Guest: Karen Finney, Tony Blankley, Ed Rendell, Howard Fineman, Eugene Robinson, Peter Morici, Tony Blankley, Karen Finney
High: President Obama‘s approval rating is now at 61 percent. How can we get universal health coverage?
Spec: Finance, Stimulus; Governors; Economy; Barack Obama; Healthcare
CHRIS MATTHEWS, HOST: Things are bad and getting worse. What are we going to do about it?
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews, reporting tonight from Philadelphia. Leading off tonight: What now? Just think of the economic crises confronting us and President Obama—unemployment, deficits, toxic assets, the auto industry in deep trouble, the Dow Jones Industrial Average going down 250 points today to close just over 7,000 points.
Today the president held a financial responsibility summit with leaders from government and private industry, but does President Obama have the answers? And what approach should he take in his address to Congress tomorrow night? Should he admit that the crisis is beyond our immediate grasp, or does he tell us a bedtime story? Or is there a sound message somewhere in between? We‘ll talk about the economy and what the president can do or should do at this point.
Also, with the country‘s governors in Washington, D.C., we‘ll talk to two of them about the economy and why some Republican governors have said they don‘t want the money from the economic recovery plan. Is that good policy, good politics, or neither?
And what about the Republicans? Do they stand for something at this point, something besides the word no, the tack they took successfully back in 1994 on the Clinton health care plan? Add to that the following statement by Richard Shelby of Alabama questioning President Obama‘s citizenship. Quote, “Well, his father was Kenyan, and they said he was born in Hawaii. But I haven‘t seen any birth certificate. You have to be born in America to be president.”
Also, here‘s how President Obama—well, how‘s he doing in the public‘s mind right now? We‘re going to look at the latest Gallup poll and see where the president compares to other presidents at this point in tonight‘s “Politics Fix.”
And don‘t look now, but guess how many Republican governors are not ruling out running for president in 2012? That‘s in the HARDBALL “Sideshow.”
We begin with the economy and the challenges facing President Obama right now. Jim Cramer is host of “Mad Money,” which airs weeknights at 6:00 and 11:00 Eastern on CNBC.
Jim, tough question. You got to write the speech for the president tomorrow night. Fifty million people may be watching. They‘re worried. They‘re angry. Young people can‘t get jobs. Middle-aged people are losing the their jobs. And retirees and almost-retirees are ripped (ph) about the decline in their nest eggs. What do you say to them?
JIM CRAMER, HOST, CNBC‘S “MAD MONEY”: You tell them that, Look, it‘s real bad right now. We do not have a quick-term solution, but it will get better. It will get better, and you want to be in good shape when it gets better. And emphasize that it will get better because I don‘t hear that. I hear fear. I don‘t hear hope.
MATTHEWS: What would that hope be based upon?
CRAMER: I think that the hope would be based upon the idea that one day, with all the policies that are being put in and the money that‘s being printed, that your house, which has been the fundamental problem from day one, will stabilize in value. And if it does and employment just goes down little bit, we will be out of this jam in 18 months. But it has to start with housing and they have to come up with a coherent banking plan that helps housing.
MATTHEWS: OK, let‘s—let‘s you be president now. You know his plan, stimulus package almost $1 trillion in expenditures. That‘s going to do what?
CRAMER: Very little. That just made it so that your municipal bonds probably will not default. There will be some pressure taken off the governors. But there is no job creation to speak of and no infrastructure. The Chinese market is up 30 percent because their infrastructure is their stimulus, and that puts a lot of people to work. We‘re not going to put that many people to work, and it‘s a shame. That‘s really been a big part of the problem.
MATTHEWS: What did the president do wrong in designing his stimulus package, as you see it?
CRAMER: I think that he should have put 10 times the amount of money in infrastructure. Everyone in this country recognizes that there are a lot of bridges and roads that need work. It was a natural to do. It would have put a lot of people to work in the industrial sector and made people feel like jobs could be plentiful in an area that‘s decimated by autos.
MATTHEWS: OK, more infrastructure would have helped. Let me ask you about the housing plan he has. What does that do, and will that solve the problem, the housing problem?
CRAMER: No, it will not. It will not. He has to, first of all, get out of the class warfare game. He has to offer a U.S. government solution not just to people who are defaulting on their mortgage but to everybody. The idea that I wanted, and I‘m going to be talking with Sheila Bair, who‘s terrific, from the FDIC, is 4 percent interest rate nationwide. You can refinance or you can get a mortgage at those prices. That will take a lot of the supply off the table.
You must cut principal. You cannot do it with interest. People have been defaulting within six months if you just cut the interest.
MATTHEWS: And what doesn‘t he do that he should have done in his bill on housing?
CRAMER: Well, what he should have done is said that, We can help everyone, that we will not just help the people who overextended themselves that you may not care to help, we will help you, too, because if we can stabilize housing, your house is going up in value and you will be able to spend again. Why he didn‘t focus on that and why he only focused on the people who are now considered to be ne‘er-do-wells—because the wrong debate is being framed—is beyond me. He should have been inclusive. Let everyone benefit.
MATTHEWS: OK. So he should have reduced the interest rate for everyone who has a mortgage down to 4 percent.
CRAMER: Right.
MATTHEWS: He should have begun to reduce the principal people owe because it‘s too high for people to handle. And he should have covered everyone who‘s a home mortgager, right?
CRAMER: Boom! That would have done it. You wouldn‘t have this kind of pocket rebellion that‘s going on. You wouldn‘t have class warfare, where the people who‘ve been good are saying, How can we help the bad? That would have been a way to get the foreclosure pool down big. There‘s only 400,000 homes that are going to be built this year, Chris. That‘s down from two million homes three years ago.
We would have taken care of the supply. The demand would have gone up with those interest rates. And we would solve the biggest piece of the puzzle, which is house price depreciation. But he only addressed interest changes. You cannot—people are just going to default again six months from now if you don‘t cut principal.
MATTHEWS: OK. The other leg in the stool is banking. What can he do? What should he be doing on banking, to recapitalize those weak banks, to dump the banks or nationalize the disastrous banks? What should he do?
CRAMER: Well, right now, the biggest problem and why Wall Street keeps going down is your Treasury secretary, Tim Geithner, came in and had a plan. We thought he had a plan. He seems to just like to speak to a couple reporters and bounce off different ideas. He is destroying the banking industry by letting the marketplace, short sellers, destroy common stocks, creates fear. He needs to take over not individual banks but the marketplace itself, get it out of the hands of stock traders and into the hands of private people who want to invest alongside the banks.
Where is Geithner? We are playing not “Waiting for Godot,” we‘ve been waiting for Geithner. He has severely let the people down, and he is the problem right now on Wall Street!
MATTHEWS: OK. So you‘ve sized it all up. There‘s not enough infrastructure in the stimulus package. There‘s not enough—the interest rates have to be (INAUDIBLE) the housing—housing package—interest rates have to come down across the board to 4 percent. There has to be reduction in principal and it has to cover everybody. And he needs to get a new secretary of the Treasury. You‘re pretty tough.
CRAMER: I want to win. I want the country to win. I see the country losing.
MATTHEWS: OK. Well, I‘m not sure he‘s going to address all those points tomorrow night, Jim, but I‘m sure his people have heard you right now. Thank you very much, Jim Cramer.
CRAMER: Thank you, Chris. Thank you for (INAUDIBLE)
MATTHEWS: By the way, “Mad Money” airs weeknights at 6:00 and 11:00 Eastern on CNBC.
Let‘s bring in University of Maryland economist and business professor Peter Morici. Peter, I want to ask you the same questions, Professor, and those are—starting with this, what should the president say tomorrow night?
PETER MORICI, BUSINESS PROF. UNIV. OF MARYLAND: Well, certainly, he should start to talk confidently. He‘s talking down the economy but not offering hope. It is OK to outline the problem, but you have to offer solutions. We know what the problem is. People aren‘t spending enough money in America, we import too much, and too many people have lost their jobs. Unfortunately, the stimulus package was a great buffet for the Democratic majority in the House to plop in all those social programs they‘ve missed for the last 10 years, and they forgot all about infrastructure, maybe $100 billion. If I were...
(CROSSTALK)
MATTHEWS: Hold on, Professor. Hold on. So far, you agree with Jim Cramer. The president has to be much more upbeat and convincing in his confidence tomorrow night. And number two, he misread the need for infrastructure, real jobs to build real bridges, real roads, put the cranes up, put the tractors out there. He didn‘t do that. Too much generalized spending and not enough particular infrastructure. OK, what else should he do? Let‘s start with housing.
MORICI: Well, with housing, you really have to go to the bank problem because the housing program is nice, but it‘s certainly not enough. You do have to have equity in there. You have to basically buy down the mortgages. Interest rate resets won‘t do it. What you really have to do is fix the banks. And in order to fix the banks, you have to remove their bad assets. You have to have create an aggregator bank or a bad bank, something Geithner doesn‘t want to do, and it‘s not that difficult to accomplish. We accomplished it during the Resolution Trust period, in the savings and loan crisis, and we could do it again. Unfortunately, we‘re seeing Treasury TARP 2 is really TARP 1 redux.
MATTHEWS: You know, I am tired—I am so frustrated as a non-economist in hearing about toxic assets, hearing that banks‘ problems are that they‘ve got too many mortgages that aren‘t real, that the people are never going to pay them off. Get at to again, Professor. Nail it down. If you were running a dictatorship right now, if you had command economy, command of this economy, what would you do if you‘re President Obama to deal with this toxic asset problem which is blamed for everything?
MORICI: Well, I‘d take the TARP money, double it up by floating some bonds against it, and I‘d buy up the toxic assets on the books of the banks and perform triage. Those mortgages that will take care of themselves, leave alone. Those mortgages that are absolutely going to fail, you know, people who owe five times their income on housing...
MATTHEWS: Yes.
MORICI: ... let them fail, and we‘ll sell those off the way we did with the Resolution Trust. And lower the principal for the others that need to be reworked. If you do that, CitiGroup becomes an attractive asset. It‘s got 8 percent of the deposits nationally. It‘s got lots of branches with shiny desks and computers. You could sell new shares, pay the government back the TARP money they owe, and off the banks go. All the rest the same. They would be privatized again.
MATTHEWS: Well, what‘s holding the president back from doing what you recommend, ideology or what?
MORICI: Well, for one thing, is the bankers would lose out on this. After all, a lot of bankers would get fired and a lot of existing shareholders would have the value of their capital further depleted. And Geithner‘s trying to make the bankers happy. What the bankers would like is for the government to take the very worst mortgage-backed securities off their books and leave the other ones where it can make some money. If it does that, the new Resolution Trust company cannot break even, the way the one did during the savings and loan, and there was an analog institution during the Depression. You have to disappoint the bankers.
But let‘s remember, Tim Geithner, a man without ideas, is the former president of the New York Fed.
MATTHEWS: OK...
MORICI: He‘s just too much a part of that culture, the way Hank Paulson was.
MATTHEWS: OK. Professor Morici, thank you, of Maryland University. Thank you, sir. We‘ve got a consensus here, and here it is. We‘ve got to do something about true infrastructure spending—bridges, roads, get some shovels moving, build things, shovel-read projects, too much generalized spending in that stimulus package, not enough real job-creating infrastructure. We got to deal with the housing problem. We got to reduce the interest rates and reduce the principal or these people are never going to pay up their mortgages. Number three, we got to get rid of Geithner. These guys are tough. Thank you, Peter Morici. Thank you, Jim Cramer.
Coming up: Are Republicans behaving like it‘s 1994? Are they taking a page from the old Bill Kristol playbook which is to say no to President Obama? We‘ll debate the merits of the Republicans‘ scorched earth policy coming up next.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
REP. JOE BARTON ®, TEXAS: It is very easy in the House, since it‘s set up to get things done quickly if the majority‘s united, to forget about the minority. But if you really want consensus, I would encourage you to encourage the Speaker to have a true open process.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive.
(END VIDEO CLIP)
MATTHEWS: Welcome back to HARDBALL. That‘s President Obama today taking a question from House Republican Joe Barton of Texas at the end of today‘s fiscal responsibility summit. With President Obama calling on lawmakers to put aside political maneuvering, how will Republicans respond? A report in today‘s “Politico” says they‘re dusting off an old playbook that worked in the 1990s. The strategy, unite against Democrats‘ economic policy, block and counter health care reform, tar them with spending scandals. Will the old magic work again?
Karen Finney‘s communications director for the Democratic National Committee. Tony Blankley was Newt Gingrich‘s press secretary when he was Republican leader in the ‘90s and is author of “American Grit: What it Will Take to Survive and Win in the 21st Century.” I like it, Tony. You‘re in the how-to business.
(LAUGHTER)
MATTHEWS: I love it.
(CROSSTALK)
MATTHEWS: I made a venture into that, too. We‘ll see how it worked. Good luck to you, buddy. Well, come on, come back and talk about that in the next couple of days.
TONY BLANKLEY, FORMER PRESS SECRETARY FOR NEWT GINGRICH: Sure.
MATTHEWS: Let me ask you, Karen—let me ask you, Tony, you know, back in 1993 or so, Bill Kristol, that genius of the right, basically advised your party not to cut any deals on health care. Let it go down. He said any deal on health care with the Clintons, with Senator Clinton—well, now Secretary of State Clinton, her husband, President Clinton at that time—would help the Democrats win the middle class. So kill the program in its bed. Is that the strategy of the Republican Party now generally?
BLANKLEY: Well, that was Bill Kristol‘s idea. A lot of the members in ‘93, like a lot of the health care industry, tried to negotiate with the Clintons. They wouldn‘t negotiate. And then in early ‘94, the opposition stiffened up.
It depends what President Obama proposes. If he proposes the universal care, which will cost between $1.5 trillion and $2 trillion over the next 10 years, my guess is that most Republicans will oppose it. On the other hand, if he proposes something more modest, there may be some support.
The article strikes me as in search of an insight. Look, obviously, on domestic spending, Republicans and Democrats have been pretty consistent for about 80 years. Republicans like less domestic spending and the Democrats like more. That‘s not going to change. That‘s not a strategy. That‘s a philosophy.
MATTHEWS: OK, Karen Finney, the question is whether (ph) the Democrats do it if the Republicans try scorched earth. You didn‘t get a single Republican vote for the House-passed stimulus bill.
KAREN FINNEY, DNC COMMUNICATIONS DIRECTOR: Right.
MATTHEWS: Not a single vote. You got three in the Senate who may have, for their own regional interests, gone along with it. It certainly wasn‘t a coalition package. It was what we called a horse and rabbit stew, with the Democrats being the horse and those three Republicans the rabbit. That‘s not exactly a coalition.
FINNEY: No. But I mean, you know, Chris, I think what we‘ve seen, though, in the last few weeks and months is the Republican Party kind of groping around, trying to sort of figure out sort of where they go next. And I think they‘re going to very significantly miscalculate things if they think just being the party of no is going to work because it does send a message.
I mean, you know, you had those three Republican senators who voted for the bill, and I think that was important to get that bill passed, obviously. But you know, I told you so, or sitting back and watching and just saying, No, no, no—that‘s not a strategy and that‘s not a message. And I think there‘ll be real consequences with the American people.
I mean, imagine if you‘re one of these people who has lost your job recently and you‘re sitting back and you‘re seeing that perhaps your governor in your state doesn‘t want to take some of the money that might actually help extend your unemployment benefits. Or if you‘re someone who‘s lost your job and you‘re seeing Republicans on the Hill just basically seeming to stand back and say, you know, It‘s all on you, Democrats, I told you so. I just don‘t think that‘s going to work.
MATTHEWS: Well, what do you think of that? Let‘s start with Karen—pick on Karen‘s thought there, Tony, that idea that some people, like Bobby Jindal, who‘s running for, clearly...
BLANKLEY: Right.
MATTHEWS: ... saying that they don‘t want any money from the—from the North. That‘s what it seems like.
BLANKLEY: No, that‘s not—that‘s not what he said. What he said was he‘ll take some of the money, but the part of the program that requires permanent change in the state policy and which will outlast the federal money, which will dry up after a year or two...
MATTHEWS: Yes.
BLANKLEY: ... that‘s the part of the money he won‘t take. So I think he‘s showing good judgment, picking some and not others. That‘s the same thing Haley Barbour‘s doing. They‘re taking what little infrastructure money is put in.
FINNEY: But the problem with the way they‘re doing it is, when you have no Republicans in the House voting for the bill, only three Republicans in the Senate, it does give the appearance that this is really all about partisan politics, not about doing what‘s right.
BLANKLEY: Sometimes appearances are wrong. You heard in the previous segment two people who are not Republicans also argue that the stimulus package was ill—designed. Had it been a well-designed, full of infrastructure budget, I think you would have probably seen 80 to 100 Republican votes in the House.
MATTHEWS: OK, let‘s talk about something you pointed out, Tony. I‘d like to follow up on your thought. You said if the Democrats proceed towards universal coverage, they‘ll have a hard time getting Republicans to join them. But let‘s—I keep going back—and I am for national health of some kind, but I‘m—I think it‘ll never happen unless business goes along with it because these are usually workplace-based health care plans. That‘s the way we do it in this country.
BLANKLEY: Yes. Look...
MATTHEWS: If you have got Massachusetts with a health care plan that came in under Mitt Romney, if you have California with one that came in under Schwarzenegger, why can‘t you have a universal coverage plan nationwide? I don‘t understand.
BLANKLEY: Here‘s—here‘s the problem.
And I was talking with a health care expert at lunch today on this very issue. It‘s going to cost between $150 billion and $200 billion a year to pick up that 47 million people covered. Somebody‘s got to pay for that, whether it‘s the federal government or business or individuals.
Someone‘s going to have to pay $200 billion a year. If it‘s the government, it is all deficit. That‘s $2 trillion of deficit over the next 10 years.
(CROSSTALK)
MATTHEWS: Well, who‘s paying for all the emergency care right now?
BLANKLEY: No, that‘s not—that doesn‘t remotely match the $200 billion a year that the full coverage would cost.
KAREN FINNEY, COMMUNICATIONS DIRECTOR, DEMOCRATIC NATIONAL COMMITTEE:
But—but you know what I find so interesting in this discussion, Chris, is, Tony is, like the Republicans, starting from the position of, no, no, no. If you do it this way, that won‘t work, instead of...
BLANKLEY: No, I‘m—yes, yes, yes. I‘m not doing that.
FINNEY: ... instead of saying, how are we going to make this happen; how are we going to sit down and make it work?
Rather than saying all the things we—quote, unquote—shouldn‘t try to do, how about focusing on what we should try to do?
(CROSSTALK)
FINNEY: That‘s what the election was all about.
(CROSSTALK)
MATTHEWS: Let me—let me give you particulars. I am going to give
I am going to give you a menu, both of you.
What‘s the most likely item on this menu that you will pick as bipartisan to accomplish: entitlement reform, the long-term reduction in the cost of Medicare and Social Security; number two, energy policy; number three, health care; number four, energy?
Tony, you start. Where do you see a bipartisan operation that, if you were Barack Obama, the president, you would say, let‘s get some Republicans working on that one?
(CROSSTALK)
BLANKLEY: If you had a bipartisan—if you had the Democrats agreeing, I think entitlement reform. That‘s what Newt tried to work out with Bill Clinton 15 years ago.
We tried to get Medicare, and then we were going to move to Social Security.
(CROSSTALK)
FINNEY: Well, actually, Newt was going to scrap it altogether.
BLANKLEY: I think that‘s a real area where we could agree.
FINNEY: You know, look, Chris the bottom line is, we don‘t have a choice between any of those things.
We have to get all of those things done. And, again, I think the very clear message from the last election is that the American people are sick of the bickering and the fighting.
MATTHEWS: OK.
FINNEY: And, again, I think there will be—I think there will be real consequences.
(CROSSTALK)
MATTHEWS: Let‘s—let‘s go—let‘s go here with this thing by Senator Shelby over the weekend, who was—now, this is something that he said was appended, but he doesn‘t deny the quote. He said it was an incomplete quote, which is—well, he is talking about Barack Obama‘s citizenship, the president of the United States‘ citizenship.
And he says: “Well, his father was Kenyan and they said he was born in Hawaii, but I haven‘t seen any birth certificate. You have to be born in America to be president.”
Now, Shelby, the senator of Alabama, says, he had further thoughts on that, saying: “I—I think that‘s never been—that‘s never been thoroughly”—or, rather, “that‘s been thoroughly examined.”
(CROSSTALK)
MATTHEWS: But he doesn‘t deny the statement at all.
BLANKLEY: I think that has got nothing—that has got nothing to do with a serious policy debate.
FINNEY: Yes.
BLANKLEY: Republicans...
(CROSSTALK)
BLANKLEY: And, by the way, on the—on the previous issue, Republicans have been proposing positive issues on health care, trying to get free markets, first dollars spent, for years. We have not been able to get agreement. It‘s not just yes and no. It‘s whether—which choice do you want.
(CROSSTALK)
MATTHEWS: But is there an ad hominem piece to this, Tony?
BLANKLEY: Of course that‘s ad hominem. I don‘t associate with it. Most Republicans don‘t associate with that. That‘s a—by the way, a former Democratic senator saying that.
(LAUGHTER)
FINNEY: I knew you were going to say that, Tony.
(LAUGHTER)
MATTHEWS: Well, it is true, actually.
(LAUGHTER)
FINNEY: It is. Look, I mean...
MATTHEWS: Karen, is that an ad hominem—is that part of an anti-Barack Obama position by the Republicans, or is that just an incidental shot—it was poorly stated—by a man who will probably regret and correct it extensively...
FINNEY: Yes.
MATTHEWS: ... over the next couple days?
FINNEY: It—well, I think it was—it was a poor choice of words.
And, if I were in the Republican Party, I would be pretty embarrassed by it, actually. I—I‘m not going to say I can‘t say it‘s part of a broader strategy, but it‘s not the way to get on the trail of bipartisanship and getting things done with those kind of comments.
MATTHEWS: By the way, just to be fair here, Senator Shelby released this statement today.
“The ‘Cullman Times‘ article”—that was the article he was quoted in
“contains an incomplete account, and therefore a distortion, of Senator Obama—Senator Shelby‘s comments regarding President Obama‘s citizenship. At the town hall meeting in Cullman, Senator Shelby laid out the constitutional qualifications for the presidency and said that, while he hasn‘t personally seen the president‘s birth certificate, he is confident that the matter has been thoroughly examined.”
That is what he says today. I think, probably, we‘re going to find out more as the days goes on, because the newspaper...
BLANKLEY: Yes.
MATTHEWS: ... has asked everyone in the audience, is there anyone who has a cell phone, anyone who recorded—have any recording device? Because the newspaper sounds confident that they want to get the actual wording down.
FINNEY: But, Chris, do we really—do we really want to spend a few more days talking about that, or do we want to spend a few more days talking about the budget that the president is going to be laying out? I think that‘s far more important.
BLANKLEY: I would—you know, I would like to talk about...
MATTHEWS: Well, thank you for correcting me on that.
(LAUGHTER)
MATTHEWS: But, you know, these stories come in, and we act on them.
(LAUGHTER)
MATTHEWS: Go ahead.
FINNEY: I know.
(CROSSTALK)
MATTHEWS: Karen, you want to do some more editing tonight?
(LAUGHTER)
BLANKLEY: I was—I was going to say that—that Karen‘s suggestion that have to do all of those things, she has to recognize that there‘s some upward limit on how much borrowing capacity the U.S. government has.
FINNEY: Of course.
MATTHEWS: I think you‘re right.
BLANKLEY: And we‘re already—we are already pushing towards a $2 trillion deficit this fiscal year, more to come, more when Medicare starts going unfunded by the some of $40 trillion.
And, yes, we would like to do everything wonderfully, but the fact is...
FINNEY: Well, but...
BLANKLEY: ... that money is going to be running short. And that‘s going to be an issue, I think, in the coming years.
FINNEY: But of course it is. But, Tony, that doesn‘t mean we—that we shouldn‘t try. And I think that‘s the point that the president has made.
(CROSSTALK)
FINNEY: We shouldn‘t let be the excuse for why we once again put off some of the things that, frankly, if we would have done them 10 years ago, five years ago, we wouldn‘t actually be in this position.
BLANKLEY: If we had—if we had reformed Social Security the way Newt wanted to seven—about 17 years ago...
FINNEY: It would have been an unmitigated disaster if we had done what Newt Gingrich would have done.
BLANKLEY: ... we would be ahead of the game. Bill Clinton would had been the one to do it...
(CROSSTALK)
FINNEY: I remember that battle very well, Tony.
BLANKLEY: Yes, I know.
(LAUGHTER)
FINNEY: It was—it would have an unmitigated disaster if we had done what Gingrich wanted.
BLANKLEY: Well...
MATTHEWS: Well, I have to tell you, you‘re both highly skilled debaters. Perhaps we can have a meeting, one of these fiscal responsibility meetings...
BLANKLEY: Be glad to have a meeting any time.
FINNEY: Have a summit.
MATTHEWS: ... in a restaurant, and you can—you can put it—I do think, Tony, you‘re at a disadvantage in talking the need for fiscal responsibility after all this years of...
BLANKLEY: No. No, I...
(CROSSTALK)
FINNEY: A $1.3 trillion deficit.
(CROSSTALK)
MATTHEWS: No, all these years of deficit-spending by the Republican Congress.
(CROSSTALK)
BLANKLEY: When I was editorial editor of “The Washington Times,” I opposed a lot of his appropriations.
MATTHEWS: But, in your role here, as an ideological defender of a point of view, you have a problem.
(CROSSTALK)
BLANKLEY: No, I‘m arguing the same position the Republicans have argued for 80 years, which is less spending is better, smaller deficits are better.
FINNEY: But, Tony...
(CROSSTALK)
MATTHEWS: Well, they used to argue it.
(CROSSTALK)
BLANKLEY: It is also true that...
(CROSSTALK)
MATTHEWS: They used to believe it.
BLANKLEY: ... every president‘s party tends to compromise their principles to support their president. Democrats will be doing that now, as Republicans did.
(CROSSTALK)
MATTHEWS: Well said.
Would you put that would—you chisel that—chisel that in granite in this city of Washington, that every presidential party tends to compromise its principles because the executive would rather keep power...
BLANKLEY: It is true.
MATTHEWS: ... than follow principles?
BLANKLEY: It‘s absolutely true. It always happens.
(CROSSTALK)
MATTHEWS: That‘s—it‘s not quite as elegant as Lord Acton, but—about absolute power corrupting absolutely, Tony, but it‘s damn close, sir.
(LAUGHTER)
MATTHEWS: Thank you very much.
BLANKLEY: Thank you.
MATTHEWS: Karen Finney, congratulations on your tenure as...
FINNEY: Thank you.
MATTHEWS: ... as communications director for the Democratic National Committee, which ends at sundown tonight.
(LAUGHTER)
MATTHEWS: Thank you very much for being—please come back in another capacity.
FINNEY: Absolutely.
MATTHEWS: Tony, you are always welcome in any capacity.
Up next...
(LAUGHTER)
(CROSSTALK)
MATTHEWS: And, by the way, we will have back to talk about your book.
BLANKLEY: I would love to do that.
MATTHEWS: It‘s way too early to think about who might challenge President Obama in 2012 -- or is it? The Republican wannabes were out this weekend. And they‘re out there. And, boy, are they making it obvious, in the way they don‘t deny it. Wait until you catch this stuff we have got for you.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Time for the “Sideshow.”
Last night, at the Academy Awards, which I stayed with to the end, Steven Spielberg presented a tribute to the themes that connect the nominees for best picture this year with great movies of the past.
(BEGIN VIDEO CLIP)
TOM HANKS, ACTOR: Every man I kill, the father away from home I feel.
UNIDENTIFIED ACTRESS: We couldn‘t just let them escape. We were responsible for them.
UNIDENTIFIED ACTOR: You made a choice. You let them die, rather than risk letting them escape.
UNIDENTIFIED ACTOR: There may be honor among thieves, but there‘s none in politicians.
UNIDENTIFIED ACTOR: Are you really saying the president could do something illegal?
FRANK LANGELLA, ACTOR: I‘m saying that, when the president does it, that means it‘s not illegal.
UNIDENTIFIED ACTOR: Because I‘m a slumdog, I‘m a liar, right?
UNIDENTIFIED ACTOR: Most of you are.
UNIDENTIFIED ACTOR: Don‘t you know how these people lie? It is born in them. I mean, what the heck? I don‘t have to tell you. They don‘t know what the truth is.
JENNIFER CONNELLY, ACTRESS: I need to believe that something extraordinary is possible.
CATE BLANCHETT, ACTRESS: What are you thinking?
BRAD PITT, ACTOR: Well, I was thinking how nothing lasts.
UNIDENTIFIED ACTOR: We have got to give them hope.
UNIDENTIFIED ACTOR: This is not just jobs or issues. This is our lives we‘re fighting for.
(END VIDEO CLIP)
MATTHEWS: Well, that part was brilliant. It was the one part of the whole night last night where they focused on the movies.
I have never seen an Academy Award night with so few clips of actual movies. They didn‘t even show the winning performances of the actors. Is this the end of the movies? What is with the producers last night? No clips of the best actors of work, no clips of old movies, the classics over the years, none of it. It is as if they figured people who watch the Academy Awards don‘t go to the movies or don‘t like movies. Or what?
Next up: George W. Bush has a new job offer. When the former president moved back to town this year, Elliott‘s Hardware in Dallas, Texas, publicly offered him a job as the store greeter.
Well, this weekend, the former president showed up to meet the store‘s employees and pick up a couple of things for his new house, though he declined the job offer. The store gave former President Bush a store shirt with the name tag W., in case he changes his mind.
By the way, it looks like the rest of Bush 43‘s team could use some offers thrown their way. “The Wall Street Journal” reports that just 25 to 30 percent of former President Bush‘s officials looking for full-time jobs have succeeded in finding one.
Time now for the “Big Number.”
Yesterday, a rash of Republican governors took to the Sunday talk show circuit to argue their case for or against taking those billions of dollars in the giant economic stimulus bill. A select crowd, however, were confronted with that perennial question about running for the top job.
(BEGIN VIDEO CLIP, “MEET THE PRESS”)
DAVID GREGORY, MODERATOR, “MEET THE PRESS”: You‘re not ruling out a run for the presidency?
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(BELL RINGING)
(BEGIN VIDEO CLIP, “MEET THE PRESS”)
GOV. BOBBY JINDAL ®, LOUISIANA: What I‘m saying is, I‘m running for reelection. I have no plans to beyond that.
(END VIDEO CLIP)
(BELL RINGING)
(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)
GOV. MARK SANFORD ®, SOUTH CAROLINA: Is it a plan?
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(BELL RINGING)
(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)
SANFORD: Absolutely not. Is it a likelihood? Absolutely not. But I have learned that you never say guaranteed on tomorrow when you don‘t know tomorrow.
(END VIDEO CLIP)
(BELL RINGING)
(BEGIN VIDEO CLIP, “FOX NEWS SUNDAY”)
WALLACE: But you‘re not ruling out 2012?
GOV. TIM PAWLENTY ®, MINNESOTA: I‘m first thinking about running for reelection for governor in the state of Minnesota, and that‘s my focus. And if I do, you know, people would expect you to serve out that term.
(END VIDEO CLIP)
MATTHEWS: Well, there you go. Three Republican governors yesterday would not rule out a bid for president—three Republican governors looking to 2012 -- tonight‘s “Big Number.”
Up next, we will ask Pennsylvania Governor Ed Rendell, who‘s a Democrat, whether it‘s smart policy for those Republican governors to decline that stimulus money, or is it just politics?
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
JULIA BOORSTIN, CNBC CORRESPONDENT: I‘m Julia Boorstin with your CNBC “Market Wrap.”
Another major sell-off, with the Dow and the S&P 500 closing at their lowest levels since 1997. The Dow plunged 250 points, closing at 7114. The S&P 500 tumbled 26 points, and the Nasdaq dropped 53 points, finishing at a three-month low.
CNBC‘s David Faber reports, insurance giant AIG is in talks with the government about securing additional funds, so it can keep operating beyond next Monday. That‘s when, sources say, AIG will report the largest loss in U.S. corporate history, about $60 billion.
The Federal Reserve and Treasury Department have already provided $150 billion of assistance to AIG. And the company is 80 percent owned by the government.
Meanwhile, troubled banking giant Citigroup is reportedly in talks to give the government a larger stake. Taxpayers could end up owning as much as 40 percent of Citi‘s common stock.
That‘s it from CNBC, first in business worldwide—now back to
HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
President Obama told the country‘s governors today it is OK to disagree on some small percent of his recovery package, but hold off on making it all about politics.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If we agree on 90 percent of this stuff, and we‘re spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it‘s being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that‘s what right now we don‘t have time to do.
(END VIDEO CLIP)
MATTHEWS: So, is the president right? Is some of this just playing politics?
With us now, Pennsylvania Governor Ed Rendell. He is chairman of the National Governors Association. He‘s a Democrat.
Governor Rendell, I‘m up in your city up here in Philadelphia. Let me ask you about this thing. We had a couple people on. You know Jim Cramer from Philadelphia. He was on tonight. And we had another guy, a conservative professor from Maryland. Both made the same points.
The president needs to be very confident tomorrow night. That‘s what former President Bill Clinton says he should do. Let‘s start with that. Can he be very confident, when we have such a troubling economic situation, with so many facets to it?
GOV. ED RENDELL (D), PENNSYLVANIA: Well, he can‘t be overconfident.
And he can‘t convey to the American people he thinks this is going to be easy. This is going to be tough, no question about it. But I think he can show some confidence in the fact that we are moving in the right direction. I think the stimulus, despite all of the criticism, had to be done. It‘s a step in the right direction.
People are going to start being hired back to work as early as May. We‘re going to see a lot of momentum. And I think it‘s going to raise the mood of the country. So, he can be confident about that. And he can portray to that to the American people.
He can also be confident about the fact that we‘re moving on the mortgage front. It may not be the best solution that people can come up with, but it‘s a good solution. It is going to avoid a meltdown. And that‘s true with the financial institutions as well.
So, I think he has to be upbeat. He has to get the American people thinking that we‘re going to turn a corner. It may not be in the next month or two, but we‘re going to turn the corner. We‘re going to get there. We‘re going to come back as an economy.
MATTHEWS: Well, here‘s a couple of your Republican colleagues, fellow governors, who take very different views.
One of them supports your position, which is, the states need the money. That‘s Charlie Crist of Florida. And then there‘s Bobby Jindal, who is clearly running for president, from Louisiana, who basically taking a cherry picker attitude, at best, towards the package.
Let‘s here it first. Here‘s Jindal and then Crist, both on “Meet the Press” yesterday, back to back.
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GOV. BOBBY JINDAL ®, LOUISIANA: You know, now they‘re talking about spending billions of that to build a train from Disneyland to Las Vegas. There‘s so much wasteful spending here. I think the president had a chance. If he had worked with Republicans, instead of allowing Speaker Pelosi to write this bill.
GOV. CHARLIE CRIST ®, FLORIDA: I think my obligation, as in essence the CEO of the state, to do everything I can to help us get through this tough economy. Certainly, this stimulus package, about 12.2 billion dollars for Florida, will help Florida an awful lot.
(END VIDEO CLIP)
MATTHEWS: I‘ve got to tell you, Governor Rendell, that‘s cartoon talk by Jindal. Nobody‘s talking about a train or a light rail from Disneyworld. They‘re talking about Los Angeles connecting with one of the great places to spend money out there, Vegas. Why he says Disneyland is obviously just an attempt to make fun of the whole thing. That‘s stupid talk.
RENDELL: Sure.
MATTHEWS: Your thoughts?
RENDELL: Number one, I‘m voting for Charlie Crist. Charlie Crist is a responsible guy who has tried to be bipartisan. He is intelligent. He says what‘s needed. He knows the stimulus program is needed. He is going to take the money for Florida.
But I have a secret for you. After Governor Jindal is finished with his posturing and making jokes, he is going to take 98 percent of the money that‘s going to Louisiana, as well, because he knows that his citizens need the help. And no governor would be responsible if they didn‘t take money that their citizens desperately needed.
There is one little segment of this, it‘s seven billion dollars out of the 787 billion, Chris, where there‘s a legitimate concern to some governors, even Democratic governors. That‘s in the unemployment compensation. It‘s 37 billion dollar package; 30 billion goes to the states and everyone is going to take that. It‘s for increasing the stipend, things like that.
The other seven billion requires the states to lift their requirements. So for example, under certain circumstances, to have unemployment comp for part time workers, which many states don‘t have. Some do. That would cost the state to have to put some of its own money up to match the federal money. And there are some governors who have a legitimate concern about doing that.
Pennsylvania‘s facing a billion dollar deficit. I have a concern about doing that. But I believe I have to do it. I believe it‘s my moral obligation. How can I look at a man or a woman who‘s lost their job and their family and tell them, I am not going to be able to give you any unemployment compensation benefits because I‘m worried about balancing my state budget? Not this time, not now, not in America.
MATTHEWS: OK. Thank you very much, Governor Ed Rendell of Pennsylvania, who has agreed to take the money.
Up next, how is President Obama is doing generally. We‘re going to get into the politics of how he‘s doing. We‘ve got brand new poll about data, by the way. He‘s holding up there pretty well in terms of the positives. He has some negatives creeping up in that undecided crowd. I guess the undecided crowd is turning against him a bit, but he‘s still holding up with very high positives. The politics fix is next. This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Welcome back to HARDBALL. Time for the politics fix. Joining me is “Newsweek‘s” Howard Fineman and Gene Robinson of the “Washington Post.”
Gentlemen, we have two heavy weights joining me right now. They would be you. The new Gallup Poll has President Obama‘s approval rating one month into the presidency at 63. That‘s a hearty number. It‘s high, but a drop of points from a month ago. I am not going to say it‘s down. What‘s gone bad for him, I guess, is the negatives have gone from 12 to 24. I guess that‘s the congealing of people who are Republican, who never wanted him to succeed anyway, and now they figure they got some excuse not to like him, whatever.
Let me go to something really interesting. And that is what we learned in the early part of the show. First Howard, then Gene. We had a couple critics on of the economic program. In broad strokes, I think they‘re saying what most people are saying as the deficiency of what Barack Obama‘s put forward as president so far. He should have had that stimulus package of his packed with infrastructure, real bridge building, real road building, real construction stuff that looked like stimulus spending.
Number two, he needs to inspire us. He needs to take a very upbeat position tonight—or tomorrow night rather. He can‘t be mealy mouthed about it. Third, we have to do something much more dramatic on the mortgage problem, reducing the rates to something people can pay, and reducing those principal down to where they are willing to actually commit to paying it.
And third, we have to something on the banks that is a lot more dramatic than we have done. Your thoughts on that, both of you, gentlemen. First you, Howard?
HOWARD FINEMAN, “NEWSWEEK MAGAZINE”: Well, I listened to both Jim Cramer and the economist from the University of Maryland, Chris. I agree with some but not all of what they said. Let‘s talk about the politics first. I agree that Obama, the president, hasn‘t quite gotten the tone right. He‘s both grim and a little distant at the same time. And we need the lift of a driving dream here, as well as the details of the budget. So I think he‘s got to get the tone right tomorrow and he has to inspire confidence and turn those positive approval ratings into deep confidence in the American people.
As far as the substance of things are concerned, I also agree that some of it isn‘t sweeping enough. I would say there‘s a lot of infrastructure in that stimulus package, Chris, a lot. There‘s 48 billion dollars just for highways and railroads and bridges and everything alone. So I don‘t totally buy that part of it. I agree about housing and I agree about Geithner. Tim Geithner, the Treasury secretary, who should be a major figure, hasn‘t inspired any confidence anywhere, as far as I can tell.
MATTHEWS: I agree with that. That seems to be the consensus. Gene, your thoughts on the whole question of the tone, the need for more confident building, deep confidence, as Howard just phrased, rather than superficial we like the guy. Something in terms of the selling at least of the infrastructure piece, that it‘s job creating, dealing with the homeowner situation in a way that seems dramatic. It doesn‘t yet. And perhaps dumping Geithner already. I don‘t know. It seems like he is so unsuccessful. He seems like Barney Fife to me. Do you remember Barney Fife in Mayberry?
EUGENE ROBINSON, “THE WASHINGTON POST: I remember Barney Fife. I actually referred to him in a column as looking like Doogie Howser, Treasury Secretary. That was a bit unfair.
MATTHEWS: That‘s what we like here, Gene. Gene, stay unfair, but stay close to the truth here. Life is unfair.
ROBINSON: You know, in terms of the tone, I think Obama‘s tone has been OK. I think it could be—it could be more lift of a driving dream. It could be more optimistic. He‘s going to have to do that.
But remember, he had to make everybody understand how serious the situation was to get this stimulus passed in the first place. By the way, you know, I talked to Obama people before the plan came out. They said, there‘s so much infrastructure you can fund in a timely fashion that would be stimulative. You could put a whole bunch of projects on that they couldn‘t possibly get started for another few years. But they did what they could, they said. Here‘s what I think—
MATTHEWS: You know what, guys? I once did a study that—it‘s not hard. Go around and get every bridge that‘s under code. Every bridge right now that presents a safety hazard to the school bus going over it tomorrow morning, and fix the damn thing right now. You‘ve already got the list of projects. It‘s called bridges below code. Fix them. I don‘t understand—I think they‘re solve shovel ready. I don‘t know everything.
FINEMAN: Not immediately so, Chris. But if I could just step back for a minute here, I think the one thing is, despite the positive approval rating that the president has, despite his obvious intellect and his sense of goodwill, as he displayed today in that meeting with Republicans and so forth, he hasn‘t quite yet seemed to convey the sense that he really knows the way forward and is going to lead us out of it. And I thought the opening of your show—
I hate to comment on our own show here. But I thought the first 15 minutes of the show was devastating from the point of the Obama administration. They haven‘t convinced people—not that Jim Cramer is the only person they have to convince. But they need to be able to convince people that they know what they‘re doing, that they‘re not just feeling their way along and hoping for the best. They certainly haven‘t convinced the so-called experts, including Wall Street traders.
MATTHEWS: You know, Gene, the old rule that you‘re supposed to spend so much time preparing yourself for the limited time you‘re on the air, the limited time you give a speech? I get the feeling his ratio‘s office. He‘s so frenetic, so peripatetic in running around and giving speeches and meeting with people in these summits, et cetera, et cetera, et cetera, town meetings, that people get the sense, if he‘s not somewhere studying this stuff, how would he know how to solve these problems? Doesn‘t he need to go hide somewhere and go into intensive training and talk to the smartest minds in the country and make it clear that he‘s in the process of learning?
ROBINSON: Well, he does know. We know from the campaign that he knows how to go away for a few days and come out and give a dynamite speech. If they give the sense of making this up as they go along, they are, because the confluence of economic crises we have right now is not a confluence we‘ve seen before. They don‘t know what they‘re doing. They are making it up. Here—and the big one is coming right now. What are you going to do with the banks? What are you going to do with Citigroup and what are you going to do with Bank of America? They‘re doing these stress tests. But what does that lead to?
Are they going to be transparent about what banks are basically insolvent or zombie banks and which are not? Until we get this transparency, which will be painful—until we get it, I‘m not sure we‘re going to move very far.
MATTHEWS: We have cop terms like zombie banks floating around. We have problems already. I want to ask you when we get back, how does he deal with the fact that he has a scorecard now. It‘s called the Dow Jones. Every day now—first of all, they‘re going to nationalize the banks. Then they‘re not going to nationalize the banks. No matter what they say, the Dow keeps going down. It‘s down to almost 7,000 now. I used to think 8,000 was the floor.
It‘s heading toward 6,000. People are really getting angry. I‘m getting angry. People have saved money, who are facing retirement, are ripped right now. It‘s absolutely disturbing, to put it lightly, what this must be saying to people who are retired now. They have a nest egg, a 401(k) that‘s now a 101(k). They are ripped. I‘m only saying it the nice way. They are really angry and they‘re going to get mad at him if we don‘t get this market turned around.
We‘ll be right back with Howard Fineman and see how the president does with his scorecard, and Gene Robinson. Can he deal with that Dow Jones scorecard every day in decline? You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We‘re back with Howard Fineman and Eugene Robinson for more of the politician fix. Eugene first, then Howard. This fear and loathing is growing.
ROBINSON: Yes, it is. You know, you asked before the break about the market. I think a lot of the decline has been led by the financial stocks, which have just tanked. And the reason they‘re tanking is this uncertainty over the banks and over the whole banking system and who‘s solvent and who‘s not. That‘s a bullet that‘s going to have to be bitten, I think, before things can begin to turn around.
FINEMAN: Chris, I think there‘s something else that the markets are worried about here. I‘m just guessing. I had an interview for “Newsweek” the other day with Peter Orszag, who is the new budget director in the Obama White House. Very impressive, very competent guy. What he was saying is in the new budget that Obama‘s going to come out with, they‘re going to try to get to what he called a path to sustainability. Now what that means is you want to bring down the deficit over the next several years enough so that interest payments on the debt don‘t keep rising and eventually consume the whole budget.
Why do I mention this? Because there‘s a long-term fear of inflation here, that if we keep borrowing money endlessly, if we keep running up the deficits each year and the debt, that eventually we‘re going to pay for it in terms of the value of the dollar. I think if Wall Street didn‘t have enough to worry about, they‘re beginning to worry about this, now that they look at the long range spending stuff that Obama‘s going to be talking about tomorrow night and in the weeks and months ahead. That to is enough to scare the markets.
MATTHEWS: It scares me when you try to sell two messages at the same time. And if the president is saying get out there and spend money, and the government‘s spending money as the great over-leverager, and at the same time he says, by the way, we‘re cutting back on our spending in the long run, it gets complicated. Thank you, Howard Fineman. Thank you, Gene Robinson.
We‘ll all be watching tomorrow night here on MSNBC. Tomorrow night, President Obama will address a joint session of Congress, his first chance to walk into that chamber as the president of the United States. Join us at 5:00 and 7:00 Eastern and watch the president‘s address on MSNBC at 9:00 Eastern tomorrow night. We‘ll be back again at midnight for another edition of HARDBALL. I think I‘m on four hours tomorrow, starting at noon, then back at 5:00 and 7:00, then midnight. 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.
END
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