updated 12/29/2008 5:02:22 PM ET 2008-12-29T22:02:22

Guests:  Jim Warren, Roger Simon, Rep. Phil Gingrey, Rep. Jim Moran, Stephanie Ramage, Jill Zuckman, Ron Brownstein

MIKE BARNICLE, GUEST HOST:  The tape delay is over.

Let‘s play HARDBALL.

Good evening.  I‘m Mike Barnicle, in tonight for Chris Matthews. 

Leading off tonight: The Blagojevich report.  That‘s a tough name to say!  A report just released by the Obama transition team has concluded that incoming chief of staff Rahm Emanuel did have a number of conversations with the governor of Illinois‘s office, but it says no one close to Obama suspected that the governor was trying to sell Obama‘s Illinois Senate seat.  The report says that Obama, Rahm Emanuel and another Obama aide, Valerie Jarrett, have been interviewed as part of the federal investigation into Blagojevich.  Is this the end of the story?  Not by a long shot.

Plus: There‘s more coming out every day about that $700 billion Wall Street bail-out.  As if it wasn‘t enough that executives from AIG went on an expensive beach vacation right after the company got bailed out, now we learn that banks that received billions in bail-out money this year were very generous with their top executives last year.  How generous?  According to the Associated Press, cash bonuses and high-priced perks last year for 600 executives would cover this year‘s bail-out costs for 53 banks that have taken taxpayer money.  More on the bail-out-rage in a moment.

Also: While the financial industry gets its $700 billion, the struggling auto makers are getting just $17 billion, with lots of strings attached and only after it had passed (ph) over (ph) by a Congress who wanted auto workers to take a wage cut.  Why are blue collar workers being made the scapegoat for the country‘s economic blues?

Also: John McCain is finding out just how much of a maverick Sarah Palin really is.  Palin is now talking about her regrets from the campaign, and she seems to be going a little bit rogue on McCain.  More on that in the “Politics Fix.”

And it‘s the snapshot heard and seen ‘round the world, the latest picture of the president-elect in Hawaii.  What is Barack Obama‘s secret to staying fit and trim during the grueling campaign here?  The recipe is in the HARDBALL “Sideshow.”

But we begin with the just-released report of the Obama transition team‘s communication with Illinois governor Rod Blagojevich.  Jim Warren is an MSNBC contributor and Roger Simon is with “The Politico.”

Jim, you‘re on the ground there in Chicago.  You‘re been there on the ground in Chicago for years, nearly all your life.  Any surprises in this thing this afternoon, this just-released transition report?

JIM WARREN, MSNBC CONTRIBUTOR:  First of all, you assume by my attire I‘m in Chicago, not Honolulu.

(LAUGHTER)

BARNICLE:  Well, yes, especially from last night‘s Bears game, too.

WARREN:  What a surprise!  Well, you know, I would say so.  The first thing that struck me in just recent minutes in perusing this is that President-elect Obama comes off a tad more proactive when it came to figuring out or trying to help the governor figure out who to place him in the Senate than he has previously suggested.

At a news conference after the election, I think it was November 7, which as it turns out, is right between a bunch of Rahm Emanuel calls to the Blagojevich administration—the president-elect had said on November 7 that this was the governor‘s decision to make, not his, and clearly implied that he was going to be very much hands-off.  He does not come off as quite so pristine pure as far as distancing himself from the whole selection process, even though if this version is to be believed, nothing at all illegal happened, no quid pro quos.

But there is admission that Rahm Emanuel had, you know, four or five conversations in which this subject came up.  I mean, that‘s a lot of talking to do about this.  And it is quite clear that Rahm Emanuel got the OK from President-elect Obama to pass along a bunch of names, most of which will be not necessarily known to a national audience but known to folks in Illinois.

BARNICLE:  Well, in the report, written by Greg Craig, who is going to be counsel to the president on January 20 -- Greg Craig does point out that Rahm Emanuel, in seeming to endorse Valerie Jarrett, a very close friend of the president-elect‘s, to the governor, did so initially without the knowledge of the president-elect.  But we‘ll get to that during the course of the conversation.

Roger, I want to ask you something that I‘d like Jim to respond to, as well, and it is this.  After reading the report, do you have any questions that you‘d like to ask the president-elect or Rahm Emanuel about what you‘ve just read?

ROGER SIMON, POLITICO.COM:  Yes.  I have a slightly different view of the report.  To me, it‘s a case of the dog that didn‘t bark.  Why didn‘t Barack Obama, senator from Illinois, president-elect, have conversations with the governor of Illinois, who had the power to replace him?  It would have been legal.  It would have been natural.  It would have been normal.  They‘re both politicians.  They both care about who fills the job.

To me, it indicates that Senator Obama, President-elect Obama, knew that Rod Blagojevich was poison and knew, like most people in Illinois did, that he was under investigation and wanted to keep him at arm‘s length and that he personally never had any conversations with him, conversations that probably in any other state would have taken place.

The other thing I would ask is, where from these—the release of the transcripts of the tapes of Blagojevich provided by Patrick Fitzgerald, the prosecutor—Blagojevich is furious with the Obama administration and with Obama for not dealing with him.  That‘s good news for Barack Obama, obviously.  But why—where does Blagojevich get that impression?  From this report we have today, the subject barely comes up.  No quid pro quos are mentioned.  Why does Blagojevich think Barack Obama won‘t deal with him?  Did he never make any steps toward a deal?

And that‘s the third point, that this report deals repeatedly with the great vulnerability of the Obama staff.  It‘s not whether they made deals and responded to bribes with Blagojevich.  We can assume they were that smart and they didn‘t do that.  The vulnerability comes that if Blagojevich or his aides tried to shake them down and the Obama staff did not report that to the federal prosecutor, then that‘s trouble.  This report goes out of its way to say nobody from Blagojevich‘s staff ever suggested a quid pro quo.

BARNICLE:  Well, who better to respond to the first two questions that you raised, Roger, than the former managing editor of “The Chicago Tribune,” who has, fortunately or unfortunately, been immersed in the Blagojevich era.  Jim, how do you respond to what—what—the issues that Roger just raised about the governor and why the president-elect seems to have kept him at much more than arm‘s length?

WARREN:  In a rare difference of opinion with my friend, former colleague and Chicago native, Roger—Roger, I would propose to you that keeping his distance from Blagojevich on the part of the president-elect may have less been a matter of seeing him as political poison than a matter of not wanting to signal very clearly which of a bunch of, to him, you know, pretty strong candidates he might personally like.  He didn‘t want to perhaps antagonize any of those folks.

The problem with the poison argument is, if you knew that, if that was your suspicion, why did you send your chief of staff to be, you know, into that—into that, you know, muddy situation with Blagojevich...

SIMON:  Well...

WARREN:  ... particularly somebody you knew—Rahm, who is—you know, he‘s a serial cell phone caller.  I mean, look at these calls here.  That‘s a lot of talking that we‘re going to apparently be seeing on those transcripts.  And inflections are going to be critical.  One can hereby imagine a distinctly profane Rahm giving his take on a lot of these folks.

So I think it may have had less of a matter of propriety on the part of Obama when it came to staying clear of evil Rod Blagojevich than it was being very, very politic and not wanting folks like Jan Schakowsky, a north suburban liberal Democratic congressman—you know, let them know that he had been—thrown in his cards with somebody else.

SIMON:  Well, I think the reason you send Rahm in is because you have no expectation, you have no knowledge that Patrick Fitzgerald will act before a senator is named.  After all, Patrick Fitzgerald said in his press conference that he had to act a little hurriedly to end what I think he called an orgy of criminal conspiracy, or whatever it was, so that if you don‘t make your choices known through a cut-out man, you‘re not going to have any chance to play in who your replacement is.  And clearly, the president-elect cared who was going to replace him.  But he was smart enough not to get on the phone himself.

BARNICLE:  Jim, let me ask you about something you just raised in your response here.  You raised the issue of perhaps the president-elect and his people, Rahm Emanuel and David Axelrod, the people around him, didn‘t want to—and you used the word “antagonize” the governor of Illinois or the people around him.  Now, I‘m looking in on this from the outside.  I know a bit about Chicago.  I know a bit about the balkanization of politics in Chicago.  But he‘s the president-elect of the United States.  Why would he be afraid of antagonizing a guy who he sort of knew who the guy was and what he was about?  What do you mean by antagonize?

WARREN:  We might—well, hey, Mike, I might have been typically inarticulate.  I meant that he did not want to antagonize a bunch of fellow Democrats, all of whom...

BARNICLE:  Oh, OK.

WARREN:  ... probably there, almost desperately wanted the job.  And why signal to Jesse Jackson, Jr., who very much wanted it, that, you know, he preferred Valerie Jarrett?  One infers from this rendition today that Rahm Emanuel sort of on his own senses that Valerie Jarrett might be a first among equals.

We‘ll have to—you know, you‘re going to have to listen to the tale of the tape on this one.  And again, for folks who, you know, have not been following it this closely, this report is in no way, shape or form based on the actual federal wiretaps.  So what one has here is Greg Craig, former Clinton administration White House counsel, now in the Obama camp, getting one side of the story from participants, and one side of these phone conversations, notably Rahm Emanuel, but also Valerie Jarrett, who was speaking to the Service Employees International Union official, Tom Balinoff (ph).

BARNICLE:  Roger, where‘s the end of this story?

SIMON:  This story is going to go on for a while.  I don‘t think Illinois is going to have a junior senator for a while.  If I were Rod Blagojevich—and I‘m very happy that I am not—I would be having my lawyer plea bargain like crazy for a resignation in exchange for a lesser sentence in prison.  He‘s not going to escape prison time, if he‘s guilty.

The thing is that all the solutions are a mess.  You know, you‘re not going to be able to impeach him without the evidence that the federal prosecutor is unlikely to give them.  A special election opens the chance of the seat going to a Republican.  They don‘t want that.  The best solution is resignation, Rod Blagojevich‘s resignation, and allowing the lieutenant governor to name the replacement, is the one that Governor Blagojevich currently says is not going to happen.  I don‘t see an easy, quick solution for that.

And as Jim correctly points out, we don‘t have the tapes of the conversations between Rahm Emanuel and the governor yet.  That may be months in coming.  And we‘ll see.  We don‘t even know the exact number of conversations.

Also, one more question that I would ask, if I could—going back to your first question—is why, when Valerie Jarrett is approached by a union official and is told that the governor would be interested in HHS, does she dismiss it as ridiculous, and he says it‘s never going to happen?  What do they know about the governor that makes this ridiculous and impossible?  To me, it‘s once again an indication that they know this guy is poison.

BARNICLE:  Yes, well, I think...

WARREN:  Mike...

BARNICLE:  Quickly, Jim.

WARREN:  Mike, can I just add one intriguing thing?  In an earlier letter today from the U.S. attorney to the special investigative committee of the Illinois house of representatives, Patrick Fitzgerald turns down all of their requests for information, including a desire to interview various people.  However, Fitzgerald makes clear that transcripts of wiretaps at Blagojevich‘s office and on his home phone is a subject that, at least as of day‘s end today, they had not denied the house committee on.  And he says that is still under, quote, “active consideration.”

Boy, would that be interesting, if in the next 24 hours, we hear that Patrick Fitzgerald is willing to give that state house panel transcripts of the wiretaps which we‘ve been talking about now for a couple of weeks.

BARNICLE:  Then the story‘s going to live for a couple more weeks longer.  Jim Warren, Roger Simon, thanks much, as always.

Coming up: The banks that received the first $350 billion of bail-out money either can‘t or won‘t say how that money is being spent.  But can they really track each and every dollar?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL.  Where did the bank bail-out money go?  That‘s what the Associated Press report has asked.  And the banks didn‘t have much of an answer.  Joining us now, two congressmen who voted differently on the bail-out.  Congressman Phil Gingrey of Georgia voted not to give the banks the bail-out money.  Congressman Jim Moran, one of the five greatest products of Holy Cross College in Worcester, Massachusetts, and of Virginia, voted to give them the money.

And Congressman Moran, let me ask you, do you have any regrets about doing it?

REP. JIM MORAN (D), VIRGINIA:  I don‘t have any regrets, but I‘m sure not satisfied with the way in which the money was used.  You know, if the intent was to enable the banks to help the average working-class guy to stay in their home, stay in their job, keep their kids in school, then it‘s been an abysmal failure.

We tried to help the banks help those consumers, and instead, the banks have basically helped themselves.  They paid dividends to their shareholders, bonuses to their executives, and they‘ve even acquired other banks with the money we gave them.  That was not the intent.

So I‘m dissatisfied with the monitoring of the way that the money was distributed by the Treasury Department, but that doesn‘t mean I don‘t think we did the right thing in hoping that Treasury could curb the pain of the credit crisis that‘s being felt by consumers all over the country.

BARNICLE:  Congressman Gingrey, you voted against the bank bail-out.  And now, you know, we‘ve had the bail-out money, some of the bail-out money, you know, thrown out there.  It‘s our money.  It‘s taxpayers‘ money.  Why is it that we cannot force these banks to account for each and every dollar that they‘ve expended, telling us where it‘s been spent?  Is it just too big?  Is it too much money?

REP. PHIL GINGREY ®, GEORGIA:  No, it‘s not.  It‘s not too big.  We can force them to account.  Mike, I voted—as you pointed out, I voted no.  But I am disappointed.  I had hoped that the prevailing vote, the yes vote, would help, that these banks would do the right thing, that they would use the money—originally, the $800 billion was to be used to purchase troubled assets, thus the acronym TARP.

But instead, Paulson and his buddy Kashkari decided that was too much trouble, they would just go ahead capitalize banks, make them take money whether they needed it or not.  And unfortunately, as my good friend Jim Moran has pointed out, these banks have abused the privilege.  They were supposed to use that money to free up loans to help the common man, the blue-collar workers.  Absolutely.  And they haven‘t done it.  And I think it‘s despicable and deplorable and they should be accountable.

And clearly, they know what they did with the money.  And Jim pointed out one thing they did with the money, they‘re getting into mergers and acquisitions.  So essentially, the government is picking winners and losers, and in many cases, particularly at the community level, right where we sit as representatives of our districts—Jim‘s 8th in Virginia and my 11th in Georgia—the people, the man on the street that invested in these small community banks, they‘re holding an empty bag now, and they need the help and it‘s not trickled down to them.

BARNICLE:  All right. 

Congressman Moran—and, Congressman Gingrey, jump in on this as well

it‘s been our understanding here, off of the reporting, since the bailout began, that, at that initial meeting at Treasury in September, when

when Hank Paulson, secretary of the treasury, and Ben Bernanke had the nine or 10 biggest banks in the country to Washington, that at least three of the biggest banks, Wells Fargo, J.P. Morgan Chase, and Bank of America, didn‘t want the money.

But they insisted they take the money, because they wanted all the banks covered, probably, in reflection, it‘s been reported, because Citigroup was probably even going under then, and it was to help Citigroup. 

So, in view of that, and in view of what, Congressman Gingrey, you just alluded to, the fact that community banks, who really need the money, and who get the money right out the door for mortgages and auto loans, didn‘t get a whole lot of money, what was in the legislation?  Did you guys read the bill, Congressman Moran? 

(LAUGHTER)

MORAN:  I read a summary, I have to confess. 

But, you know, the Treasury said that it—it based their reversal of course on a colloquy that I had with Barney Frank on the floor of the House.  And Spencer Bachus, the ranking Republican, and Barney agreed, we needed to give them flexibility to be able to infuse capital into the banks and return for equity held by the government, because the reverse-auction approach might actually have been counterproductive.

When there were no other buyers, you could have forced some of these toxic assets down to zero, and caused even worse ramifications, devaluing all of the assets on all of the banks‘ books.  So, I think Treasury did the right thing. 

The problem may be that they see the whole economy through the prism of these large investment banks.  That‘s where Hank Paulson and Neel Kashkari are coming from and many of the other people in the Treasury Department.

Because we see it from—in the view of our constituents, we were hoping that the large banks would be a conduit to get the cash out there the form of credit to the homeowner, the—you know, the student borrower...

BARNICLE:  Yes. 

MORAN:  ... small businesses.  It hasn‘t happened.  I regret that. 

I suspect the Obama administration might see the economy through a different prism, though. 

BARNICLE:  So, Congressman Gingrey, off of what Congressman Moran was talking about, going forward now—actually, not going forward—looking back...

GINGREY:  Yes. 

BARNICLE:  ... you know, we‘re sitting there out in the country.  You guys are in Washington when this whole thing is imploding.  And we‘re looking at it, and people of a certain age certainly are looking at it, and saying, oh, my God, we don‘t want to have another Great Depression. 

And, so, quite fearfully, a lot of people say, OK, maybe go ahead and bail out the banks. 

What was the fear factor involved in Congress?  How much of a role did the fear factor play in banging this legislation through? 

GINGREY:  Well, it played—it played a huge role. 

And, of course, when—when Paulson came to us, both the Democrats and Republicans in Congress, and talked about this, he had a three-page bill.  It ended up being at least a 200-page bill. 

And, yes, Jim and I read it, but you can‘t read all—every specific.  And I don‘t remember him having the authority really to not buy the troubled assets, but instead infuse capital. 

Now, Jim tried to explain that.  When you get into the weeds of that in these sound-bite opportunities, it‘s hard to do that. 

BARNICLE:  Yes. 

GINGREY:  But I don‘t disagree with that either. 

But the point is, they got the cash.  What are they doing with it?  They‘re, as you pointed out at the top of the show, paying big bonuses to their executives, buying up other banks, smaller banks, troubled banks, making troubled banks out of banks that could survive if you would just give them a little bit, three million, four million to a community bank, so they could lend, as Jim pointed out, to Joe Six-Pack...

BARNICLE:  Yes. 

GINGREY:  ... to somebody that needs a college loan, that needs to pay off a credit card debt. 

BARNICLE:  Congressman Moran, as Congressman Gingrey just pointed out, it was a three-page bill.  The initial Paulson bill, it was a three-page. 

So, let me ask you, if you were going to put together a piece of legislation to name a bridge in your district after, say, Bob Cousy, another great Holy Cross graduate, how long would that bill be?

MORAN:  I would do that.

BARNICLE:  Would it be three pages? 

(LAUGHTER)

BARNICLE:  Would it be two pages? 

(CROSSTALK)

BARNICLE:  I mean, three pages, $700 billion.  People—people just walk around and say, what—what are you people doing? 

MORAN:  Yes. 

You know, I think the underlying problem may be, Mike, that there is no silver bullet to what has happened.  Over the last eight years, we have had the highest corporate profit ever in American history and, in fact, the highest worker productivity. 

But fully a third of that profit went to the financial services industry.  Of course, they, as you—you talked about, the automakers, at the beginning of the program, you know, they get all of this bailout of $700 billion, and then we bicker over whether to give 2 percent of that amount to the manufacturing sector.

And people in the manufacturing sector actually lost ground.  You know, the average—the average worker, when adjusted for inflation, lost $792 on their paycheck, while we had this enormous corporate profit.  Ninety percent of the income growth has gone to the top 10 percent over the last eight years.  That‘s basically the problem, this tectonic shift of wealth to the people who already had the most of it. 

And—and there may no—be no silver bullet that is going to correct that.  And, you know, now we see home values dropping by the most that has ever occurred since the Great Depression.

BARNICLE:  Yes. 

MORAN:  And that‘s going to have the most profound effect upon the average middle-class family.  And it‘s a very negative effect.  And I‘m not sure how we unravel it over the short term, Mike. 

BARNICLE:  Tectonic shift.  Congressman Jim Moran, Holy Cross, just proved it.

Thanks very much. 

Congressman Phil Gingrey, thanks very much for joining us.

Up next:  President-elect Barack Obama will use the same Bible that was used in a previous inauguration.  Can you guess whose? 

The HARDBALL “Sideshow” next—only on MSNBC. 

(COMMERCIAL BREAK)

(MUSIC)

BARNICLE:  Always puts me in a good mood. 

Back to HARDBALL.  Time for the “Sideshow.”

2008, where did you go?  Here‘s the year-end report from the folks over at JibJab.com. 

(BEGIN VIDEO CLIP, JIBJAB.COM)

(MUSIC)

(END VIDEO CLIP)

BARNICLE:  OK.

Next up, talk about camera-ready.  It looks like the time Barack Obama has spent golfing, playing basketball, and the working out at the gym are paying off.  Just check out the cover of today‘s “New York Post,” “Fit For Office.”  That‘s a shot of the president-elect in Hawaii yesterday on his last vacation before taking office. 

By the way, “The New York Times” has the scoop on how Obama keeps the

pounds off.  A caterer at his campaign events tells of times that Obama was

quote—“remarkably careful” with what he ate, with an eye for the healthy stuff.  Among his requests?  Salads, mini-pizzas, seafood skewers, cheese, and olives.  Barack Obama also avoided soda, opting for water instead. 

Next up:  It turns out the president-elect is taking yet another page out of the Abe Lincoln playbook.  Obama will be sworn into office with the same Bible Lincoln used back in 1861 for his first inauguration.  The president-elect had already announced plans to follow Abe Lincoln‘s train trek from Philadelphia to Washington for his swearing-in next month. 

Speaking of the transition, it‘s time for today‘s edition of “Final Daze,” a look at sitting President George Bush as he prepares to hand over the reins of power. 

Today, the president checked out of Washington to head to Camp David for Christmas.  This will be the 12th Christmas George Bush has spent there, four when his father was president and eight during his own presidency.  We wish the president and his family a sincere happy holidays. 

Moving on:  It‘s time for tonight‘s “Big Number.”  And it‘s a very big and painful number if you are Hillary Clinton. 

New campaign filings show that Hillary Clinton is formally writing off the personal loans she made to her campaign earlier this year.  All in all, how much will Hillary Clinton have to eat from her failed presidential bid?  Try $13.2 million.  Hillary has poured $13.2 million into her own 2008 presidential bid, and she‘s not getting it back.  That‘s tonight‘s “Big Number.” 

Up next: the demonization of blue-collar workers.  Are the unions being scapegoated for the economic crisis? 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

BERTHA COOMBS, CNBC CORRESPONDENT:  I‘m Bertha Coombs with your CNBC “Market Wrap.”

Stocks finishing lower again, the Dow Jones industrials dropping for a fifth straight session, the Dow losing 100 points today, while the S&P 500 was off by eight, and the Nasdaq shed 10 points. 

Sales of new homes—new homes fell 2.9 percent last month, to the slowest pace in 18 years.  Meantime, sales of existing homes fell 8.6 percent.  Prices plunged by 13 percent, the worst the Great Depression. 

The government left its estimate of the economic deterioration in the third quarter unchanged at a loss of five-tenths-of-a-percent, but analysts are bracing for a possible 6 percent drop when the government reports fourth-quarter figures next month.  That would be the worst quarterly drop since 1982. 

And Starbucks told employees it will no longer guarantee it will make matching contributions to their 401(k) accounts next year.  If it stops matching contributions, it would join a growing list of companies that includes FedEx, Motorola, and Unisys.

That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

BARNICLE:  Welcome back to HARDBALL. 

So, are blue-collar union workers being unfairly blamed for Detroit‘s economic mess and economic problems in general?  In today‘s “New York Times,” Bob Herbert—Bob Herbert wrote—quote—“We need some perspective here.  It‘s becoming an article of faith in the discussions over an auto industry rescue that unionized autoworkers should be taken off of their high horses and shoved into a deal in which they would not make significantly more in wages and benefits than comparable workers at Japanese carmakers like Toyota.  That‘s fine if it‘s agreed to by the autoworkers themselves, in the context of an industry bailout, at a time when the country is in the midst of a financial emergency.  But it stinks to high heaven as something we should be aspiring to”—unquote. 

Joining us now, MSNBC political analyst Pat Buchanan, and Stephanie Ramage, a news editor and columnist with “The Sunday Paper” in Atlanta. 

Stephanie, you were against any bailout for Detroit.  Why? 

STEPHANIE RAMAGE, NEWS EDITOR, “THE SUNDAY PAPER”:  I was—well,

actually, because—and this isn‘t only my idea—I want you to know that

I read a wonder column by Nicholas von Hoffman over at “The Nation.”

And, in that, he said, bankruptcy exists for a reason.  It‘s for an opportunity to restructure.  Restructuring would allow the Big Three to get out and away from those union contracts.  And I realized...

(CROSSTALK)

BARNICLE:  What‘s wrong with the union contracts? 

RAMAGE:  The job of the unions is to protect jobs.  And that‘s fine and good.  But, when that becomes a priority over the health of the industry, then that‘s not good.  Then we have a problem. 

I don‘t want to demonize the autoworkers.  I really don‘t want anybody wants to demonize them, Mike.  I think what we want is for them to have a future.  And they‘re not going to have a future if they continue doing things exactly the same way that they have done them for the past 40 years, while the world has changed. 

BARNICLE:  Well, Stephanie, let me—let...

RAMAGE:  You know, the definition of insanity is doing the same thing over and over again, and expecting a different result. 

BARNICLE:  Yes, I—yes.  Yes, Albert Einstein. 

RAMAGE:  And that‘s the insanity that we see in Detroit. 

BARNICLE:  Yes.  No, I get it.  I get it.  But let me ask you a question. 

You say, you know, you don‘t—it‘s the autoworkers.  The autoworkers did this over 30 years.  The autoworkers didn‘t design these bust-out cars.  The union didn‘t design them. 

(LAUGHTER)

RAMAGE:  No, that‘s the whole point.  They aren‘t designing anything, which brings me to my next point.

When Detroit is hiring lobbyists to make sure that congressmen vote against tougher CAFE standards, and they are hiring lawyers...

BARNICLE:  That‘s management.  That‘s management. 

RAMAGE:  ... and they are hiring lawyers—and they are hiring lawyers to make sure that the better ideas are buried in the U.S. Patent Office, we need to reform Detroit.  We don‘t need to reward Detroit with $17 billion in taxpayer money. 

BARNICLE:  But—but it‘s OK to give $700 billion to guys who are making a million dollars a year in salary? 

RAMAGE:  You know what?  Obviously, that wasn‘t OK. 

(LAUGHTER)

BARNICLE:  Duh.

RAMAGE:  You know, it sounded like a—it‘s one of those things that it was a great idea at the time, but you look at it, and—and, obviously, the results of that have been mixed. 

My fear with the auto industry is this.  You know, actually, I have worked at a car lot.  Let me just go ahead and get that out of the way.  And I know that the slowest time of the year for them is January to March.  As you know, the condition on which this bridge loan is based requires that the industry show its viability by March 31st.  I don‘t believe that‘s going to happen. 

I think we‘re going to see Detroit coming back to Washington in February to ask for more money to ask for an extension on that loan.  That puts tax payers like me on the hook for an open-ended loan, because you know that Nancy Pelosi is going to give them the money. 

BARNICLE:  OK.  Patrick J. Buchanan, go ahead. 

BUCHANAN:  Well, I think that—I agree that they may be back for more money.  But I‘ll say this, if you let GM go under, you let Chrysler go under, and their suppliers—many of their suppliers will go Chapter 11 as well.  I think you‘ll have tens of thousands, hundreds of thousands of workers.  And quite frankly, their pensions and their health care benefits are going to fall on the tax payer one way or the other. 

Mike, I don‘t believe that the United States of America can give up an auto industry when the whole world is going to be buying 100 million cars a year, which is a major consumer item, and we‘re going to drop out and give it to the Japanese and the Koreans and the Chinese? 

RAMAGE:  Oh, Pat, I‘m so sorry, but we already dropped out.  That‘s why our industry has been lagging behind for years now.  That is the problem that we have here.  What restructuring would allow the industry to do is to regroup.  As for all of these small parts manufacturers filing for bankruptcy, look, I‘m listening to you.  I think we need to expand and extend those unemployment benefits to the workers of Detroit. 

BUCHANAN:  Stephanie, let me tell you what the problem is.  The problem is we want the highest paid workers in the world.  We want them to have the most benefits.  We want to have the safest, most protected factories.  We don‘t want to put them into head-to-head competition with Chinese or unsafe factories making two dollars an hour. 

The problem is globalization.  The problem is globalism.

RAMAGE:  Pat, that horse is out of the barn. 

BUCHANAN:  It is not out of the barn. 

(CROSS TALK)  

BUCHANAN:  Let me tell you something, Stephanie.  In 1781, Alexander Hamilton, they had French musket, French uniforms, French ships; he said, we‘ve got to be economically independent if we‘re going to be politically independent.  He structured an economic system called protectionism, put in every Republican platform until 1948.  That‘s how we became the greatest manufacturing power the world has ever seen, producing everything we consumed here.  And the Americans had the highest standard of living the world had ever seen.  It can be done. 

RAMAGE:  Patrick, two corrections. 

BUCHANAN:  It was done. 

RAMAGE:  First of all, that was before the age of the Internet.  Secondly, we became the greatest power in the world because we were the last economy standing. 

BUCHANAN:  What does the Internet have to do with it? 

RAMAGE:  The Internet has everything to do with globalization, Pat. 

You can buy a product from anywhere in the world thanks to the Internet. 

Maybe you should try it some time.

BARNICLE:  Stephanie, let me ask you a question. 

RAMAGE:  I want to make one more point. 

BARNICLE:  Let me ask you a question.  It has to do with the concept called imports and exports.  It has to do with the number of Toyotas and Nissans that are allowed to come into this country to be sold in this country, and the number of exports, Ford, Chevy, Cadillac, that are allowed in by China and Japan.  It‘s like this, it‘s night and day. 

RAMAGE:  Mike, I‘m so glad that you said that, because that actually takes us back in time again with Pat.  Maybe he‘ll meet us back there.  In 1982, the United Auto Workers pressured the Reagan administration to put limits on foreign imports.  You know what resulted from that?  Honda putting its own manufacturing plants in the United States.  Pat, I‘m not asking—

BUCHANAN:  That‘s exactly what I want it to do. 

RAMAGE:  I‘m asking them to compete with Honda workers here in the south. 

BARNICLE:  Let Pat speak. 

BUCHANAN:  Let me tell you something.  Let me finish here, right.  That‘s exactly what Reagan did.  Look, I want Honda, Toyota, Nissan plants in this country.  I also want their parts made in this country.  I also want the Japanese to stop putting taxes on our imports and rebating on their exports.  I want to make America the winner in World Trade.  That means, Stephanie, we look at this thing as a battle, as a contest, a rivalry, not as just a bunch of consumers looking for what we can buy cheapest now.  That‘s not how your country became the greatest manufacturing country on Earth, and can be again. 

BARNICLE:  And that from a guy who drives an 11-year-old Navigator, Stephanie.  I‘m sorry, we‘re out of time. 

BUCHANAN:  A wonderful car, Stephanie.  Try it. 

RAMAGE:  I drive a Mazda.  Thank you, Pat. 

BARNICLE:  Thanks very much, both of you. 

Up next, former Republican Vice Presidential Candidate Sarah Palin says she was not allowed to do many interviews during the campaign.  Who is she blaming?  We‘ll let you know next on the politics fix.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

BARNICLE:  We‘re back and it‘s time now for the politics fix.  Jill Zuckman is with the “Chicago Tribune.”  Ron Brownstein is with the “National Journal.”  Ladies and gentlemen, earlier, a couple of hours ago, the internal transition team report released from the Obama team.  Any surprises there for you, Ron? 

RON BROWNSTEIN, “THE NATIONAL JOURNAL”:  No.  I mean, they essentially argued that there was, as you have already discussed, that there was no inappropriate contact.  It is interesting that Rahm Emanuel initially was expressing a preference, perhaps not surprising, for Valerie Jarrett, later amended it.  He said he spoke to Obama and Obama did not want to be aligned with any individual candidate. 

It‘s essentially what we expected from the Obama said.  Now the only question will be whether anything further in the investigation contravenes anything it says.   

BARNICLE:  Jill, no surprises there from you?  I want to get to Sarah Palin. 

JILL ZUCKMAN, “THE CHICAGO TRIBUNE”:  Right.  No, not at all.  In fact, the Tribune had reported very early on that Rahm Emanuel had spoken to the governor and to the governor‘s chief of staff.  It‘s exactly what you would expect a pol to do, which would be to say, hey, you should be thinking about this, this, and this person. 

BARNICLE:  Now, ladies and gentlemen, the main event.  Governor Sarah Palin of Alaska, who told “Human Events Magazine,” quote, “the biggest mistake made”—talking about the campaign—“was that I could have called more shots on this.  The opportunities that were not seized to speak to more Americans via media.  I was not allowed to do very many interviews, and the interviews that I did were not necessarily those I would have chosen.  But I was so thankful to have the opportunity to run with John McCain that I was not going to argue with the strategy decisions that some of his people were making regarding the media contacts.”

Jill Zuckman, you‘ve covered Governor Palin.  You‘ve been with Governor Palin.  What did you think when you saw this? 

ZUCKMAN:  Well, I think she‘s on a rehab tour.  I think she is trying to rehabilitate her image so that she can go on to other things in the future.  Certainly, there has been a lot of back and forth since even before election day, where many of McCain‘s senior advisers were very critical of her and her work ethic during this campaign, and her approach to the campaign.  So she is finally getting out there and defending herself a little bit.  One of the big criticisms was that she was so sheltered from reporters, not taking their questions. 

BARNICLE:  Ron, is it possible to underestimate Governor Palin‘s ambition here? 

BROWNSTEIN:  No.  I think she is a real challenge for the GOP.  I think there are three things at play here.  One, as you see interviews like this, her ambition is not quenched.  She clearly wants to be a figure in the future of the GOP, exactly what role is not clear.  Second, she still has a lot of support in the conservative base of the Republican party, enough to make her a formidable figure, if not necessarily a presidential nominee. 

But third, while she is popular with the base, she ended this campaign with deep problems among everybody else, swing voters and certainly Democratic leading voters, not only on the question of her competence.  And 60 percent of voters in the exit poll said they did not consider her qualified to be president.  But also, I think, in the kind of cultural tone that she struck.  She was very much of a culturally polarizing, kind of mid ‘90s to mid-2000 kind of Republican playbook, very much of a Karl Rove kind of play book from the 2004 campaign.  And I think she left with a lot of baggage among those upper middle class, college educated, white suburban voters, who have been trending Democratic, and trending markedly Democratic in this election. 

So I think she is a problematic figure, popular in the base, but with real limited appeal beyond the base.  I‘m not sure she‘s going to be easy for Republicans to dislodge from the stage.  That‘s the message I get from the kind of interview you‘re citing today. 

BARNICLE:  Jill, a large part of the storyline with regard to Governor Palin and the people who support her has to do with the media.  You know, we beat her up.  We misinterpreted things that she said.  We cut her short.  We edited the thing.  While you were covering Governor Palin, did you see anything on a daily basis that the viewing public, the reading public may have missed because of space problems in newspapers or editing problems on TV?  Was there anything else there that we didn‘t see? 

ZUCKMAN:  I think that in most campaigns, voters get a good sense of the candidate regardless.  They get to the end of the race and they have a feel for who that person is.  Now, she may not like their interpretation of her.  And I think that‘s what she is trying to redo at this point.  But I think that people got a pretty good handle for her.  She was a fantastic candidate on stage.  She really has a way with this right wing conservative base.  But beyond that, as Ron was saying, it is not clear that she can go much further. 

BARNICLE:  We‘ll be right back with Jill Zuckman and Ron Brownstein for more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  We‘re back with Jill Zuckman of the “Chicago Tribune,” and Ron Brownstein of Atlantic Media for more of the politics fix.  Ron, I‘m reading portions about the Sarah Palin interview with “Human Events.”  It strikes me in reading it that she blame everyone but herself for the sometimes failings of her campaign and herself.  It is just like a weird thing. 

BROWNSTEIN:  Well, look, whatever you think of the decision to have her big national interview be with Katie Couric at CBS, she was the one who conducted the interview.  That was the single most damaging interview for a politician since at least Bob Dole and Dan Rather, stop lying about my record 1988, if not Ted Kennedy and Roger Mudd in 1980.  That was an event that changed the way the public saw her in a lasting way. 

And secondly, her own instincts on the campaign I think were less than stellar.  When she talked about the pro-America parts of the country, she displayed a kind of polarizing mindset that I think is ultimately limiting as a politician.  And I think that would be my overall sense of her as a candidate.  She has a lot of skill.  She has pizzazz.  She has energy.  She does, as Jill said, have an extraordinary connection with the Republican base.  But she defined herself in a way that I thought constantly limited her appeal and limited her reach.  And I‘m not sure what she could do over these next few years to get beyond that. 

That‘s why she is so challenging for the party.  She could be a leader within it, but in terms of their overriding task after the Bush years is to rebuild their reach, both demographically and geographically.  It is hard to see how she is one who is going to lead them back in suburbs of Philadelphia or Northern Virginia or any of these other places that have trended away from them since 2000. 

BARNICLE:  Jill, she is seen in the interview, talking about problems on a larger, bigger scale in the future, a bigger stage; “when others are making decisions for me, as they were in the campaign, and I am the one to live with the fallout from the decisions made on my behalf, that is something I‘m not very comfortable.”  You know, why didn‘t you speak up, governor? 

ZUCKMAN:  Well, I mean, there is that.  And I think that also plays into this idea that voters perceive her as just intellectually not ready for prime time, intellectually incurious.  And I think that‘s going to be a hard thing to erase.  She is going to have to do some serious travel abroad, get on some commissions.  I don‘t know how you overcome that perception.  And just because you didn‘t do as many interviews, I‘m not sure that helps her. 

BARNICLE:  Jill Zuckman and Ron Brownstein, who is very upset about the Yankees signing Mark Teixera, but we‘ll get to that. 

BROWNSTEIN:  Another time, yes.

BARNICLE:  We‘ll be back Monday night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it is time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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

END   

Transcription Copyright 2008 ASC LLC (www.ascllc.net) ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon MSNBC and ASC LLC‘s copyright or other proprietary

rights or interests in the material. This is not a legal transcript for

purposes of litigation.>

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

Discuss:

Discussion comments

,