updated 2/5/2009 11:33:30 AM ET 2009-02-05T16:33:30

Guest: Bernie Sanders, Harold Ford Jr., Joan Walsh, David Corn, Antonio Villaraigosa, John Harwood, Evan Thomas High: Former vice president Dick Cheney warned of possible terror attacks in interview with three “Politico” newspaper reporters.

CHRIS MATTHEWS, MSNBC HOST:  What we have here is a failure to communicate.  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight, I‘ll say it again.  This failure to communicate.  It‘s not just the Daschle problem with not paying taxes or the Geithner problem with not paying taxes or the deputy OMB director‘s problem with not paying her taxes.  Believe me.  It‘s bigger than that.  I have never met a political figure more gifted at communication than Barack Obama.  Certainly, he was in Kennedy‘s league and Reagan‘s league.  But here‘s the difference.  You know what those presidents were doing once in office.  You knew Kennedy wanted the Peace Corps, wanted to put a man on the moon, wanted civil rights.

You knew Reagan was out there cutting taxes to make government smaller.  What‘s Barack Obama doing?  He keeps talking about his stimulus package like it‘s some big Santa‘s bag filled with all kinds of sundry items.  Extended unemployment benefits, green jobs, aid to states.  But how on earth does this trillion dollar grab bag work?  How does this money, all of it borrowed, repeat, all of it borrowed, going to help get the country moving again?  That‘s my question.

Meanwhile, the president has found himself a fat and worthy target of attack.  Those masters of universe up on Wall Street.  He wants to cap the executive salaries getting bailout money at half million dollars a year.  That‘s $100,000 more than he makes a year.

(BEGIN VIDEO CLIP)

BARACK OBAMA, U.S. PRESIDENT:  For top executives to reward themselves these types of compensation packages in the midst of this economic crisis isn‘t just bad taste, it‘s bad strategy and I will not tolerate it as president.

(END VIDEO CLIP)

MATTHEWS:  Let‘s get back to the heart of the problem.  We wouldn‘t care what the big shots were making up on Wall Street if the economy were doing well.  And if we weren‘t bailing them out.  So, again, how will all this spending of borrowed federal money, these bailout bills and stimulus packages, get the economy going again?

Plus, tonight, former Vice President Dick Cheney is back in the news back to tell us he was right and Obama was wrong.  Telling us if that we get hit get it‘s because he was right and again Obama was wrong.  The torture and Guantanamo and even Dick Cheney will look better if we get hit with a biological and nuclear weapon.

(BEGIN AUDIO CLIP)

DICK CHENEY, FORMER VICE PRESIDENT:  I think there‘s a high probability for such an attempt.  Whether or not they pull it off is whether or not we keep in place policies that have allowed us to defeat all further attempts since 9/11 to launch mass casualty attacks against the United States.

(END AUDIO CLIP)

MATTHEWS:  Question.  Isn‘t it a bit early for Cheney to be back from hibernation just two weeks after inauguration?  Just the first days of February?  I think he woke up before the groundhogs did.

And a group of mayors went to the White House today to press for the Santa‘s bag called the stimulus package.  One of the mayors, Los Angeles Mayor Antonio Villaraigosa is going to be here with us tonight on HARDBALL.

On the politics fix tonight we‘re going to look at who in the Obama White House is not doing their job.  Who is supposed to be getting the message across right now?  Who is supposed to let us know how this stimulus package is supposed to stimulate?

And finally B-Rod is back, this time on Letterman.  Did David slay Bogliath (ph)?  That if we had to tell you is in the HARDBALL “Sideshow” tonight.

We begin, however, with Vermont‘s Bernie Sanders.  Senator Sanders, I just want to know if you can do it, a man of the proud left who believes in government, how is this stimulus package going to get the economy back in shape or back towards good health?

SEN. BERNIE SANDERS, (I) VT:  Well, no one thinks it‘s going to work miracles.  What we‘re doing right now, Chris, as you know is hemorrhaging jobs.  We‘re in the worst economic crisis since the Great Depression.  What we hope to do is by investing in our crumbling infrastructure.  I don‘t know about what the rest of the country.  I can tell you in Vermont, we have pot holes.  Our bridges in desperate shape.  Our roads need help.  Our water systems are fall apart.  So we need to invest in any case.  We may as well invest now and in the process create a whole lot of jobs.

In addition to that, for decades, now, we‘ve been talking about energy independence and the insanity of spending $700 billion a year to import oil from abroad.  This has been going on for decades.  Now is the time to move to energy independence, break our dependency on fossil fuel.  Move to energy efficiency and sustainable energies.  And you know what?  If you do that over a period of time you create millions of jobs as well.  No one things this is a panacea.  But in the midst of hemorrhaging jobs, in the midst of try to keep us from falling over the cliff into a depression, it is right policy.  It is good policy.

MATTHEWS:  So what exactly is the connection between the unemployment rate rising right now, as it continues to rise and companies keep laying people off, and people aren‘t buying at the store.  And we‘ve got over 2 million foreclosures out there.  How does this bill deal with the foreclosure problem, the rising unemployment problem, the financial crisis?  How does it deal with it?

SANDERS:  I think clearly, if you‘re talking about weatherizing millions of homes it takes workers to do that.  If you‘re talking about rebuilding our bridges, our highways, our roads, our water system, it takes workers not only on the job, it takes the people who are supplying those products as well.

So what we‘re talking about in the process is creating millions of jobs in helping states and cities get the help they need so that teachers and police officers and firemen don‘t get fired, adding to the unemployment role.  I think this is a time-tested way of stimulating the economy, putting money into people‘s paychecks, allowing them to go out and spend and create other jobs.  Not a panacea.  It‘s something the republicans tell us we should be doing now.

MATTHEWS:  The problem is, senator, I agree with what you said.  The problem is with how you describe the stimulus package is how you might describe a small portion of it.  But so much of the bill includes different kinds of tax cuts.  It includes extended unemployment benefits.  It includes health care.  It includes aid to the states.  It seems to be a grab bag of everything everybody wanted on Capitol Hill.

SANDERS:  I don‘t think that‘s fair, Chris.  I think rebuilding our infrastructure, moving to energy efficiency creates jobs right away.  But in the midst of this, you can‘t forget about the worker who lost his or her job and the fact they no longer have health insurance.  What do we do?  Just kick these people on to the sidewalk?  I think we have to protect them with health insurance.  There are millions of families right now who are wondering if their kids are going to be able to stay in college or go to college.

MATTHEWS:  Right.

SANDERS:  So we‘ve expanded Pell Grants which is a right and good thing to do.

MATTHEWS:  That‘s right.  I‘m all for relief, senator, I‘m all for relief measures.  We have to extent relief measures.  I don‘t think they should be confused with getting the economy rolling again.  Here‘s Senator Lamar Alexander, a Republican.  I guess we once would have called him a moderate or centrist Republican.  I‘m not sure what he is right now.  But here he is describing what he thinks is necessary.

(BEGIN VIDEO CLIP)

SEN. LAMAR ALEXANDER, ® TN:  So we welcome the cause for bipartisan work.  We‘re ready to work.  We have good ideas.  Fix housing first, let people keep more of their own money and focus the bill on spending projects that create jobs today, not those that don‘t.

(END VIDEO CLIP)

MATTHEWS:  What do you make of that, senator?

SANDERS:  Well, I think Lamar is right, we do have to pay attention to housing.  That‘s absolutely right.  But I think what the economists would tell Lamar is that our economy is hemorrhaging so bad that we need a significant infusion.  Much more, I think, than Lamar Alexander and some of the Republicans are talking about.

MATTHEWS:  I just wonder whether in the end, we might as well be better off writing checks to everybody who bought a house more than they could afford.  Because until they can afford the houses they‘re living in, we‘re going to have more foreclosures and more economic decline, aren‘t we?

SANDERS:  I think the housing crisis is at the root of our problems.  We just met with President Obama today and very soon there is going to be a significant housing proposal coming down the pike to protect those people who are in danger of foreclosure as well as those people who are struggling to keep the house.  So housing is a huge issue that we‘ve got to address.

But bottom line, Chris, let‘s be clear.  This economy, right now, is on the verge of slipping into a depression.  And if we slip into a depression, it‘s going to take years and years and years of suffering to get out.  What most economists will tell us is even though we have a huge deficit and national debt.  It is better to spend now, create jobs now and keep us out of that depression.

MATTHEWS:  OK.  Thank you very much.  Senator Bernie Sanders of Vermont.  Up with us now, MSNBC political analyst, Pat Buchanan, Harold Ford Jr., also chairman of the Democratic Leadership Council.  I want you to go first, Harold.  I want you to answer this question.  Explain to my grandmother, if she were still alive, exactly how this trillion dollar bill is going to get the economy moving again.  Moving again.

HAROLD FORD JR., CHAIRMAN, DLC:  I think two things.  First off, you‘re right.  There‘s not a clear settled narrative yet.  I think that the president has in mind a number of different policy areas that Bernie Sanders said to you.  They‘ve got to settle on a narrative around job creation that‘s easy for your grandmother, for my late grandmother, and for so many citizens across the country to realize why it‘s critical to spend an extra trillion dollars.

Weatherizing homes is actually an important thing to do.  But I don‘t think most Americans connect the dots with how that may lower their electricity bill, create a job in their community and make the country safer.  They need to narrow down and hunker down and come up with a clear set of objectives and an easier, articulated set of objectives.

And I would agree with you.  This president is more capable than anyone of doing it.  Thus far, though, the administration and even the Congress have not done a very good job.  As a matter of fact, Mitch McConnell has controlled the conversation far more effectively than Harry Reid, my friend Harry Reid, my friend Nancy Pelosi, and my friend the president.

If they don‘t wrestle that back from Mitch McConnell and the Republicans in highlighting some of the more egregious spending items this bill will have even more problems in the coming days.  It‘s got to be about job creation.  It‘s got to be about right now in dealing with this, not only the jobs but housing.  Jobs and housing.  If they sell it on that narrative and color around that, they‘ll have a much better chance of passing this bill.

MATTHEWS:  Jobs and housing.

Pat Buchanan?

PAT BUCHANAN, MSNBC ANALYST:  The problem is this.  Obama‘s an adversarial procedure.  And this stimulus package is being put in the prosecution‘s seat.  And the prosecutors, the Republicans, are nailing it with one charge after the other.  It‘s got this, the STDs .

MATTHEWS:  It‘s got the Hollywood money.

BUCHANAN:  It‘s got the condoms in there.  The National Endowment for the Arts.

MATTHEWS:  It doesn‘t have housing in it.

BUCHANAN:  Yeah.  But they‘re prosecuting and convicting the stimulus bill.  They have succeed because they‘re focused and they‘re going after it.  They‘re on the offensive.  I agree with Harold in this extent.  Barack Obama should have taken out that section of the stimulus package which is clearly job creation, infrastructure, new economy.

MATTHEWS:  Bernie Sanders said it was.

BUCHANAN:  New economy stuff.  Go for that.  He could have gotten Republican support.  He‘s got enough support for the rest of this stuff later on.  But you‘ve got a stimulus package married to a huge, big, liberal spending bill with all the goodies in it they can put in it and they‘re being killed on it.

MATTHEWS:  I think the simple problem, congressman, was calling it a package.  From the beginning it lacked thrust, it lacked purpose, it was a package.  It sounded like Santa Claus‘ bag, like it‘s going to have a lot of stuff on it.  So what do all the people on the Hill say, I have more stuff I want to put in it.  When you talk about something become a package, you ask people to fill it.  He should have said, this is going to be the engine that gets the economy moving again.  The engine.  Not the package, not the bill, not the plan.  The economic engine of job creation and road building and construction.  He never did that.

BUCHANAN:  The White House—the White House staff and Barack Obama are both .

MATTHEWS:  Do they have a communications director?  Is there such a person there?

BUCHANAN:  Chris, when you call the senior staff meeting in the morning, the chief of staff is there.  The communication director, folks.  What is our message today?  And somebody says we‘re getting killed and we‘ve got to have this focus.  Barack Obama goes on television and says I screwed up?  What is going on?

MATTHEWS:  Congressman, would you have done that?  I think there‘s a debate among our producers here who study these issues as much as I do every day, whether a man or person who makes a mistake or has a mistake done to him as it was in the case of Daschle should admit it.  Or is it Daschle‘s mistake?

Whose mistake is not paying taxes?

FORD:  I think the country appreciated the president saying a mistake was made here.  We haven‘t had that the last eight years here.  Recall when president when asked if he made mistakes couldn‘t think of one, so for the president to say, look, a mistake was made, we can debate how he should have said it.  But I think the country will give him credit for that.

To Pat and your point, I think at this point they have to come up with a message and I think road building, job creation, housing has to be a part of the message.  They have to have a very smart team, an engine.  No doubt about it.

But two, they have to make a decision I think about how many Republican votes they actually want.  Then go after those republican votes.  And I don‘t think you need 20 to 25 republican votes.  The country needs a stimulus and then the country needs a financial recovery package.  You‘ve got to organize your energy and energize your political and policy apparatus around getting that done.  And as you do that, as Pat said, in that morning evening, afternoon meeting, late evening meeting.  You‘ve got to settle and move forward.  Yesterday they were thrown off with the Tom Daschle—Tom Daschle is one of the most decent people I know.

But the Tom Daschle situation, the situation with the OMB, the deputy director, they‘ve got to get back on message.  The signing today of the SCHIP bill was a good thing.  But they‘ve got to get back to talking about job creation, talking about building things and saving American homes.  They‘ve got to sell on a narrative .

MATTHEWS:  Jobs and housing.

BUCHANAN:  Let me agree.  But let me tell you, Chris, in the Reagan White House we got there in the morning, clearly.  What is the exact message we want?  We wrote a speech, we had it in about 30 seconds.  We had Reagan over there.  Reagan at 4:50 and the cameras.  He gives these 45 seconds.  They‘ve got to all cover that message.

Now why does he go in there?  Everybody—The one indispensable guy in the White House is the chief, the president.  Everybody falls on his sword for him.  You don‘t .

MATTHEWS:  I hate to say it‘s a bigger problem than that.

BUCHANAN:  He doesn‘t have to take responsibility for something that isn‘t his fault.

MATTHEWS:  But guys, Brian Williams last night gave him the perfect opportunity on the NIGHTLY NEWS with about 10 million people watching.  And he said, tell me what‘s in this package?  He went through it like he was in a drugstore explaining what‘s on each shelf.  He didn‘t give a sense that this is the economic engine.  He said, well, we‘ve got unemployment extended benefits.  We‘ve got healthcare for the extended unemployment.  We‘ve got this in there for green jobs.  Nothing that said this is going to turn the engine over.

FORD:  I‘d agree.

BUCHANAN:  Here‘s what you‘ve got to do.

Have a senior staff in there, get the exact message down you want to sell, have it focused, have the president do it, and have his surrogates in the Cabinet do it and the guys on the Hill hammer it home.  A tough, focused message.

MATTHEWS:  None of us won the election.

Thank you Pat Buchanan, thank you Harold Ford.  Thank you.  Maybe you should have, congressman.

Coming up.  Two weeks out of power.  Dick Cheney is back saying he was right, Obama‘s wrong.  If we get hit again, he was right, Obama‘s wrong.

It‘s a pretty gruesome message he‘s got for us right now.  But not a surprise from Dick Cheney, who by the way, is back.  He‘s ended this hibernation before the groundhogs did.  Anyway, he‘s back.  You‘re watching HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back on HARDBALL.  Former vice president Dick Cheney warned of possible terror attacks in interview with three “Politico” newspaper reporters.  We have audiotapes from that interview from yesterday.  We‘re going to review them with David Corn of “Mother Jones” magazine and Joan Walsh of Salon.  Here‘s—welcome, Joan.

Here‘s Vice President Cheney—by the way, he‘s back in just two weeks now—on the threat to the United States security that he sees coming.

(BEGIN AUDIO CLIP)

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES:  Well, I think, in some respects, the biggest threat hasn‘t changed, that the biggest threat has been—since before 9/11 -- has been that you get a 9/11-type event where the terrorists are armed with something much more dangerous than an airline ticket and a box cutter.  Now, they are equipped with a nuclear weapon or a biological agent of some kind, some ability of an al Qaeda organization or an al Qaeda group to get their hands on that kind of weapon and deploy it in the middle of one of our own cities.  That‘s the ultimate threat.  That‘s the one that would involve the deaths of perhaps hundreds of thousands of people, and it‘s the one you have to spend a hell of a lot of time guarding against. 

(END AUDIO CLIP)

MATTHEWS:  Well, that‘s the question, David and Joan. 

And his—his threat is—well, his warning is, if that happens, it‘s because you dropped my habits of water-boarding and Guantanamo. 

DAVID CORN, WASHINGTON BUREAU CHIEF, “MOTHER JONES”:  Well, I mean...

(CROSSTALK)

MATTHEWS:  And you dropped me. 

CORN:  It‘s certainly not news that there‘s this threat out there.  Anyone who watches “24” and knows about Jack Bauer knows this.  So, it‘s not a big deal that he‘s worried about this. 

But, in the—in the interview, he said time and again, you know, the Obama people, they want to release suspects; they want to turn the other cheek. 

He was really arguing against a caricature of the Obama position, making it sound like they really want to beat al Qaeda with hugs. 

JOAN WALSH, EDITOR IN CHIEF, SALON.COM:  Right. 

CORN:  And that‘s just not the case.  So—so, the question is, how detached from reality is he? 

MATTHEWS:  Well, 100,000 people are dead now because he got it wrong about nuclear weapons before...

CORN:  Yes. 

MATTHEWS:  ... back in 2004. 

WALSH:  Right. 

MATTHEWS:  We have to remember that Dick Cheney was wrong in a way that was lethal, 100,000 people dead, including 4,000 Americans are dead, and something like 15,000 wounded, because he was wrong. 

WALSH:  Well, yes.

MATTHEWS:  There was no nuclear weapons in the hands of Saddam Hussein.  And he said there was. 

Yes, Joan. 

WALSH:  And, Chris, here, again—Chris, here, again, we have a situation where it‘s vintage Dick Cheney.  It‘s dark.  It‘s dire.  It‘s creepy.  It‘s kooky.  It‘s very scary.  But there‘s absolutely no evidence. 

And, so, you‘re right to point to the fact that this is a man who‘s gotten everything wrong.  There was no connection between the 9/11 hijackers and Saddam Hussein.  There was—there were no weapons of mass destruction.  We were not greeted by a mushroom cloud as the smoking gun. 

MATTHEWS:  Yes. 

WALSH:  He got everything wrong.  Thousands are dead, and now he‘s back. 

And I think the really creepy thing that David has pointed out is that you—you—all he—all Obama has done is announced, we will not torture and we‘re going to begin to close Guantanamo. 

He has not closed it yet.  It‘s going to be a very, very time-consuming, painstaking process.  So, really, what he‘s done is say, we‘re not going to water-board; we‘re not going to torture.  And that‘s what—that‘s all it takes.  That‘s all that stands between us and disaster, is Dick Cheney‘s water-boarding that he‘s so proud of and torture and things that Americans are horrified by. 

So, you know, it‘s just ridiculous.

MATTHEWS:  Of course, we have never gotten a metric—we have never gotten—we have never gotten a metric, as—as Rumsfeld would put it, a metric, a number of people, the number of terrorists who become terrorists because of us going to Iraq. 

Let‘s take a look.

WALSH:  Right. 

MATTHEWS:  Here is Dick Cheney on the likelihood of attempted terrorist attack again.  And he does seem like a character out of “Dr.  Strangelove.”

Here he is.

(BEGIN AUDIO CLIP)

CHENEY:  I think there‘s a high probability of such an attempt.  Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States. 

(END VIDEO CLIP)

MATTHEWS:  You know, he has this avuncular manner of, “We all know now,” or—you know, that sort of bonding technique he has, where, “We now know, Bernie,” or “We know now, John,” and...

CORN:  Well, I would call it arrogant, more than avuncular. 

MATTHEWS:  Well, but it‘s sort of like—it‘s sort of like it presumes that you‘re a part of his team. 

CORN:  Well, yes.  It also presumes there is no other way of looking at this issue other than my way. 

MATTHEWS:  Right.  Right. 

CORN:  And, I mean, this—there is...

MATTHEWS:  Even when he‘s wrong after—time after time. 

CORN:  Listen, there is a threat here.  There—no one denies the threat. 

But what he does is, he turns discussion of a threat into fear-mongering and saying, there can only be one way of dealing with this, which is my way. 

There was another quote, too, that hasn‘t gotten much attention.  We‘re talking about the stimulus bill this—today and others.  He was asked about the economy.  It wasn‘t the focus of the interview. 

And he said, “We did worry about it, to some extent.”

(LAUGHTER)

CORN: “To some extent.”

I mean, boy, does that not say it all?

(CROSSTALK)

WALSH:  David, I was going to—I was going to point out...

(CROSSTALK)

MATTHEWS:  There‘s no guilt from this guy.

Yes, go ahead, Joan. 

WALSH:  I wanted to point to something else that he said in this—in the same sequence. 

He said, no one could have predicted this kind of economic crisis. 

And I just thought, my God, that is the—the epitaph of the Bush administration, because, remember, Condi Rice told us, no one could have predicted that they would use airplanes as weapons, except they did predict it.  And Bush and—and Brownie told us, no one could predicted the levees would fail in New Orleans.  But the civil engineers did predict it. 

And now, no one could have predicted that there would be this type of collapse, and—and economists have been predicting it.  So, it‘s just, again and again, incompetence and cluelessness defended as, no one could have known.  We did the best we could.

(CROSSTALK)

MATTHEWS:  Well, who would have predicted that George W. Bush would have been elected president of the United States? 

(LAUGHTER)

MATTHEWS:  Anyway, we have to—we have to go. 

(CROSSTALK)

WALSH:  ... not me.

MATTHEWS:  We have to go to one more bite, as we put it, of Cheney.  As I said, he‘s back before the groundhogs.  He‘s back as of yesterday, this guy. 

(LAUGHTER)

MATTHEWS:  He didn‘t waste too much time. 

(BEGIN AUDIO CLIP)

CHENEY:  Obviously, I‘m one who believes it‘s a—it‘s a tough world out there.  And the United States needs to be not so much loved as it needs to be respected.  And we need, from time to time, to use military force or all of the resources at our command in order to defend the nation and defend our friends. 

Sometimes, that requires us to take actions that generate controversy.  I‘m not at all sure that that‘s what the Obama administration believes.  I think there are probably some who actually believe, if we just go talk nice to these folks, everything is going to be OK.  I don‘t think the world works that way. 

(END AUDIO CLIP)

CORN:  Who believes in the Obama administration that, if you talk nice to al Qaeda, everything will be OK? 

WALSH:  Yes. 

CORN:  Nobody. 

WALSH:  Name names. 

CORN:  Absolutely nobody. 

WALSH:  Nobody.

CORN:  I mean, this—this is—you know, he‘s rigging the deck.  And what‘s frightening to me about this is that it shows very little intellectual depth. 

I mean, there are arguments to be had—and we do have them on this show and in op-ed pages—about how far to go in trying to secure our safety and protect civil liberties. 

But he‘s not involved at that level.  He‘s like a—he‘s a comic book character, is what he is. 

WALSH:  He is.

CORN:  And he‘s—he‘s putting everything in the most dark, as Joan mentioned, dire, black-and-white terms, and he‘s avoiding any real substance. 

WALSH:  And he doesn‘t...

MATTHEWS:  How many countries, Joan, do you think he would have had us attack and occupy if he had been in complete power the last eight years?  I think I could name a number of countries on his list.

WALSH:  Oh, I know.  I know we would have gone into Iran.

MATTHEWS:  Oh, yes.

WALSH:  I mean, I know we would have gone to Iran and—and Syria. 

But, you know, he doesn‘t even acknowledge that—that Obama has sent more troops, tens of thousands of more troops, into Afghanistan, which is controversial among liberals.  That—that‘s not an easy war. 

He has—you know, he signed off on the drones going into the tribal areas of Pakistan a couple of days after he became president.  I don‘t see any big symbolism or concrete moves that are—that are showing me that he‘s a pacifist and he just wants to go around the world talking to people.

He will talk.  He will—you know, he will also do what he needs to do to keep us safe.  This is just scare-mongering and trying to bring himself back into the picture, when he‘s gone.  And good riddance.

(CROSSTALK)  

CORN:  Well, that‘s interesting thing.  I mean, to what degree does Dick Cheney want to continue to lob, you know, missiles at the Obama administration? 

MATTHEWS:  You know what he wants.

CORN:  What does he want, Chris? 

MATTHEWS:  He wants to hold salons across the river, like Perle Mesta...

(LAUGHTER)

MATTHEWS:  ... in the old days.  He wants...

(CROSSTALK)

MATTHEWS:  ... the salon meister of the Republican Party in retreat. 

You know what he wants to be.  He wants to have the best soirees. 

Anyway, thank you.

(CROSSTALK)

CORN:  ... party guy. 

MATTHEWS:  Thank you. 

WALSH:  He is.

MATTHEWS:  Those kind, sitting around over sifters of...

(CROSSTALK)

CORN:  Brandy.

MATTHEWS:  ... brandy and cigars...

WALSH:  I‘m going to skip that one. 

MATTHEWS:  ... and talking about the weaklings across the river. 

CORN:  You wouldn‘t be allowed.  Women aren‘t allowed in these. 

MATTHEWS:  Well, Lynne will be allowed in the room.  A few will, the right kind of women in the—in that issue.

Anyway, I‘m not going any further with that crowd...

WALSH:  Yes. 

(LAUGHTER)

MATTHEWS:  ... because I don‘t really know that crowd. 

Anyway, thank you, David Corn. 

Thank you, Joan Walsh.

Up next:  Rod Blagojevich is here to stay.  B-Rod did “David Letterman” last night.  And that, of course, belongs, as it will be, coming up next in the “Sideshow.” 

(BEGIN VIDEO CLIP, “LARRY KING LIVE”) 

DAVID LETTERMAN, HOST, “THE LATE SHOW WITH DAVID LETTERMAN”:  Honest to God, what...

(LAUGHTER)

ROD BLAGOJEVICH (D), FORMER ILLINOIS GOVERNOR:  Well, you know, I have been wanting to be on your show in the worst way for the longest time.

LETTERMAN:  Well, you‘re on in the worst way, believe me. 

BLAGOJEVICH:  I sure am.

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

Last night, bounced Illinois Governor Rod Blagojevich went on “David Letterman.”

As you might figure, Dave was ready for him. 

(BEGIN VIDEO CLIP, “LARRY KING LIVE”) 

LETTERMAN:  Why exactly are you here, honest to God?  What...

(LAUGHTER)

BLAGOJEVICH:  Well, you know, I have been wanting to be on your show in the worst way for the longest time.

LETTERMAN:  Well, you‘re on in the worst way, believe me. 

BLAGOJEVICH:  I sure am.

(LAUGHTER)

(APPLAUSE)

BLAGOJEVICH:  The alternative is to sit in some corner, hide, cower in the fetal position, and assume and accept what people are saying that you did.  And you didn‘t do it.  And I didn‘t do it. 

LETTERMAN:  Right. 

BLAGOJEVICH:  And, at the appropriate time, I will have a chance to prove that. 

LETTERMAN:  Right.  So, why not wait until the appropriate time? 

(LAUGHTER)

BLAGOJEVICH:  Well...

(LAUGHTER)

BLAGOJEVICH:  I—I get that. 

LETTERMAN:  Do you think I have done anything wrong? 

(LAUGHTER)

BLAGOJEVICH:  I think some of your questions have been kind of tough, but other than that, no, I think you have been pretty good. 

(LAUGHTER)

LETTERMAN:  Now, are you—are you going to continue to be on TV? 

BLAGOJEVICH:  Well, look, I don‘t know.  Are you going to invite me back? 

LETTERMAN:  Well, I mean—I mean, just in terms of filling time, you have been tremendous. 

(LAUGHTER)

BLAGOJEVICH:  Have I?  OK. 

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Come on, B-Rod, come on HARDBALL. 

Next up:  Tell us how it‘s done.  Remember Obama‘s election-night shout-out to his campaign manager? 

(BEGIN VIDEO CLIP)

OBAMA:  To my campaign manager, David Plouffe...

(CHEERING AND APPLAUSE) 

OBAMA:  ... the unsung hero of this campaign, who built the best...

(CHEERING AND APPLAUSE)  

OBAMA:  ... the best political campaign, I think, in the history of the United States of America. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  That‘s great. 

Well, David Plouffe didn‘t want a job in the White House.  He has got other plans.  He just signed on to write a book about the Obama presidential campaign, its title, “The Audacity to Win. “

And, in case you missed it, here‘s actress Ashley Judd in a new ad blasting Sarah Palin for a state policy up in Alaska that encourages the hunting of wolves. 

(BEGIN VIDEO CLIP, DEFENDERS OF WILDLIFE ACTION FUND AD)

ASHLEY JUDD, ACTRESS:  Hi.  This is Ashley Judd for Defenders of Wildlife Action Fund. 

When Sarah Palin came on the national scene last summer, few knew that she promotes the brutal aerial killing of wolves.  Now back in Alaska, Palin is again casting aside science and championing the slaughter of wildlife. 

(END VIDEO CLIP)

MATTHEWS:  Governor Palin put out a statement today saying the ad misrepresents what‘s going on in Alaska. 

Time now for the “Big Number” tonight. 

President Obama is now on the defensive, as we have been saying, over his stimulus plan.  And it‘s no wonder.  Just last week, the bill that passed the House stood at $819 billion.  Now, in the Senate, the president‘s stimulus package tops $900 billion.  You call something a package, you‘re just asking people to stuff more into it. 

The tab for the stimulus package stands at $900 billion—tonight‘s “Big Number.” 

Up next:  President Obama‘s stimulus plan has a lot of critics, but, today, some big-city mayors were here in Washington pushing to get it passed.  We are going to talk to one of them, Los Angeles‘ Antonio Villaraigosa.  He‘s coming here. 

You‘re watching HARDBALL on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I‘m Margaret Brennan with your CNBC “Market Wrap.”

Stocks falling on more disappointing earnings reports and continuing concerns about the financial sector.  The Dow Jones industrial average dropped 121 points, closing below the key 8000 level.  S&P 500 lost six, the Nasdaq basically flat on the day. 

After the close, tech bellwether Cisco Systems reported, quarterly profit there fell nearly 30 percent, but earnings still beat low Wall Street expectations.  Shares of the networking equipment giant are higher after-hours. 

The nation‘s service sector shrank in January for the fourth straight month, but it wasn‘t as bad as analysts expected.  But there are more job cuts being announced today.  Japanese electronics giant Panasonic says it will close 27 factories worldwide and eliminate 15,000 jobs. 

Time Warner Cable says it will cut 1,250 jobs. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

As Senate Democrats try to put together that stimulus package which will get 60 votes and pass the Senate, a group of city mayors visited the White House today to press for their share of the plan. 

One those mayors is mayor of one of the biggest cities, Los Angeles, Mayor Antonio Villaraigosa. 

Mayor, we‘re old buddies.  Thank you for this. 

ANTONIO VILLARAIGOSA (D), MAYOR OF LOS ANGELES:  Good to see you again.

MATTHEWS:  This is—put it—the president has had a hard time—the cat‘s got his tongue for some reason—explaining why what he‘s going to do, this big bag of stuff, is going to get the economy rocking again or moving again in the right direction. 

Can you make the case, or what? 

VILLARAIGOSA:  Well, we know doing nothing is not going to work.  And that‘s what we have done for too long.  And it‘s time for the Senate and the Congress to—to pass this package. 

People can quibble about their differences.  They can talk about the things that they don‘t like in the bill.  They should take them out.  But we need to get people back to work.  We need to do what‘s critical to invest in the infrastructure that our economy needs right now. 

And the fact of the matter is, you know, two weeks ago, the president said—or last week, rather—the president said that the worst-case scenario is an unemployment right—rate in the double digits. 

In L.A., we‘re in the double digits, and growing. 

MATTHEWS:  Yes. 

VILLARAIGOSA:  And, in cities across the country, the unemployment rate is up. 

Our foreclosure rate right now—last year was four times higher than the year before. 

MATTHEWS:  There‘s over two million people in foreclosure right now.  But a lot of this stuff in this bill, that everybody says is essential, sound like a joke to some people.  Why do we give a quarter billion to the movie industry?  The movie industry is having a great year.  Now you‘re getting nervous, because you have to represent the movie industry.  But the guy living in Omaha right now or in Philly or in Detroit says wait a minute, we‘re giving federal tax dollars that have to be borrowed from abroad, in some cases, to help the movie industry out?  And most Americans over 30 don‘t go to the movies.  Yes?  Why do we give money to the movie industry? 

VILLAGAIROSA:  We‘re giving money to the jobs that it creates.  You see the people in front of the camera, and you forget all the people behind the camera, whether it‘s caterers, hair dressers, cinematographers, whatever it is.  The fact of the matter is, if it‘s good to give tax breaks to other businesses, the film industry should be able to qualify. 

Let‘s say you take that money out, and I hope they don‘t.  But let‘s say you take some of that money out.  The fact of the matter is what the Senate has been doing is creating obstacles to getting people back to work.  Let‘s figure out what we can agree on.  The president has reached out to Republicans in both houses.  He put in tax breaks for business that he thought they would like.  And they still haven‘t come on board.  What we came to Washington, D.C. to say the people are tired of this kind of bickering.  They want to see these jobs on the streets in our city. 

MATTHEWS:  Who should we give the money to, mayors or governors? 

VILLAGAIROSA:  Look, we have to give money to both.  But when—historically, what we‘ve done is two-thirds to the cities and counties and a third to the state.  When the states take 50 percent off the top, that‘s going to delay the money that goes to jobs on the streets. 

MATTHEWS:  You have the state of California, where Arnold Schwarzenegger has got a low bond rating, because the government of California is in bankruptcy, basically.  And you‘re saying skim some of the money from Sacramento and give me the money in L.A. 

VILLAGAIROSA:  No—

MATTHEWS:  You‘re robbing Peter to pay Paul. 

VILLAGAIROSA:  It‘s the other way around. 

MATTHEWS:  You‘re asking for the money.  You want it directly.  You don‘t want it to go to Sacramento.  Isn‘t this the kind of fight—it looks pretty desperate. 

VILLAGAIROSA:  It‘s not desperate.  What it is, we want to put the money where the jobs are and the people are.  Eighty eight -- 89 percent of the GNP of the nation are generated in metropolitan areas; 84 percent of the people in the nation live in metropolitan areas.  So we want to put the money where the people are. 

Now, we also want to make sure this money goes to job creation.  If it just goes to states to balance their budgets, that‘s not going to create the jobs we need to get people back to work. 

MATTHEWS:  Tell me the hard story, mayor, because I have heard it from other mayors back east.  You start firing cops, start closing libraries, closing swimming pools, getting rid of kids‘ summer jobs, the crime rate spikes.  The crime rate spikes, people start fleeing the cities again.  You end up with no tax base.  You have an even deeper problem.  Tell me your story in L.A.  You start firing cops, are you in that situation now? 

VILLAGAIROSA:  No, we‘re not.  But let me just say, we‘re looking at a 450 million dollar deficit, about 10 percent of the general fund.  So we‘re going to have to think creatively, be more efficient.  But just so you understand, L.A. is the second safest big city in America.  Crime is down in numbers we haven‘t seen on a per capita basis since 1956.  If we start cutting our police department, we‘re going to go in another direction. 

You said it, people leave cities for the same reason business does:

crime, the cost of housing and the quality of schools.  So if those things begin to fall in disrepair, you know—

MATTHEWS:  It‘s a vicious cycle.  I feel for you guys who are mayors, because you‘re the guys on the front line.  You really are.  You‘re doing the job.  Thank you, Mayor Antonio Villaraigosa.  You going to run for governor of California?  Yes or no? 

VILLAGAIROSA:  I‘m running for re-election. 

MATTHEWS:  Up next, after a rough couple of days—We had Dianne Feinstein, asked her the same question.  Looks like no one is running for governor, except Jerry Brown.  Very little direction out there. 

Who has the rudder to this president‘s economic policy?  Who is steering this ship?  That‘s next in the politics fix.  We‘ll get to the politics.  Who in the White House has the job of getting the message out and isn‘t doing it?  HARDBALL back in a minute.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time for the politics fix.  Joining me right now is Evan Thomas of “Newsweek.”  “Newsweek‘s” cover story this week, by the way, is “Obama‘s Vietnam, How to Salvage Afghanistan.”  And cNBC‘s John Harwood, also at the “New York Times.”

Good job, by the way, on Daschle the other day.  That was your editorial page.  Boy, what a slam that was.  He gets up in the morning and gets him out of work.  Let‘s ask you about these—this problem, the bigger question to me—this president has one big challenge, job one, get the economy at least beginning to turn around by the end of the year.  Has he had a problem explaining what he‘s doing so far? 

EVAN THOMAS, “NEWSWEEK”:  I think you have to look back to the campaign on this.  They always thought they were being second-guessed too quickly by people like—

MATTHEWS:  Me. 

THOMAS:  -- us sitting here, yes.  They did much better if it was steady as you go, don‘t respond, don‘t get in the tit for tat, don‘t get in the day for day.  This is very much Axelrod‘s steady as she goes.  It worked in the campaign, and I think they think it is going to work now.  They don‘t like the daily tussle. 

MATTHEWS:  But didn‘t they have a product in the campaign, the product being Barack Obama‘s unique history, coming from both race backgrounds, how far he had come in his life, how articulate he was, how eloquent he was in expressing his love of country.  They had a product.  What‘s their product?  It‘s not the same as the candidate. 

THOMAS:  They haven‘t to bring their product through Congress during the campaign.  That‘s a big difference. 

MATTHEWS:  John, the product now is the economic stimulus package.  I don‘t think they‘ve done a good job of explaining it as the engine of economic recovery.  It seems like a lot of sundries and notions, rather than an engine.

JOHN HARWOOD, “THE NEW YORK TIMES”:  It‘s hard with a package that is so big and you have so many people, so many committees of Congress involved in putting stuff into this bill.  It is difficult to explain and I think they‘ve run into two problems.  One is the problem raised by the Daschle situation, by Tim Geithner, which really gets to larger questions about incoming inequality in this country, the divide between people who live and work here and many people elsewhere, same as on Wall Street. 

They‘ve also had a problem with the issue of him rising above partisanship, because very quickly this got to be a bill that go no Republican support in the House.  Now in the Senate, they‘re trying pass this thing with just a couple of Republicans.  They‘re trying to hold the Democrats together.  This whole talk about 80 votes in Senate, that is gone now.  That may be a casualty of some of what you‘re talking about, the inability to sell this package as something that—

MATTHEWS:  What numbers of votes does he need to pass it, 50 or 60? 

HARWOOD:  He‘s going to need 60. 

MATTHEWS:  Why?  Is there going to be filibuster or something like it? 

HARWOOD:  Yes, Republicans—

MATTHEWS:  Are willing to risk their political hide by threatening him, denying him an up or down vote on majority vote?  They‘re going to do that? 

HARWOOD:  I think there‘s no doubt about that.  I think the opposition within the Republican party has hardened to the point that they‘ve got to get 60 votes or it‘s not going to move. 

MATTHEWS:  Here‘s the president talking to his critics today. 

(BEGIN VIDEO CLIP)

OBAMA:  Now, in the past few days, I‘ve heard criticisms that this plan is somehow wanting.  And these criticisms echo the very same failed economic theories that led us into this crisis in the first place.  The notion that tax cuts, alone, will solve all our problems, that we can ignore fundamental challenges like energy independence and the high cost of health care, that we can somehow deal with this in a peace-meal fashion and still expect our economy and our country to thrive. 

I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change. 

(END VIDEO CLIP)

MATTHEWS:  He‘s getting tough.  He looks like he‘s mad. 

THOMAS:  He acts like he‘s a little stunned.  You can always predict that Washington will behave this way.  But when Washington does, when you feel the fury of it, it is kind of shocking.  You have Daschle almost in tears by it because of the “New York Times.”  It is—I think he‘s a little—he feels it‘s slipping away a little bit.  It‘s amazing how fast the honeymoon—

MATTHEWS:  How many liberal papers the other day—there‘s still some liberal papers, the “New York Times” editorial page, “The Philadelphia Inquirer” editorial page—I read about what, seven or eight of them yesterday blasting Daschle.  I think you got to it—“The Nation Magazine,” which is liberal.  Inside the belt state, the “Washington Post” defended Daschle.  They said the president should get the cabinet member he wants.  Outside of Washington, it was almost unanimously, Daschle blew it.  It‘s interesting.  He fights that nexus. 

THOMAS:  I think Daschle did blow it.  I‘m on that side.  I think it‘s one of those things that went to far.  The interesting thing is whether—how quickly you react.  This fascinated me in the campaign, because I think Obama was mostly right not to take the bait, not to do the—

MATTHEWS:  The story on Daschle broke Thursday night.  Was he too slow to react by not breaking with him at all?  He never really broke with him. 

THOMAS:  He didn‘t.  You‘re right.  It was Daschle who pulled his own plug.  So you could say he was too slow.  I think there‘s a fascinating tension here.  I think in the long run, it works to be cool and not over-react.  At this moment—

MATTHEWS:  Was Hillary Clinton right?  Experience counts.  Was Dick Nixon right?  Experience counts? 

THOMAS:  You think that Hillary would have done any better?

MATTHEWS:  I‘m asking.

THOMAS:  No.

MATTHEWS:  OK.  We‘ll be right back with Evan Thomas and John Harwood. 

We‘ll be right back to talk about Dick Cheney.

(COMMERCIAL BREAK)

MATTHEWS:  That‘s how you ruin sources.  We‘re back with Even Thomas and John Harwood for more of the politician fix.  I have been amazed.  I‘ve never—I‘ve always had a different sensibility then Dick Cheney.  But here he is in his interview with the “Politico” reporters.  He‘s back so fast from having, you know, left the White House.  Here he is taking a shot at the new people. 

(BEGIN VIDEO CLIP)

DICK CHENEY, FMR. VICE PRESIDENT OF THE UNITED STATES:  There‘s a challenge there for the Obama administration, whether or not they take the time to understand what we did and why we did it and how we did it, before they run off and start taking down programs that I think are essential to the security of the nation. 

(END VIDEO CLIP)

MATTHEWS:  John Harwood, what‘s Cheney up to?  It‘s an early start for a government in opposition. 

HARWOOD:  It‘s kind of surprising.  It suggests that he went out of office not amused by all the bile that was directed his way and Bush‘s way.  Bush says he‘s going to go get off stage and lay low for a while, leave Obama alone.  Cheney doesn‘t feel that way.  I think it‘s an interesting description, saying that he hopes the Obama team takes the time to comprehend what their policies were before they change them, as if, if you actually did comprehend them, you wouldn‘t do anything about it.  I think that is a value judgment that the other team does not share. 

MATTHEWS:  You know what British colonialists would do to third world people?  When they didn‘t understand English, they would yell at them louder.  You don‘t understand me, I‘ll speak louder.  What do you think Cheney‘s up to?  Because it‘s so unusual to get back in the game.  Usually there‘s a period of grace where you say, let the new team have its honeymoon before we whack them. 

THOMAS:  I think he enjoys being in this position of saying, even though you heaped all this abuse on me all these years, in the end, I‘m going to be vindicated by history; just watch.  He obviously thinks that.  You know, he wants to rub it in as much as he possibly can. 

Also, give him credit for being sincere.  I think he thinks his policy did work.  He‘s convinced—I don‘t know what history will ultimately show, but he‘s convinced himself. 

MATTHEWS:  Gentlemen, geography matters.  George W. Bush is going back to Crawford, Texas to participate probably with his freedom agenda at the university down there, SMU.  Dick Cheney is staying in Washington.  Isn‘t that significant?  He‘ll be available to reporters like you guys.  You‘ll be able to call him up and get his thoughts, like “Politico” did the other day.  

HARWOOD:  Remember, he was much more of a creature of Washington than George W. Bush ever was before he became vice president. 

MATTHEWS:  Will he be like the Polish government in exile?  Will he be here for the years to come, available? 

THOMAS:  His wife is a real activist.  She loves being at the center of things.  She was over at AEI during the wilderness years, where they were in Washington.  He took a job in Dallas for a while.  They were a presence. 

HARWOOD:  I don‘t think you can head the government in exile, though, unless you‘re admired within your own party.  I think the party wants to move beyond Cheney.  I think he‘ll be head of the Bush administration in exile. 

MATTHEWS:  He‘ll be here.  We‘ll have to have him on.  Thank you, Evan Thomas and John Harwood.  A final personal note; Millard Fuller died today.  He‘s the founder of Habitat for Humanity.  What a great man.  Anyone who has ever been involved with the Habitat for Humanity can tell you Millard was an inspiration to all those volunteers who helped poor people build houses for themselves.  What a great cause, what a great man, what a great loss. 

Join us again tomorrow at 5:00 and 7:00 Eastern for more HARDBALL. 

Right now it‘s time for “1600 PENNSYLVANIA AVENUE.”

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

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