updated 3/5/2009 10:34:25 AM ET 2009-03-05T15:34:25

Guests: ,Jim Cramer, Michael Isikoff, Bertha Coombs, Harold

Ford, Nicolle Wallace, Tom DeLay, Carrie Johnson, Roger Simon, Lynn

Sweet

High: Can anyone in the Republican Party stand up to Rush Limbaugh?

CHRIS MATTHEWS, HOST:  Mounting (ph) Rush-more.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight, if you‘re a Republican, don‘t ask what time it is, it‘s Rush hour.  The horns are blowing.  The traffic‘s getting snarled.  Tempers are hot as the noisy motorcade of the right snakes its way to the man on the radio.  Everyone, it seems, wants to get there first to apologize, to genuflect, to show the respect for the man who speaks from and for the right.

Question: Can anyone in the Republican Party stand up to Rush Limbaugh?  Republican national chairman Michael Steele tried to.  On Saturday, he called Limbaugh an entertainer whose views were “incendiary,” and yes, he said it, “ugly.”  Yesterday, Rush blasted Steele on his show, and what did Steele do?  In a Miami minute, he was on the phone trying to reach the man with the mike.  He said he hadn‘t been thinking straight, speaking right, that he was “inarticulate.”  So who has the nerve to stand up to Rush?

Plus—you knew this was coming—conservatives are now blaming President Obama for the stock market‘s collapse.  Never mind that Republicans have been in the White House for the last eight years.  CNBC‘s Jim Cramer is not shy about this subject and he‘s going to join us soon.

And President Obama‘s Justice Department has released secret Bush administration legal memos that read like a how-to manual for getting around the Constitution post-9/11.  Silence free speech?  Not a problem.  Warrantless searches?  Go right ahead.  Should Bush administration be investigated for possibly breaking the law?

And from the “that didn‘t take long” department, John McCain laid into the president for all the pork in a new spending bill.  We‘ll look at that in the “Politics Fix.”

Also in the “fun and games” department tonight, will President Obama and Britain‘s visiting prime minister, Gordon Brown, decide to take each other on in tennis or basketball?  That‘s in the “fun and games” department in the “Sideshow.”

But we begin with Rush Limbaugh and the Republican Party.  Nicolle Wallace was White House communications director for President Bush, and Tom DeLay, of course, was Republican majority leader of the U.S. House of Representatives.

I want to ask you both about this strange back and forth, where Michael Steele—well, let‘s take a look.  Limbaugh‘s been a topic of conversations on couches, by the way, of late night.  Let‘s take a look at what David Letterman said about Rush Limbaugh.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, “LATE NIGHT WITH DAVID LETTERMAN”:  What about this bonehead Rush Limbaugh?  Honest to God!  I mean, what is going on there?

KATIE COURIC, ANCHOR, “CBS EVENING NEWS”:  Oh, Dave, don‘t do this to me, please!

(LAUGHTER)

LETTERMAN:  No, because...

COURIC:  Don‘t do this to me.

LETTERMAN:  Now, he gets up in Washington and he‘s the keynote speaker at some function, and he comes up, he looks like an Eastern European gangster, you know?

(LAUGHTER)

LETTERMAN:  He‘s got the black jacket on...

COURIC:  You‘re killing me.

LETTERMAN:  ... the black silk shirt, and it‘s unbuttoned, like, Oh, yes, when you think Rush Limbaugh, you think, Oh, let‘s see a little flesh!

(LAUGHTER)

(END VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  So don‘t expect the race industry to go away.  Southern Christian Leadership...

(END VIDEO CLIP)

MATTHEWS:  Rush Limbaugh in his Hollywood—I don‘t know what costume.  I wouldn‘t call it Eastern European tyrant.  But there he is, an interesting show business costume.  This guy is dominating the airwaves right now and dominating the talk about your party.

NICOLLE WALLACE, FORMER BUSH WHITE HOUSE COMMUNICATIONS DIR.: 

Absolutely.  And that‘s nothing new.  I mean, I think Rush Limbaugh has been a fixture in our party.  And you know, I think the mainstream media sometimes gets lost in the back and forth and misses the reason that he is so powerful.  His animating philosophy...

MATTHEWS:  Not me.

WALLACE:  Well, his...

MATTHEWS:  I know why he‘s powerful!

WALLACE:  Not you!  Not you!

(LAUGHTER)

WALLACE:  Present company excluded.  His animating philosophy is a belief in American exceptionalism, and I think it really gets under his skin...

MATTHEWS:  Well, I believe in that!

WALLACE:  Well, listen, that speech, everyone that‘s talking about the back and forth with Michael Steele has missed the point of that speech.

MATTHEWS:  Yes.

WALLACE:  And I wrote about it in a piece for Thedailybeast today.  The news he made in the speech is that a president of that country is elected to serve.

MATTHEWS:  Right.

WALLACE:  And they are a steward of this country.  They are not elected to remake America in their own image.  And you know, I think that we‘re missing something...

MATTHEWS:  OK...

WALLACE:  ... when we talk, you know, all day and now on our third day about the back and forth with Michael Steele.

MATTHEWS:  OK, Mr. Leader, what do you make of Rush Limbaugh and his lionhood these days, where even the chairman of your party has to do a bit of genuflexion when he gets off message?

TOM DELAY (R-TX), FORMER HOUSE MAJORITY LEADER:  Well, Chris, I got to tell you, Rush Limbaugh is not the leader of Republican Party.  He‘s the leader of the conservative cause and the Republican Party is the conservative party.  He never—he has never claimed to be the leader of the Republican Party, but he is speaking for conservatives all across this country and showing leadership.

And I tell you, the Republicans better understand and look at his—the role model that he‘s presenting: Stand up and fight for what you believe in.  This whole notion that we‘re not going to take on Obama but we‘re going to take on Pelosi and Reid will get you nowhere.  That‘s a minority mindset of playing on the ballfield of the left.  You need to stand up and fight, and that‘s what Rush is doing and that‘s why people are gravitating towards him and support him.

MATTHEWS:  Well, let‘s watch this, Mr. Leader.  Let‘s watch now a recap of Rush Limbaugh, Michael Steele going at it.  First, the Republican national party chairman, Michael Steele, says in an interview with a guy named Hughley—here he is.

(BEGIN VIDEO CLIP)

D.L. HUGHLEY, HOST, “D.L. HUGHLEY BREAKS THE NEWS”:  We don‘t need incendiary rhetoric.

MICHAEL STEELE, RNC CHAIRMAN:  Exactly.

HUGHLEY:  Like—like Rush Limbaugh, who is the de facto leader of the Republican Party.

STEELE:  No, he‘s not.

HUGHLEY:  Well, I‘ll tell you what.  I‘ve never heard anybody...

STEELE:  I‘m the de facto leader of the Republican Party.

HUGHLEY:  Then you know...

STEELE:  Just put it in the context here.  Rush Limbaugh‘s an entertainer.  Rush Limbaugh is—his whole thing is entertainment.

HUGHLEY:  He influences the Republican Party.

STEELE:  Yes, it‘s incendiary.  Yes, it‘s ugly...

(END VIDEO CLIP)

MATTHEWS:  Here‘s Rush coming back.

(BEGIN VIDEO CLIP)

LIMBAUGH:  It‘s time, Mr. Steele, for you to go behind the scenes and start doing the work that you were elected to do instead of trying to be some talking head media star, which you‘re having a tough time pulling off.

(END VIDEO CLIP)

MATTHEWS:  He‘s great!  In an interview with “The Politico‘s” Mike Allen, Michael Steele apologized, saying, “My intent was not to go after Rush.  I have enormous respect for Rush Limbaugh.  I was maybe a little bit inarticulate.  There was no attempt on my part to diminish his voice or his leadership.”  Today Rush Limbaugh lets his audience question him—anyway, here‘s the whole thing here.

Let me ask you.  He basically gave him a bye today.  He said that was yesterday‘s news.  Rush Limbaugh was magnanimous.  He won the fight.  He knows he won the fight.  Michael Steele had to kowtow to him, and now it‘s over.  Michael Steele had to call him the leader, OK?  Now, Mr. Delay denies that he‘s the leader, but Michael Steele, the leader of the supposed Republican Party, calls Rush Limbaugh the leader.

WALLACE:  Yes.  Look, and what gets lost in there and what shouldn‘t is that Michael Steele I think knows he has his work cut out for him.  His job, really, the most important thing that the party does is the grass roots building of a party, and we do have a lot of rebuilding to do.  We are a long way off from where we were in 2004 when the party won reelection.  And you know, so Rush has a point there.  But yes, look, nobody—I‘m sure you don‘t want to make Rush mad.  No one wants to make Rush Limbaugh mad.  He has, you know, millions of listeners and...

MATTHEWS:  Well, he goes after me every couple of days.  It doesn‘t bother me.  It‘s all in good fun.

WALLACE:  From that tickle down your leg?

MATTHEWS:  Well, we disagree—well, you know, I said it.

WALLACE:  I know.  And you own it.  Absolutely.

MATTHEWS:  We live with what we say.

WALLACE:  We all do.

MATTHEWS:  And I‘m—and I‘m very...

WALLACE:  I‘ve been in trouble with Rush Limbaugh.

MATTHEWS:  ... capable of handling what I say.  Go ahead, Mr. Leader, Mr. Delay.

DELAY:  Well, Chris, you‘re seeing in Michael Steele exactly what I was talking about.  He took the bait.  The left is trying to discredit the conservative movement, discredit the Republican Party.

MATTHEWS:  How so?

DELAY:  Well, they‘re rewriting history.  You just did it in your introduction, saying that...

MATTHEWS:  What did I do?

DELAY:  ... the last eight years of Bush is what caused this recession.  That is absolutely false, and you know it.

MATTHEWS:  Well...

DELAY:  And giving Bill Clinton credit for good economics in the ‘90s is just false because Bill Clinton didn‘t get to sign one bill he initiated with a Republican Congress.

MATTHEWS:  We just took—Mr. Delay, we just took a “Wall Street Journal”/NBC poll.  It‘s out tonight.  And the first number that jumped at me was this.  “Did Barack Obama, the president of the United States, inherit the economic crisis we‘re in right now or not?”  Eighty-four percent of the American people—not me, 84 percent of the American people say he inherited this crap.  He didn‘t do it, and nobody believes in one month, he brought the stock market down.  They believe he inherited this mess.  You disagree with the overwhelming majority of the American people.  Accept it.  You‘re in a very minority position here.

DELAY:  Chris, you‘re putting words in my mouth.  I didn‘t say he did not inherit this mess.  But...

MATTHEWS:  Well, you said President Bush was innocent of all this.

DELAY:  He was innocent of all this.

MATTHEWS:  What?

DELAY:  He was innocent of all this.

MATTHEWS:  Well, who was president fir the last eight years?

DELAY:  Excuse me, but the economy from 2001 to 2007 was going quite well, thank you, but people were pushing especially Freddie Mac and Fannie Mae into loaning—making loans to people that couldn‘t afford them.  That caused the housing strike (ph).  And we can all go through that.  But the economy most of the years of Bush was going just fine and we were fighting a war on terror in two different countries and we were keeping the homeland safe and we were not on a spending spree, like Obama is putting us on with his budget.

So to say that it‘s all Bush‘s fault and that we inherited it, so we don‘t have to do anything about it and we‘re just going to transform...

MATTHEWS:  No, I‘m just quoting the American people against you.

DELAY:  ... America is just absolutely outrageous.

MATTHEWS:  Mr. Delay, you said—Mr. Delay, you said it wasn‘t Bush‘s fault, it was Obama‘s fault, and I‘m saying the American people overwhelmingly right now disagree with you.

DELAY:  Chris, I never said it was Obama‘s fault.  I‘m saying that Obama‘s policies, which have nothing to do with getting us out of this economic mess...

MATTHEWS:  Right, well...

DELAY:  You look at his budget.  That has nothing do with getting us out of the economic crisis.  His stimulus package has nothing to do to stimulating the economy.  He has—he doesn‘t understand and he‘s inexperienced in understanding what caused this problem.  And therefore, he has no solution to help us get out of it.  In fact, his solution‘s going to drag us deeper and longer in this recession.

MATTHEWS:  OK, Nicolle, your thoughts, because I can only quote the newest polling we get here in the “Wall Street Journal”/NBC poll.

DELAY:  Well, that—that poll—Chris, that poll, I also saw his negatives are approaching 40 percent.

(CROSSTALK)

MATTHEWS:  Well, I‘m looking at his numbers and he‘s got 60 percent—well, I can‘t get all these numbers right now, but he‘s doing quite well.  We‘ll give them all to you in the second show tonight at 7:00 o‘clock.  Go ahead, Nicolle.

WALLACE:  Let me bring it back to Rush.  I thought the most instructive thing that he did was bring our party into the present moment and try to push us into the future.  And the most instructive thing he did for Republicans was to recognize the power of Barack Obama...

MATTHEWS:  Right.

WALLACE:  ... as an inspirational figure and as a communicator.  And he said, Let‘s drop all the process.  And you know, we don‘t need to make it personal.  Let‘s get back to a basic philosophical...

MATTHEWS:  I agree with you.

WALLACE:  ... debate about the role of government in peoples‘ lives.

MATTHEWS:  I‘ll tell you, you know why I think Rush was smart?  Because he stripped away all the arguments about abortion rights and stem cell and all the other cultural issues.  He stripped aside this neoconservative argument for going to war in Iraq and endless democratizing of the Middle East and all that stuff...

WALLACE:  Which isn‘t what people talk and around the kitchen table anyway.

MATTHEWS:  No, he dropped all that, and he said, The issue here is, Are we going to keep taxing people who succeed in American life...

WALLACE:  Right.

MATTHEWS:  ... and try to keep fixing people who have troubles in American life...

WALLACE:  Are we going to...

MATTHEWS:  ... with a Great Society program...

WALLACE:  Are we going to end—right.

MATTHEWS:  ... and he keeps saying that.  His economic—to me, the smartness of Rush Limbaugh is he‘s focused on the core issue that will get the Republicans back in power some day, the same thing that got Ronald Reagan into power in 1980, not all the social arguments, the economic issues.

DELAY:  Wrong, Chris!

MATTHEWS:  Is that your view?

DELAY:  Wrong, Chris~!

MATTHEWS:  Well, that‘s what—why is Rush Limbaugh only talking about the economy?

DELAY:  Because the economy‘s the top headline of today.  We‘ve got plenty of time to talk about the social issues because those are coming...

MATTHEWS:  Well, he didn‘t buy into them...

DELAY:  ... in the next few weeks, believe me.

MATTHEWS:  OK...

DELAY:  And Rush Limbaugh will stand up and he‘ll talk about it and he will lead.  That‘s the whole point here.  The point is...

MATTHEWS:  Well, when he had a shot before CPAC, he never mentioned any of those issues, which tells me he knows where the butter‘s breaded—the butter‘s—what side of the bread the butter‘s on.

Let‘s take a look at this new ad from the other side, Mr. Delay.  This is the democracy advocacy group, Americans United for Changed.  I think it‘s based mainly with AFSCME money.

DELAY:  Yes.  It is a coalition of unions.

MATTHEWS:  Right.

DELAY:  Yes.

MATTHEWS:  Here we are.

DELAY:  What about it?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Who was the leader Republicans hailed as a hero last weekend?  Was it Sarah Palin?

UNIDENTIFIED FEMALE:  Nope, nope, nope.

UNIDENTIFIED MALE:  Bobby Jindal?

UNIDENTIFIED MALE:  No, no, no.

UNIDENTIFIED MALE:  Michael Steele?

UNIDENTIFIED MALE:  No, no, no.

UNIDENTIFIED MALE:  Mitch McConnell?

UNIDENTIFIED MALE:  No, no, no.

UNIDENTIFIED MALE:  Then who?  Not Rush Limbaugh.

LIMBAUGH:  Yes.  Yes.  Yes.  Yes.  Yes.  Yes.

UNIDENTIFIED MALE:  Call the Republican leadership.  Tell them to just say no to the politics of Rush Limbaugh.

LIMBAUGH:  I hope he fails!

UNIDENTIFIED MALE:  Paid for by Americans United for Change.

(END VIDEO CLIP)

MATTHEWS:  So what do you make of that?

DELAY:  Well, I‘ve been telling people for two years now that the left has put together the most powerful coalition that I‘ve ever witnessed in my lifetime.  And the right is nowhere near capable of putting up that kind of organization, where you have all these different coalitions that are well funded with coordinated giving from all kinds of different directions, in this case, pulling together money from all the unions.  And they‘re able to support what Obama is doing.  They‘re able to support it in ads and grass roots organizations...

MATTHEWS:  Right.

DELAY:  ... through the Internet.  We have nothing like that.  And unfortunately, no one—no one‘s talking about putting together the organization, the communication, the coordination it‘s going to take...

MATTHEWS:  Right.

DELAY:  ... to stand up and fight this fight.

MATTHEWS:  But the message is the question of—not the message sending but the message itself.  Do you buy—one last thought.  I‘d ask Nicolle first and then Mr. Leader, Tom DeLay.  Do you buy the Rush Limbaugh argument he hopes that Barack fails, President Obama fails?

WALLACE:  No.  I mean...

MATTHEWS:  Well, let me ask Mr. Delay.  Do you buy that?  I think you do in some quote I saw.  You do like that argument, We hope that the president fails.

DELAY:  I don‘t have to.  The president is going to fail.  The—his policies are going to fail.  They‘ve been tried before and they have failed before.  You cannot increase taxes, increase spending, increase regulation and expect the economy to recover.  They are going to fail.

MATTHEWS:  OK.  Thank you very much, Tom DeLay, who‘s always welcome here...

DELAY:  Thank you.

MATTHEWS:  ... with his powerful voice.  It‘s almost as strong as Rush Limbaugh‘s.  Nicolle Wallace, welcome back.

Coming up: The stock market closes below 7,000 for the second straight day.  It‘s on a downward spiral, some thing.  And some on the right suggest President Obama‘s policies are to blame.  We just herd one who thought so.  We‘re going to put those claims to the test to some extent with CNBC‘s Jim Cramer and former U.S. congressman Harold Ford.  They‘re going to be here to duke it out on who put the fire in the bed?  Did Barack Obama get in the bed when it was already on fire?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  A brand-new NBC News/”Wall Street Journal” poll just out tonight finds that 84 percent of the country thinks President Obama inherited the country‘s economic conditions.  Only 8 percent think his policies—that‘s President Obama‘s policies—are mostly responsible for our current economic problems.  But the pain at the stock market is bad, closing again today at a 12-year low, and some people think that President Obama isn‘t helping matters.

Here‘s CNBC‘s Jim Cramer reacting just last night on “Mad Money.”

(BEGIN VIDEO CLIP)

JIM CRAMER, CNBC “MAD MONEY”:  I wish I could tell you that everything‘s going to be OK.  I wish I could hold your hand.  But until the Obama administration starts listening, until they start paying attention to what you‘re watching, to the stock market, until they realize that their agenda is destroying the life‘s savings of millions of Americans, then all I can give you is caution.

Mr. President, stare at Bloomberg quote machine and come to your senses.  I just want some sign that Obama realizes the market is totally falling apart and that his agenda has a big hand in that happening.

(END VIDEO CLIP)

MATTHEWS:  Well, is Jim Cramer right?  Is the Obama administration contributing to this problem?  With us now, Jim Cramer himself and former U.S. congressman Harold Ford, Jr., who‘s an MSNBC political analyst and professor at Vanderbilt.

I would only guess, having listened to Robert Gibbs, Jim, that the response from the White House will be—to what you say—that they‘re looking at this as a long-term problem and they‘ve got to get out of this ditch and it‘s going to take a year or so, and the only way to do it is with dramatic action.  Now, that dramatic action meaning big spending, big fiscal policy shifts, tax cuts, all kinds of expenditures.  The only way to do that is big-time.  If that shakes some people in the short run, it‘s the cost you pay to do what is necessary.  Your response?

CRAMER:  I think that when a man is drowning, you got two choices.  You can throw him a life preserver, get him back in, put him in good shape, or you throw him an anvil.  Look out!  We got the anvil!  I mean, I don‘t know, I guess it could have been a piano.

MATTHEWS:  Well, here‘s President Obama responding to that thought today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  What I‘m looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. 

And, you know, the stock market is sort of like a tracking poll in politics.  You know, it bobs up and down day to day.  And if you spend all your time worrying about that, then you‘re probably going to get the long-term strategy wrong. 

(END VIDEO CLIP)

MATTHEWS:  Harold Ford, the problem is that it is not bobbing up and down.  It‘s not gyrating.  It is plunging. 

HAROLD FORD, MSNBC POLITICAL CONTRIBUTOR:  As one who‘s had to follow tracking polls, I can tell you, there‘s a difference.  I understand where the president is going and I understand what he is trying to achieve with the comment. 

But when you have gyrations in a tracking poll, people are not losing vast amounts of wealth, which we‘re seeing in the stock market day in and day out. 

As Jim knows, I happen to agree with Cramer‘s points, his—his larger thrust that he‘s—the point he‘s trying to make to this administration. 

If I were giving them advice tonight, they need to be assertive.  They need to be forceful.  They need to—they need to be lay out a set of rules and follow through on those set of rules, and give investors and the market a clear sense of how we will go about dealing with this deflationary psychology when it comes to homeownership in this country. 

What are you going to do with the trillion dollars of bad assets that these banks have on their books?  If you lay out the rules, investors, and market players, and risk-takers, they know how to get us out of this mess and will take the right kind of risks.

But if you continue to change, as some suggest that this White House is doing, we will continue to face the kind of strife and the kind of stress, the unbelievable stress, we‘re seeing in the markets day in and day out. 

MATTHEWS:  Jim, what is it that‘s driving the market down, as you see it? 

CRAMER:  Well, there is tremendous uncertainty. 

We believe that there is no plan to be able to save the banking system.  The creeping Citigroup nationalization makes us feel, what‘s next, Bank of America, U.S. Bank, Wells Fargo, J.P. Morgan?

We also felt that the tax increases—look, I‘m a part of the tax

increase.  I—I take it like a man.  But there‘s a lot of people who feel

like, now, suddenly, we‘re going to get penalized for making a lot of

money.  And then there‘s the sense that the health care budget is that—

that that was wrong, that the oil stocks are now under attack, because this

the cap and trade.  Your utility‘s bill going to go up. 

And the tone-deafness—I got here a little handbook.  It‘s called “The Great Crash.”  John Kenneth Galbraith urges people, when he wrote this book, to pay attention to what the stock market says.  It is not a gyration.  It is not a poll.  As Harold Ford said, it is the real deal. 

MATTHEWS:  What do you make, Mr. Ford, of the comparison between the last months of decline in the stock market that shows it tracking what happened in ‘29? 

(CROSSTALK)   

MATTHEWS:  We‘re not there, obviously, down to the floor, where they reached in ‘32.

But, if you look at the polling—rather, the stock market dropping from ‘29, in October of ‘29, when Hoover came into office that year, down to ‘32, when he‘s about to leave office, the market plunged the whole time.  But we‘re on that course right now. 

FORD:  There are some things that the president said today that are absolutely correct. 

He‘s developed a strategy, a strategy that will get us out of this over a period of time.  But, in the interim, there has to be a sense of certainty, as Jim has said.  And if you don‘t give the markets and you don‘t give investors and most importantly you don‘t give everyday workers in this country a sense that we‘re finding our way out of this, we‘re navigating our way out of this, people won‘t spend. 

People are going to be concerned.  They won‘t buy homes.  They won‘t buy cars.  They won‘t do the things that will get this economy moving in the right direction again. 

The White House is almost there.  Tim—Secretary Geithner, the president, Larry Summers, they‘re working their way towards this.  But they have to follow, I think, the larger point that Jim is making.  We need a forceful, assertive set of ideas.  And we need for it to be consistent.

And I‘m hopeful that the president will consider a tax credit for homeowners, for people buying new homes, maybe a 15 percent tax credit, up to $25,000, a tax credit to buy automobiles, American automobiles.  You have got to give people a sense of something they will get back and incent them to go out and spend. 

MATTHEWS:  Right.   

Do you buy that?  Because a lot of people are thinking—I‘m thinking people are rational.  I don‘t think people are irrational.  I think we have things to fear besides fear itself right now.  I think, if you know the house of—the value—the house you have got your eye on is going to be cheaper six months from now, you wait out the buyer.  If you are thinking of buying something now, you know it‘s going to be cheaper a few months from now.  That‘s rational. 

You also know you have overborrowed.  You have got a big credit card debt.  So, you‘re not going to go buy stuff you don‘t need. 

I think people are rational.  How do you turn their rationality to start spending?  What do you do, Jim? 

FORD:  Jobs. 

CRAMER:  Well, I think that...

FORD:  I‘m sorry. 

CRAMER:  ... I‘m not so sure that it‘s rational at this point, if you put in what Harold Ford said, if you felt that you were going to get money back if you bought a house, we would work through that inventory of homes.

The home price problem is at the genesis of the whole issue.  And had we put that tax credit in that was substantial, particularly for existing homes, we would see a turn in people‘s principal asset. 

I think that did matter.  I agree with you that people are acting rationally, but I think that they can be, because they could act rationally...

MATTHEWS:  Yes. 

CRAMER:  ... be propelled from the sidelines to start buying homes, we get through that inventory, and then that would keep people in their homes, and foreclosures go down. 

MATTHEWS:  Right. 

CRAMER:  That‘s the essence of America. 

MATTHEWS:  OK. 

What‘s—and you think Barack Obama, the president‘s big mistake right now is talking big on health care, big on the budget, raising taxes on the wealthy, and that‘s it?  That‘s what you don‘t like.  You don‘t like his basic fiscal policy.  You don‘t like his values.  You think they‘re hurting the country.

CRAMER:  No. 

I think that he needs to put the agenda in a more quiet fashion, say, look, if things—when things get better, here‘s what awaits you.  But we are going to get them on even footing first. 

I—green—look, I‘m against greenhouse gases.  I want wind power.  I think that there‘s—that the poor people don‘t make enough money.  I‘m willing to accept the tax increase.  But the vast majority of people right now are saying, listen, I‘m fearful.  Could you slow it down?  If you slow it down, I will get on board. 

MATTHEWS:  OK. 

Thank you, Jim.  You have never been accused of slowing it down. 

(LAUGHTER)

MATTHEWS:  Thank you very much, Jim Cramer. 

“Mad Money” airs weeknights at 6:00 and 11:00 Eastern on CNBC.

And, thank you, Harold Ford. 

Up next:  John McCain takes President Obama to task on the floor of the U.S. Senate.  You ought to hear this.  He has got some tough words for the guy who beat him—next in the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Just four months in, the post-election truce is over.  Take a look at Senator John McCain on the Senate floor late yesterday railing against an administration-backed $410 billion spending bill. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  I just went through a campaign, Mr.  President, where both candidates promised change in Washington, promised change from the wasteful, disgraceful, corrupting practice of earmark pork barrel spending. 

So, what are we doing here?  Not only business as usual, but an outrageous insult to the American people.  Not surprising, the measure has over 9,000 unnecessary and wasteful earmarks. 

So much for the promise of change, Mr. President.  So much for the promise of change. 

(END VIDEO CLIP)

MATTHEWS:  Well, the McCain amendment to strip earmarks from that bill came up for a vote this afternoon.  It went down 32 votes to 63. 

Next up:  It is perhaps the oldest of all American alliances.  Here‘s British Prime Minister Gordon Brown and President Obama answering a question about their fresh working relationship during an Oval Office photo-op this afternoon. 

(BEGIN VIDEO CLIP)

GORDON BROWN, BRITISH PRIME MINISTER:  I don‘t think I could ever compete with you at basketball.  Perhaps tennis. 

OBAMA:  Tennis, I hear you‘ve got a game. 

BROWN:  Yes, we could maybe have a—have a shot.

OBAMA:  We haven‘t tried it yet.

BROWN:  I don‘t know.  I think you would be better.

(END VIDEO CLIP)

MATTHEWS:  Well, the fact is, President Obama‘s extremely popular on the other side of the Atlantic.  The prime minister‘s trip here is just a prelude to the huge excitement that will come when our president visits Great Britain as part of his first overseas trip at the end of the month. 

And take a look at this official portrait of Michelle Obama that came out last week.  Well, some have noticed a similarity in the pose struck by the first lady and that once posed by Hillary Clinton.  There she was, the former first lady, in the year 2000 posing for the cover of her book, “An Invitation to the White House.”

When asked for a comment, Michelle Obama‘s press secretary told “The Washington Post” that the likeness was a complete coincidence. 

We have to wonder what else it would be.  Did someone really think that Mrs. Obama went out there and consciously imitated, limb for limb, what the current secretary of state was doing in that photo? 

Time now for tonight‘s “Big Number.” 

This past weekend, the head of the Republican National Committee, as I said, Michael Steele, dared to deride that leader of the right, Rush Limbaugh.  Never one to back off of a fight, Rush took on Steele yesterday during his radio show. 

(BEGIN AUDIO CLIP, “THE RUSH LIMBAUGH SHOW”) 

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  It‘s time, Mr. Steele, for you to go behind the scenes and start doing the work that you were elected to do, instead of trying to be some talking head media star, which you‘re having a tough time pulling off. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  Hah!

So, how long did it take for Chairman Steele to apologize to Rush Limbaugh once the great man had taken umbrage?  About 51 minutes.  Rush called out Steele at 2:09 on his show.  And Chairman Steele told ThePolitico.com that he called Limbaugh right after the broadcast -- 51 minutes for Steele to apologize, tonight‘s “Big Number.” 

Up next:  The Obama administration releases secret legal files from the Bush era showing just how much power Bush administration lawyers thought the president, President Bush, should have in the fight against terrorism.  Did the Bush people overstep the law and avoid the Constitution, and should they be investigated for possible crimes? 

You‘re watching HARDBALL.  And that‘s coming up next, only on MSNBC.  

(COMMERCIAL BREAK)

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

Several attempts at a rally failed today, stocks ending slightly lower, even after President Obama said there are some good deals in stocks out there—the Dow falling 37 points, closing at a fresh 12-year low.  The S&P 500 lost four points, closing below 700 for the first time since October 1996.  The Nasdaq fell nearly two. 

February was an ugly month for auto sales.  GM sales were down 53 percent from a year ago.  Ford sales dropped 48 percent, while Chrysler fell 44 percent.  Toyota and the other Japanese automakers were down about 40 percent. 

Meantime, pending home sales plunged to a new record low in January.  And Fed Chairman Ben Bernanke told Congress—quote—“I share your anger” over the latest bailout of insurance giant AIG.  But he warned, an economic recovery hinges on success in stabilizing shaky financial markets and their major players. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

President Obama‘s Justice Department has just released secret legal memos drafted by the Bush administration that assert broader authority for the president in the months after 9/11.  The documents say that the military could conduct warrantless raids on terror suspects right here in this country, and that free speech may have to be discarded in wartime, as they put it. 

So, is this further proof that the Bush administration should be investigated for violations of the law?

Michael Isikoff is “Newsweek” investigative correspondent and an MSNBC contributor.  And Carrie Johnson is the Justice Department reporter for “The Washington Post.”

Michael Isikoff, this is your field of study.  What is new in here, in terms of what they did during the Bush administration? 

MICHAEL ISIKOFF, INVESTIGATIVE REPORTER, “NEWSWEEK”:  Well, look, the basic philosophy that John Yoo, who is the author of these memos, had adopted has been articulated before.  We have seen them in—in—in several other memos that have become public.

But every time we get new—new ones come out, we learn he‘s taking it even further than we thought before. 

MATTHEWS:  Now, who is this guy?  He‘s a Justice Department deputy.

ISIKOFF:  John Yoo was—John Yoo was a young conservative law professor who gets hired to work in the Bush Justice Department in the first term, was very much aligned with David Addington...

MATTHEWS:  Yes. 

ISIKOFF:  ... the chief counsel for Vice President Cheney.

And they had these really hard-line views about executive power.

MATTHEWS:  Was he an ideologue?  Is Yoo an ideologue?

ISIKOFF:  I think that he could probably fit that description, yes, sure.

MATTHEWS:  Well, the reason I ask that is, how did he get the job of defining how we could ignore the Constitution during that period of time? 

ISIKOFF:  Well, look, I mean, his response would be, this is—you know, the Constitution gives the president this enormous power, executive power, that can be—that is unchallengeable and unreviewable. 

It is really—I mean, what he really did, when you read some of

these memos—and they‘re pretty stunning reading, when you look at them -

is to put a constitutional gloss on the ethos of a banana republic. 

The basic John Yoo philosophy is, “El Jefe” decides everything...

MATTHEWS:  Yes. 

ISIKOFF:  ... protects the security of the people, and cannot be questioned. 

MATTHEWS:  Well, that‘s what a lot of Latin American armies used to believe in the bad old days...

ISIKOFF:  Yes. 

MATTHEWS:  ... that, when things got rough, they could start running the show. 

(CROSSTALK)

ISIKOFF:  There was literally nothing in these memos, nothing that the president cannot do to protect the country, under John Yoo‘s philosophy of government. 

MATTHEWS:  Well, it has to do with—let me—let me go to Carrie.

It has to do with limits on free speech, warrantless searches, domestic raids by the military—in other words, the cavalry can attack some apartment building in this country—about how to deal with detainees, warrantless eavesdropping, the works. 

Your view and your reporting, Carrie? 

CARRIE JOHNSON, “THE WASHINGTON POST”:  Well, Chris, many of the memos were known about, but the text of them was not available publicly until yesterday.  And I also think it‘s important to distinguish between some of the programs that were actually carried out by the Bush administration, warrantless wire tapping, for instance, the memo for which we do not yet have, the memos for which do not yet have public access, because they remain classified, and some of these issues involving the military, the use of the military here on American soil. 

There‘s no evidence that government officials during the Bush era ever took steps to enact or use that authority, even though they had it and they clearly wanted it after 9/11, when they were quite frightened that another attack would come any time. 

MATTHEWS:  Would you treat these documents as policy? 

JOHNSON:  I think they underpin policy that some high level Bush administration officials desperately wanted, and they underpin authorities that these folks thought that they had under the Constitution.  Many people, even conservative scholars, now disagree.  And that‘s why it‘s so important for people on both sides of the aisle for a lot of these documents to get a public airing, so there can be a debate about them and whether or not they were wrong headed. 

MATTHEWS:  You know, in the short range, I completely accept this, as we all do.  If we‘re under attack, if the enemy‘s riding in, as it was on 9/11, and the vice president‘s sitting in the bunker below the White House, and he has to decide whether to shoot down enemy planes that have become enemy planes, because they‘ve been hijacked, it‘s fair enough.  Right?  Does anybody dispute the right of the president in an urgent situation to defend the country? 

ISIKOFF:  Yes.  No.  But the problem with the John Yoo memos is there‘s no time frame. 

MATTHEWS:  No limit. 

ISIKOFF:  No restriction, no limit.  So that since by its own—by the way, John Yoo and people in the Bush White House were defining the war on terror at the time, it is an endless war against an enemy that cannot be defined. 

MATTHEWS:  This is what I‘m worried about: in bad governments, like Mugabe over there in crazy Zimbabwe right now, he would take an emergency order, back under the Ian Smith days, and invoke it now. 

ISIKOFF:  Right.  Exactly.  I should point out that Carrie is absolutely right that a lot of the things talked about in this October 23rd, 2001 memo were never—that Yoo talks about, were never actually implemented.  But they did do some things that went pretty far along those lines.  For instance, declaring Jose Padilla, a U.S. citizen, an enemy combatant, locking him up in a military brig without access to a lawyer, without charge, indefinitely. 

MATTHEWS:  Who was Jose Padilla again? 

ISIKOFF:  The alleged dirty bomber of which they never—

MATTHEWS:  Let me go back to Carrie on this.  Carrie, you have a thought there.  You were telling us what you‘d like to get as a reporter, your hands on. 

JOHNSON:  Well, certainly, some of the most hot documents out there are memos that are still classified, that deal with exactly what interrogation techniques that CIA and military officials could use against some of these al Qaeda suspects.  Some of them we expect are pretty gruesome and scary, and people still very much want those documents, reporters do, civil liberties advocates do, people on the Hill do, particularly Democratic lawmakers. 

Other documents, some of them are quite lengthy and are—you know, they‘re multiple opinions on this warrantless wiretapping program that remains the subject of ongoing investigations by the Justice Department‘s inspector general and all manners of other authorities.  Those are some of the most sensitive national security programs that the Bush administration employed over the past seven years.  They remain mysterious in many respects.  And we all want to know what was going on. 

MATTHEWS:  What are we to make, Michael Isikoff, of the 92 videotapes of the interrogations that we just were destroyed?  In other words, evidence to protect to the interrogators. 

ISIKOFF:  Right.  There‘s an ongoing criminal investigation on that one by a special counsel. 

MATTHEWS:  Who ordered the destruction of these tapes?  Do we know? 

ISIKOFF:  Well, we know that Jose Fernandez, who was the director of the CIA‘s Counter Terrorism Center, ordered the destruction of the tapes.  The question is why did he order the destruction, and who knew about it, and what representations were made to court?  So there is a criminal investigation on that one. 

There is also a Justice Department ethics investigation of these

memos, how they came to be written, why they were written and whether they

the lawyers involved violated their cannon of ethics by writing memos that had no support of law. 

MATTHEWS:  Thank you.  I want to know why didn‘t Scooter Libby get a pardon? 

ISIKOFF:  I think that the president felt after he commuted his sentence he didn‘t want to go—take any further flack. 

MATTHEWS:  Thank you, Michael Isikoff, our new colleague, and Carrie Johnson of the “Washington Post.”  Thank you for the reporting.  

Up next, when elephants attack.  Rush Limbaugh versus Republican party chair Michael Steele and how much damage to the party is this fight going to goes?  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  What‘s your reaction to Michael Steele‘s apology to you?  Do you think he needs to declare more clearly whether he wants Obama to fail?  I wrote back, no comment on Steele.  That‘s yesterday‘s news. 

(END VIDEO CLIP)

MATTHEWS:  Wow, how magnanimous.  That‘s Rush Limbaugh giving a break to his former sparring partner.  Time now for the politics fix.  Roger Simon writes for “The Politico.”  And Lynn Sweet is with the “Chicago Sun Times.”  You know, obviously, we are enjoying this, because it‘s a heavyweight fight.  But he is taking on—it‘s almost like bum of the month, this guy.  It‘s like Joe Louis.  He‘s taking on one guy after another.  He went after this guy—remember this guy, Phil Gingrey from Georgia, had to come and apologize. 

ROGER SIMON, “THE POLITICO”:  Absolutely. 

MATTHEWS:  The only contest is how fast can you come back and apologize to this guy. 

SIMON:  Having forced Michael Steele to crawl on the belly like a snake, Rush can now show a little—

MATTHEWS:  Right. 

SIMON:  -- a little magnanimous, as you say.  There‘s a fundamental difference besides—between Steele and Rush Limbaugh, besides that one is good and one isn‘t good at what he does.  And that‘s that Michael Steele genuinely wants to broaden the message to the party, to take it, as he said, off the hook and apply it to an urban, suburban, hip hop setting, to broaden the base.

MATTHEWS:  That‘s broadening it.

SIMON:  You can imagine how the base felt about that.  Rush Limbaugh‘s message is, we don‘t have to change message.  Our message is still the message of Ronald Reagan, small government, low taxes.  And if people don‘t want to join us, they‘re idiots.  And if we lose elections, it‘s because they‘re idiots and that‘s what happens. 

MATTHEWS:  Lynn Sweet?

MATTHEWS:  What a lucky man Rush Limbaugh is to not only have Barack Obama to deal with on his show, but now to have—to have an intra-family fight.  I just think that Michael Steele should be listened to as an in-kind contribution to the “Rush Limbaugh Show” and maybe he should get commissions on the ads they sell.  That‘s how great a favor Michael Steele is doing to Rush Limbaugh. 

MATTHEWS:  To your point, Lynn, P.T. Barnum, who was the master of all talk shows, way back when he started Barnum and Bailey, he said, if you want a fight—if you want a crowd, start a fight.  They used to send advance men to little towns ahead of time when the circus was coming, and they would stage fist fights on the street, and then pass out hand bills that the circus was coming.  This is what this is. 

SWEET:  Exactly, this is—this is the kind of proverbial guy who‘s running for office who throws the brick through his campaign headquarters, then alert the press, someone broke my window.  This is—there‘s nothing better than for Rush Limbaugh to have a fight on two fronts.  Again, within the party, with somebody who‘s trying to take it moderate, you know, in a reasonable, kind of lower key guy.  What a—you know, playing against type he is.  He is a foil for—

MATTHEWS:  I would say, you‘ve got to ask yourself—Rush Limbaugh doesn‘t have to run for anything.  There are an awful lot of Republicans out there who do.  They see this message and say, people really don‘t care about this.  

MATTHEWS:  Let me, once again, go back to rationality.  I think he knows what he‘s doing.  I think the Republican party took a thrashing last November and they know it.  So when you come back, you pick your strengths.  You find your strengths and you go with it.  You don‘t argue about abortion again.  You don‘t argue about the Iraq war, which 80 percent of the people, basically, say was a bad idea.  It‘s over.  That argument is over. 

What does he do?  Go back to basics, as Lynn said.  The basics in the Republican party is, and the reason they‘re still a strong political party, is they oppose taxes, just that.  Just oppose all taxes for every economic group.  It‘s not a bad argument because people hate taxes.  Just keep saying it over again, you‘re punishing success. 

SIMON:  If that was a—

MATTHEWS:  It works. 

SIMON:  If that was a winning argument, however, John McCain would be president and Barack Obama—

MATTHEWS:  It‘s not the only argument.  It‘s the one they got right now. 

SIMON:  It‘s not winning.  The Republicans—he does energize the base.  Going back to basics.  But in the end—not in the end, right now, the Republican base is shrinking, not expanding with that message. 

MATTHEWS:  We‘ll be back with Lynn Sweet, picking it up when we come back.  We want to talk about John McCain‘s comeback.  Is he hitting Obama after the bell?  He‘s back fighting again on his strength, which is earmarks and pork and how he opposed it.  Everybody goes to their strength when they‘re down, if they‘re smart.  We‘ll be right back with HARDBALL.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  Not surprising, the measure as over 9,000 unnecessarily and wasteful earmarks.  So much for the promise of change, Mr. President.  So much for the promise of change. 

(END VIDEO CLIP)

MATTHEWS:  That‘s Senator John McCain of Arizona, hitting President Obama last night in the U.S. Senate on the floor.  That was viewed on C-Span.  We‘re picking it up right now.  We‘re also with Roger Simon and Lynn Sweet. 

Lynn, it‘s interesting that a guy who a year or so—in fact, a few months ago had the national platform, now needs C-Span to get his message across.  But he did.  We‘re showing it because it‘s a valuable message.  He‘s pointing out what is inarguable, that the Congress of the United States continues to pack every spending bill with pork, with earmark spending for individual purposes of individual politicians that has no national value, in many cases.  He‘s pointing it out and nobody seems to be joining him.  That amendment of his to cut out the pork was defeated two to one.   

SWEET:  That appropriations package that he talked about, that was passed by the House on February 25th, just last week, may be one of the last hoorahs for earmarks.  The Obama administration likes to set the limits of argument.  They‘re saying this bill doesn‘t count because it was largely written and devised before we came into power.  There were still earmarks leftover from the House—

MATTHEWS:  That‘s a talking point. 

SWEET:  I don‘t agree. 

MATTHEWS:  It‘s an absurd argument, because it‘s being passed in this administration. 

SWEET:  Chris, I brought it up because it is absurd, and I don‘t think they should be allowed to get away with it.  That‘s what I want to underscore.  They can‘t always make the rules of the debate, and say this doesn‘t count, that doesn‘t count.  You know, when they give a waiver to a lobbyist, that one doesn‘t count.  IN this case, it counts.  John McCain made the argument.  Not a lot of people were listening. 

MATTHEWS:  Barack Obama, the candidate, promised to go through each spending bill line by line to look for pork and take it out.  He promised verbatim to do that.  He‘s not doing it here. 

SIMON:  His stimulus bill had no earmarks in it.  He‘s saying this has fewer earmarks in it.  I‘ve got to say, you know, the ground has shifted beneath John McCain‘s feet once again.  In bad times, people look upon pork as jobs.  Is there an earmark in this bill for 200,000 for tattoo removal in Hawaii?  There is.  But, you know, there are probably 15 out of work tattoo removal artists on the phone right now saying, hire me.  I want that. 

There is stuff in there to build school sidewalks.  There is stuff for the Planetarium in Chicago, which I went to as a child.  It is a fine planetarium.  It‘s employing people.  So now—

MATTHEWS:  By that argument, every corporate pig, as we used to call them, who is out there spending money on wasteful trips or anything like that, or refurbishing his office, like that guy got fired for, that‘s all spending too.  That‘s—

SIMON:  That doesn‘t put people to work. 

MATTHEWS:  It does put people to work. 

(CROSS TALK)

MATTHEWS:  You don‘t think he did it himself, do you? 

(CROSS TALK)

SIMON:  There is waste, fraud and abuse in government.  

MATTHEWS:  I just wonder whether one guy‘s waste and fraud is somebody else‘s earmark. 

(CROSS TALK) 

MATTHEWS:  OK, thank you, Roger Simon.  We agree with the American people on this one.  Lynn Sweet, thank you.  Join us again in one hour at 7:00 eastern for the results of the NBC News/”Wall Street Journal” poll.  We have lots of numbers for you.  Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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