updated 1/7/2009 3:19:36 PM ET 2009-01-07T20:19:36

Guest: Lynn Sweet, Jim Warren, Steve McMahon, Todd Harris, Steve McMahon, Ron Brownstein, Michelle Bernard, Michael Smerconish

CHRIS MATTHEWS, HOST:  Mr. Burris goes to the Senate, but will they let him through the door?  Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews.  Leading off tonight, welcome to Washington, Mr. President-elect.  Barack Obama wanted so much to be president that he campaigned for almost two years, well, he has got the job.  He is in Washington now.  And look at what he‘s facing. 

First, the Senate is a mess.  Can Democrats afford to seat Rod Blagojevich‘s choice for Obama‘s seat, Roland Burris?  And after having lost five elections in a row, are they worried that he won‘t even hold the seat if they give it to him?  But as someone who could be the only African-American senator in the entire body, can they afford not to seat him? 

Chicago Congressman Bobby Rush, who is not afraid to cause the establishment a little trouble, called the U.S. Senate, quote, “the last bastion of plantation politics in the country.” Burris, by the way, made himself very clear today on where he stands on whether he should be seen as a U.S. senator already. 

(BEGIN VIDEO CLIP)

ROLAND BURRIS, FORMER ILLINOIS ATTORNEY GENERAL:  . junior senator from the state of Illinois, that‘s all I can say. 

QUESTION:  But you haven‘t been sworn in yet. 

BURRIS:  Well, I‘ll look to be sworn in, but I am the senator. 

MATTHEWS:  What a show.  Much more in just a minute. 

Plus, more Senate news, the Minnesota State Canvassing Board has now certified officially the results showing that Democrat Al Franken got, catch this, 225 more votes than Norm Coleman.  That‘s not 225,000.  That‘s 225 over Coleman.  That race may not quite be over because Coleman can still challenge it in court. 

Next, the economic stimulus plan, which is more important than any of this stuff, the economy, Obama said, hurting, maybe worse since the Great Depression and getting worse.  We haven‘t seen the unemployment numbers yet.  Obama met today with congressional leaders about his plan.  Will $300 billion in tax cuts win over the Republicans?  Our HARDBALL strategists will debate that in a minute. 

Plus, commerce secretary?  What commerce secretary?  Who‘s the commerce secretary?  Bill Richardson withdrawal is the first real misstep of the Obama transition team.  How did it happen?  We‘ll get to that.

And George H.W. Bush, that‘s Bush 41, says he thinks Jeb Bush, his other son—one of his other sons, would be a fine president.  Is the country really ready for Bush 45?  Believe me, this is all true. 

Also, the latest on Caroline, we know her last name, it looks like she has got it in New York. 

But first, Roland Burris, Rod Blagojevich‘s pick for the Senate, says he is the junior senator from Illinois already.  Let‘s turn to two Chicago reporters, Lynn Sweet of The Chicago Sun-Times, and MSNBC contributor Jim Warren. 

Tomorrow morning, sometime in the U.S. Senate, somebody‘s going to read a list of new senators, newly elected.  The name Roland Burris is not going to be on that list, but maybe Roland Burris going to be somewhere near the U.S. Senate tomorrow morning. 

Lynn Sweet, what is going to happen? 

LYNN SWEET, THE CHICAGO SUN-TIMES:  I can tell you he is going to appear at 12:30, plans to come.  And he is going to be turned away.  He says he won‘t cause a fuss.  And I have a little scoop for you right now.  He‘s on the way now, unless his plane was late to Washington from BWI Airport, and I think he is planning on showing up at a reception that Senator Dick Durbin is having for new senators tonight. 

MATTHEWS:  Is he flying in on his own dime? 

SWEET:  Well, he was—when I talked to him, he wasn‘t sure how anything is going to get paid for.  He believes he needs to be reimbursed.  But he is taking Southwest Airlines in. 

MATTHEWS:  Just in case. 

SWEET:  From Midway with some of his aides. 

MATTHEWS:  Keep the cost down if he has got to pocket it.  So here‘s Roland Burris then, here‘s a guy who he believes—by the way, let‘s give the man something of a break here.  He believes he was formally and officially and fairly named United States senator from Illinois to replace Barack Obama. 

Unfortunately for him, he was named to that post—if he was named to it, by Rod Blagojevich, who‘s facing indictment, perhaps, and impeachment probably.  Here‘s Roland Burris today. 

(BEGIN VIDEO CLIP)

BURRIS:  I‘d like to separate myself from Rod Blagojevich.  He carried out his duties and he filled a vacancy as according to law.  Isn‘t that correct?  Isn‘t that what the statute says?  That the governor shall appoint a person to fill the vacancy.  It didn‘t say anything about being tainted or being associated with or being—you know, I mean, this is all politics and theater.  But I‘m the junior senator, according to every law book in the nation. 

(END VIDEO CLIP)

MATTHEWS:  OK.  It‘s all politics and theater, but Jim Warren, let me give you five reasons why this guy won‘t be picked as the United States senator by the Senate or allowed in the door.  One, Barack Obama doesn‘t want him in the door.  Barack Obama says that Blagojevich has no standing in politics to be naming anybody to the U.S. Senate, certainly not to his former seat. 

Number two, the governor is under indictment or about to face indictment, it looks like, and about to face impeachment.  Number three, the secretary of state of Illinois has refused to sign the document that‘s required to have a guy seated as a senator. 

And number four, this guy has lost five primary elections in a row.  He is not exactly the person you‘d want to pick as a likely person to get elected in next year.  What do you make of it?  Is he ever going to become a senator?  Is there any deal here? 

JIM WARREN, MSNBC POLITICAL ANALYST:  First of all, looking at that shot of Midway Airport, the CEOs from the automakers should have flown Southwest to begin with.  I don‘t know why he‘s flying so cheap, because he has made so much darn money exploiting his political connections along with everybody else here. 

Three of those four elements you just mentioned, Chris, were distinctly political, not legal.  The only legal one you mention, and that one is very arguable, is whether the secretary of state, Jesse White, has to sort of sign some papers.  I think legally he does not.

MATTHEWS:  Isn‘t he the Maytag repairman, Jesse White?  A different Jesse White, I guess. 

WARREN:  Well, yes, yes.  No, close.  But the fact is, if this is legally correct, that he has to sign off, this means that the secretary of state who most people in the state couldn‘t name is the single most powerful politician because he has to approve every single appointment.  I really don‘t think that the law is on their side on that one.  So the three of the four ones you just mentioned, I think that‘s all political.  I think the law is on Roland Burris‘ side.

MATTHEWS:  So you sound like this guy has got a good case.  You believe objectively and under the law this guy should be seated as a senator, you‘re saying? 

WARREN:  Right.  And one vision, you didn‘t—along with Lynn‘s vision of what might happen tomorrow, one that we should have, which might make us slightly dyspeptic, is that of Rod Blagojevich back here grinning like a Cheshire cat because the “Saturday Night Live” character aside, the bipartisan animus toward him aside, the likelihood that he will be indicted aside, he has every legal right to do this.

And I think he has pulled one over on Harry Reid and Dick Durbin.  And Harry Reid is left looking like some parent huffing and puffing and warning his kid that there is going to be big punishment unless he does what he says and then the kid doesn‘t stop doing it and Harry Reid doesn‘t have anything left to go to unless what, he‘s going to send it to the Rules Committee? 

And Chuck Schumer, head of the Rules Committee who wants Al Franken seated ASAP because Minnesota has got to have two senators on that floor as quickly as possible.  Boy, I think Blagojevich has really played this in the most cynical but adroit of ways. 

MATTHEWS:  Boy, is this the brilliant bad guy? 

SWEET:  Well, he is.  He‘s devious.  He is probably laughing all the way, as Jimmy says... 

MATTHEWS:  Well, what‘s going to happen?  This poor guy Burris has paid for his ticket from Washington—from Chicago.  He arrives on a low-cost airline.  He has got to find—what, is he going to stay at Days Inn?  He has got to find a place to stay tonight. 

SWEET:  Hold on, I could tell you, I could tell you. 

MATTHEWS:  I know.

SWEET:  He is planning on meeting with Reid and Durbin on Wednesday. 

What they would like him to do.

MATTHEWS:  A day later. 

SWEET:  What they would like him to do is to just say that he won‘t run for the seat in 2010 and then they‘ll just say, fine.  Done.  Go in.  We‘ll sign you up.  They want this monumental distraction over. 

MATTHEWS:  But don‘t they still have this smell of a Blagojevich appointment on their hands in the Senate and when they have this—you know how we do the State of the Union on television and they flash to this guy.

SWEET:  Yes. 

MATTHEWS:  Every anchor person in the country of every network will say, here‘s the guy that Blagojevich put here, the guy who is facing indictment and impeachment. 

SWEET:  In the situation where there is not many good alternatives right now, they‘re willing to take it.  That should be the least of their problems right now. 

MATTHEWS:  So your hunch is, as a reporter, that they will seat this guy if he agrees not to run? 

SWEET:  Well, yes, but.

MATTHEWS:  In two years from now, in your opinion. 

SWEET:  . he is not agreeing to it.  I know he is not agreeing to it. 

MATTHEWS:  Because he says he is a candidate, he is going to run. 

SWEET:  He has said that.  And.

MATTHEWS:  This guy is ambitious. 

SWEET:  Well, it‘s more than ambition.  It is, frankly, in all due respect to Burris who is not the senator, yet despite what he says, he is the designate.  But he doesn‘t go for little, you know, smallest details like that.

MATTHEWS:  No, he swore himself in, this guy. 

SWEET:  He doesn‘t want to negotiate anything because I think he thinks he doesn‘t have to.  He might be, you know, smart by, you know, winning a—he might not be as smart as he thinks because if they do slow walk it to Rules and Rod Blagojevich is replaced by Pat Quinn, then you can have another scenario, another appointment, it could be a messier fight.  If he‘s willing to negotiate, he could be what he wants right now. 

MATTHEWS:  Yes.  Jim, how long is it going to take for the Senate out in Illinois and Springfield, the legislature out there, to boot this governor?  I mean, he could be around months from now?  I saw the indictment schedule looks like it‘s going to stretch out. 

The fact that he gets prosecuted and convicted could take months if not years?  Who‘s to say there is going to be another governor out there to deal with?  To make another appointment to the Senate? 

WARREN:  Well, the lieutenant governor is acting as if he is the governor already.  I mean, he was talking to reporters today about an ethics pick that he has, a hot shot former aide to Patrick Fitzgerald to clean things up.  So he is getting ready.  Sort of spring training for lieutenant governors in the state of Illinois.

MATTHEWS:  What a—this a carnival.  This is where Barack Obama became Barack Obama. 

(CROSSTALK)

SWEET:  Actually, I have one other detail.

WARREN:  And can I just say?  Can I just say one thing, Lynn?  Lynn?  Lynn, just—despite Lynn‘s sort of, I think, Solomonic notion that Roland Burris  would be allowed to enter the Senate if he says, I just won‘t run in two years, the problem, as Lynn knows, is Roland Burris.  His whole career has been a testament to self promotion.  He is not lacking in self confidence. 

And he is now exhibiting this sense of a guy who thinks this is not only a lifetime achievement award, but this is something akin to Harvard or Princeton tenure that he should now be there forever and he is going to run in two years and, boy, will that be a mess. 

SWEET:  Absolutely.

(CROSSTALK)

MATTHEWS:  Well, let‘s listen.  Here‘s the Senate Democratic leader, Harry Reid, how he is dealing with it.  Here he was on “MEET THE PRESS” with David yesterday. 

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER:  I‘m going to meet with Senator McConnell, my Republican counterpart.  I hope to do that Monday evening.  I think it‘s around 6:00 or something like that.  We‘ll talk about this.  I hope we can solve this issue on a bipartisan basis. 

DAVID GREGORY, HOST, “MEET THE PRESS”:  But there sounds to me like there may be some room here to negotiate and actually seat Burris. 

REID:  Hey, listen, David.  I‘m an old trial lawyer.  There‘s always room to negotiate. 

GREGORY:  All right.  So you are not saying no completely that he won‘t serve.  That‘s what you‘re saying? 

REID:  That‘s right. 

(END VIDEO CLIP)

MATTHEWS:  Well, that‘s what they do on “MEET THE PRESS.” Really brilliant, is create a news story.  There you have the opportunity.  There is a—you think there is—and you see that as the people he will go through, which is, if he agrees not to be a political figure in Chicago, just to sit this term out as a seat warmer, they‘ll put up with it.

But suppose Jim Warren is right and the guy does plays really hardball and he says, look, I‘m not going to take your deal.  I was appointed by the governor, it‘s valid, I‘m here, live with me, and by the way, I‘m a politician like you guys and as an incumbent, I now believe I can win this next election. 

SWEET:  Well, a few things are true, and I don‘t disagree with Jim.  I think he won‘t take a deal just to get in.  I mean, he could have the salary, the title, he could chisel this line in his mausoleum that‘s ready for him where he has his achievements.  He could have it done.

And by the way, people who say they won‘t run for higher office, often end up do and their many flip flops, term limit flip flops.  But what he is willing to—he thinks he is actually the senator right now.  And as Jim has said, we both know him.  I believe in my soul he thinks he has this as a done deal and there is no—there‘s no room whatever and he won‘t—you know, Reid now says he‘ll negotiate. 

To negotiate means two people have a conversation.  He wants a monologue. 

MATTHEWS:  OK.  Well, let‘s talk about the other state in the Midwest, Minnesota‘s Canvassing Board has now certified Al Franken as the victor in that Senate recount against Norm Coleman, who was the incumbent. 

Here‘s Franken late today. 

(END VIDEO CLIP)

AL FRANKEN (D), DECLARED WINNER IN MINNESOTA SENATE RECOUNT:  After 62 days of careful and painstaking hand inspection of nearly 3 million ballots, after hours and hours of hard work by election officials and volunteers across this state, I‘m proud to stand before you as the next senator from Minnesota.  This victory is incredibly humbling.  Not just because it was sonar row, but because of the tremendous responsibility it gives me on behalf of the people of Minnesota. 

(END VIDEO CLIP)

MATTHEWS:  Thank you, Lynn.  Thank you, Lynn Sweet.  Thank you, Jim Warren. 

As Roland Burris fights to take Obama‘s Senate seat, Obama may have an even bigger problem.  What‘s it going to take to get the economy moving again?  Obama wants to win Republican support for his massive economic stimulus plan, so he is including $300 million worth of tax cuts.  Our strategist debate whether the Obama stimulus plan will work politically and economically coming up next. 

You are watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, a transition stumble.  President-elect Obama‘s pick for commerce secretary, New Mexico Governor Bill Richardson, withdraws.  What‘s going on here?  HARDBALL returns after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT-ELECT:  It‘s clear that we have to act and we have to act now to address this crisis and break the momentum of the recession or the next few years could be dramatically worse. 

MATTHEWS:  Welcome back to HARDBALL.  President-elect Obama me with congressional leaders today to craft an economic stimulus package.  And he wants to include $300 billion worth of tax cuts aimed at enticing Republicans to support the plan.  Is this a victory for Republicans or Obama?  And will his plan put the economy back on the road to recovery, which is the real question? 

Let‘s turn to our strategists, Steve McMahon, who is a Democratic strategist, and former McCain spokesman Todd Harris, who is a Republican. 

Now you know what I thought, one thing good about Rahm Emanuel is he is a tough guy who talks like a tough guy.  He says, never let a serious crisis go to waste.  In other words, when the country is really facing disaster economically, jam through something.  Is that smart politics? 

In other words, get this rolling, the train, get it done, because you‘re only going to have this sense of national unity as long as there‘s a sense of national crisis. 

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  It‘s not just smart politics, it‘s the best thing for the country, because Barack Obama is about to inherit George Bush‘s mess, the recession that George Bush left.  And needs to deal with it and he needs to deal with it fairly quickly before it gets too much worse. 

So this is very good politics, it is also good policy.  He has given the Republicans what they need to join him.  But what they need is basically what he wants anyway.  It‘s targeted tax cuts to the middle class and to small businesses to get the economy moving again.  It‘s a great move for him and it‘s great for the country. 

TODD HARRIS, REPUBLICAN STRATEGIST:  Steve is right.  There was a convergence of three things going on... 

(CROSSTALK)

MATTHEWS:  What, he‘s right in saying it‘s all George Bush‘s fault? 

(LAUGHTER)

(CROSSTALK)

MCMAHON:  Could you say that again, Todd?

HARRIS:  Well, he is certainly right about a crisis. 

MATTHEWS:  Well, let‘s take back this thing, because you‘re trying to create a bipartisan atmosphere for success by throwing a stink bomb at Bush.  I mean, you just threw one, you said it is all his fault. 

MCMAHON:  It is all his fault, I mean... 

MATTHEWS:  OK.  Well, that‘s a good start. 

(CROSSTALK)

MATTHEWS:  OK.  Let me talk about this.  It seems to me that Barack came in with two things.  Facing urgency, let‘s get something done.  And create the tone that this is a new Washington.  This isn‘t the old Karl Rove screw the opponents, you know, divide and conquer, the nastiness is gone. 

Isn‘t he, by offering a big tax cut as part of his package, basically going down the road politically to the Republican side, which has always been, if you want to stimulate, cut taxes, don‘t increase spending? 

HARRIS:  Yes.  Absolutely.  And Republicans will quibble about issues related to transparency and what the makeup of the tax cut is, you‘re already hearing people say, well, we shouldn‘t be cutting taxes for people who don‘t pay any taxes.  So McConnell is talking about lowering the 25 percent tax rate down to 15 percent. 

But overall, yes, this is a nod, certainly, toward Republicans, toward bipartisanship and, frankly, I‘m not sure that he actually has to do this. 

MATTHEWS:  Who doesn‘t like this, Steve?  Who doesn‘t like tax cuts as part of a stimulus package as one goal?  Not pork barrel, not earmarking, not paying off local political people.  The purpose of a stimulus package is to kick the economy in the butt, get it rolling again so it doesn‘t go downhill the next two years.

So isn‘t a tax cut as good as a spending hike?  Because I know liberals generally don‘t believe a tax cut is as good as a spending hike because a spending hike is 100 percent spending, in stimulus where people save some of the money they get in a tax cut. 

MCMAHON:  Well, people save some of the money they get in tax cuts unless you target the tax cuts to people who.

MATTHEWS:  Who need to spend every nickel.

MCMAHON:  Who need to spend every nickel.  And that‘s what‘s going on here.  I think that what the Obama folks have done is they have given the Republicans the sleeve off their vests.  They have given them tax cuts because the Republicans screamed for tax cuts. 

But they targeted them in exactly the same way that they said they wanted to target them during the campaign.  Nobody who makes $150,000 or $200,000 a year is going to get this tax cut.  However, it comes.

MATTHEWS:  OK.  So this is no giveaway to the Republicans.

MCMAHON:  It‘s not a giveaway at all.

(CROSSTALK)

MATTHEWS:  By the way, is it—to make his point, isn‘t what—Obama promised middle class tax cuts, I‘m looking at the numbers here.  According to the leaks here, a middle class family, that includes like 80 percent of the country, is going to get a tax cut of between $500 and $1,000 a year.  Is that about right?

HARRIS:  Well, it‘s—it‘s what he has talked throughout the campaign. 

MATTHEWS:  Yes.  Right. 

HARRIS:  So, no—no one should be surprised about this.

MATTHEWS:  So, though, he‘s not giving way.  And he‘s just doing what he said what he would do, which is rare in politics maybe.

HARRIS:  You‘re going to hear Republicans talk about the fact that 40 million some taxpayers file who pay no taxes at all.  And giving them a—quote, unquote—“tax cut” is...

MATTHEWS:  Yes. 

HARRIS:  ... not giving them a tax cut.  It‘s just writing them a check, and—which is fine. 

(CROSSTALK)

HARRIS:  If you want to put that on the spending side, then put that on the spending side.

(CROSSTALK)

MATTHEWS:  Why do we call it a tax cut...

(CROSSTALK)

HARRIS:  Right.  It is not a tax cut.

MATTHEWS:  Why not just call it a giveaway?

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Well, it‘s not a giveaway.  It is a tax cut. 

MATTHEWS:  How is it a tax cut if you don‘t pay... 

(CROSSTALK)

MCMAHON:  You pay payroll taxes. 

MATTHEWS:  Oh.  OK.  It‘s an offset against payroll taxes.

HARRIS:  But it‘s not what they‘re cutting.  They‘re not cutting their payroll taxes.

MCMAHON:  We don‘t know what they‘re doing yet, because there are various proposals on the table.

But what we know is, they want to get $500 to every family.  And if the family doesn‘t pay taxes, they want to get $500 to that family anyway, because that family needs it.  And that family pays payroll taxes.

MATTHEWS:  What did Bush give everybody out of tax cuts this past spring?

HARRIS:  There was the $500 stimulus. 

MATTHEWS:  It didn‘t do anything. 

HARRIS:  No.  Well, we don‘t know.  It may—things may have been worse. 

(LAUGHTER) 

HARRIS:  Hard—hard to believe.  It could have been worse. 

(CROSSTALK)

MATTHEWS:  You think that—I heard that money just got swallowed up

by the system and didn‘t do anything for the economy.

HARRIS:  Well, but you have got to put all of this in perspective. 

You—when think about the amount of money that has been lost in home values alone, they estimate more than $10 trillion.  We are talking about $700 billion. 

(CROSSTALK)

HARRIS:  It‘s a lot of money, but it‘s a drop in the bucket. 

MATTHEWS:  Can I suggest something that is...

(CROSSTALK)

MATTHEWS:  ... to both of you guys, because you want to argue politics?

You know what the best stimulus package in the world was?  Gas going from four bucks to two bucks. 

MCMAHON:  That‘s right. 

MATTHEWS:  Do you know what that does to an average person?  I‘m not an average person.  I‘m lucky.

But let me tell you something.  Two bucks a gallon—I was looking at the pump the other day -- $1.75 for some—for regular, that means they‘re not paying four bucks.  That means you have that cash at the end of the week and it‘s still in your pocket if you‘re living in cash.

That‘s real money.

(CROSSTALK)

MATTHEWS:  That‘s maybe going to a restaurant with your family. 

That‘s maybe buying shoes the kids need.  That‘s real money. 

(CROSSTALK)

MATTHEWS:  That‘s stimulating to the economy, isn‘t it? 

MCMAHON:  That is real money.

And it‘s—somebody estimated—I don‘t know who it was—it was a $32 billion tax cut for working families.  And that‘s a tax cut that recurs every week and every month for as long as prices stay low.  Hopefully, they will stay low.

But you‘re right.  The families that are living dollar to dollar, paycheck to paycheck, that money in their pocket every single week matters more than a $500 check. 

(CROSSTALK)

MATTHEWS:  By the way, I just did the math.  If you—if you fill your tank a couple of times a week, and you have a 25-gallon tank, and saving 25 gallons times two, that‘s $50.  That‘s $100 a week.  That‘s...

(CROSSTALK)

MATTHEWS:  Look at the math.  Look at the amount of money you‘re saving by just taxes—by gas going down. 

MCMAHON:  That‘s right. 

MATTHEWS:  I think gas prices are the real tax for most people.

(CROSSTALK)

MATTHEWS:  And, by the way, if you don‘t pay taxes, income taxes, you just pay payroll...

HARRIS:  You‘re still...

MATTHEWS:  ... the gas guzzler is taking the money. 

(CROSSTALK)

MATTHEWS:  So, I think that‘s a stimulus to the economy.  I think that‘s...

(CROSSTALK)

HARRIS:  It is real money, but...

MCMAHON:  These are progressive tax cuts, every single one of them, whether it‘s gas taxes, whether it‘s a payroll tax cut.

(CROSSTALK)

MATTHEWS:  By the way, I‘m saying what Barack‘s not saying.  But you guys agree. 

(CROSSTALK)

MATTHEWS:  A tax cut—a gas tax cut is the best break we‘re getting.  We‘re also getting another 500 bucks, maybe to 1,000 bucks.  Would you prefer the money was going into shovel-ready projects, like building bridges, than in tax cuts?  That‘s what liberals generally support. 

MCMAHON:  I think you need to do both, because you have got to stimulate the economy and you have got put people back to work. 

We may be headed for double-digit unemployment.

MATTHEWS:  Yes. 

MCMAHON:  And the best way to prevent that is to go to shovel-ready projects.

But the best way to get the economy moving is to put money in peoples‘s pockets.  And I think that this—it is like—it is like Goldilocks, right?  Is it too hot, too much, too little? 

(CROSSTALK)

MATTHEWS:  Yes.  Look, I‘ll tell you what.  The economy is facing a disastrous next you‘re or two.  We possibly think that.

And, by the way, nobody‘s buying houses.  And there‘s problems with that.  And I don‘t think anybody‘s buying cars.  Anyway, thank you.  You know? 

HARRIS:  Well, the money—the money ought to be spent on tax cuts.  And if you want to put people back to work, then give companies tax incentives to hire more people.  But these shovel-ready programs, that‘s going to take years for that money to... 

(CROSSTALK)

MATTHEWS:  You know what you need to do that?  Get a Republican elected president, because that‘s pure... 

(CROSSTALK)

HARRIS:  Well, we‘re—we are working on it. 

MATTHEWS:  I know. 

Steve McMahon, thank you, Todd Harris.

(LAUGHTER)

MATTHEWS:  Rare agreement here:  Tax cuts are good, and the more taxpayers that get them the better. 

Up next, call it a sign of the times.  There‘s something new on the front page of “The New York Times”—wait until you catch this—

Advertising. 

Plus, another Bush in the White House?  You want him.  Former President Bush says he would love his other son, Jeb—one of his other sons—to get the job soon.  But, after George W. Bush, is this guy young enough to outlast the memory of this Bush?  That‘s ahead in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” 

First up:  If you can‘t beat them, join them.  That theme began when Senator Hillary Clinton joined Barack Obama as the country‘s secretary of state.  Now look at what Terry McAuliffe—and he was Hillary Clinton‘s presidential campaign chairman—look what he is doing. 

He is using the winning theme from the Barack Obama campaign to win his own race for governor of Virginia.  Here is McAuliffe this past weekend ripping off Barack Obama‘s rallying cry in his announcement video. 

(BEGIN VIDEO CLIP, MCAULIFFE CAMPAIGN AD)

TERRY MCAULIFFE (D), VIRGINIA GUBERNATORIAL CANDIDATE:  Joining together has never been more important.  And, yes, we can do it again this year. 

(END VIDEO CLIP)

MATTHEWS:  Yes, you got it, Terry.  Yes, we can. 

As the greatest historian and Kennedy aide Arthur Schlesinger once said, politics is essentially a learning profession.  You learn what works, even if it worked against you. 

Next up:  President George W. Bush has just two weeks left in office, but there‘s at least one American out there who would like to see the president‘s younger brother apply for the job.  Here he is. 

(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)

GEORGE H.W. BUSH, FORMER PRESIDENT OF THE UNITED STATES:  I would like to see him run.  I would like to see him be president some day. 

CHRIS WALLACE, HOST, “FOX NEWS SUNDAY”:  Really?

G.H.W. BUSH:  Or maybe senator.  Whatever.  Yes, I would.  I mean, right now is probably a bad time, because we‘ve had enough Bushes in there.  But no, I would.  And I think he‘s as qualified and able as anyone I know on the political scene.  Now, you‘ve got to discount that.  He‘s my son.  He‘s my son that I love. 

WALLACE:  Would you really want, after all you‘ve gone through yourself and your son, to have another son go through the White...

G.H.W. BUSH:  Absolutely. 

(END VIDEO CLIP)

MATTHEWS:  Wow. 

And now a sign of the times.  No, they‘re not jumping out of the windows up in New York, not yet.  But look at the front page of “The New York Times.”  Here it is: advertising.  The front page of today‘s “The New York Times” has a below-the-fold display ad for CBS. 

“The Times” calls the move in its own editorial on this (INAUDIBLE) its news story on this—quote—“the latest concession to the worst revenue slide since the Great Depression.”

Talk about a shrinking news hole. 

Now for tonight‘s “Big Number,” a little nugget courtesy of today‘s “Washington Post.” 

Last year, how much money did outgoing Interior Secretary Dirk Kempthorne spend on renovating his office bathroom?  Two hundred and thirty-five thousand dollars.  The upgrade includes a new shower, a new fridge, and—get this—monogrammed towels.

Question:  Does the incoming secretary of the interior, Ken Salazar, have to change the D.K. towels to the K.S. towels?  And, yes, change, of course.  We‘re getting change in the towels.  Secretary Kempthorne‘s $235,000 upgrade in his official bathroom at the Interior Department—tonight‘s “Big Number.” 

Up next:  As president-elect Obama figures out how to deal with his Senate replacement, Roland Burris—what a mess that is—Obama‘s transition team made its first major misstep, meanwhile, when his pick for commerce secretary, New Mexico Governor Bill Richardson, withdrew his nomination, citing a grand jury investigation into pay-to-play politics. 

We will have that when we come back.  What a nasty bit of business, a bad show here.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

JULIA BOORSTIN, CNBC CORRESPONDENT:  I‘m Julia Boorstin with your CNBC “Market Wrap.”

Stocks falling, as automakers reported dismal sales for December.  The Dow Jones industrials dropped 81 points, the S&P 500 down four points, the Nasdaq also down four points.

General Motors reports, December sales were down 31 percent, falling to a 49-year low.  Ford sales dropped 32 percent, and Chrysler sales plunged 53 percent. 

As for the Japanese automakers, Honda‘s U.S. sales fell 35 percent in December.  And Toyota sales were down 37 percent.  But Subaru says its U.S.  sales increased slightly last year. 

Oil prices rose, amid the continuing conflict between Israel and Palestinian militants and the turmoil involving Russia and Ukraine.  Crude gained $2.47, closing at $48.87 a barrel. 

And the Commerce Department reported, construction spending fell six-tenths-of-a-percent in November, but that was less than expected. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

Rod Blagojevich made pay-for-play politics infamous, but is Bill Richardson the first casualty of that infamous phrase? 

“Newsweek”‘s Howard Fineman joins us.  He‘s an NBC News analyst.  And Ron Brownstein is the political director for Atlantic Media. 

Gentlemen, it‘s—I don‘t know anybody in the business who covers politics who doesn‘t have some fondness for Bill Richardson.  He is just a guy—the kind of guy—or person—you like. 

I want you to start on this.  What happened here to his nomination? 

Why is he the first sort of bad news coming out of this transition team? 

He had to withdraw. 

RON BROWNSTEIN, POLITICAL DIRECTOR, “ATLANTIC MEDIA”:  Yes, he‘s a big character, first of all. 

I mean, he is someone who kind of has larger-than-life aspects to his personality, kind a little sprawling, unwieldy at times, but someone who is very engaging. 

Look, he‘s run into an investigation here on whether one of his

contributors was given unfair consideration as an adviser to the state on -

on bond issues.  And that—that investigation is ongoing in a way that would make it impossible for his nomination, his—to be confirmed quickly.  And he decided to—to pull out. 

MATTHEWS:  Do we know that he was informed by the transition team that he was running into some static, and they weren‘t going to confirm—or he would have a problem on the Hill in the Senate Commerce Committee, Howard.

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT:  I don‘t think it went quite down that way.

I spent a lot of time with him in July out in New Mexico during the week when he learned for sure that he wasn‘t going to be the vice presidential running mate, which he was in the ball game. 

MATTHEWS:  He has had a bad year. 

FINEMAN:  He has had a bad year. 

MATTHEWS:  He missed for that.  He missed for president.

FINEMAN:  Yes.  And he also missed—yes.

MATTHEWS:  He missed for vice president.  He missed for everything. 

FINEMAN:  Now, he told me—and this was in the garden of the governor‘s mansion out in Santa Fe—he said, what I really want is to be secretary of state or secretary of the treasury.  I want one of those big jobs. 

MATTHEWS:  The big ones.

FINEMAN:  But, yet, I sensed, having known him for a long time, that he felt that he wasn‘t going to get either of those things. 

And, for him, the commerce job was a was a—was the—was a consolation prize, to begin with.  Also...

MATTHEWS:  Isn‘t governor of New Mexico bigger than Commerce? 

(CROSSTALK)

FINEMAN:  It is.

(CROSSTALK)

FINEMAN:  Also, the other thing that confuses me here is, all he had to do was read the New Mexico papers to know that this investigation was going on. 

What I understand happened here is that it became clear to Richardson that the investigation was deeper and longer and would not end quickly enough to not incur the wrath of people like Rahm Emanuel, the new chief of staff, incoming, who is protecting Obama, and is saying, look, we don‘t want any trouble from anybody.  We don‘t want to start out with any stumbles.  If you are going to get out, you better get out now. 

I think Richardson anticipated that and took himself out, knowing—knowing he was going to get in trouble if he didn‘t. 

(CROSSTALK)

BROWNSTEIN:  Yes. 

And I think the points connect there in the sense that, look, this wasn‘t as much to give up as if he had received one of the top jobs.  I mean, stepping away from commerce secretary is not as big a sacrifice as stepping away...

(CROSSTALK)

MATTHEWS:  I think the governor of New Mexico has the better clout. 

(CROSSTALK)

MATTHEWS:  So, look at this.  Here is what the president-elect had to say—quote—this came out Sunday.  This is from Barack Obama. 

“It is a measure of his willingness to put the nation first that he” -

Bill Richardson—“has removed himself as a candidate for the Cabinet, in order to avoid any delay in filling this important economic post at this critical time.”

Now, let me talk about this, because this—gentlemen, you guys are pros.  Pay to play, it is part of politics we don‘t like.  It has a smell factor, meaning transactional contributors.  A person says, I‘m willing to give you $50,000.  And for a governor‘s race, you can give big chunks of money.  Now, we have a particular problem with this agency you know about, or we want this product we would like to sell to you guys. 

At what point does it become not just transactional in some loosey-goosey sense, but a crime? 

BROWNSTEIN:  Yes. 

MATTHEWS:  If this guy says, I can help you get a bond rating or I can help you get the—I can underwrite this, I want this $1.4 million in business—oh, by the way, I‘m willing to give you $100,000 in PAC money.  At what point is it illegal? 

BROWNSTEIN:  It is a very gauzy line.  And it‘s what U.S. attorneys and other officials who prosecute these kinds of crimes wrestle with all the time. 

I mean, there‘s a continuum.  Obviously, everybody who gives money to

almost everybody who gives money to a politician expects something. 

(CROSSTALK)

BROWNSTEIN:  They want something.

(CROSSTALK)

BROWNSTEIN:  But, when there‘s an explicit quid pro quo, that is when you get closer to—to crossing that line. 

(CROSSTALK)

MATTHEWS:  OK.  Let me stretch this... 

(CROSSTALK)

FINEMAN:  Yes. 

MATTHEWS:  Pretend that—that Patrick Fitzgerald is listening to this conversation right now.  And I say to you...

(CROSSTALK)

FINEMAN:  We should all hope to have our conversations listened to... 

(CROSSTALK)

MATTHEWS:  ... Howard, I have got some clout.  Howard, I have got some clout.  I want to get you ambassador to Great Britain, to the Court of Saint James.  Now, you give me $100,000, and I will make the phone call for you. 

That is a crime.  That is a crime.  But nobody ever has that phone call.  Nobody ever has the phone call.

(CROSSTALK)

FINEMAN:  But, as Ron says—I know—as Ron says, it is never that clear. 

Now, what happened in this case—and—and, by the way, the news that‘s buried in here is that the Justice Department and has—had an investigation going on across the country now for at least a couple of years in state after state after state, looking for—at pay-for-play schemes everywhere.  Chicago is one place, New Mexico.

MATTHEWS:  Meaning campaign contributions for... 

(CROSSTALK)

FINEMAN:  Yes. 

Now, what happened in this case is, this guy who ran a consulting firm in California gives a lot of money to Richardson‘s campaign committees.

MATTHEWS:  Right. 

FINEMAN:  And then his firm gets business. 

MATTHEWS:  Is that the order of it was?  That was money first to the candidate and then the...

(CROSSTALK)

MATTHEWS:  Or was it the other way?

FINEMAN:  Well, it—I think it was both.  I think there was some before, some after. 

MATTHEWS:  Yes. 

FINEMAN:  Now, there‘s no conversation.  And, by the way, there‘s no indication that Richardson knew anything directly or is under—is a person of interest or a target or anything like that. 

Richardson continues to say, “I‘m going to be cleared of anything here.” 

BROWNSTEIN:  You know, and it...

FINEMAN:  It‘s just, it‘s not going to happen fast enough...

BROWNSTEIN:  Right. 

FINEMAN:  ... for the Obama campaign and the Obama presidency. 

BROWNSTEIN:  And, in fact, it‘s interesting.

MATTHEWS:  You know, when you go into a baseball game or a football game, and you hand over your ticket, you don‘t say, I‘m giving you this ticket so I can go to the baseball game.  It is implied.  Or you pay money to go to a carnival, you give the guy five bucks, you walk in the door.  Why do you have to have a conversation—

BROWNSTEIN:  Look, otherwise, almost every dollar that a candidate raises from any kind of organized interest would be subject to—

MATTHEWS:  Right. 

BROWNSTEIN:  -- legal prosecution. 

MATTHEWS:  Political action, they want something done. 

BROWNSTEIN:  We allow private fund raising in this country. 

MATTHEWS:  Occasionally we catch somebody. 

BROWNSTEIN:  Like I said, it‘s a gauzy line between how explicit it becomes to become a crime.  And to Howard‘s point from a moment ago, Richardson was I thought interesting today in his press conference, where he explicitly said he hoped to some day serve the Obama administration.  He hoped to come out at the other end of this and be cleared and have an opportunity for a job. 

MATTHEWS:  Everybody‘s fighting over card check, whether you can have a union organized on a job site because 50 percent of the people sign a card.  Business hates this, because they think it‘s too easy for labor to do this, or they might argue it‘s thuggish, whatever.  But everybody in politics has a position on that, and everybody gets money from one side or the other or both.  They either get money from the Chamber of Commerce, the National Association of Manufacturers, or they get it from one of the unions.  That‘s the SEIU, right? 

BROWNSTEIN:  Right.  Absolutely. 

MATTHEWS:  That‘s all legal.  That‘s all legal. 

FINEMAN:  Yes.  It‘s legal because—because it‘s in the sun light and they‘re using their—they‘re using it to get somebody elected with their own people.  All of politics is quid pro quo. 

MATTHEWS:  The average person watching right now thinks that is dirty. 

FINEMAN:  Here‘s the difference—here‘s what the—

(CROSS TALK)  

FINEMAN:  Here‘s what the prosecutors are looking at in a place like New Mexico: did they follow the rules?  Every state has rules because—

MATTHEWS:  Like don‘t get caught. 

FINEMAN:  No.  Designed to try to make it not a pay for play.  But in this case—in this case, the question is whether the company that got the business skirted—was allowed to skirt the rules for applying for the business. 

MATTHEWS:  In other words, it wasn‘t an open bid.  It wasn‘t a competitive bid? 

FINEMAN:  Did they do a separate thing so this guy didn‘t have to follow the rules? 

MATTHEWS:  It looked like a quid pro quo because there was a special meeting and a special opportunity. 

FINEMAN:  Exactly. 

MATTHEWS:  Is the governor involved? 

FINEMAN:  Not directly, as far as anybody knows. 

MATTHEWS:  So why is his appointment being held up? 

FINEMAN:  Because there‘s an investigation going on and Richardson realized there‘s going to be many weeks longer than he had originally thought.  . 

MATTHEWS:  By the way, pay to play used to mean—I used to think it meant you give some money to like an old magistrate in one of the big cites like Phillie.  Here‘s some money in your drawer.  They used to have the drawer open when you went by.  You knew what they wanted, money in the drawer. 

FINEMAN:  Decorate the mahogany. 

MATTHEWS:  We can do this all night.  I don‘t want nobody, nobody said.  It‘s all this political talk.  But then it began, because Fitzgerald is an aggressive prosecutor, any times there‘s money changing hands, even if it‘s a political contribution, not going to the guy‘s house or his family or to fix the roof, that‘s also pay to play. 

BROWNSTEIN:  Again, it Depends on how explicit and how clear the connection is.  When you‘re talking about broad public policy, it‘s not clear what the direction of causality is.  Does the position follow the money or does the money follow the position?  And in many cases, it can be the money follows the position, as well. 

MATTHEWS:  There‘s a lot of excitement about this election.  I experienced it myself, about the possibility of change.  And here we are talking about Blagojevich‘s appointment to the United States Senate to fill the seat of Barack Obama.  We‘re talking about Bill Richardson.  We are talking about pay to play politics.  It must be driving Barack Obama and his people crazy.  They come in under a rubric of, my god, the change, the music, the excitement, especially in the African-American community.  This is going to be completely new.  This is going to wonderful politics, liberals and young people. 

Great.  Now, pay to play politics is being exposed. 

BROWNSTEIN:  And we still have a Rangel investigation to go.  We‘ll have Republicans making questions about Eric Holder as well.   

MATTHEWS:  Chicago—coming out of Chicago now, is this really going to hurt the mood of this inauguration? 

FINEMAN:  No, I don‘t think so.  I don‘t think so, because I think they want to try to get it over with now and—

MATTHEWS:  For that reason Richardson -- 

FINEMAN:  Richardson took it, get out of the way now, to clear the decks for the new birth of freedom, which is going to be the campaign theme on the 20th.  And you have to give Obama credit for trying to say, I am going to clean up this system.  Whether he‘s going to do it or not, who knows.

BROWNSTEIN:  And, in fact, he‘s advantaged because the scale of the problems are so large that, to most Americans, these do look like side shows next to the size of what he‘s confronting on the economy. 

MATTHEWS:  The smell is unfortunately familiar from big city politics of old.  And we don‘t like it.  I‘m aloud to exercise that opinion here.  We don‘t like pay to play.  Thank you guys.  I love this stuff, because it‘s awful, but we‘re catching it.  Howard Fineman and Ron Brownstein.  But you just say, it‘s just a sideshow. 

Up next, Mr. Burris goes to Washington.  But what does Washington—do they want him to come through the door?  This is an amazing story.  This guy has been is appointed senator to replace Barack Obama, the next president.  And the U.S. Senate wants to keep him out of the place.  This is—this is theater.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROLAND BURRIS, SENATOR DESIGNATE OF ILLINOIS:  The word is we‘re on our way to Washington as a senator from the great state of Illinois. 

(END VIDEO CLIP)

MATTHEWS:  Roland Burris, there he is, just landed in Washington.  He got off the plane, a cheap plane ride to Washington from Chicago.  But will he become a senator?  Will he even get through the door of the chamber?  It‘s time now for the politics fix. 

Joining me, the president of the Independent Women‘s Forum and MSNBC political analyst Michelle Bernard, and radio talk show host and MSNBC political analyst Michael Smerconish.  Lady and gentleman, thank you.  Lady first, you know this guy, Roland Burris.  Does he believe he is a U.S.  senator now? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  He believes he is a U.S.  senator.  I just got off the phone a few minutes ago with a member of his senior staff.  And the big question I asked was what happens tomorrow showing up and if they decide they won‘t seat him? 

MATTHEWS:  He‘s not on the list. 

BERNARD:  What they‘ve told me is no confrontation.  He‘ll walk straight over to the court house and file suit. 

MATTHEWS:  Can he—does he have a pass to get into the Senate building, into the U.S. Capitol? 

BERNARD:  It does not appear so.  But he is here. 

MATTHEWS:  You know, I was thinking of “Mr. Smith Goes to Washington,” where Claude Raines says to Jimmy Stewart, who just gets appointed to the Senate, to fill the seat of a senator who just died—he says, “do you have your papers?”  And he hands him the big document and says he‘s been picked by the governor of the state.  This guy doesn‘t have the signed document.  It‘s a little problem maybe.  But the secretary of state of Illinois, Mike—I know you love this stuff—refused to sign the document from Blagojevich, because he believes Blagojevich is tainted and a hopeless case and shouldn‘t be picking anybody, let alone U.S. senators.  What do you think?

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  I have a problem with this notion that because Barack Obama is an African-American, then it must go to an African-American, in a similar way that some are saying, well, Hillary Clinton‘s seat needs to be filled by Caroline Kennedy because, after all, it‘s a female position in the U.S. Senate. 

Having said that, I think Burris wins this battle if he continues to stand his ground.  Chris, the man was legally appointed.  From his perspective, he‘s qualified.  The governor asked him to take this position.  He wants to serve, and I think he‘ll win out. 

MATTHEWS:  So what—apparently, according to Lynn Sweet of the “Chicago Sun-Times,” the deal that might work if he agrees not to run for election in two years, he can have the seat as a seat warmer.  But Lynn also believes, and I think Jim Warren also agrees, he isn‘t going to accept a deal like that.  He‘s got the power to come into the U.S. Senate, sit in that seat and run if he wants to. 

BERNARD:  The senior staffer that I spoke to a few minutes ago, I asked exact same question, and he said absolutely not.  He‘s not willing to cut that kind of a deal.  He‘s in this for the long run.  As far as he‘s concerned, he‘s been legally appointed to the seat.  And should 2010 come around, he‘s going to run again. 

MATTHEWS:  We hope to have him here tomorrow to come on the show. 

We‘d like to see senator designate—

BERNARD:  Roland Burris. 

MATTHEWS:  Let me ask you about this.  You raised the ethnic thing.  I would normally agree with you.  I‘m against identity politics.  There are no African-American senators.  There‘s only been three since Reconstruction, as the way we say it, the great Ed Brook from Massachusetts, a Republican, and Carol Moseley Braun, who served a term, and, of course, Barack Obama who served a portion of a term.  Only from two states. 

Now, you say it shouldn‘t be a black seat, if you will.  If it isn‘t filled by an African-American, by Mr. Burris in this case, there won‘t be any blacks in the U.S. Senate.  Doesn‘t that bother you as a principle, that in a country that‘s represented—

SMERCONISH:  Absolutely. 

MATTHEWS:  Supposed to be a representative democracy, 15 percent of the country or so is black, why don‘t they have a senator, at least, out of 100?  They should have 15, if you go by the numbers, not that we should have a quota system.  Go ahead. 

SMERCONISH:  Chris, I think it is a quota system, that you‘ve stolen my thunder.  That‘s exactly what you‘re prescribing.  Of course, I would like to see additional representation for African-Americans and for females in the United States Senate. 

MATTHEWS:  There aren‘t any. 

SMERCONISH:  I‘ve got a problem with a set aside that says, they own this seat.  You just can‘t pursue this.  If Blagojevich goes down, is someone like me, who‘s Yugoslavian, going to say, wait a minute, that‘s a Serbian position.  Give us a Serbian governor of Illinois.  We don‘t have any others. 

Well, OK.  If we had kept Serbs slaves for 300 years, maybe they would have a different case. 

BERNARD:  As the black chick on the panel, let me just say tonight, I agree with Mike.  I don‘t think that he should get—that anyone should get a seat because they‘re a woman or African-American, or appointed just because he‘s black.  But he is qualified.  For that reason—

MATTHEWS:  I‘m reminded of Ross Barnett in the old days of desegregation of the South.  We‘re going to have a situation where a door will be available to certain people and not to others.  Tomorrow morning, there will be a list of winners.  It won‘t include Al Franken, because he‘s not quite authentic yet, not quite done the job in terms of paperwork out there in Minnesota.  But this guy will not be on the list, Burris, and he will come to Washington expected to be seated.  He calls himself a senator.  He may well be one.  There may be a deal in the works. 

We‘ll be back with Michelle Bernard and Michael Smerconish.  Wait until you catch this, Leon Panetta has been named the head of the CIA.  And the top Democrats, a couple of them, are saying, no, way.  They want a pro in there.  They don‘t want a former congressman, former chief of staff to Bill Clinton in there.  We have a fight on our hands in Washington.  It‘s not just Bill Richardson.  It‘s not just filling the Barack seat.  It‘s filling the top spook in the country, the CIA director.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Michelle Bernard and Michael Smerconish for more of the politics fix.  Interesting, it looks like Caroline Kennedy is going to get that appointment from Governor Paterson in New York to replace Hillary Clinton.  Here‘s an audio clip of Caroline Kennedy‘s interview. 

(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, DAUGHTER OF FMR. PRES. JOHN F. KENNEDY:  You know, what I think people are really looking for is people to work together.  So, you know—and you can laugh at that, but it‘s something that I take really seriously.  And I think that we need, you know, Republicans and Democrats, all Democrats—you know, people need to look at what we have in common and what we can get done here. 

(END VIDEO CLIP)

MATTHEWS:  Well, despite the use of that phrase “you know” a lot—most people have been making fun of, fairly or not, maybe not fairly.  It looks like Governor Paterson is going to ahead and pick the very popular Kennedy heiress, as it‘s fair to say, to this.  Let me ask you about something very hot, just breaking tonight.  Leon Panetta was chief of staff to Bill Clinton when he was president, a very popular fellow in Washington, among the press especially.  He was a top Democrat in the Congress.  He was chairman of the Budget Committee, later head of the Budget Office under Bill Clinton. 

Now he‘s been named to be CIA director, which is one of the hottest spots in Washington.  However, he‘s catching flag from Senator Dianne Feinstein in California, the new chair of the Intelligence Committee.  Michael Smerconish, who would have thought, it reminds me of the Ted Sorensen appointment in the Carter administration for CIA director.  He‘s not a spy-master.  He‘s not a trained intelligence officer.  Is this a bad selection? 

SMERCONISH:  You know, by all accounts, a very competent public servant and the sort of person you would want to see serving President Obama.  But in a post-9/11 world, with the issues that we now confront, it doesn‘t seem that he‘s got the CV to support it.  I think of Leon Panetta as the head of OMB, if I‘m not mistaken.   

MATTHEWS:  Yes, I would like to be police commission of a big city. 

But I don‘t think I‘m qualified.  I would like the job though.  Go ahead. 

BERNARD:  I would have to agree with you.  It‘s a strange pick, not only because of his CV or what‘s lacking on his CV for this post.  Also, we‘re seeing so many of the old Clinton folks going into the Obama administration.  A lot of that.  I was sitting with folks today when they saw the announcement about the appointment and the reaction immediately was another Clinton person. 

MATTHEWS:  Aren‘t you stunned the top Democrats like Dianne Feinstein and Jay Rockefeller are already trashing this already, already? 

BERNARD:  No, I‘m not stunned at all. 

MATTHEWS:  OK, well, that ruins my theory.  Thank you, Michelle Bernard.  Thank you, Michael Smerconish. 

Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL, and there‘s lots of it.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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