updated 12/12/2008 10:51:44 AM ET 2008-12-12T15:51:44

HARDBALL

December 11, 2008

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

Guests: Tom DeFrank, Steve McMahon, Todd Harris, Perry Bacon, Jeff Johnson

CHRIS MATTHEWS, HOST: My kind of town. Chicago keeps corruption chugging.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Welcome to HARDBALL. Leading off tonight, the president and the governor. The moment the Rod Blagojevich scandal broke on Tuesday, the whispers began. What, if anything, did Barack Obama and his staff know about those sordid dealings for his Senate seat? Today Obama answered those whispers loud and clear.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I'm confident that no representatives of mine would have any part of any deals related to this seat. I think the materials released by the U.S. attorney reflect that fact.

(END VIDEO CLIP)

MATTHEWS: Well, that's true. The wiretaps clearly show Blagojevich was frustrated that Obama would not "pay to play" to get his Senate seat given to someone he liked. But how did Blagojevich know Obama wouldn't pay unless someone on Obama's staff was talking to the governor or his aides? Obama said today he hopes Blagojevich resigns.

Plus, before people get too comfortable smirking at what goes on in Chicago, "pay to play" might be well happening in a city near you. We'll talk to two old pros on what goes on in those back rooms.

And having a hard time remembering all the good things that President Bush has done for us? Don't worry, the White House has thoughtfully provided a two-page talking point memo for high-ranking administration officials to tell us what a great job the president's done for us. And now we're making some of it available to you in the public for free. Watch the HARDBALL strategists tonight debate those talking points.

Getting back to the Illinois scandal, wait until you hear some of the things Rod Blagojevich's wife had to say about how the governor might make some extra cash. We've got that in tonight's "Politics Fix."

And as long as we're on the subject, guess which state has the highest rate of convicted politicians? It's not Illinois. In fact, Illinois is not even close. We'll count down the top three in the HARDBALL "Sideshow," that's the top three most corrupt states in terms of the metric we're using, who got caught. We can argue about whether the metric is any good later on.

But first, the president-elect is getting pulled into this Illinois political investigation. Carol Marin is with NBC Chicago station WMAQ and "Washington Post" columnist Eugene Robinson is an MSNBC political analyst.

Eugene, let me go with the big-let's look at Obama. Here's the president-elect talking about the contacts he did not have. That's really what he's denying here. Let's take a look.

(BEGIN VIDEO CLIP)

OBAMA: In terms of our involvement, I'll repeat what I said earlier, which is I had no contact with the governor's office. I did not speak to the governor about these issues. That I know for certain. But what I'm absolutely certain about is that our office had no involvement in any deal-making around my Senate seat. That I'm absolutely certain of. And that is that would be a violation of everything that this campaign has been about. And that's not how we do business.

(END VIDEO CLIP)

MATTHEWS: Well, I guess, Gene, is the problem here. How do you deny the denied? How do you prove-well, how does he suggest that he-that the governor, the obviously sleazy governor, got the idea that Obama wouldn't pay to get the right person in that seat if he didn't say so?

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Exactly. And he didn't say it to-there was no contact between Barack Obama and Rod Blagojevich, the two men. But it doesn't rule out that there was contact between the two staffs and-or representatives of the two. And duh, wouldn't there be? Wouldn't you think the outgoing senator, who happens to be president-elect, would be interested in who succeeds him in his home state of Illinois?

MATTHEWS: And the question is, did he offer any deal, Barack's, people on his behalf? Did David Axelrod make an offer, or did they respond to an offer? Because it seems like Blagojevich is a guy always with his hand out, trying to get his palms crossed with some money.

ROBINSON: Right.

MATTHEWS: I guess I have to wonder about this complicated third way deal that was discussed by the governor, whether the SEIU, the union, was somehow in a position to somehow thank him by giving him a job for doing a favor for the president-elect by picking his preferred candidate. Who told that union leader, if he did say this, that he was actually operating on behalf of the president, he could actually, you know, give a thank-you gift of a big job to the governor if he picked the right person?

ROBINSON: If, in fact, that was even the case. I mean, there's a certain amount of fantasy going on, I think, in Blago-world. But...

MATTHEWS: A lot of lobbyists and sleazeballs you deal with in politics, and semi-sleazeballs, make claims that they represent someone when they don't.

ROBINSON: That's true. But somehow, Rod Blagojevich got the idea that Barack Obama wanted Valerie Jarrett to get the Senate seat and that Barack Obama wouldn't give him anything for it. All he wanted to give him was appreciation. Somehow, he got that idea.

MATTHEWS: Isn't it amazing how-you know, you've heard these stories about how when a lobster tries to get out of the lobster tank, the other lobsters try to pull him back in the tank?

(LAUGHTER)

MATTHEWS: It's like he's trying to get out of Chicago politics. He was able to get through it pretty clean, obviously, never a mark on him, really, except the Rezko case.

ROBINSON: Right.

MATTHEWS: He was able to get through it pretty clean, and now all the other lobsters are reaching back to pull him back into the tank.

(LAUGHTER)

MATTHEWS: Here's President-elect Obama on his involvement in the investigation.

(BEGIN VIDEO CLIP)

OBAMA: I have not been contacted by any federal officials, and we have not been interviewed by them. As is reflected in the U.S. attorney's report, we were not, I think, perceived by the governor's office as amenable to any deal-making. And you know, I won't quote back some of the things that were said about me, so...

(LAUGHTER)

OBAMA: This is a family program, I know. So you know-so beyond that, I'm not really certain where the investigation is going forward. I'll leave Mr. Fitzgerald to address those issues.

(END VIDEO CLIP)

MATTHEWS: Boy, it's so sticky.

ROBINSON: Very sticky. I mean, in that explanation, there are some holes that you could drive a scenario through. For example, you could imagine the scenario that a representative of Obama, somebody speaking for him, talked to Blagojevich's office, maybe got shaken down.

MATTHEWS: What about Axelrod, who said that he-Axelrod said that the governor had talked with his candidate, the president-elect.

ROBINSON: Right.

MATTHEWS: And then somebody else-and he had say he misspoke.

ROBINSON: He misspoke, but maybe...

(CROSSTALK)

ROBINSON: ... or maybe somebody else did speak to him. But maybe he got shaken down. Did he then go talk to Patrick Fitzgerald...

MATTHEWS: Yes.

ROBINSON: ... to the prosecutor? Because Obama says he has not been contacted. He says, We have not been interviewed. I wonder is-does that give wiggle room to-you know, he didn't say, But we didn't drop a dime on Blagojevich with Fitzgerald, that we didn't go to Fitzgerald and tell him that the governor's trying to shake us down.

MATTHEWS: You know, one of the-I have a political memory that's ridiculous, but one of the memories I had, the romance of the Kennedy people. The Irish mafia used to say that one of the things Jack Kennedy wanted to do after he left the presidency, had he survived, was to go back to Massachusetts politics and clean it up...

(LAUGHTER)

MATTHEWS: ... you know, I mean, run for governor and clean it up. But you know, it seems like there's a job to be done there in Springfield, Illinois.

ROBINSON: Oh, it seems like there is, yea.

MATTHEWS: You know, the land of Lincoln has become the land of Blagojevich in a matter of two days.

ROBINSON: Yes. But I mean, he was an outlier even, I think, in the context of-then again, his predecessor is in federal prison in Terre Haute, so not that of much of an outlier. But the way-the heavy-handed way in which he-he did the...

MATTHEWS: OK. Let's-so nobody thinks that the era of hope is lost, here's the president-elect talking, at least hopefully, about the different kinds of candidates. I want to go into this because I think there are two kinds, the kind of person, man or woman, Republican or Democrat, who runs for office because it's the best paying job he's ever seen and who can't wait to get that job and hold onto it and make any money he can off the job.

ROBINSON: Right.

MATTHEWS: And then there's the person who actually does-whatever their background economically, goes for the job because they think they can do some good for the public. Now, maybe there are mixed bags. The world's filled with them.

But here's Obama trying to explain that distinction today. This is President-elect Obama.

(BEGIN VIDEO CLIP)

OBAMA: Well, first of all, I can't presume to know what was in the mind of the governor during this process, so I won't even speculate on that. All I can do is read what was in the transcripts, like the rest of you have read it, and shake my head. But what you also have, I think, are habits and a culture that thinks of politics as a means of self-aggrandizement. That's exactly what has to change.

(END VIDEO CLIP)

MATTHEWS: If something is available in terms of power, a lot of politicians look at it as a chance to make some money. If I can name a judge, where's the money? If I can grant a license, where's the money? If I can grant some pilot program money, where's the money? Everything has to be a kickback in terms of at least a campaign contribution. We know that exists. It's called pay to play.

ROBINSON: Right.

MATTHEWS: This is not unique.

ROBINSON: Not unique to Chicago. It's not unique to...

MATTHEWS: It is what makes me sick about politics. It's there.

ROBINSON: It is there.

MATTHEWS: Right, Gene?

ROBINSON: No, it is there.

MATTHEWS: You were editor of a big-city newspaper before you became an opinion-meister. You know all this stuff!

ROBINSON: There's a perfectly legal and accepted way of pay to play.

I mean...

MATTHEWS: Explain.

ROBINSON: Well, contractors-guess what? -- give campaign contributions to mayors, and they get city contracts.

(CROSSTALK)

MATTHEWS: ... used to take the bag to the White House.

ROBINSON: Right. Exactly. Exactly.

MATTHEWS: The cash in the bag.

ROBINSON: Exactly. But you know, there's a legal kind of aboveboard way, and then there's a not so legal, not so aboveboard way that involves kickbacks. And people have gone to jail for decades...

MATTHEWS: And how many law firms...

ROBINSON: ... and hundreds of years for...

(CROSSTALK)

MATTHEWS: And investment house gets to underwrite everything a city does, the state does.

ROBINSON: Yes.

MATTHEWS: You know what it is? When you pick up a rock and you see all the bugs underneath that rock, that's what we're looking at in Chicago. You pick up the rock, and we're looking at the bug life of political life. It's not so pretty underneath all the good speeches. Thank you, Gene Robinson.

Coming up: As shocking as the allegations are against the Illinois governor, this kind of "pay to play" politics is rampant in some cities across the country, and some statehouses. Who's playing and how's it played? Let's talk about the sordid nature of politics when we come back.

You're watching it, HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. The corruption case in Illinois has a lot of people yelling, What's wrong with these guys? Before we get into that, let's look at the tangled web of Governor Blagojevich. At the center of it all, the governor, six years on the job. At his side, wife Patricia. The governor apparently wanted to use his influence to get her high-paying jobs on corporate boards. Her father is Richard Mell, a longtime Chicago political leader who helped get the governor started in politics.

Before he was governor, Blagojevich was a U.S. congressman. That seat belongs to Rahm Emanuel. Years ago, it was held by Dan Rostenkowski, who went to prison for corruption. Rahm, of course, is President-elect Obama's new chief of staff.

And Obama confidante Valerie Jarrett is Senate Candidate 1 in the federal government's complaint against Governor Blagojevich. The governor's predecessor in office, Republican George Ryan, is in prison right now for corruption. Ryan carries on a tradition of other recently imprisoned Illinois governors, like Otto Kerner and Dan Walker.

We found out yesterday that Senate Candidate 5 is U.S. Congressman Jesse Jackson, Jr. Jackson, of course, is the son of the Reverend Jesse Jackson, who backed Obama in the presidential race but gave him a few headaches along the way. Illinois attorney general Lisa Madigan wants to oust the governor from office, if necessary. She's the daughter of Illinois house speaker Michael Madigan, who's had his own fights with Blagojevich. Madigan also has fought with Illinois senate Emil Jones, who is one of Obama's political mentors.

Mayor Richard Daley said the governor should do the right thing. Daley's brother, Bill, might want to run for governor himself. And Bill Daley, of course, is a close adviser to Obama. And finally, there's Illinois lieutenant governor Pat Quinn, who also wants the governor out. If Blagojevich leaves, Quinn might pick Obama's successor in the U.S.

Senate.

With us now, MSNBC political analyst Pat Buchanan and Tom DeFrank.

He's the Washington bureau chief of "The New York Daily News."

I want to start with you, Tom. This whole question of pay to play, is it new to politics?

TOM DEFRANK, "NEW YORK DAILY NEWS": No, it is not. It's-the levers of government, Chris, are greased by quid pro quos. Usually brown bags filled with cash are a little-little to the extreme. I can remember as very young reporter, going up to Baltimore for weeks on end, covering the comings and goings of the Spiro Agnew going to. And Agnew, of course, had to cut a plea deal to avoid jail by resigning from the vice presidency.

But I mean, the notion that, If you do this for me, I'll do this for you, I'll vote for this bill if you give me a dam in my district back home all of that stuff goes on every day.

MATTHEWS: Patrick, you were-you knew a speech writer for Vice President Agnew, didn't you?

PAT BUCHANAN, MSNBC POLITICAL ANALYST: I was very close to Vice President Agnew. I went to his funeral. But Chris, even the exchange of office, which you see Blagojevich wants an ambassadorship or a cabinet seat in exchange for giving the senator-what is new about that? You know, the election of 1824, John Quincy Adams came in second and Henry Clay came in third. The two got together. Clay got secretary of state. Adams got the presidency. Andrew Jackson, who'd won the electoral votes and who won the popular vote, was completely shafted. It was called the "corrupt bargain." It...

MATTHEWS: Who lost out there?

BUCHANAN: Andrew Jackson lost out, but that was the trading of offices, much like what Blagojevich was going to do with whoever wanted this Senate seat.

MATTHEWS: He wanted, like, HHS in exchange for giving...

BUCHANAN: He wanted a cabinet seat or...

MATTHEWS: ... giving Obama's seat to somebody preferred (ph).

BUCHANAN: ... or a big embassy. Sure, that's an exchange. But this is so crude, it's so much on the table and stuff. But what Tom says is very true...

MATTHEWS: Isn't the use of the "F" word-isn't just the crude language we see in these tapes...

(CROSSTALK)

BUCHANAN: ... the crudity of the expression. But as Tom says, a lot of guys go in and say, Look, you know, I want your vote. I need your vote on that, and you say, Well, I need some help on this thing in my district.

MATTHEWS: Yes.

BUCHANAN: And so they trade the votes. I remember the NAFTA vote. They were 30 votes short, and Clinton just went down there, C5A (ph) for your district. What do you need? You get this. You get this.

MATTHEWS: Yes, I know.

(CROSSTALK)

MATTHEWS: Tom, whenever you get to only needing four or five votes on Capitol Hill, we know the president goes around with a shopping list and buys each one of those votes.

But let's talk to the cruder forms. The most crude form is when the guy or the woman gets cash for themselves personally, which, obviously, they're not going to pay taxes on, so they're going to break the law right there. This guy, Blagojevich, was talking about something, quote, "tangible up front." A half million bucks he wanted from one of these candidates for-to fill that Obama seat. Is that unusual today, cash for the person, not for his campaign treasury?

DEFRANK: I think that's what makes this really extreme and over the line in terms of the normal way power is exercised in Washington and in state capitals all over the place, big amounts of money directly to somebody, to an office holder, to a member of an office holder's family. I think that is fairly rare.

MATTHEWS: What about the norm of pay to play? The term as it's used in bit cities means this. If you want to get a license from a city to build something, build something, put something up anywhere, if you want to run anything, a taxi cab, you got to pay somebody. You go to make a campaign contribution. That's unfortunately common.

BUCHANAN: Well, Chris...

MATTHEWS: And it's in big cities today.

BUCHANAN: What is local government and especially-you know, guys, when you get to city councils and things like that in state government, you have the power to enrich. And these guys spend years and years...

MATTHEWS: How does a congressman-I mean, how does mayor make somebody rich? He gives them...

BUCHANAN: Sure. You give them a license to build...

MATTHEWS: A cable license, something...

BUCHANAN: Give him some-they can build a skyscraper somewhere. They're going to get rich.

And you say, OK, this is going to-you're going to get so many hundreds of millions out of this. Can you raise a million bucks for my reelection? And you have got there.

One-if it's for the campaign and things like that-but once you're talking about putting it in a satchel for the individual, you don't anybody who is stupid as a post knows that is criminality.

MATTHEWS: Of course, you're not going to pay taxes on it.

Let's take a look at Barack Obama distinguishing between the kind of pol who goes into it for the money and the kind of pol who goes in it-who doesn't need that money, who has it from another source, another career, but does it because he or she has a dream of doing something somewhat altruistic.

Here he is.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: Now, with respect to Illinois, look, as I said, I think in Illinois, as is true in American politics generally, there are two views of politics. There's a view of politics that says you go in this for sacrifice and public service, and then there's a view of politics that says that this is a business, and you're wheeling and dealing, and what's in it for me?

(END VIDEO CLIP)

MATTHEWS: You know, Tom DeFrank, you have covered a lot of politics.

And, Pat, you have seen it from so many directions.

Is it fair to say he's being a little bit too neat there, that every pol, including him, had to make certain deals to get campaign funds, that you have to ask people-it's not-everything is not transactional. But do you, in fact, take money from labor unions, the SEIU, $29 million, with the agreement you are going to support their-their agenda, which includes card check, or whatever? That's part of the nature of politics. It's not illegal. It's not unethical.

You do something for them, and they're going to-you're going to support their agenda, and you're going to get some help from them in the campaign. That's normal politics.

(CROSSTALK)

TOM DEFRANK, WASHINGTON BUREAU CHIEF, "NEW YORK DAILY NEWS": Yes.

And that's the way it works.

MATTHEWS: Tom, isn't that normal politics? You help an organization legitimately, that has a legitimate goal, like a union organization, and you help them, and they help you?

DEFRANK: Well, I think that's right.

MATTHEWS: That's politics.

DEFRANK: I think that's right, Chris.

And I think there's a third category that Obama did not mention. And I think that's the category in which most elected officials fall into, where it's a little of foot in both camps. Yes, you're trying to do good things for public service and for your constituents, but you're probably pretty ambitious, and you would like to do something for yourself as well, but not, as Pat says, put money-take money from satchels.

(CROSSTALK)

MATTHEWS: Yes, and you like to be famous. You like to be an elected official.

(CROSSTALK)

MATTHEWS: There's all this self-aggrandizement...

(CROSSTALK)

MATTHEWS: ... come with the territory.

BUCHANAN: There's no absolute purists. There are ideologues and people who believe in ideas. And there's the guy that is thoroughly corrupt. But most politicians...

(LAUGHTER)

(CROSSTALK)

MATTHEWS: But you were a purist when you ran. You were a total ideologue.

BUCHANAN: Well, sure, but, look-well, sure, but, look, I'm very pro-life. I'm naturally pro-life.

Pro-life people gave me money. Let me tell you something. People who believe in economic patriotism and protectionism, they came to me to gave me money. After I had endorsed, suddenly, I became for protectionist. They know that, Buchanan, they can trust...

(CROSSTALK)

MATTHEWS: So, you weren't a protectionist to get the money. You were protectionist that thereby got the money.

(CROSSTALK)

BUCHANAN: Yes. And a lot of you came to you. And I would go-I'm sure if I had got-really gotten somewhere, and you got close to the election, you would go to somebody and say, look, I can help your industry out. I believe as you do. Why aren't you helping our campaign?

MATTHEWS: You know, I have always wondered, Tom...

BUCHANAN: Nothing wrong with that.

MATTHEWS: ... why guys who take money from the tobacco industry didn't just take the money and screw the guys that gave them the money. I always wondered why they don't say, I don't like you. I will take your money, but I'm not going to do it.

I think it was-was it Phil Burton who used to say that in California? If you can't take their money and whatever, you don't belong in this business, and vote against them in the morning?

(CROSSTALK)

(LAUGHTER)

DEFRANK: It was Jesse Unruh.

(CROSSTALK)

DEFRANK: It was Jesse Unruh.

MATTHEWS: Jesse Unruh, that's right. If you can't take their money the night before and vote against them in the morning, you don't belong in this business.

(LAUGHTER)

(CROSSTALK)

MATTHEWS: Boy, that would be real pay-to-play.

(LAUGHTER)

DEFRANK: He also said something about their woman, but we probably shouldn't go down that road.

MATTHEWS: I know. I already cleaned it up, Tom.

(LAUGHTER)

MATTHEWS: That's what I do here.

By the way, with the use of the F-word so often here, we're not going to be able to have too many transcripts to make available.

(LAUGHTER)

MATTHEWS: But I just wonder, if this guy had a more Ivy League accent in the way, could it be that we could be helpful to the incumbent-the new president if we picked this person, and, at the same time, we're helpful to some of his people, would it be as crude?

BUCHANAN: Well, exactly.

You said, look, say-let's give an example, say, Ms. Jarrett is an outstanding United States senator, and I would like to help you. But, look, I'm leaving office pretty soon myself, Mr. President-elect. And I sure would like to get some kind of position down there, so I can continue my career of public service. Can we work together on this?

(CROSSTALK)

MATTHEWS: Reasonable.

BUCHANAN: I mean, that's not...

MATTHEWS: That would be-it wouldn't be as good on the transcript.

BUCHANAN: No, the tapes are...

(CROSSTALK)

(LAUGHTER)

MATTHEWS: By the way, we're still thanking Nixon for his idiom.

(LAUGHTER)

MATTHEWS: Anyway, Pat Buchanan, you didn't write the speeches for the Oval Office conversations. They were sort of instinctive.

Anyway, Pat Buchanan, Tom DeFrank, thank you, sir.

Thank you, sir.

DEFRANK: Thanks, Chris.

MATTHEWS: Up next: Rod Blagojevich's scandal has thrust corruption in Illinois to the forefront. But where does Illinois actually rank in the top five most corrupt states in the country? We have got the metrics, as Rumsfeld would say. We will tell you who are the most corrupt states.

By the way, the metric here is who's been caught. So, it's not a perfect metric. The ones who get away with it don't get counted. We have got that in the next slot, in the "Sideshow," coming back here.

You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL.

Time for the "Sideshow."

So, what is the deal with Illinois and all those corrupt politicians?

Well, here's what the head of the FBI's Chicago bureau said at Tuesday's news conference on Governor Blagojevich.

(BEGIN VIDEO CLIP)

ROBERT GRANT, FBI SPECIAL AGENT IN CHARGE: I got here four years ago. A lot of you were in the audience, asked me the question of whether or not Illinois is the most corrupt state in the United States.

But I can tell you one thing: If it isn't the most corrupt state in the United States, its certainly one hell of a competitor.

(END VIDEO CLIP)

MATTHEWS: So, is Illinois really the most corrupt state?

"USA Today," the newspaper, looks to answer that question by ranking the number of public corruption convictions in each state on a per capita basis.

The results? Number three on the list of most corrupt states, Alaska, home of recently convicted Senator Ted Stevens. Number two, no surprise here, Louisiana, home state of U.S. Congressman Bill Jefferson, the guy who had that $90,000 in very cold cash wrapped in his freezer.

And number one? North Dakota. Who would have guessed it?

So, where is Illinois on the list of most corrupt states? All the way at 18. But let's not forget the metrics here, the way they count this. We're talking about cases where the crooks got caught.

Next: What do Caroline Kennedy and Jennifer Lopez have in common?

Not much, if you would ask most people.

But, according to one New York member of Congress, they should have the same right to Hillary Clinton's soon-to-be empty Senate seat. U.S. Congressman Gary Ackerman told a radio show this week-quote-"I don't know what Caroline Kennedy's qualifications are, except that she has name recognition, but so does J.Lo. I wouldn't make J.Lo the senator unless she proved she had great qualifications, but we haven't seen them yet."

That's the congressman. J.Lo is, of course, for those of you who don't read entertainment mags, Jennifer Lopez.

I think it's very democratic, by the way, of Congressman Ackerman to rail against royalism, even if it's not going to be the most popular thing he's ever said about this country's most revered political family.

Anyway, time now for tonight's "Big Number."

In the new NBC/"Wall Street Journal" poll, Sarah Palin, the governor of Alaska, has just a 35 percent favorability among most of those-among all those surveyed. That's only 35 percent among the public.

But consider the more important fact. Catch her favorability among Republicans? Seventy-three percent. She topped every other Republican tested in the NBC survey.

By the way, I know of two conservatives who came back from defeat to win the Republican presidential nominations: Barry Goldwater, who lost out to Richard Nixon in 1960, and Ronald Reagan, who lost to Jerry Ford in 1976. Check your history. Watch out for Sarah Palin. Conservatives tend to come back.

Palin's 73 percent favorability rating in the Republican Party, that's tonight's "Big Number."

Up next: What's the best thing you can say about the presidency of George W. Bush? We got ahold of that White House talking points thing they have been putting out. Our strategists will be here to debate whether the president deserves any of it. That's the talking points you're supposed to read out if anybody asks you, and you're a top Republican in this administration, what's George Bush done for you?

We're going to debate those points and that little memo we have discovered when you come back to watch HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

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

Stocks fell on the latest employment data and on concerns the auto industry bailout plan will fail to pass the Senate. The Dow Jones industrials dropped 196 points, the S&P 500 down 25, and the Nasdaq 57 points.

The number of laid-off workers filing new claims for unemployment benefits jumped more than twice as much as expected last week, hitting a 26-year high.

Meantime, Bank of America just announced big job cuts. It says it expects to eliminate up to 35,000 jobs over the next three years.

Oil surged more than 10 percent today, as the dollar weakened, and OPEC's president called for-quote-"severe production cuts." Crude rose $4.46, closing at $47.98 a barrel.

And America's trade deficit rose unexpectedly in October, as U.S. exports slid to a seven-month low.

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

HARDBALL.

(LAUGHTER)

MATTHEWS: Welcome back to HARDBALL. Now it's time for the strategists.

Joining me, the two specialists in that field, the Democratic strategist Steve McMahon and the Republican strategist Todd Harris.

Let's take a look at some brand-new polls on history, because it will tell us where President Bush stands in history. That's George W. Bush.

NBC/"The Wall Street Journal" poll says that 78 percent says that President Bush will turn out to be worse than most presidents.

I want to ask you that, yourself, right now, Todd. Would you categorize-there's been 42 different presidents. Cleveland was president twice at different times. We have had 42 presidents. Would you classify him in the top 21 or the bottom 21, George W. Bush?

TODD HARRIS, REPUBLICAN STRATEGIST: I don't know.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Come on.

(CROSSTALK)

MATTHEWS: Just answer the question.

HARRIS: I honestly don't know.

MATTHEWS: Come on. Just answer the question, please.

HARRIS: I don't the answer. I don't the answer to it.

MATTHEWS: Would you put him in the top 21 or the bottom 21?

HARRIS: I don't the answer to it.

(CROSSTALK)

HARRIS: And I don't think-look...

MCMAHON: What about the top...

HARRIS: Look, we're going to be-I think it's like the height of arrogance for anyone to try to suggest where Bush-how will be viewed in history.

MATTHEWS: Well, from today-you know, journalism is the first-first draft of history. Where would you put him in the first draft? Top 21, bottom 21?

(CROSSTALK)

HARRIS: He's got a 20-some percent approval rating. Obviously, most Americans are not satisfied with the president. They would probably not put him...

(CROSSTALK)

MATTHEWS: OK.

(CROSSTALK)

MATTHEWS: Where would you put him?

MCMAHON: I would put him near the bottom.

MATTHEWS: Near the bottom? OK. Let me go to President Clinton.

(CROSSTALK)

MATTHEWS: At the end of his term, 42 percent of people polled said

President Clinton should turn out to be-would turn out to be better than

well, actually, it was-why did we get this wrong? Fifty-six percent say better, and worse 42 percent.

Fifty-two-would you put him in the top 21 or the bottom 21, Steve McMahon?

MCMAHON: That's a tough one. I...

MATTHEWS: Well, what's good for the goose is good for the gander.

(CROSSTALK)

MATTHEWS: You were helping him stutter here. I want to ask you, was President-was President Clinton...

(CROSSTALK)

MATTHEWS: We have some got perspective. Top 21 presidents?

MCMAHON: I think in the top 20, but I don't think in the top 10. How about that? That's fairly precise.

MATTHEWS: Well, who would say top 10?

MCMAHON: Well, you just asked. I'm just telling you what I think.

(LAUGHTER)

MATTHEWS: Where would you put President Clinton, top 21 or bottom 21?

HARRIS: Well, after the perspective-we have got some perspective, but not enough. But, as of right now, I would put him in the bottom...

(CROSSTALK)

MATTHEWS: Bottom 21?

HARRIS: Yes.

Look, David McCullough said that you need at least 50 years to get any sense of what a presidency was like.

MCMAHON: So, you want to come back here in 50 years?

HARRIS: Let's come back in 50 years. I will be...

(CROSSTALK)

MATTHEWS: OK. Let's talk about the-let's talk about the president we have right now.

"The Los Angeles Times" obtained a copy, a little-a bootlegged copy of a memo that was sent out from the White House to top administration officials, telling them what to say about the last eight years. And we have got the memo. It was to remind people of how Bush kept us safe after 9/11.

Let's go through the items on this. And I want to ask you if this is yes or no. And please answer the question, OK?

Todd, has he kept the American people safe after 9/11 against terrorist attacks? Has that been accomplished...

(CROSSTALK)

HARRIS: Yes, absolutely.

MATTHEWS: Has he kept us safe?

HARRIS: Yes.

MCMAHON: I would say that is probably the only one that...

(CROSSTALK)

MATTHEWS: You will say yes?

MCMAHON: Yes.

MATTHEWS: So, Steve McMahon, Democratic consultant and strategist here, will say...

MCMAHON: I will say that.

MATTHEWS: ... Bush deserves credit for keeping us safe since 9/11.

MCMAHON: He does. He does.

MATTHEWS: Does that hurt?

MCMAHON: Does it hurt? No.

MATTHEWS: OK. Good.

MCMAHON: Everything-by the way, everything else hurts, the collapse of the financial markets, the housing markets.

MATTHEWS: Well-well, let's go on here.

This is very important, because I think his dad did this. I'm not sure we will agree on him. Did President Bush maintain the honor and dignity of his office? That's another talking point, that he's maintained the-I think this means he did not have a Monica. I think that is what it means in sub rosa language.

HARRIS: Right. Yes.

When he talked about maintaining the honor and dignity of the office of president, that was-he wrote that in '99 in his memoir. And it was on the heels of the Lewinsky scandal. So, he was specifically referring to that and...

(CROSSTALK)

MATTHEWS: Saying that's what he would do.

HARRIS: Yes. And he did.

MATTHEWS: And, by the way, every time we covered him, beginning in New Hampshire, wherever President Bush campaigned, he said, and when I take the oath of office to defend the Constitution, I will also defend the honor and dignity of the Oval Office, meant no Monicas.

Has he done that?

(CROSSTALK)

MATTHEWS: Has he maintained-has he maintained the honor and dignity of the presidential office? Or has he tarred it or tainted it in some other way, besides that kind...

MCMAHON: I think he's tainted it in some other way.

He didn't debase an intern, but he debased the Constitution of the United States. He didn't tell the Congress the truth. He did all kinds of things that violated, in my opinion, his oath that he took.

MATTHEWS: On purpose?

MCMAHON: On purpose. I mean, you don't lie about the-or-I'm sorry-you don't misrepresent the intelligence to Congress systematically and repeatedly...

MATTHEWS: And you believe he did that deliberately?

MCMAHON: Yes, I do. I think-I think they all did.

HARRIS: Look, I think that people can have strong-and people do have very strong disagreements on what he did and the way that he did it. But I think that he-I think that he-most people, I think, would agree that he's an honorable man.

MATTHEWS: OK. Let talk about another area we might agree. He's worked hard to curb AIDS in Africa.

HARRIS: Even-even Bono has...

MATTHEWS: He's taken the-he's taken the initiative on that.

HARRIS: Even Bono has given him credit for this.

I mean, the amount-the billions and billions of dollars that the U.S. has committed to fight AIDS in Africa, it's unprecedented. And it happened under President Bush. And he ought to get credit for it.

MCMAHON: He did what is expected of the United States of America with respect to a plague that was killing people in Africa. So I would say that he certainly engaged.

MATTHEWS: Why didn't Clinton do it?

MCMAHON: Well, Clinton has been actively involved in the last-through the Clinton Foundation.

MATTHEWS: He has done a great job. By the way, one of my sons worked for him in the Global Initiative over in Rwanda. I'm very proud of both he and the former president, what they do. So I want to say. But does the president of the United States deserve credit for what he has done fighting AIDS in Africa?

MCMAHON: I think the United States of America deserves credit. Congress had to appropriate that money and the president of the United States deserves some credit, but I don't think he deserves any special credit that the United States of America...

(CROSSTALK)

MATTHEWS: OK. Now we're to the fun part. Respond-this is what the White House is saying you should brag about. And I think you might have a problem with this. The White House wants you to say, if you're a supporter of the president, quote, "the president of the United States," George W. Bush, has, quote, "responded with bold measures to prevent an economic meltdown." That he's done a good job to fight this coming deepening recession. Would you say that's true?

HARRIS: I'm not sure that he-I mean, a lot of people were very critical of the president immediately after the September 15th collapse. I think he came out and spoke for two minutes. I do think that Secretary.

MATTHEWS: Like a cuckoo clock.

HARRIS: I think Secretary Paulson has shown some pretty bold leadership. People can differ on...

MATTHEWS: he came out for two minutes and went back into the West Wing like a cuckoo clock, like a Schwartzwald clock figure, in, cuckoo, and went back in again in the middle of the biggest economic crisis since the '30s. Did he respond with compelling action, with bold measures, or did he wimp out?

HARRIS: I don't think the president showed the kind of moral leadership.

MATTHEWS: I love you're honest.

MCMAHON: He supported Paulson's plan, which was fine. And I think it was the right thing to do. But he has been notably silent on what could be the end of the U.S. manufacturing base in this country. He needs-not notably silent, but he should go up to Capitol Hill and he should argue with the same passion to save the automakers in this country as he argued to save AIG and all of the Wall Street bankers and financiers who, frankly, you know, got 20 or 30 times the amount of money...

(CROSSTALK)

MATTHEWS: So you're for the auto bailout.

MCMAHON: Absolutely, absolutely.

MATTHEWS: You're against it?

HARRIS: I'm not categorically against it, but until there are some major concessions made-additional concessions by the unions like the UAW.

MATTHEWS: Why has it been a party issue? Why are the Republicans in the Senate-we are going to get to this perhaps later in the program, but why is it on an issue that affects the Midwest where the Republicans are very well-represented-and they represent the people in many cases, why have they not supported the auto industry in this bailout? Why are they-on the Senate side, if we understand, Voinovich said that-the Senator from Ohio, he is having problems getting any Republicans on his side of the aisle to support this thing. Why is that?

HARRIS: Labor. Because of the UAW.

MATTHEWS: They think labor benefits from this?

HARRIS: Because of the UAW. Because of the ridiculous.

MATTHEWS: Contracts. They don't like the contracts.

HARRIS: Contracts, yes. And the contracts need to be renegotiated.

MCMAHON: Contracts are being renegotiated. It's part of the plan. But you have got to let the company survive to the point where they can implement the plan. And you know, the U.S. manufacturing base in this country, built this country, it created the middle class, and when the bankers on Wall Street needed help, they ponied up $700 billion.

And we're talking about $14 billion. Less, like 2 percent of what the financiers on Wall Street got. And the Republicans are running for cover. I just don't understand it.

MATTHEWS: Hey look, I agree with that. But I look at all of the stuff that Barack is talking about in terms of infrastructure, building bridges, building highways, the broadband, all of this stuff I don't even understand, but he's spending a lot of money in his big stimulus effort.

It may be a trillion dollars, Is that going to bring back factory jobs for people coming out of high school like I had growing up? Is it going to bring back the big back the big industries, where people can get blue collar jobs coming out of school? I don't see the connection, Todd. I don't see the connection, Steve.

MCMAHON: I'm not sure it's going to bring back factory jobs...

(CROSSTALK)

MATTHEWS: How do you bring back all of these factory jobs we grew up with-I grew up with?

MCMAHON: Middle class, blue collar jobs, the kind of jobs that pay.

MATTHEWS: How are they going to come back?

MCMAHON: . $18, $20, $25 an hour.

MATTHEWS: I'm all for them. But who is going to do it? Who is going to-is Barack going to do that?

MCMAHON: Well, all of this-this package that Barack Obama is talking about, the stimulus package, people are-the people who are going to work construction.

MATTHEWS: OK. You tell me how spending money on highway construction is going to bring back those factory jobs. Will it?

MCMAHON: I'm not sure it's going to bring back the factory jobs, but it's going to protect and create.

(CROSSTALK)

MATTHEWS: Well, I'll tell you, everybody watching wants that industry back. And you've got to be pretty green not to want a factory industry in this country, some industrial base. Don't we need an industrial base?

HERERA: Absolutely, we need an industrial base.

MATTHEWS: That's what I think we agree on. Anyway, thank you, Steve McMahon. I think you were great at answering the questions, except you didn't want to place President George W. Bush in the bottom 20.

(LAUGHTER)

MCMAHON: Shocked.

MATTHEWS: Anyway, thank you, Todd Harris, thank you. I've got a new phrase, "just answer the question."

Up next, it's all in the family with the Blagojeviches. It turns out that Mrs. Blagojevich, the governor's wife, has a-well, she has a foul mouth. No surprise I suppose, but wait until you hear these tapes and these transcripts. Wait until you hear her talk, and she talks like him.

We'll take a closer look at the governor and Mrs. Blagojevich and whether they were partners in crime next on the "Politics Fix." This story gets deeper and dirtier. This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Coming up, you've heard some of Governor Blagojevich had to say in those wiretap transcripts, wait until you hear the things his wife had to say. HARDBALL comes back the "Politics Fix."

(COMMERCIAL BREAK)

MATTHEWS: We're back. Time now for the "Politics Fix" with The Washington Post's Perry Bacon, and Jeff Johnson of BET's "The Truth with Jeff Johnson."

Let's take a look at some of this material here right now. Here's where Blagojevich's wife gets mentioned in the indictment. Quote: "During the call, Rod Blagojevich's wife can be heard in the background telling Rod Blagojevich to tell Deputy Governor A 'to hold up the (expletive deleted)

Cubs (expletive deleted) (expletive deleted) (expletive deleted) (expletive

deleted) them.'

"Later, Rod Blagojevich's wife got on the phone and during the continuing discussion of the critical Tribune editorials, stated that Tribune owner can just fire the writers because Tribune owner owns The Tribune. Rod Blagojevich's wife stated that if The Tribune owner's papers were hurting his business, Tribune owner would do something about that editorial board."

Perry Bacon, I know everybody is getting laid off and given-what do they call it, given short time to get out of here kind of deals with their newspapers these days. But here you have the governor of a state and his wife talking about how they're going to destroy people's jobs by telling the owner of the paper, in this case, Sam Zell, if they don't fire these editorial writers, they're not going to get to sell the stadium, the Cubs stadium.

PERRY BACON, THE WASHINGTON POST: This indictment portrays quite a couple. I mean, he's very profane. Obama made fun of that today a little bit, about him being profane. But she seems just as profane and she also seems very involved in his career. And when he's looking to like gain money from Obama's seat, he's trying to get her a job in part of what he says. He's trying to get her a job on some of kind of board or some kind of foundation. So she seems quite involved in his career as well.

MATTHEWS: Jeff, it seems to me like a scene from "The Sopranos" or perhaps she should be Lorraine Bracco in that movie "Someone to Watch Over Me." This woman is as tough as her husband.

JEFF JOHNSON, HOST, "THE TRUTH WITH JEFF JOHNSON": She's clearly not Miss Congeniality. And above all else, I mean, you hear these private conversations, And I don't know about you, Chris, but I don't want everybody listening to my private conversations either.

But she definitely has proven to be somebody that's a pit bull and a pit bull for her husband for that degree. I mean, who has got a better second at this point than the governor of Illinois to do their bidding? So, you know, it definitely was nasty and it shows a lack of class, if nothing else.

MATTHEWS: Let me ask you about this, how does this hit the newsroom when you talk about this down there, Perry, the fact that so many people in the news business getting fired now that you have a politician talking about ways that he can fire more of you?

BACON: I think it just shows how outrageous some of the things he seemed like he was doing were. I just think it shows sort of his tone and the way he expressed it was odd and so striking. I think it was less about the news business and more just about him.

MATTHEWS: Well, here it is, more of Mrs. Blagojevich. Quote: "Rod Blagojevich stated that governor general counsel believes that the president-elect can get Rod Blagojevich's wife on paid corporate boards in exchange for naming the president-elect's pick to the Senate.

"Rod Blagojevich's wife suggest during the call that she is qualified to sit on corporate boards and has a background in real estate and appraisals. Rod Blagojevich asked whether there is something that could be done with his wife's 'Series 7' license in terms of working out a deal for the Senate seat."

So here he is, the governor of Illinois, saying, I will give this job, a United States senator, to somebody if my wife can get these jobs on boards. This guy is selling and trading. This is a barter economy here.

JOHNSON: I mean, he is-and in an aggressive way. I mean, what happened to his wife having any of her own abilities to be able to get these positions on her own? And in many cases, I mean, he totally disgraces the fact that she may have abilities.

I mean, so this is incredibly blatant. It's more, I think, egregious than what we usually see. And I think that we're continuing-I don't think this story is over yet. I mean, when this is all laid out I think it's going to be even more disgraceful than it is right now.

MATTHEWS: Perry Bacon, does this pay-to-play stuff happen in Washington do you know, where you have to do business with the city government if you work and you have a business there but you have to make campaign contributions to the mayor's office or the city council? Is this the norm in politics now?

BACON: No. I think that what you saw in this-what you heard on these tapes is definitely unusual, the way he approached it. I think this happened in places, you know, in history, but no, I think the answer to that is no for across the country.

MATTHEWS: I think it happens a lot. We'll be right back with Perry Bacon and Jeff Johnson for more of the "Politics Fix." You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We're back with The Washington Post's Perry Bacon and BET's Jeff Johnson for more of the "Politics Fix." Jeff, let's talk We were talking during the break about this whole implication. I mean, Blagojevich is going down the river-up the river, wherever you go out there, he has got problems-unless he clears himself, of course.

But we have a president-elect who came in clean as a whistle. Still clean as a whistle. Is this a problem?

JOHNSON: Absolutely. I mean, nobody wants to deal with this going into what has been really a very productive transition period. I mean, so this is one of those things that you don't want to deal with that casts a negative light, it is in my home state, it's dealing with people that I'm potentially connect with, I supported this governor on the campaign trail.

None of these things are what his administration or he, for that matter, wants to deal with right now.

MATTHEWS: You know, Perry, it looks like there will be a trial. That is a safe assumption, that trial will be a federal trial, involving Fitzgerald, famous prosecutor. It will be all over the front pages of your newspaper and everybody else's. You have a trial right in the middle of the first term, right? Middle of the first year, probably.

BACON: Yes. And there will probably be a lot of figures in Chicago, from Tony Rezko forward who Barack Obama knows. I think in that sense it won't be great for him. On the other hand, I think the country will be maybe focused on other things in six or seven or eight months like the economy beyond sort of this trial. But yes, it could be bad news for him when it goes on.

MATTHEWS: Let's talk about the Senate seat that has to be filled by Barack Obama's state. If Quinn, the lieutenant governor, makes the choice, if he puts somebody in there, will that be a subject-I notice for the first time that the Senate is exercising its right-I don't think it does very often in history, to reject a member.

They are saying if Blagojevich tries to name somebody to the U.S. Senate, the Senate Democratic majority will reject that person. I haven't heard that referenced-that little piece of the Constitution referenced in decades.

BACON: I would be surprised if someone took the appointment if Blagojevich picked them in the first place. I think that's not the question. I think the question will be whether-if the lieutenant governor takes over, whether he appoints someone or whether they have a special election, because that will make an impact upon who can win it.

There is a special election, say, in the next few weeks, a Republican will probably have a good chance of winning if only because of the controversy. But I think if becomes like an appointment and then in 2010 you have a race, then I think the Democrat is favored, because Illinois is a pretty liberal state.

MATTHEWS: Yes. Is it worth $50 million to $60 million to have a special election? That's the other question, Jeff.

JOHNSON: No. I mean, it's not.

MATTHEWS: That's what you say?

JOHNSON: Well, I don't think the taxpayers will say that it is worth it either. I think that this needs to go on, I hope, a better course than it is right now. Clearly I agree that nobody that would be appointed by this governor would want to take it. But there is an opportunity here to ensure that there is less political drama than there would be otherwise.

MATTHEWS: OK. Jesse Jackson Jr., of the Jackson family, how are they affected by this? Because he had to defend himself on television the other day.

JOHNSON: He didn't have to.

MATTHEWS: And he has been clean a whistle in his political career.

JOHNSON: He didn't have to. I mean, Jesse, I think, made a misstep by doing a press conference. He has spent the last decade trying to distance himself from how his father has done business. And in the last 24 hours, he has been more like his father than he has been Obama.

MATTHEWS: How so?

JOHNSON: This was an opportunity for him to sit back, to allow some things to be laid out. He did not have to come out saying.

(CROSSTALK)

MATTHEWS: And he went for the camera when he shouldn't have.

JOHNSON: Absolutely.

MATTHEWS: That is what you mean, being like his dad.

JOHNSON: Absolutely. And not being like Obama, who I think has tried to set this change.

MATTHEWS: He is not cool.

JOHNSON: Well, cool-Jesse is cool.

MATTHEWS: Cool in positive sense.

JOHNSON: Jesse is cool, but it wasn't strategic. And I think that's what we are talking about here.

MATTHEWS: OK, OK. I meant cool being non-reactive.

Thank you, Perry Bacon. Thank you, Jeff Johnson. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now it is time for "1600 PENNSYLVANIA AVENUE."

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

END

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