Guest: Julia Boorstin, David Faber, Chuck Todd, Pat
Buchanan, Lois Ramano, Rick Hertzberg, Tom DeFrank, Chrystia Freeland> High: Vice President Dick Cheney argued strongly in the last days of the Bush administration for the full pardon of Scooter Libby. President Obama signs the economic stimulus bill and now has to deal with crises in banking, the housing market and the auto industry.
Spec: Politics; Economy
CHRIS MATTHEWS, HOST: President Obama faces round two as the fight gets tougher.
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews. Leading off tonight, round two. President Obama signed the big recovery bill today. That was round one in his fight to bring the country back. It had the three elements that worked for him—urgency, clarity and success. Round two will confront him with a battle on several fronts. Our colleague at “The Washington Post,” Eugene Robinson, wrote this morning that this week, Barack Obama may have to become the nation‘s leading auto executive to fix the car industry, its top mortgage brokerage as he takes on the housing crisis and the biggest banker as he tries to save the nation‘s banks.
Here‘s the president marking the end of the round one, and let‘s face it, the start of round two.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don‘t want to pretend that today marks the end of our economic problems, nor does it constitute all of what we‘re going to have to do to turn our economy around. But today does mark the beginning of the end.
(BEGIN VIDEO CLIP)
MATTHEWS: Let‘s look at the big fights coming to the White House tonight, fights the country itself is already battling. And let‘s do something we‘re not supposed to do, decide who to blame for all this hell. “Time” magazine has just listed the prime suspects, 25 of them, in order of probable guilt for what‘s going on in the economy.
Speaking of blame, it seems that Dick Cheney is just fit to be tied over the failure of President Bush to pardon his former chief of staff, Scooter Libby. Are these real tears of anger or the crocodile tears of a former vice president worried that his former top aide may be wondering why he was hung out to dry for something he did in the line of duty. He took one for the team, Scooter did. Why did the team leave him behind in the dust? “The New York Daily News” reports that Cheney repeatedly pressed President Bush to pardon his ex-chief of staff. When President Bush stood his ground, Cheney walked away furious. Our question tonight on Cheney:
Does his fury mask his fear?
Also, Roland Burris flips his story. He said there was no deal making between him and Governor Blagojevich. Now he says he went out to do some fund-raising calls for B-Rod at the very same time he was pitching himself for Barack Obama‘s Senate seat. Well, if it walks and talks like “pay to play,” is it “pay to play”? That‘s in the “Politics Fix.”
And finally: He‘s got game. A former NBA player and current team executive in the NBA talks up President Obama‘s skills as a b-baller. Could Obama be the best athlete in the White House since All-American University of Michigan footballer Gerald Ford? The scouting report coming up in the “Sideshow.”
But we begin with President Obama signing that economic recovery bill into law today. NBC News chief White House correspondent Chuck Todd is with us from Denver, where the president was today. And here with me, NBC political analyst Pat Buchanan.
Chuck, you‘re right on top of things there. According to Gene Robinson, who‘s on this program as our colleague so often, the president‘s now tackling the auto industry, the banking industry and the housing industry, all three at once. Is this much more troubling territory than passing an economic stimulus bill?
CHUCK TODD, NBC CORRESPONDENT, POLITICAL DIR.: Well, it is because when he takes the lead on these things, he becomes the pivot person. He becomes the point person. For instance, tomorrow, when he rolls out this new housing plan, which will, it looks like in many ways, allow people to refinance at a lower rate. It won‘t get rid of some of the loan but it‘ll allow them to refinance as a way to try to keep them in their homes and stop people from having to deal with this foreclosure thing.
It is the president that‘s going to be announcing it. So you‘re absolutely right, he ends up looking like America‘s chief mortgage broker. Now he‘s working with the auto folks, creating a task force that is directed right inside the White House, with Larry Summers. So he is the guy—on one hand, they like—you know, you hear—Rahm Emanuel said, “Never let a crisis go to waste,” and on one hand, they want the president to be seen as the point person. They feel like that‘s why he won the election, that‘s why he got elected, and he‘s got the energy to do it.
On the other hand, he has the potential for having all of this on his shoulders, and at some point, he can‘t—you know, you hit a marker about six months into your administration when you can‘t blame anybody else. It‘s on your watch.
MATTHEWS: Well, it‘s unusual. You know, one of the old tricks of H.R. “Bob” Haldeman in the old days was to shift responsibilities away from yourself. Isn‘t this president taking on an awful lot personally? He‘s saying, Blame me if the housing thing doesn‘t get fixed, blame me if the auto industry doesn‘t turn around, same with banks, a lot of personal acceptance here. Does he have to do it?
PAT BUCHANAN, MSNBC POLITICAL ANALYST: I think he does. Look, in 6 months, 12 months, it‘s going to be his problem, Chris. But I think the big thing here is the banks. It‘s not the auto industry. We all know what‘s happening there. The huge stimulus has been discounted by the market. Problem is, in January and February, the markets have turned in the worst performance in the first two months in history. They‘re down almost 15 percent.
What it‘s saying is, is Geithner and the banking crisis, which could cause a depression, a financial crisis, has not been resolved and they look like it‘s not going to be resolved. That is going to be the central focus here. If that‘s not resolved, I don‘t think the issue is resolved, Chris.
MATTHEWS: Well, one of the advantages politically, Chuck and Pat, has been—in terms of this fight the last couple of weeks, is it‘s had clarity. We know the government is going to spend more money and cut taxes to get the economy moving again. Most people get that. They may not agree with it, but they get it. They understand that there was a winner or a loser. He was the winner. And they understood the need for urgency.
And getting to Pat‘s point, how does the president bring clarity to the banking issue, urgency to do something about it—I guess the urgency‘s there—and a sense of possible victory? How does he find in the banking question any kind of a conquest, where he looks like he‘s on top of it, for months and months and months ahead? How does he look like a winner, Chuck?
TODD: I think what they‘re trying to do now is they‘re trying to slice it off a little bit and take it on a piece at a time. If you take on housing, that at least touches the average American. Everybody‘s dealing with this. You know, there‘s probably not many people watching this program that haven‘t seen the value of their own house go down. That doesn‘t mean they‘re in their own foreclosure problem, but they‘ve seen the value go down. So that touches everybody.
I think the initial problem with the bank bail-out and TARP 2, whatever you want to call it, that Treasury Secretary Geithner rolled out, or frankly, didn‘t roll out last week, is that it was too big. The problem is big, as Pat has noted, and you can‘t—you can‘t discern it very well if you‘re the average American following this. So you have to bite it off a piece at a time.
And I think now peeling off housing will help that. Peeling off the auto industry which is, frankly, tied into this issue will help that. And they have to figure out how to keep doing this, peeling it off, you know, save the good banks, peeling off different layers of this and taking it on one bite—smaller bite at a time. But doing the whole comprehensive thing, I think people get lost, and I think the market got lost.
BUCHANAN: But here‘s the thing, Chris. I think the fundamental
problem, you can it in a single word, is confidence. The markets, which
talk about the future, are saying, We got no confidence what you‘re doing -
it may do this, it may do that—can bring this economy back. It seems to me the only big part of this that can really bring the confidence back is if something is done with the banks.
Remember when Gordon Brown first acted there? All of a sudden, things turned around and went up. And I think they‘ve got to get Geithner and they‘ve got to get that package there that the country says, the market says, or people say, you know, We‘ve have hit bottom and we‘re now starting back uphill. Then everything will get well.
MATTHEWS: OK. I want to apply...
BUCHANAN: I don‘t think you can solve it...
MATTHEWS: ... my rule of clarity...
BUCHANAN: ... one at a time.
MATTHEWS: ... and urgency and victory to Geithner. I don‘t understand Geithner. He seems like a child to me. He doesn‘t seem like a grown-up.
BUCHANAN: That‘s exactly what happened, Chris. He went out there.
People said, Holy smoke! This guy don‘t know what he‘s doing!
MATTHEWS: This guy‘s in charge?
BUCHANAN: He doesn‘t know what he‘s doing!
MATTHEWS: You know, I mean, I‘m not saying, Chuck, he‘s as bad as that Japanese finance minister, but he does seem a little bit lacking in charisma, doesn‘t he, Chuck?
TODD: He does. And frankly, the White House is aware of this and that‘s why it is Obama that is rolling out housing tomorrow and not the Treasury secretary, which had he been a more charismatic figure, they might have had that come out of Treasury because, frankly, the housing issue is going to be something that‘s dealt there.
But I want to go to something that Pat said about bottom. This banking issue -- - you know, when they rolled out the bank bail-out, I was told that we were going to have a fairly easy time, frankly. You want clarity, Chris? We were going to have an easy time to be able to identify which banks are solvent, which are worth saving and which banks aren‘t.
And I think, in a way, that‘s what Wall Street wants. If we‘re going to have failing banks, fine. Tell us which banks are going to fail. Let them fail. Show us now, and then you find the bottom. And I think they wanted to do that and then they got cold feet because I had plenty of sources telling me that they were going to do, and then something stopped them. Maybe it was somebody in the markets that said, Hey, don‘t do it yet. That isn‘t—it‘s going to cause a panic.
MATTHEWS: Yes.
TODD: Well, at this point...
(CROSSTALK)
MATTHEWS: ... who‘s the boss?
(CROSSTALK)
MATTHEWS: Chuck, I‘m laying a lot on you, my colleague. But who‘s the boss in terms of economic policy making right now? Who is there when you want to—if you had to get one person on the phone at 11:00 o‘clock tonight, who‘s in charge? Who would be the one? Who‘s the pivot—as the term you‘ve used. Who is that person on the economy right now?
TODD: It‘s Larry Summers...
MATTHEWS: Setting the policy.
TODD: I think it‘s pretty clear—I think it‘s pretty clear it‘s Larry Summers. Absolutely. I think Summers...
MATTHEWS: And he‘s working in the White House without...
TODD: I think Geithner worked for Summers...
MATTHEWS: ... a big—without a title.
TODD: ... at one time.
MATTHEWS: Yes.
BUCHANAN: You know...
TODD: He‘s—no he‘s chairman of the National Economic Council, but he‘s the guy.
BUCHANAN: Right. Take Chuck‘s point. We got to get—some of these banks may die and they‘re not coming back. What we need to know, Chris, they are gone. They‘re called zombie banks, and some of them—this guy Martin Wolf (ph) says put them to sleep. Just figure out which ones...
MATTHEWS: Shouldn‘t we tell the depositors that their bank‘s a zombie?
BUCHANAN: The depositors aren‘t the ones going to lose, it‘s the people who are investors, got preferred stock...
(CROSSTALK)
MATTHEWS: ... are insured.
BUCHANAN: Depositors all insured now. They got them—all of them insured...
MATTHEWS: OK, let‘s take a look. We got a problem here, and we‘re moving into the banking area and I think we‘ve got a problem here. If banking‘s the number one concern, if the whole question of the currency—are we going to inflate it—these questions are pivotal.
BUCHANAN: Chris...
MATTHEWS: Who‘s in—and you think it‘s Larry Summers...
BUCHANAN: You only got two ways—you only got two ways to do it. You borrow from the Chinese and Asians or you print money, one or the other. One‘s going to raise interest rates down the road. The other‘s going to inflate the currency and destroy its value. You got those two ways to do it because we don‘t save anything.
MATTHEWS: OK, let‘s take a look at the president. I don‘t think we‘re going to get a cue here about whether he‘s going to print money or borrow it, but here he is today in Denver.
(BEGIN VIDEO CLIP)
OBAMA: None of this will be easy. The road to recovery will not be straight. We will make progress and there may be some slippage along the way. It will demand courage and discipline. It will demand a new sense of responsibility that‘s been missing from Wall Street all the way to Washington. There will be hazards and reverses, but I have every confidence that if we‘re willing to continue doing the critical work that must be done by each of us, by all of us, then we will leave the struggling economy behind us and come out on the other side more prosperous as a people.
(END VIDEO CLIP)
MATTHEWS: Chuck, one of the things I can do is analyze politics. I‘m not good at banking. But let me ask you this question...
TODD: Yes. You and me both.
MATTHEWS: It seems to me that Barack Obama has been able to win regularly over the last year or so. He won in Iowa. He lost New Hampshire. He came back and won in South Carolina. He won in North Carolina. He won in places where he wasn‘t supposed to win, and that‘s how he won the nomination. Then he won in states he wasn‘t supposed to win in the general election. That‘s how he won the presidential election and became our president.
Last week, he won the big fight over the stimulus package. Does he need for his political sustenance and his dynamics, his wellbeing, regular tests and regular opportunities for victory? And I just wonder, as he goes into this murky, amorphous world of banking, autos and housing, that there‘ll be no tests he can win, and therefore, he won‘t have that sustenance—sustenance of regular victories. Is that a problem? It seems to me it is.
TODD: No, I think they are going to have...
MATTHEWS: He does have to win every month or so...
TODD: ... an opportunity to try to...
MATTHEWS: ... doesn‘t he, to be a winner?
TODD: Well, I think that they will try to do this. You know, one of the things they‘re going to do is go on the road once a week. They‘re always going to travel. And I think when they travel, it‘s going to be an attempt to always—you know, always look like they‘re on the move.
You know, again, I go back to this—I think one of the reasons Obama inspired confidence in enough people to win the presidency is that he said he was going—you know, he looks like he‘s going to have the energy to tackle a problem if he—even if he doesn‘t have the right solution at first. And I think that‘s something that he was trying to sell today. He sold it before when he‘s been trying to sell the stimulus, which is, Hey, this—you know, if it doesn‘t work, it‘s probably going to mean I‘m a one-term president. But in some ways, that‘s a way of saying, Hey, I‘m going to own up to this, and that‘s why I‘ll go ahead and own some of these issues...
MATTHEWS: Yes.
TODD: ... own them all on my shoulders...
BUCHANAN: In the last analysis, Chris—in the last analysis, Chris, look, it‘s—this is like a rocket launch. I don‘t care how charismatic you are and bright and clever and articulate. I mean, that rocket might go up like Vanguard, four feet off the ground...
MATTHEWS: Yes.
BUCHANAN: ... and blow up, or maybe that thing‘s going into orbit. It all depends on whether you put these things, factors in there and you bet right and the decisions you made about the economy were right and work out. If it doesn‘t work out, as Lincoln said, you know, 10 angels swearing I was right ain‘t going to help me. And if this doesn‘t work out and this economy‘s not up and moving by 2010, the Democrats are going to be burned and Obama‘s going to be burned.
MATTHEWS: Right. Fair enough. That is the scorecard we‘re operating from. Victory is victory for the Democrats. Failure is victory for the Republicans. Thank you, Chuck Todd. Thank you, Pat Buchanan.
Coming up: Times are tough, so who‘s to blame? We‘re going to do something you‘re naughty to do these days. You‘re not supposed to do this. We‘re going to look at who‘s responsible for this mess we‘re in right now. Let‘s get to the names. Is it George W. Bush? Is it Phil Gramm? Is it Wall Street? We‘ll see. The blame game—we‘re going to play it. You‘re not supposed to. We‘re going to do it here.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. We just got news, by the way, on HARDBALL here that of the top 20 recipients of bail-out funds from the federal government, they all cut lending. In other words, they didn‘t lend money. In fact, they lent less money after getting big money from the federal government. Well, that‘s a problem, and it‘s actually reduced lending to consumers and businesses in the last three months of 2008.
Meanwhile, today President Obama did sign that big spending and tax bill, the biggest in history, to try to steer us out of this economic crisis. But I want to know right now who‘s responsible for getting in this mess. It‘s getting time to find out the problem.
“Time” magazine put together a list, including the usual suspects at the top—their prime suspects, I should say. Let‘s take a look at the top of the list right now. The chief executive of Countrywide, Angelo Mozilo—by the way, joining us right now we‘ve got Chrystia Freeland of “The Financial Times” and we got David Faber, who‘s with MSNBC—NBC “Squawk Box”—CNBC‘s “Squawk Box.”
Let‘s go to these names here. Angelo Mozilo—David, this guy‘s head of Countrywide. What did he do wrong?
DAVID FABER, CO-ANCHOR CNBC‘S “SQUAWK BOX”: Mozilo, butcher‘s son, you know, started in the business when he was 14, I think, Chris. What did he do wrong? Well, they were one of the largest providers of subprime loans in the country for quite some time. Listen, he built an incredible business, but ultimately, they were part of the machine that was giving people mortgages that ultimately those people could not pay back and that there may have been quite a few mortgages given to people who couldn‘t pay them back when they knew very well they weren‘t going to pay them back.
Why would you do that? Well, Countrywide was able to securitize those mortgages, put them in a pool and sell them almost immediately to investors around the world. That was the chain that ultimately allowed there to be an enormous amount of credit...
MATTHEWS: So they used...
FABER: ... put out there from people who wouldn‘t pay it back.
MATTHEWS: So Countrywide used the access to easy loan money to basically seduce people into buying houses they couldn‘t afford, right?
FABER: Yes. I mean, listen, well, nobody cried when they cashed the check, right? And by the way, important point. A lot of subprime—in fact, more than half of it—was for cashout refinancings. It wasn‘t for minorities or people who were poor. It was cashout refinancings for my home because I want to put in a pool or redo my kitchen.
MATTHEWS: OK, let‘s go to...
CHRYSTIA FREELAND, “FINANCIAL TIMES”: And I think...
MATTHEWS: Your thoughts, Chrystia.
FREELAND: I was just going to say I think David made a really important point about Countywide, that it wasn‘t Countrywide alone, it was part of this system of disintermediation, where the banks, as they did historically, no longer held the mortgage...
MATTHEWS: OK. So we‘ve heard this story. This is an old story now. People got loans they couldn‘t afford. The houses are now basically facing foreclosure because the house is not worth anything anywhere near the amount of money they borrowed to buy it. They don‘t have the money to buy it. They‘re never going to be able to deal with the situation.
FREELAND: And the banks no longer had a direct financial incentive to care whether you‘re going to pay your mortgage back...
MATTHEWS: Because they...
FREELAND: ... because they sold it to somebody else.
MATTHEWS: They sold it to somebody else. So they sold the loan. Phil Gramm, former senator from Texas—he was number two on “Time‘s” list for being the top champion of deregulation. David, is that a fair shot at him for being a deregulator? We deregulated who that should have been regulated?
DAVID FABER, CO-ANCHOR, CNBC‘S “SQUAWK BOX”: Yes, well, a lot of people...
MATTHEWS: He also backed a law that separated—that once separated commercial banking from investment banking, and he allowed—and he‘s responsible for exempting what are called derivatives from regulation.
Explain that, if you can, David.
(LAUGHTER)
FABER: Yes.
Well, you earlier said you‘re an expert in politics, not this stuff. I don‘t want to completely confuse you, Chris, but the credit default swap market was in part deregulated as a result of Phil Gramm and his efforts. And, ultimately, that market, an enormous market, where you‘re essentially providing insurance to somebody for protecting them against losses on whatever it might be, aided and abetted the incredible growth we saw in all of these securitized mortgage products.
MATTHEWS: Right.
FABER: I guess that‘s the easiest way I can say it. So, you will just have to believe me.
MATTHEWS: OK. I get you.
FABER: But, ultimately, that market has sprung out of control.
MATTHEWS: It makes sense.
(CROSSTALK)
FABER: ... completely deregulated.
MATTHEWS: It is almost a conspiracy to bring down the American economy, because what we‘re doing is getting people to buy things they can‘t afford, which will lead to foreclosures and asset devaluation and everything else.
And, at the same time, we insure that to happen to make sure it happens.
Let‘s go right now to Fed Chairman Alan Greenspan. He‘s third on the list for presuming financial firms could police themselves, another deregulator.
Chrystia.
FREELAND: Yes, that‘s absolutely right.
I mean, I think that Greenspan and Phil Gramm are both on this list to represent what was the prevailing ideology really until this year.
MATTHEWS: Reaganism.
FREELAND: Yes, and that—market fundamentalism is how people describe it, this notion that the market could take care of itself, that it would find its own equilibrium.
And what we‘re finding is, that works most of the time, but some of the time, you have this moment of profound disequilibrium, which is what we‘re experiencing.
MATTHEWS: OK.
Let‘s take a look at Chris Cox, former congressman, Republican from Southern California, head of the SEC, the Securities and Exchange Commission, turning a blind eye to Madoff, and for not reining in the investment banks.
Your thoughts, David. Tell me what about what he did wrong with Madoff. Should he have caught him...
FABER: Well, listen, a guy named Harry Markopolos...
MATTHEWS: ... the big Ponzi schemer?
FABER: A guy named Harry Markopolos, who testified in front of Congress, what was it, last week, was writing letters to the SEC back in 1999 saying there was no doubt in his mind it was either a Ponzi scheme or front-running.
The SEC certainly could have done a much better job on Cox‘s watch in terms of Madoff. But another key consideration here for Cox is, the investment banks—or they used to be—Morgan Stanley, Goldman Sachs, Bear Stearns, Lehman Brothers, their chief regulator was the SEC.
These were companies that were packaging up all of these mortgages, again, sending them around the world, and taking the risk at their firms up enormously over time through something called the leverage ratio, mainly the equity they have vs. the actual assets they controlled.
So, I would agree, Chris Cox certainly one of many, many people here who you can point a finger at.
MATTHEWS: What about George W. Bush, the president who just left office? How blameworthy is he here, Chrystia?
FREELAND: I think pretty blameworthy.
I mean, first of all, it happened on his watch. And when you are president, I think you get take credit for the good things that happen, but I think you have to take the blame for the bad things.
More significantly, I think, he was behind two other important things that are a real problem now. One is this overall philosophy of deregulation, which we‘re seeing has had terrible consequences. And the second is, I think that he was—in building up the huge budget deficits that the government has now, he has put the American federal government in a much poorer position to deal with this crisis.
(CROSSTALK)
FREELAND: During the years of prosperity, you should have been running a surplus.
MATTHEWS: Can we blame Bill Clinton for any of this? He presided over a good time economically, the booms of the—the boom time of the ‘90s. Can he be blamed at all, David?
FABER: You could go back. Listen, there‘s plenty of your viewers, I‘m sure, Chris, who want to go back to the Community Reinvestment Act, and say that Bill Clinton was certainly one of the engines behind tightening that act, making an even stronger case for banks to be lending to minorities. There is something to that and to people who couldn‘t get mortgages in the past.
There‘s something to that. But it doesn‘t completely play out in terms of the timeline that we‘re talking about here, where the real housing...
MATTHEWS: Yes.
FABER: ... boom began in, like, ‘02, and Wall Street played such an important role in that.
MATTHEWS: OK.
FABER: But, nonetheless, he did oversee the deregulation, Glass-Steagall, as you mentioned earlier...
MATTHEWS: OK. Here is what I want to know.
FABER: ... important part—point there.
MATTHEWS: Everybody loves philosophy. It sounds highfalutin and important. But could it be we‘re the victim of our own philosophy, the philosophy of laissez-faire, less government, the better, the end of big government, let people do what they want to do, let Reagan be Reagan, let the economy be the economy, that philosophy, that, somehow, freedom, economic freedom, is a good thing in itself? Are we a victim of that?
Are we a victim of the idea that everybody should own a pretty nice home, even if they can‘t afford it? Are we a victim to that? Have our generous philosophies and optimistic philosophies what brought us down, Chrystia Freeland?
FREELAND: Yes.
I think they didn‘t quite work. And I think Alan Greenspan put it the best. In testimony in October, he said, there was a flaw in the model. He said: I counted on shareholders and the CEOs of these financial institutions to make the best decisions for themselves.
MATTHEWS: OK.
FREELAND: And they didn‘t.
MATTHEWS: OK, David, last point to you.
Could it be that what we don‘t like about the American consumer, he or she likes to consume; they don‘t mind running up debt? There‘s a whole movie about there about the “Shopaholic,” by the way, just coming out right now.
Is that what we‘re going to start pushing now? In other words, having lambasted people for spending too much money and living on credit cards and above their life income potential, isn‘t that what we want them to do now? Right now, we want people to go out there and hit the stores, hit the malls, and dump every dollar they can get out of their credit card or out of their savings account, right?
FABER: We do.
MATTHEWS: Isn‘t that what people want us to do now?
FABER: That is—that‘s certainly something that would encouraged now. It‘s not going to happen.
(LAUGHTER)
FABER: Now, actually, people are starting to save money, for the first time in ages. Look, everybody...
MATTHEWS: Which is what you don‘t want them to do.
FABER: Everybody wanted to have it all. There‘s no doubt about it.
Greed runs through this entire episode. The only thing I would leave you with on the regulation front is, the mortgage market in this country is a $12 trillion market direct to the consumer that was never regulated whatsoever.
MATTHEWS: Yes.
FABER: If there had been some regulation in that market, we might not be having this conversation.
MATTHEWS: OK. It looks like greed and freedom and optimism, all the things we normally say—what, greed is good, Gordon Gekko. It wasn‘t good for this country. Freedom wasn‘t so good, in terms of the economic marketplace. Deregulation wasn‘t good.
And the—the notion of everybody owning a nice house, even if they can‘t afford it, was probably an overblown dream.
Anyway, thank you, David Faber, a great analysis here.
Thank you, Chrystia, as always. I read “The Financial Times.”
Up next: your chance to take out some of your anger on one of the people who may be responsible for the economic crisis, Bernie Madoff—that story next in the HARDBALL “Sideshow.”
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Time for the “Sideshow.”
First up, here‘s a hard lesson for you. Don‘t tell a knee-slapper about a kneecapper.
Remember this quip from Obama in Iowa back in ‘07?
(BEGIN VIDEO CLIP, DECEMBER 31, 2007)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: People said, see, the only way he can win now is to kneecap the front-runner. He has got to do a Tonya Harding on her. But you know what? Even when we were written off, we said, nope, we‘re going to run a positive campaign.
(END VIDEO CLIP)
MATTHEWS: Well, figure skating champion Tonya Harding, known because her ex-husband hired some guy to bash the kneecap of Tonya rival Nancy Kerrigan, still remembers that call-out.
In a new interview tonight airing on HBO, Harding criticizes Obama‘s
reference to her—quote—“He has this country to think about. He has
the candidacy to think about, the war to think about. And he has to bring me up?”
Harding confessed, however, that all publicity is good publicity, and that she‘s actually been booked for some jobs because of President Obama‘s bringing up her name. And guess what? She‘s one person who can truthfully say, “The president knows my name.”
Speaking of the president, we know he thinks—he likes to show off his skills on the basketball court. And how would he fare in the NBA? Well, former NBA player Ernie Grunfeld, now the president of the Washington Wizards, rates Obama‘s game for us in the next issue of “Men‘s Journal.”
Grunfeld says Obama is a team-oriented player. His jump shot has—there it is—has real range, with nice form and arc. And read what you will into this. Players defending Obama‘s crossover dribble are forced to play him both ways. In other words, be prepared to guard him whatever way he moves, whatever way he breaks, because he‘s got a good feel for the game.
Overall, Grunfeld calls Obama a solid weekend warrior, in other words, a good middle-aged athlete.
And I think the president would take that as a compliment.
And, finally, a lesson in always knowing the camera‘s ready and always be camera-ready. Today, Japanese‘s finance minister, Shoichi Nakagawa, was forced to resign.
Why? Well, just check out his performance, if you want to call it that, at this weekend‘s G7 meeting in Rome.
(BEGIN VIDEO CLIP)
SHOICHI NAKAGAWA, JAPANESE FINANCE MINISTER: (SPEAKING JAPANESE)
(END VIDEO CLIP)
MATTHEWS: Wow.
Well, Mr. Nakagawa initially blamed cold medicine and fatigue for that train wreck. He‘s now admitted to sipping some wine before the press conference.
Time for tonight‘s “Big Number.”
Are you one of the thousands swindled by New York financier Bernie Madoff, the man who pulled off a $50 billion Ponzi scheme? For some victims, the promise of courtroom prosecution isn‘t enough. So, one toymaker is offering this, the Smash-Me Bernie. The Madoff look-alike doll is dressed as a devil and comes with its own hammer.
How much are they charging? -- $99.95, a bargain-sounding price to punish a profit-promising crook. You, too, can have a piece of Bernie Madoff. The price for the doll, $99.99 -- that‘s tonight‘s “Big Number.”
Whew. What people won‘t do.
Up next: Former Vice President Dick Cheney is furious, we hear, with George W. Bush because Bush didn‘t pardon Cheney‘s chief of staff and henchman Scooter Libby. We‘re get into that little sugarplum after this.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
JULIA BOORSTIN, CNBC CORRESPONDENT: I‘m Julia Boorstin with your CNBC “Market Wrap.”
Big declines on Wall Street, the three major indexes closing near three-month lows, the Dow Jones industrials falling nearly 298, or about three-and-a-half percent, to close at 7552. The S&P 500 fell more than 4 percent, to 789. And the Nasdaq dropped 4.5 percent, to 1470.
Chrysler wants $5 billion more in government aid, and says it will cut 3,000 jobs. That‘s part of the automaker‘s restructuring plans submitted to the Treasury Department late today. General Motors is expected to submit its survival plan at any moment.
Meanwhile, the government says the 20 largest banks that received federal funds slightly cut lending to consumers and businesses in the last three months of 2008.
And President Obama signed that $787 billion economic recovery bill.
It‘s one of the costliest pieces of legislation in U.S. history.
That‘s it from CNBC—now back to HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
Here‘s some of the exclusive report in today‘s “New York Daily News.”
Quote: “Vice President Dick Cheney launched a last-ditch campaign to
persuade his boss to pardon Scooter Libby, and was furious when President
George W. Bush wouldn‘t budge. Several sources confirmed that Cheney
refused to take no for an answer—quote -- ‘He went to the mat and came
back and back and back at Bush,‘ a Cheney defender said—quote -- ‘He was
still trying the day before Obama was sworn in.‘”
With us now, the man who broke this story, Tom DeFrank, Washington bureau chief for “The New York Daily News.”
Tom, this story is getting to you now. When did you begin to pick up on this story that Cheney fought to the bitter end, went to the mat, to save Scooter?
TOM DEFRANK, WASHINGTON BUREAU CHIEF, “NEW YORK DAILY NEWS”: About a week ago, Chris. About a week ago, I would say. I have been working on it for at least that long.
I got an original tip. And then I—this is not the kind of thing that you call 17 people in a single day. So, I let it percolate a little bit, and worked on it a little at a time.
MATTHEWS: Well, we didn‘t have an office pool here, but I thought, for month, that this guy would get his—his—his pardon.
I thought that Scooter covered for Cheney. If you look at the court testimony about how he was basically being a good soldier and not talking about Cheney‘s role, how he blamed the information he got from Tim—the late Tim Russert, when, in fact, he got it from Cheney, all that in the public record about—about the situation with the—the overseas diplomats and the—I mean, the undercover agents for the United States CIA, and the whole thing, Joe Wilson, his wife, Valerie Wilson, the whole thing, he clearly was covering for the boss.
I thought Cheney would get him the—the—the pardon.
DEFRANK: Well, Chris, there‘s no—there‘s no doubt that Libby was a very good soldier at the trial.
On the other hand, my expert on this, my colleague James Meek, said, anybody who read Bush‘s commutation of the jail term couldn‘t have read that and would have—could have believed that Libby was going to get a pardon. Bush said the—he respected the jury verdict. He thought it was just.
He went on and on and on. He went out of his way to praise special prosecutor Patrick Fitzgerald. And smarter guys about these things than I convinced me that Bush was never going to pardon Libby. And they were right.
MATTHEWS: Is it part of the problem that the president made a very
strong statement—here‘s—he made a very strong statement at one point
that he was going to get to the truth in this matter of who leaked the
identity of the undercover agent. And let‘s take a look. Here he is now -
I think this may have put him in a box, in terms of not being able to pardon perhaps. Here he is six years ago.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: If there‘s a leak out of my administration, I want to know who it is. And if the person has violated law, the person will be taken care of.
(END VIDEO CLIP)
MATTHEWS: Now, Scooter Libby not just chief of staff to the vice president, he was assistant to the president, very high title. I think the president would have a hard time saying he was trying to get to the truth of the matter when the person who knew all about it, he covered up for it, was Scooter Libby. He couldn‘t then go ahead and pardon him. That could be the problem the president faced in the waning days of his term.
: Well, I think that is part of it, Chris. And also, something like this is a legacy—is a legacy issue. I think President Bush—and I don‘t know, but I‘m suspecting that President Bush had the Bill Clinton precedent very much in his mind, where at the 11th hour of that administration, Bill Clinton signed some very controversial pardons, the most notorious, of course, being the one for fugitive financier Marc Rich, whose ex-wife had contributed 450,000 to the Clinton Library. And I don‘t think—I don‘t know, but I‘m suspecting that President Bush did not want to do something that looked like that, as well.
MATTHEWS: Let‘s take a look at—you conclude in this piece, “the latest Libby flap”—OK. “The latest Libby has injected fresh strains in a relationship that had become more businesslike than warm in recent years. An official who has worked closely with both men, the president and the vice president mused that the relationship, quote, ‘isn‘t what it was when Bush tapped Cheney as his running mate in 2000. It‘s been a long, long time since I‘ve heard the president say, run that by the Vice President‘s Office. You used to hear that all the time.”
That‘s the way I thought that administration worked, that Cheney had control over the paper the flow. He was the G-2 for the president, his intelligence guy, very close relationship. When did it come apart?
DEFRANK: Well, I think it started changing after the Iraq War went south and some of the rosy scenarios by Secretary Don Rumsfeld and the vice president proved out not to be so wise and smart around the mark. I think that‘s when it started. I think the Libby indictment was a blow to the relationship between Bush and Cheney. And I think it just gradually changed a little bit.
And I want to point out that ten days before he left office, President Bush said of Cheney, he‘s been a fabulous vice president. But the point I made in the story, and I was very careful in my words, the relationship has become more professional, more businesslike, than warm in the last couple of years.
MATTHEWS: I get the feeling, more than a feeling—I‘ve been studying this for years now—that Chalabi, the head of the INC, the Iraqi National Congress, the guy with the yellow pants and the gold shoes, who couldn‘t wait to get back in that country to make some oil money, that guy worked Dick Cheney. And then Cheney worked the president, that Cheney was Cheneyed, to some extent, by the people who wanted us to go in that war for their own reasons.
DEFRANK: Well, That was part of it. I should have added that to my list of where things started going just a little bit south between Bush and Cheney. And I also have to say that in the last couple of years, with the arrival of Bob Gates, his secretary of defense, I think Gates and Condi Rice had a bit of a strategic alliance. And they started winning more than Colin Powell had won against Cheney and Rumsfeld.
I think notably Iran policy, there was—I wouldn‘t say Bush‘s line on Iran was soft, but it was softer than the hard line that Cheney was pushing.
MATTHEWS: OK. Just a thought, to win your Pulitzer now, if you‘ve got this to report yet, did President Bush begin to think he was wrong about putting our troops in Iraq?
DEFRANK: I don‘t think so. I think he absolutely is convinced that he did the right thing.
MATTHEWS: Right. OK. Well, at least I tried. Thank you, Tom Defrank.
Up next, President Obama‘s on the road, great reporting. President Obama‘s on the road again. The politics behind the president‘s road trips. Why is he on the road so much? Next on the politics fix. This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. Time now for the politics fix. Lois Ramano writes for the “Washington Post” and Rick Hertzberg writes for the “New Yorker.”
Rick, I‘d love your comment on this latest thing that the “New York Daily News” broke today. Tom Defrank is amazing. He‘s broken the story that right up until they left office, the vice president was pounding on the president‘s door, demanding the pardon of his top henchman, Scooter Libby. I think he‘s afraid of Scooter Libby. I think he wants it to look like he really worked to get his pardon, that these are crocodile tears.
Just my speculation, because he‘s damned afraid of what Scooter is going to say because Scooter knows everything the vice president did with regard to go going after Joe Wilson and building the phony case for the war in Iraq and covering up the phony case, when the Wilsons came back and blew the case on them.
RICK HERTZBERG, “THE NEW YORKER”: Yes. You know, he‘s been on this tear since the day after Obama was inaugurated. He‘s been saying this all along. And now, thanks to Tom, we have these amazing details about him actually getting red faced and pounding the table.
But there‘s a lot of motives here, Chris, that there could be. And they‘re not mutually exclusive at all. That‘s one, that he‘s scared of getting pulled into this himself, because, after all, he is, on the face of it, guilty of what seemed to be crimes. And one guy who can put the finger on him is certainly Scooter Libby.
But there‘s plenty of other reasons, too. He probably wants to separate his legacy from Bush‘s. Bush is a ship he doesn‘t propose to go down with.
MATTHEWS: Well, Lois, how does he separate himself from President Bush, even by demanding the honor of Scooter Libby?
LOIS RAMANO, “THE WASHINGTON POST”: I‘m not sure it‘s related particularly to Scooter Libby. But on the Scooter Libby front, if he gets Scooter Libby pardoned, he feels pardoned. I‘m not sure he‘s particularly worried about what Scooter is going to say, because Scooter has already fallen on his sword.
MATTHEWS: He doesn‘t have a sword anymore. He‘s not a member of the Bar. He doesn‘t have a profession anymore. He‘s now a felon. He can‘t vote, all because of being loyal to Cheney.
RAMANO: But he‘s loyal to Cheney. I don‘t think he‘s ever going to talk. Who knows what he said to Scooter. You know, I‘m going to get this done. But if Scooter is vindicated, then he‘s vindicated. He says, Scooter didn‘t do anything wrong.
MATTHEWS: You know what happened? Now, for the rest of his life, Cheney has to raise money for the American Enterprise Institutes, for these phony dedicated senior fellowships over there. Rick, this is what the right wing does. They create these Heritage Foundations and American Enterprise Institutes and the Hudson. They just sit around raising money, right wing money, to keep these guys in senior fellowships, so they ready to write op-ed pieces to fill the pages of the “Wall Street Journal.”
That‘s what they do all day, isn‘t it? It‘s a big money scheme to spend enough money to keep these guys typing, so that the right wing stuff keeps coming out in the “Wall Street Journal” and some times the “Washington Post” and the “New York Times.” They‘ve got nothing else to do.
HERTZBERG: It‘s a welfare program for right wing op-ed pages. I guess it‘s part of the stimulus package.
MATTHEWS: Let me ask you about a smaller story. We around here thought that Roland Burris—I did—had a lot of guts coming up and demanding the Senate seat. But here it is, the “Chicago Tribune” reports, today, guess what, he was raising money for Blagojevich at the very same time he was campaigning for the job as senator from Illinois. This is—well, it looks like pay to play.
RAMANO: Well, Roland Burris, he doesn‘t have smart guts. He just has kind of out there guts. We‘ve already seen, he‘s not been able to get elected to big statewide office. Politics is about legitimacy. He got put in this office. He doesn‘t have legitimacy. Now he‘s proving that he can‘t get statewide legitimacy. I think we‘re looking at a two-year tenure for this guy.
MATTHEWS: I think we‘re looking at Patrick Fitzgerald‘s taping machines, and he‘s got them wired out there. What everybody is afraid of, starting with Roland Burris, is no matter what they say, their tapes are going to speak louder than they in court. Rick?
HERTZBERG: It‘s all part of Rod Blagojevich‘s very successful effort to foul the nest that he‘s sitting in. This is the big—it‘s a horrible nest, but, you know, it is trivial. Except for the fact this is—this is a Senate seat of Adlai Stevenson and Paul Douglas and Barack Obama. That part is not trivial.
MATTHEWS: Adlai Stevenson III. We‘ll be right back with Lois Ramano and Rick Hertzberg for more of the politics fix.
(COMMERCIAL BREAK)
MATTHEWS: We‘re back with Lois Ramano and Rick Hertzberg. I want to ask Rick about the big piece you wrote for the “New Yorker” this week in Talk of the Town. You have a fresh new look at this question of bipartisanship, which is heavily bally-hooed here in Washington. Where are you on that issue? Should we be bipartisan?
HERTZBERG: I think bipartisan is something that stands in for something else. No, I don‘t think we should necessarily be bipartisan. It‘s a mindless category. What does it actually mean? What it means, I think, to voters, to people, regular people, is some kind of civility. It‘s getting along. It‘s some kind of politeness. It‘s simple human interaction, and not just assuming a defensive posture and trying to kill the other guy.
That‘s what Obama has been doing. That‘s how he‘s been behaving. The fact that the Republicans have not reciprocated, I don‘t think that hurts Obama. A lot of Washington chatterers are saying well, Obama has failed to bring about bipartisanship. Well, yes. It‘s not Obama who‘s failed to do that. It takes two to be bipartisan. But you can gain—Obama can gain from just being bipartisan, without the other side reciprocating.
MATTHEWS: That‘s what you wrote in the article, good stuff. What do you think? In other words, in you show class, if you show class and civility, and you have a different point of view than the other side, and you put your hand out and say, you want to join me? We‘ll make some changes if you do. The other side says, no, we don‘t want to make any changes, we‘re not joining you. Is it your fault.
RAMANO: Exactly. I think Obama has been nothing but a beneficiary the last week, of the Republicans just seeming to dig in, him reaching out to them. That on top of the attacks of former Bushites, Cheney and Andy Card. I think Obama looks great. Everybody looks like they‘re sniping on him. He truly looks post-partisan, not really bipartisan.
Let‘s forget about this. Let‘s be gracious, polite, have a new era.
MATTHEWS: It looks like the Republican party, which has looked good in our lifetime at different times, now looks like a party of tail gunners, Rick. Tail gunners.
HERTZBERG: Like tail gunner Joe, right. There‘s more than one Republican party here. Actually, Obama‘s program is bipartisan in the literal sense, because of all these Republican governors that are supporting it. So there‘s the Capitol Hill Republican party, which consists of a whole bunch of Republicans in safe districts who don‘t have to worry about anything except some Club for Growth candidate running against them from the right. Then you have Republican governors who actually have responsibilities, who actually have to look after people. Most of them were in favor of the package. So it is bipartisan in that sense.
Not only that—
MATTHEWS: Rick, you look very good tonight. Rick, I have to comment you on a cosmetic factor, my old friend. I‘ve known you for about 30 or 40 years. You look exceptionally good tonight. I don‘t know what brings me to say that. I‘m a little tired tonight. You look excellent. I think the old Warren Beatty comparisons are going to come up again in your favor, again.
Lois, you look great, too.
RAMANO: Thank you, Chris.
MATTHEWS: We‘ve had a heck of a week. This is the beginning of the second round in the fight for the economic recovery of this country. We brought up the issue of housing and banking and cars. It‘s almost like a Steve Martin movie. A lot of things for this guy to fight for. It‘s beginning to be really tough to be president of the United States.
Thank you, Lois Ramano. Thank you, Rick Hertzberg. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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