, the big question when president-elect Obama named Bill Richardson commerce secretary today, what about Richardson's beard? A little funny story here about what Obama-you want to think about a guy quick on the uptake. He had an interesting comment. He is pro-beard, this guy, Obama. Today, we have got the new president's verdict on that beard. That's next on the "Sideshow."

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Back to HARDBALL. Time for the "Sideshow."

A brilliant pollster friend of mine once said that every great politician has three characteristics: motive-you know why he or she is there-passion, and spontaneity.

Well, Barack Obama certainly has got that third characteristic. Talk about being quick on your feet. Here he is today giving Bill Richardson, his new clean-shaven pick for commerce secretary, a ribbing.


QUESTION: And, if I also may ask the governor, what happened to the beard, sir?


OBAMA: I'm going to answer this question about the beard. I think it was a mistake for him to get it-get rid of it.

I thought that whole Western, rugged look was really working for him.


OBAMA: For some reason, maybe because it was scratchy when he kissed his wife, he was forced to get rid of it.



It reminds me of that same way mock serious way that Barack Obama went about describing his dog-buying decision, that-the less important the issue, the more intellectual he gets.

On to-anyway, on to another politician who doesn't have quite the same way with words. Yesterday was the grand unveiling of the new Capitol Hill visitor center, that big underground place there you use to get in to see the Congress at work. One of the big pluses, the estimated three million tourists who came through each year can now wait for their Capitol tours in air-conditioned rooms.

Senator Harry Reid of Nevada, the Democratic leader, well, he was grateful for the upgrade. Here he is at the visitor center's opening ceremony yesterday.


SEN. HARRY REID (D-NV), MAJORITY LEADER: In the summertime, because of the high humidity and how hot it gets here, you could literally smell the tourists coming in to the Capitol.


REID: Well, that is no longer going to be necessary.



MATTHEWS: What? Smell the tourists? Senator, please describe that smell to us. By the way, it's the smell of votes, buddy.

Anyway, now for today's edition of "Final Daze," as in D-A-Z-E, a daily recap of what President Bush is actually doing as his term comes to a close.

With just 48 days left now, today, President Bush has got no events whatever on his public schedule-lots of private time for the president today, just sitting around, thinking about things. I should have moseyed on over there myself to say hello.

Anyway, it's time now for "Name That Pardon," HARDBALL's look at who is going to get a White House break from the big house.

This former Bush Cabinet member traveled from Texas to Washington with the president eight years ago, though he resigned from his administration post last year. While he hasn't been charged with any crime, "The Washington Post" says that this Bush loyalist could still face some legal problems for his role in firing those nine U.S. attorneys back in '06 for possible political reasons.

So, who is it? Former Attorney General Alberto Gonzales. He is on our pardon list. There he is. He may get one, even though he has not been charged yet. That's the way it worked sometimes. That's the way it worked with Nixon. He hadn't been charged.

By the way, you can probably guess what Gonzales' argument is for a pardon. What it would be? Well, just listen to him back in the hearings back in 2007 when answering questions on those Justice Department firings.


ALBERTO GONZALES, ATTORNEY GENERAL: I don't recall such a conversation.

I don't recall.

Well, I don't recall.

I don't recall.

I do not recall.

I can't recall.

I don't recall.

I don't recall.

I do not recall.

I just don't recall.

I don't recall.

I don't recall.



MATTHEWS: I don't recall.

Hey, whatever he did was in the line of doing Bush's business, OK?

Think about that one.

Time now for the "Big Number."

If there is one thing Democrats know how to do, it's throw a party.

Well, a new bill has just passed in the District of Columbia. And it says

well, it says that, during the inaugural bashes-and there's going to be one coming here for the ages-how long will Washington's bar be open during this long weekend coming up in the inaugural? Twenty-four hours a day, the bars are staying open in D.C. for the inaugural weekend.

That's right. Happy days are here again. Obama's welcoming weekend is set to an around-the-clock party. Glad I don't drink, actually -- 24 hours, tonight's HARDBALL "Big Number."

Up next: more evidence that President Richard Nixon saw enemies everywhere. Talk about a team of rivals. This guy was surrounded by them during his White House years. The newly released Nixon tapes, we have got some new ones for you. And they're all fun.

You're watching HARDBALL, only on MSNBC.


JULIA BOORSTIN, CNBC CORRESPONDENT: I'm Julia Boorstin with your CNBC "Market Wrap."

Stocks closing higher after another volatile session-the Dow Jones industrials gained 172 points, the S&P 500 up 21, and the Nasdaq up 42.

"The Wall Street Journal" reports, the Treasury Department is considering a plan to giving the housing market a boost by cutting mortgage rates as low as 4.5 percent.

Meantime the Federal Reserve's latest snapshot of business conditions nationwide suggests the economy is sinking deeper into recession. To help, many economists expect the Fed to cut interest rates again at the end of a two-day meeting that begins December 15.

The United Auto Workers union says it's willing to make concessions to help struggling automakers, among them, accepting delays in payments of billions of dollars to a union-run health care trust.

And oil slipped another 17 cents, closing at $46.79 a barrel.

That's it from CNBC, first in business worldwide-back to HARDBALL.

MATTHEWS: We are going to reach back into that stack of golden oldies tonight. Welcome back to HARDBALL.

Thirty-four years after Richard Nixon resigned the presidency, new audiotapes have been released of his conversations in the Oval Office. And this time around, they reveal his decision to launch a bombing campaign on Hanoi-that's North Vietnam-and his obsession with the press.

MSNBC contributor Jim Warren has been listening to the new tapes over the past 24 hours. And Richard Cohen is a "Washington Post" reporter who is an expert on that period.

Let's take a look, you first, Jim.

Let's listen to Nixon-that's former president, the late president -

telling Henry Kissinger he wants to bomb Hanoi. This back in December 1972.


RICHARD NIXON, PRESIDENT OF THE UNITED STATES: So, we're going to bomb them. We'll take the heat right over the Christmas period. Then, on January 3, it's Christmas withdrawal.


MATTHEWS: And the reason for bombing Hanoi was what, Richard?

RICHARD COHEN, COLUMNIST, "THE WASHINGTON POST": Well, Nixon wanted to go force the North Vietnamese back to the negotiating table.

There has been some difficulty. Kissinger had opened negotiations in Paris. There was difficulty. The North Vietnamese had some conditions. But, actually, he also wanted to bring the South Vietnamese in line, show them that he would not abandon them in the war. So, he initiated this bombing, this terrible bombing, of Hanoi, the Hanoi area, which, in the end, didn't do much.

MATTHEWS: So, to get this straight, James, he wanted to kill people in North Vietnam to prove to people in South Vietnam he would defend them?


Chris, there is absolutely no historical evidence that this actually led the North Vietnamese, in January, a few weeks later, to sign on to a peace agreement. In fact, it looks like, even a month or two earlier, around late September, October, the North Vietnamese were on the same page about the basic contours of the agreement.

It was the South Vietnamese who were balking, because, basically, the ultimate deal would be...


WARREN: ... the North Vietnamese would be swooping in and taking over their country.

So, what this was about was really Nixon kind of showing his cojones and his-show the middle finger to the American establishment, which was against this sort of thing. No impact actually on what finally happened.

MATTHEWS: Speaking of that middle finger and his cojones, here is Richard Nixon describing the press to Henry Kissinger two months after being reelected in that landslide in '72.


NIXON: Never forget, the press is the enemy. The press is the enemy. The press is the enemy. The establishment is the enemy. The professors are the enemy. The professors are the enemy. Write that on the blackboard 100 times, and never forget it.



MATTHEWS: Richard Cohen, I think he went to Catholic school and that was writing it on the blackboard 1,000 times, "The press is the enemy."


MATTHEWS: That's him talking. That's not an electronic trick, by the way.


MATTHEWS: That's the way he spoke, relentlessly repeating himself.


And Richard Nixon proves over and over again that anybody can be president. Here was a guy who was so insecure...


COHEN: ... so belligerent, so aggressive, and felt so inferior, and, yet, at the same time, was so smart.

He had just won one of the biggest landslides in American history just a couple of weeks before, and now he wants to go after enemies.

You say, what enemies? What press? I mean, he-the press had simply been-you know, Watergate had happened in June, and it had been under-reported, except for "The Washington Post."


COHEN: I really don't know what he is talking about at this time.


WARREN: Yes, I mean, it's interesting.

No sooner does he bash McGovern, one of the-I think maybe the biggest electoral margin ever, but, within 24 hours, he's bad-mouthing McGovern and saying...


WARREN: ... McGovern just part of this establishment, which he has slain.

But, by this time-what is really interesting, in some of the news tapes, Chris, is you see, this definition of establishment includes not only all of American academia, but includes a lot of folks in the White House itself, which is why, no sooner does he win that election than he calls the Cabinet in, tells them, oh, great job, guys, walks out of the room, and then has H.R. Haldeman ask all of them for their resignations, because no sooner had he won than he was ready to clean house, because there was everybody, from aide Donald Rumsfeld to the big Republican in the House of Representatives from Pennsylvania, a congressman named Hugh Scott, whom he simply didn't trust, because they played footsie with that evil establishment.

COHEN: You know, it's...

MATTHEWS: Yes, he didn't like Hugh Scott too much.

Go ahead, Richard.

COHEN: It's-it's so interesting, because this was the second president in a row who had this obsession with the establishment. The first one was Lyndon Johnson, who just felt that the Kennedys represented the establishment and were out to get him and get even with him, and the second one was Richard Nixon.

And yet both men had been president of the United States. Richard Nixon had just come from being a Fifth Avenue-a Manhattan lawyer, living on Fifth Avenue before he was president of the United States, had been vice president of the United States. How much higher in the establishment do you have to be before you feel comfortable?

MATTHEWS: Yes, I think he was going to see the opera in New York with Tom Dewey the night Kennedy was killed. He was leading quite the life there. Let's take a look, as you point out, Jim, here's Richard Nixon railing against the guy he just beat in like 40-some states after that '72 crushing defeat of the Democrats.


RICHARD NIXON, 37TH PRESIDENT OF THE UNITED STATES: It's really not an admirable performance on the part of the liberal press. You are now blaming McGovern's tactics for losing this. I said his tactics didn't lose it, his issues lost it. He lost the election the day of the nomination. Sure, Eagleton hurt him some, and a thousand other things. But I said, you want to remember, he stood for busing. He stood for amnesty. He stood for acid. He stood for bigger welfare. And all of you stood for that.


MATTHEWS: Wow. Acid, by the way, is LSD. Gentlemen, let me ask you, Jim, you've come across some interesting stuff. Haldeman, his chief of staff and he were going over some ideas you found out on the tapes. You don't have them here right now, where Nixon-Haldeman, his chief guy, his P.R. guy from J. Walter Thompson saw the coming of cable television and the demise of printed newspapers.

WARREN: He is in the Oval Office, I was listening to thing, it's in the middle of December of 1972, with Haldeman and another top aide who ended up being convicted in Watergate, then very famous, Charles Colson. And they are talking about the coming of this new medium called cable television.

And Haldeman says, you know, the Cable Association has given us a lot of money, and-but Colson says, oh, but they are a sleazy bunch, sleazy folks in cable. And Nixon said, I don't care if they're sleazy. And then Haldeman says, well, but, you know, they will be getting bigger, so they'll be attracting a better type of person into the industry.

So, Chris, congratulations. It took a while, but, you know, quality has won out.


WARREN: But they-guys, but they have a very prescient sense of the coming and the changing of American media. And to my horror and pain and certainly to Richard's, if he listens to H.R. Haldeman, there is a distinct sense that this ungainly wad of paper which Haldeman refers to, which kids on bicycles throw on doorsteps at 5:00 in the morning, and of which Haldeman says, I only want 10 percent, I don't need the other 90, this thing called a newspaper may possibly be a dying institution. This is 1972.

MATTHEWS: Oh, God. Richard Cohen, you brought down Spiro Agnew, your feelings right now that Nixon's tapes are coming out of the grave again.

COHEN: Well, I mean, Nixon is just some-I call him a theatrical creation. He is so obsessively interesting. He is so smart, he is so crazy at the same time. It's all captured, by the way, in this remarkable film, "Nixon/Frost," about the making of the David Frost interviews with Richard Nixon.

We see Frank Langella playing Nixon, a close up of the guy, and the camera is very close. You see this brilliance, you see this intelligence, you see his aggressiveness and at the same time he cannot control his insecurities. He cannot control his belligerence. He can't control his anger. It's a fascinating portrait. It's-when you look back on it now, you can't believe he was president.

MATTHEWS: I think "Nixon/Frost".


MATTHEWS: Jim, we have to go. We have to show one more tape. I'm sorry, Jim. Here's some more Nixon going after McGovern, the guy he beat.


NIXON: Even last night, he started out nicely in his thing, but then proceeded to jut his jaw out and said he wasn't going to support, you know, this or that. Did you notice that?


NIXON: What do you think of that?

DENT: As far as grace?

NIXON: I came on, I was, I thought, quite graceful to the son-of-a-bitch.

DENT: Right.


MATTHEWS: Ha! I was graceful to the son-of-a-bitch. Ha! Talk about a mixing of your English language there, Jim, it's amazing how Nixon talked, you're right. He had.

WARREN: A couple of things, a couple of things. I mean, there was a case to be made that McGovern wasn't terribly magnanimous. But, you know, when also I could not help but be reminded today, guys, and particularly as I watched Obama unveiling Bill Richardson. Obama, who is being counseled to do away with his BlackBerry lest too much information gets out about his presidency, how nostalgic we should be for 3,700 hours of these secret tapes.

We're now, Chris, I think roughly up to about 3,000. They end of course when the Watergate investigation starts getting up in full swing in July of '73. So we've got about six, seven, eight more months into 1973 of this amazing treasure trove, this window into an American presidency that we will never ever get again.

MATTHEWS: And by the way, personally, Jim and Richard personally created by Richard Nixon himself. He created his own Frankenstein's monster to chase him even in the grave. What an ironic, sad story. Well, it's a great story. Richard Cohen, Jim Warren, thank you, gentleman.

Up next, President Bush's exit interview. He is finally talking about regrets now. He says his biggest regret is the intelligence failure that he holds responsible for his decision, I suppose, to go into Iraq, although I'm not sure was true. I don't think it was about intelligence, I think he wanted to go in there anyway regardless of the intelligence.

Anyway, more of that when we come back in the "Politics Fix" tonight.

More on HARDBALL, coming back.


MATTHEWS: Coming up, George W. Bush is finally talking about his regrets as president, and his brother Jeb is thinking about joining the U.S. Senate. The "Politics Fix" is next when HARDBALL returns.


MATTHEWS: We're back. Time now for the "Politics Fix." We're joined by MSNBC political analyst Michelle Bernard, salon.com's Joan Walsh, frequently seen here with Christopher Hitchens.

Here is President Bush with ABC's Charlie Gibson.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The biggest regret of all the presidency has to be the intelligence failure in Iraq. A lot of people put their reputations on the line and said, you know, the weapons of mass destruction is a reason to reason to remove Saddam Hussein. It wasn't just people in my administration. And, you know, that's not a do-over, but I wish the intelligence had been different, I guess.


MATTHEWS: Joan, I'm not sure what the message what the message there is, is the president saying in retrospect that he would not have invaded and occupied Iraq as a matter of geopolitical policy had there been no weapons of mass destruction? He is saying that that was the single definitive reason why he went into that country and occupied it, is that what he is saying?

JOAN WALSH, SALON.COM: Yes, it seems like it. Charlie Gibson did follow up with that question, Chris, and he wouldn't quite answer. But I just have to say, that is the most astonishing buck-passing, self-pitying answer I could have imagined.

He acts as though the intelligence agencies were some wholly-owned subsidiary of some other administration, rather than his-his responsibility. He acts like people outside the administration agreed when he was responsible for pushing that faulty intelligence, for stove-piping and it ignoring everything without any kind doubt, any kind of dissent, and really cooking the book in terms of the case for WMDs.

I mean, it is really-it's scandalous how he seems to be distancing himself.

MATTHEWS: Well, I'll go further than that. I don't think the WMD was the reason we went in there anyway. I think it was geopolitics.

WALSH: Well, I don't either.

MATTHEWS: I he used that. He put that together. He had the vice president put it together, to use the British documents, the Italian papers, any kind of a.

WALSH: I agree with you.

MATTHEWS: Any kind of scheme they would come up with, they justified it. They didn't have hard evidence. In fact, they keep using that conflating term, "weapons of mass destruction." If he thought they had nuclear weaponry, if he thought they had a bomb they could drop on Israel or anybody else, they should have said clearly and distinctly.

What they did was use phrases like "mushroom clouds," and all of this

well, your turn, Michelle. I just never thought that was the reason. I think he decided to go into Iraq from the day he got into office. He wanted to get in there and so did the vice president. That was their policy, for whatever reasons.

And the WMD-first of all, the term they cooked up, WMD. I never liked that term, say what you mean.

MICHELLE BERNARD, MSNBC POLITCAL ANALYST: Well, you know, two things I noticed in looking at the interview, his body language. He looked completely just worn out, spent, and looked to be a man who is thinking about his legacy and realizing that the legacy is going to be WMD.

But I also wonder when he used that line in talking about the people who put their lines on the reputation (sic), I wonder if it wasn't-it was sort of a backdoor way to apologize to people like Colin Powell, who put his reputation on the line.

He testified before the entire world, and justified going into Iraq on the basis of weapons of mass destruction. And he has never really been able to come back from going out and making that pronouncement to the entire world. And I wonder if the president is somehow trying to find a way to apologize to Secretary Powell and others...


WALSH: You are more charitable.

BERNARD: . who put their reputation on the line.

MATTHEWS: Why doesn't he point the finger at his big brother, Dick Cheney? Why doesn't he say the vice president put his finger on this scale?

WALSH: On the scale.

MATTHEWS: He put those lines in. He pushed that whole thing with Scooter Libby. They crushed in the opposition...

WALSH: He made me do it.

MATTHEWS: . if anybody challenged it. You know, why didn't he just say that? He's going to blame this on George Tenet? I mean, give me a break. By the way, I wonder whether, you know, anybody see the movie "W."?

Have you seen it?


MATTHEWS: It is OK. It is all right. I mean, Oliver Stone has made some great movies and some movies I disagree with. But this was not one of the great ones. But it's OK. But it portrays Jeb Bush as the favorite son of the Bush senior family, of Barbara and George senior.

And now we see that he may be running for the Senate down in Florida and may well win that seat. It is a conservative state. What do you make of that? Is this going to be a successful deliverance from the stigma of George W. by bringing Jeb in there who has got a real mind for ideology, for politics, you know, thinks for himself, he doesn't need a Dick Cheney around?

Your thoughts.


MATTHEWS: I don't know, I feel-I don't leave much of answer, I give the answer to my own questions, I know.

BERNARD: Joan, of course, I don't know if you saw years ago, "Vanity Fair" also did an article on the relationship between George W. and George Herbert Walker-W. And the same sort of thing that you're talking about, it will be real interesting-people-you know, conventional wisdom is Jeb Bush is the favorite son, he's a better politician.


WALSH: Right.

BERNARD: But I think that history will look at each man as three very separate and very distinct individuals. And probably Bush 41 and whatever happens with Jeb Bush, their legacy might look a little bit more positive than the 43rd president.

MATTHEWS: Yes, you've got to wonder about evolution too when you see the advantages of 41 over 43, don't you? You have got to wonder which way we're heading here.


MATTHEWS: Just kidding! We'll be right back. Just kidding. We'll be back with Michelle-a little evolution joke there, Michelle Bernard and Joan Walsh, we'll be more of the "Politics Fix," you're watching HARDBALL, only on MSNBC.


MATTHEWS: Last night in Georgia, Republican incumbent Senator Saxby Chambliss won that runoff over Democratic challenger Jim Martin. We're back with Michelle Bernard and Joan Walsh.

Joan, it seems to me that one of the winners down there, like it or not, I know you may not like it from your opinion, is that Sarah Palin was in there, gave four big speeches for Saxby Chambliss, and in many ways got credit for that win down there, even though it was a fairly easy win for Republicans in a conservative state like Georgia.

Look at her. There she is. Look at that crowd.

WALSH: They love her. They love her. You know, I don't think it is a big surprise. And, you know, sure, I'm happy to give her some credit, Chris. I want to be magnanimous today. But really, you know, Saxby Chambliss was expected to win.


WALSH: I know, Michelle, it is a rare day. He was expected to win and she gets some credit. But I think, you know, big news, Georgia goes Republican. I think people are making a little too much of a big deal out of this today.

MATTHEWS: Well, Michelle, I wonder, because every defeat brings about some phoenix characters, some winners. And I think she is one of the winners. I think coming out of this a year from now, who do you want speaking at your Republican fundraiser anywhere?

BERNARD: Exactly.

MATTHEWS: It is her. There are always some Palin conservatives in your state, wherever it is.

BERNARD: This election, this runoff was all about getting your base out there, and Sarah Palin came to Georgia. She had huge crowds behind her. She got out Saxby Chambliss's base and he lost very few votes in comparison to what he got on November 4th. So she is a star at least in some jurisdictions.

MATTHEWS: So the question now -- (INAUDIBLE) now, Jeb Bush again. It seems to me that Jeb Bush has left the door wide open to run for U.S. Senate down there, Joan. So I think we're going to have a period perhaps like in the days of Prescott Bush, the former senator from the Bush family. Are we going back to that, again, more Bushes?

WALSH: Maybe. I mean, I don't know. Maybe Florida doesn't feel this way, but I think there is a level of Bush fatigue in this country and it just might be that that's too soon for Jeb Bush to try to make this kind of a comeback. We'll have to see how he can separate himself.

MATTHEWS: OK. We'll see. We'll see. Michelle Bernard, thank you, Joan Walsh. Right now it's time for "1600 PENNSYLVANIA AVENUE WITH DAVID GREGORY."



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


Discussion comments