updated 3/23/2009 9:56:59 AM ET 2009-03-23T13:56:59

Guest: Charlie Cook, Ron Brownstein, Roger Simon, Matt Taibbi, Jonathan Capehart, Pat Buchanan, Lawrence O‘Donnell, Eugene Robinson

CHRIS MATTHEWS, HOST:  Gambling in Casablanca?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: Everyone is shocked, just like Captain Renault in “Casablanca.”

(BEGIN VIDEO CLIP)

CLAUDE RAINS, “CASABLANCA”:  I‘m shocked, shocked to find that gambling is going on in here!

PETER LORRE:  Your winnings, sir.

RAINS:  Oh, thank you very much.

(END VIDEO CLIP)

MATTHEWS:  Shocked.  Everybody‘s shocked.  Senators say they don‘t know about the AIG bonuses.  The secretary of the Treasury says he didn‘t know their full extent until last Tuesday.  The president was downright “stunned.”  So does anybody know anything about those millions of dollars in federal money that are heading toward millions of dollars of bonuses in the hands of the American International Group executives?

I can‘t believe there‘s gambling going on in Casablanca.  But can‘t we?  Don‘t we know that, at least now, that the Federal Reserve knew all about those bonuses, that a couple of U.S. members of Congress, Kanjorski and Cummings, knew all about them and tried to raise hell about them, that Treasury staffers knew but didn‘t tell the Treasury secretary, according to him, the full extent of them until last week, or whatever?

So what exactly does accountability mean, that you‘re responsible if you know something but not if you don‘t?  What does transparency mean if you have to wait until the Friday of the following week to know what the secretary of the Treasury knew on Tuesday?

Here‘s Jay Leno joining in the hunt for the money.

(BEGIN VIDEO CLIP)

JAY LENO, HOST, “TONIGHT” SHOW:  You looked very angry about these bonuses.  Actually, stunned.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Stunned.  Stunned is the word.

(END VIDEO CLIP)

MATTHEWS:  Jesus!  He doesn‘t look stunned any more than Vichy Captain Renault looked shocked to learn about gambling in Casablanca.  The president did not look stunned.

Plus: Do we see signs of a Republican comeback these days?  A new poll put out by National Public Radio shows voters evenly divided now between voting for a Democrat or a Republican for U.S. Congress next time.  That‘s after two devastating election cycles for the Republicans and poll after poll showing Republicans losing ground.  So what‘s happening here?

One Democrat who‘s definitely got some ‘splaining to do is Senator Chris Dodd of Connecticut.  With the possible exception of Treasury Secretary Geithner, no one is taking more heat for the AIG bonuses right now.  That and more coming up tonight in the “Politics Fix.”

And finally, as “The New York Times” put it this morning, the Obamas have got themselves something of a victory garden going out back in the White House.  That‘s in the “Sideshow” tonight.

Let‘s begin with the tangling, unfinished tale of those AIG bonuses.  Eugene Robinson is a “Washington Post” columnist and MSNBC political analyst, and Roger Simon is the chief political columnist for “The Politico.”

I guess we start with this incredible timeline.  Here it is.  Look at this timeline.  In September of last year, the AIG revealed the bonus plan in regulatory filings to the Federal Reserve.  In November, Treasury and Fed officials negotiated—negotiated—the AIG‘s retention payments, which included these bonuses.  In December, Democratic congressmen Paul Kanjorski and Elijah Cummings repeatedly complained about those bonuses, and one of them even demanded the resignation of AIG‘s CEO.

In February of this year, the Federal Reserve informed Treasury

about the bonuses and Treasury Secretary Geithner opposed a proposed tax

on bonuses.  On March 10th, Geithner said he was informed—I love this

I love this weasel language—he was informed of the full scale of the AIG bonuses.  This was last Tuesday.  And on March 12th, two days later, on Thursday, he said he told Obama senior adviser David Axelrod, who then told the president that day.  Well, at least Axelrod is quick to move!

(LAUGHTER)

MATTHEWS:  He told the boss when he found out, which is called immediate disclosure, not rolling disclosure.

Gentlemen, we know what it sounds like when somebody‘s waffling and when Geithner, who is not a politician—I don‘t know what kind of guy he is, but when he said—I heard it on the car radio today—I didn‘t know the full extent of the bonuses until Tuesday, my brain says, Waffle, waffle, waffle.  He knew about them.  He didn‘t know the exact numbers involved.  Roger?

ROGER SIMON, POLITICO.COM:  That‘s the best you could say about it.  What that tick-tock shows, that timeline just shows, is that everybody who could have prevented the bonuses knew about the bonuses in advance and didn‘t prevent the bonuses.

MATTHEWS:  Yes.

SIMON:  And that includes the president of the United States.

MATTHEWS:  So what‘s that say about accountability?

SIMON:  It says there wasn‘t any.  And in Geithner‘s case, you know, knew about the full extent—in his world, it wasn‘t a big deal.  He comes from a world of eight-figure salaries, seven-figure bonuses.  Who paid?  Well, the shareholders paid.  Who pays now?  The taxpayers pay.

MATTHEWS:  Yes, funny money.

SIMON:  It wasn‘t a big deal to him.

MATTHEWS:  Low percentage...

SIMON:  It‘s only because...

(CROSSTALK)

MATTHEWS:  Let‘s take a look at Geithner.  Here‘s Geithner when asked about this whole question of AIG‘s bonuses.  Take a look at what he said and how he said it.  I love the way people talk.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY:  I was informed by my staff of the full scale of these specific things on Tuesday, March 10th.  And as soon as I heard about the full scale of these things, we moved actively to explore every possible avenue, legal avenue, to address this problem, to make sure that, again, the assistance we were providing was not going to unduly benefit these people.

(END VIDEO CLIP)

MATTHEWS:  What do you make of that, Gene?

EUGENE ROBINSON, “WASHINGTON POST,” MSNBC POLITICAL ANALYST:  Well, you know, the full scale of these things—you know?  He can‘t besmirch himself (INAUDIBLE)

MATTHEWS:  When he got the spreadsheet.

ROBINSON:  But you know, every legal avenue—we already know that he believed that it was—it was not legal for them to really do anything about it, so...

MATTHEWS:  OK, why is the president, Gene—I know you‘re somewhat favorable to the president, as I am, but why—we all have to be, with our new presidents.  But why is he trying to change the subject so much? 

Why does he keep saying—here he is, talking on Leno about the barn

door.  Let‘s take a look.  He‘s talking about trying to push this thing

the trouble is, the barn door was closed very recently.

ROBINSON:  Yes.

MATTHEWS:  Here it is—on his watch.  Here we go, Jay Leno and the president.

(BEGIN VIDEO CLIP)

OBAMA:  I understand Congress‘s frustrations, and they‘re responding to, I think, everybody‘s anger.  But I think that the best way to handle this is to make sure that you‘ve closed the door before the horse gets out of the barn.  And what happened here was the money‘s already gone out and people are scrambling the try to find ways to get back at them.

(END VIDEO CLIP)

MATTHEWS:  Well, the problem is the door was closed very recently.

ROBINSON:  Yes.

MATTHEWS:  And the horse got out on his watch.

ROBINSON:  Exactly.  Yes.  And...

MATTHEWS:  And the horse is called these bonuses I guess.

ROBINSON:  He doesn‘t want to talk about this because...

MATTHEWS:  Why?

ROBINSON:  Because he‘s getting hammered on it!

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  Does he know more than he seems to admit?

ROBINSON:  No.  It‘s—I don‘t know if he knows more...

(CROSSTALK)

MATTHEWS:  Does he know who the staffers were that went to tell Chris Dodd, Take it out of the bill?  Does he know that Geithner told his staffers to do that?  Does he know who told who to do what?

SIMON:  Sure, he does.  I mean...

MATTHEWS:  You do?

SIMON:  Geithner—the staffers went to Chris Dodd and told him to take it out of the bill because if they didn‘t do so, it would be a vulnerable to legal challenges.

ROBINSON:  Amazing.

SIMON:  Well, my God!  As Teddy Roosevelt once said, I could carve a better man out of a banana.

(LAUGHTER)

SIMON:  Geithner didn‘t have the backbone to suffer a lawsuit?  How many thousands of lawyers work at the Treasury Department?

MATTHEWS:  Here‘s the problem...

ROBINSON:  And imagine an insurance company that wouldn‘t, you know...

(CROSSTALK)

MATTHEWS:  This is totally melodramatic or artistic or whatever, but the president is laying this on Geithner.  OK.  He‘s Treasury secretary.  But the trouble with Geithner is when they release him out to talk, it does reminds me of what Will Rogers said about Calvin Coolidge—He doesn‘t say much, and when he does, he doesn‘t say much.

(LAUGHTER)

MATTHEWS:  Even when he‘s speaking, I don‘t hear anything.  He‘s not a big guy to put the weight (ph) on.

ROBINSON:  He‘s not a great communicator.  He‘s not.  And that‘s a problem because, you know, Obama obviously communicates very well.

MATTHEWS:  Yes.

ROBINSON:  But I don‘t think the president should be in a position of having to do all the explaining about the economy himself.  Nor do I think he should have to be the one to coordinate the message...

MATTHEWS:  OK, here‘s the problem.

ROBINSON:  ... on every single thing.

MATTHEWS:  Here‘s the problem...

ROBINSON:  But it seems as if he‘d better.

MATTHEWS:  The president of the United States, the only one we got, is head of our government.  He‘s not just head of state.  He‘s not just a symbol of our country.  He‘s the government in this sense because he‘s the administration and he controls the political party that runs the rest of the government.  So he‘s pretty much in charge.  But he doesn‘t act exactly like he‘s in charge.  He still has this aspect of candidacy.

Here he is last night, when asked about his reaction, as if he were a citizen sitting out in Cincinnati somewhere when he heard about this thing.

(BEGIN VIDEO CLIP)

LENO:  You looked very angry about these bonuses.  Actually, stunned.

OBAMA:  Stunned.  Stunned is the word.

(END VIDEO CLIP)

MATTHEWS:  Stunned is the word, but stunned isn‘t the manner.

SIMON:  Well, he‘s in the toughest place he‘s been in.  It‘s only been, what, 60 days.  But the fact of the matter is this bill before Congress, that Congress passed, the House passed, that‘s going to tax the bonuses, is a bill the president really doesn‘t like very much...

(CROSSTALK)

MATTHEWS:  I don‘t think the Constitution likes it very much, either.

SIMON:  That‘s one of his excuses...

(CROSSTALK)

SIMON:  He doesn‘t want to have to...

MATTHEWS:  That‘s not an excuse.  He took an oath to defend the Constitution.  Every member of Congress who voted for that did that with their fingers crossed because most of them know what‘s unconstitutional.  You can‘t pass a bill—why don‘t we just pass a bill—why don‘t we get a list of richest 20 people on the “Forbes” list or the Fortune 500 list—make a list of the 500 richest people in the United States and tax the hell out of them?

(CROSSTALK)

MATTHEWS:  Why don‘t we do that?  Some people would vote for that.

(CROSSTALK)

MATTHEWS:  That‘s called an unconstitutional act.

SIMON:  Congress passed it because the executive branch did nothing to stop it.

MATTHEWS:  Would you have voted for it?

SIMON:  Absolutely.

MATTHEWS:  Why?

SIMON:  Because you have to...

MATTHEWS:  Show rage.

SIMON:  Well, you not only have to show rage, you got to get the money back!

MATTHEWS:  OK.

SIMON:  You know, these guys not have gotten the money.  It‘s not about rage.  It‘s about they don‘t deserve this money.  It‘s our money.  We want it back.

MATTHEWS:  OK.  And so use the tax authority for punishment.

(CROSSTALK)

MATTHEWS:  That‘s exactly what right-wing Republicans believe taxes are, a punishment, not the cost of the government, which we all need.  And every time we use taxes as punishment like this is being used, you‘re sending a signal to every guy and woman out there, If I can avoid taxes, I can avoid punishment.  I‘m innocent.

SIMON:  Well, Timmy Geithner sends a bigger message.  He avoided taxes without any...

(CROSSTALK)

MATTHEWS:  Timmy?

SIMON:  Timmy.

(CROSSTALK)

ROBINSON:  That is cold.  I think it‘s a bad piece of legislation, I mean, clearly, but...

MATTHEWS:  OK.  The question is, is this going to hurt the president, this whole mess with AIG?  Is it going to hurt his ability to sell what he‘s going to have to sell in the next couple of months, a huge budget, huge federal spending, huge borrowing, huge bail-outs to come for Wall Street?  Does this hurt his ability to make his case with Democrats and Republicans?

SIMON:  Absolutely.  And that‘s the real import to him, beyond the cost to the taxpayers.

MATTHEWS:  So he can‘t be the fireman here.  He‘s—I mean, he can‘t join the mob in pushing the fire.  He‘s got to fight it now, this anger.  He‘s got to reduce this public anger, you‘re saying.

SIMON:  He‘s got to reduce the white hot anger we have to a dull...

(CROSSTALK)

MATTHEWS:  Do you agree with that?

ROBINSON:  He‘s got to get control of the message again.

MATTHEWS:  OK.  So he can‘t stir this up anymore.

ROBINSON:  But he can‘t let Congress lead on this.

MATTHEWS:  But you agree he can‘t stir it up any more.

ROBINSON:  No.

MATTHEWS:  It‘s hot (ph) enough.  We‘ll be right back.  Thank you very much, Gene Robinson.  Happy weekend, Roger Simon.

Coming up: President Obama‘s appearance on the “Tonight” show last night.  And why was there, and what was his message last night?  This isn‘t fun and games.  He apparently was watched by almost 20 million people last night, a bigger audience than you‘ll see for any of the news programs.  He got a huge audience last night.  The question is, what was he there to do and to say, and what was the impact?

You‘re watching HARDBALL right now on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LENO:  I‘m excited, I‘m honored to introduce my first guest, the 44th president of the United States.  Please welcome President Barack Obama.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  Barack Obama became the first president in office ever to appear on the “Tonight” show last night.  Did he accomplish what he wanted to in that appearance?

Joining me now are two pros, Pat Buchanan and Lawrence O‘Donnell.  Lawrence and Pat, what impressed me last night was the humanity of Jay Leno.  He was so happy to be a citizen welcoming his president.  He said, This is a night I‘ll never forget.  Kevin Eubanks, usually a bit casual, as a jazzman ought to be, wore a coat and tie for the occasion.  It had a moment there of American—well, importance.  What did you make of the evening, Pat?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Oh, well, I think Barack Obama handled himself with customary aplomb and wit and grace.  But Chris, I‘m against doing what he‘s doing.  He‘s got these—he takes the coat off in the Oval Office, is photographed there.  He does these town halls like he‘s in a campaign.  He‘s going onto these shows.

MATTHEWS:  I hear chuckling!

BUCHANAN:  I know.  There‘s chuckling and there‘s a disagreement here.

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  You do.

BUCHANAN:  But I‘ll tell you this.  I felt—we felt, for example, when I went in there (ph) with Richard Nixon, that the president as president was a far superior candidate to the president as candidate.  I think that‘s true for Barack Obama.  He is the embodiment of the nation‘s sovereignty.  He is far above a regular politician or campaigner.  I think he‘s making a terrible mistake in bringing himself down to the level of campaigner again.  And I don‘t know why they‘re doing it.

MATTHEWS:  You think there‘s a lack of respect here for the office?

BUCHANAN:  It‘s not a lack of respect...

MATTHEWS:  Or what is it?  Give me a sense.  What is it?

BUCHANAN:  It‘s too much familiarity with the people.

MATTHEWS:  OK.  Do you agree?  Is he making the mistake President Carter made, Lawrence, of being too common, too much Louis Philippe, too much the regular guy and not so much the head of state?

O‘DONNELL:  No.  I think he handled it very well.  You know, Chris, you‘ll understand this.  When people ask me, What‘s Pat Buchanan really like, I always tell them, You know, it‘s like being around a priest.  He‘s very sure of himself.  He‘s very convinced of his opinions.  You don‘t want to do anything too informal with Pat like, oh, maybe take your jacket off in the Oval Office.  I mean, Pat‘s actually outraged that the president has taken his jacket off in the Oval Office.

I mean, Pat, you worked for Nixon.  Nixon appeared on a primetime comedy show doing a comedy sketch about himself.  This was far more dignified than, you know, the way Nixon played around with TV.

MATTHEWS:  Yes, but Pat‘s still mad they turned the altar around.

BUCHANAN:  Right!

MATTHEWS:  Pat likes the old church, the old school.

BUCHANAN:  That‘s right.  Nixon did that as a candidate, the “Sock it to me” line.

MATTHEWS:  Right.

BUCHANAN:  And I thought it was a mistake, and so did a lot of people.

MATTHEWS:  But this isn‘t like that!

BUCHANAN:  But let me tell you, it‘s like—he mentions the priest.  This is like one of those bishops that comes up, you know, I‘m Bishop Timothy So-and-So, call me Tim—you know, that type of thing.  I honestly believe there‘s a—I‘ve heard a number of folks tell me they‘re—What is he doing out there on these—this show when the country‘s in such tough shape?  Jay Leno?  I mean, everyone likes Jay Leno.  He has a wonderful program.

MATTHEWS:  OK...

BUCHANAN:  I think he‘s best in the business...

MATTHEWS:  Well, let‘s get—let‘s do some substance here, gentlemen.  Let‘s take a look at what President Obama said on the “Tonight” show last night, not just went there.

(BEGIN VIDEO CLIP)

OBAMA:  Then they decided—some smart person decided, Let‘s put a hedge fund on top of the insurance company.  And what happened is, is that when people started going bust on subprime mortgages, you had $30 worth of debt on every dollar worth of mortgage, and the whole house of cards just started falling down.

If you had allowed it to just liquidate, to go into bankruptcy, it could have brought the whole financial system down.  So it was the right thing to do to intervene in AIG.  Now, the question is, who in their right mind, when your company is going bust, decides, We‘re going to be paying a whole bunch of bonuses to people?

(END VIDEO CLIP)

MATTHEWS:  Lawrence, could people understand that, regular people, what he said about hedge funds and AIG and insurance companies?  Did you make sense of that, as a regular person, what he‘s talking about?

O‘DONNELL:  I think so.  I think he did find—I think he did find a way to explain the importance of bailing out AIG, from his perspective.  And so actually, that‘s what I think was very useful about the show.  He didn‘t go on as a comedian and he, I thought, made a bunch of serious explanations to that audience about what he‘s doing.  And you know, that basic line he got through at a certain point, saying, Look, all the big problems were caused by behavior that was perfectly legal—that is a very important notion to get across to the general audience—not the “Meet the Press” audience.  They already know it.  This audience doesn‘t, and I thought he did a great job of communicating with them all the way through.

MATTHEWS:  I think he should tell people what a hedge fund is.  I‘m only learning these things now because I don‘t pay attention to the financial markets and how they work.  But he was basically saying, Imagine if you found out that your insurance company, which had insured all these mortgages and all these securities, was, in fact, gambling the money on high-risk opportunities?  In fact, you had a gamble based on a gamble, and that‘s what screwed up the whole system.  People were too risky in their behavior, greedy.

BUCHANAN:  Well, I think his explanation of AIG was pretty good, except for one point.  I mean, the reason we‘re paying those bonuses is they were contracted.  You know, they were in the contract.  He didn‘t mention—he thought—he put on as though some fellows decided, Why don‘t we give these fellows over at Financial Products some bonuses?  They were in the contract.  That was the problem.

MATTHEWS:  And you think we should let those go by?

BUCHANAN:  You know, I disagree with what Congress did.  I would not have voted for—I believe that‘s a bill of attainder.  I believe it‘s targeted.

MATTHEWS:  Right.  I‘m with you on that one. 

BUCHANAN:  . at individuals.  And I don‘t like people putting 90 percent taxes on a group of people they don‘t like and that the mob is after, quite frankly. 

MATTHEWS:  What do you think of that, Lawrence?  This tax that Congress passed yesterday on the people who benefited—a targeted tax toward the people who got those bonuses. 

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  Chris, as soon as it was announced, I came out and said that.  You‘ve been eloquent on it.  I agree with Pat 100 percent on it.  It was disgraceful mob behavior on the part of the House of Representatives. 

But on one level, a brilliant tactic by Nancy Pelosi because she trapped half of the Republicans in the House in voting for the biggest tax increase in the history of marginal rates, to take the marginal rate from 35 to 90. 

Eric Cantor voted for it.  That was a crazy act, they surrendered all principle in voting for that. 

MATTHEWS:  Yes.  And the trouble is that the people who voted correctly on that vote, who voted to protect the Constitution, as we all agree, should have been protected, are the ones in trouble now because they‘re now on record as having defended the bonus-grabbers at AIG from taxation. 

They will be—those tapes and this will be used against these poor guys.  They voted right, but they‘re going to get killed on this. 

Let‘s take a look at some more Jay Leno.  This was a moment, here he is with the president again. 

(BEGIN VIDEO CLIP)

JAY LENO, HOST, “THE TONIGHT SHOW”:  I know what would make me feel good.  Shouldn‘t somebody go to jail? 

(LAUGHTER)

(CHEERING AND APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Here‘s the dirty little secret, though.  Most of the stuff that got us into trouble was perfectly legal.  And that is a sign of how much we‘ve got to change our laws.  When you buy a toaster, if it explodes in your face, there‘s a law that says, you know, your toasters need to be safe.

But when you get a credit card or you get a mortgage, there‘s no law on the books that says that if that explodes in your face, financially, somehow you‘re going to be protected. 

(END VIDEO CLIP)

MATTHEWS:  Is he too debonair there, Lawrence?  Too debonair for the crisis we‘re facing? 

O‘DONNELL:  No, I don‘t.

MATTHEWS:  We don‘t know whether this market is going to drop another 2,000 points, we don‘t know whether the unemployment rate is going to go to 15, we don‘t know how bad this is going to get, but we can assume it‘s going to get a lot worse.  Is he too “cadge” in the way he talks about it? 

O‘DONNELL:  No.  I don‘t think when you come on Jay Leno‘s show and you spend the better part of an hour talking about an economic crisis that you‘re being in any way, you know, too casual. 

He kept that audience‘s focus and Jay‘s focus for most of the hour on these very grave, domestic problems in the United States.  That‘s not ducking it.  And like I said, I think he communicated well on it. 

BUCHANAN:  I think he is too laid back.  I think he‘s too laid back.  This whole thing, and you know, I‘m choked with anger, as you can see. 

(LAUGHTER)

BUCHANAN:  You know?  He‘s just too blase about this whole thing.  I mean, this is a—I mean, we are talking close to Great Depression in the financial markets, yet not yet in the larger economy, but this is a grave crisis and we aren‘t out of this yet. 

MATTHEWS:  OK.  Let me give you a counterpoint to Pat.  I sort of agree with you on some of this, Pat, and I sort of disagree with Lawrence except for one thing.  We have had Peter the Hermit-type presidents a long time, weird presidents who are hiding away in the sweat and weird loneliness of the White House, weird monkish behavior by Jimmy Carter, by Richard Nixon. 

They‘re weird and they‘re lonely and they‘re caught off in the darkness and they‘re sweating out these issues, it seems.  Now we have a president who is out there with us, he‘s talking with us, he‘s answering questions.  He‘s one of us.  Isn‘t that a better thing than some monkish guy hiding somewhere? 

BUCHANAN:  There are two sides.  One of them is, you are right.  Staying in the White House, not going out in the city is not what you want to do.  At the same time, being as familiar, frankly, as Bush II did and as Obama is being—doing is a mistake.  I think—and we‘ve mentioned it many times, I think FDR did it right.  I think that Ronald Reagan did it right. 

MATTHEWS:  Right. 

BUCHANAN:  When he went abroad, Chris, he was chief of state.  He represented all of us, not the Republicans, Democrats, and you saw him as the embodiment of the United States of America.  That is Obama‘s asset.  He‘s the first black president.

MATTHEWS:  Well, let‘s see him do it, two weeks, he‘ll do it. 

BUCHANAN:  It‘s depreciating.

MATTHEWS:  Let‘s watch him in two weeks act like our president abroad and not—it won‘t be the same as “The Tonight Show.”

Well, we are watching how he develops.  It‘s an early look at the presidency of Barack Obama.  I‘m very thankful to you gentlemen with your expertise and your charm and good friendship and goodwill, I must say.  Goodwill. 

O‘DONNELL:  Chris.

MATTHEWS:  Out there on the West Coast.

O‘DONNELL:  Chris, I honor—I honor Pat‘s formality.  We need it in the world.  He would be a great high school principal, but he is a little tough on the president taking the jacket off in the Oval Office. 

MATTHEWS:  And I think—Lawrence, I think I dare take your word with this, we do share with you the grief over the loss of the Latin Mass.  Pat Buchanan and Lawrence O‘Donnell.

BUCHANAN:  It‘s still there. 

(CROSSTALK)

MATTHEWS:  I know.  It‘s still in some places. 

BUCHANAN:  It‘s coming back.

(LAUGHTER)

MATTHEWS:  Up next, first lady Michelle Obama follows in the footsteps of Eleanor Roosevelt.  We‘ll show you how in the “HARDBALL Sideshow.” You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL.  Time for the “Sideshow.” First up, greening the White House.  With spring arriving, first lady Michelle Obama broke ground on the new garden for the White House today.  This one to grow food.  Here she is with some area kids helping out.  It will be the first White House vegetable garden since Eleanor Roosevelt‘s Victory Garden back during World War II.  Is this the new austerity? 

Up next, the audacity of closed press.  Check out this event from the president‘s schedule just today, quote: “The president and the first lady to attend the National Newspaper Publishers Association Reception.” The event is closed to the press.  Sounds stupid, doesn‘t it?  You mean, the press can‘t cover an event with the press? 

Well, as the White House press officer explained to me late today, the actual meaning of that announcement is that only members of the National Newspaper Publishers Association could attend that particular event, not the regular working stiffs who hang around all day at the White House looking for something to report. 

And then finally, thanks, but no thanks.  Sarah Palin is adding her name to the list of Republican governors refusing some of that federal stimulus money. 

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA:  We can‘t accept the bait.  To me it‘s bribe.  It‘s, here, take these dollars but you have got to grow your government. 

(END VIDEO CLIP)

MATTHEWS:  Well, the governor is rejecting about—she is rejecting about 30 percent of the funds which would have mostly gone to education, saying, she doesn‘t want any money that locks in the state government to future spending. 

Well, by the way, fair enough.  This is a classic fight between conservatives and liberals.  We‘ll see if she can win it. 

Time for the “Big Number.” Suppose we had another way of picking presidents.  Suppose we assigned our Electoral Votes each election by congressional district instead of by states.  Congressional Quarterly, the magazine, did just that kind of analysis of the ‘08 election in which President Obama got 365 Electoral Votes. 

Well, had the Electoral Votes last year gone to the winner of each congressional district instead of who won each state, how many would Barack Obama have won?  301 Electoral Votes, 64 votes fewer than he got in November.  It turns out McCain—Senator McCain would have gotten more votes in states like Florida, North Carolina, Ohio, and Pennsylvania. 

That‘s our “Number” tonight.  Obama wins just 301 Electoral Votes in a presidential election decided by congressional district rather than by the states.  Big point here, he would have won anyway.  Tonight‘s “Big Number.” 

Catch “The Chris Matthews Show” this weekend, by the way.  Our top reporters look at the death of the American newspaper and what it means to you. 

Up next, a new bipartisan poll shows the Republicans have tied the Democrats in a question about generic preference for congressional candidates.  Is this a potential trouble sign for a party riding a wave?  In other words, the Republicans are now even-steven with the Democrats in a big new poll.  You‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to HARDBALL.  After taking a drubbing in the last two elections, congressional Republicans are looking up a little bit right now.  A new poll shows they might be joining me—well, they might be.  Anyway, joining me is Charlie Cook of the Cook Political Report, and Ron Brownstein of The National Journal who was at the other table last night at dinner. 

I was very impressed to see you over there. 

Let me ask you, Charles, let‘s take a look at this new poll.  It‘s a new poll paid for by the National—put out by the National Public Radio of the next election and shows bull‘s eye, 42-42.  What do we make of that?

CHARLIE COOK, COOK POLITICAL REPORT:  Well, we had some.

MATTHEWS:  After all of the talk of the Democrats ascendancy. 

COOK:  Well, back in January we saw CNN and a Hotline poll that had Democrats ahead by 25, 24 points.  Then about three weeks ago we had another Hotline poll that had it at 6.  Now you have this new NPR poll taken by Public Opinion Strategies, a Republican firm, and Stan Greenberg‘s firm, a Democratic firm, together, that has it at dead even.

Now I‘m not sure we‘re ready to say, OK, this is a pattern, but it‘s not unusual to find independent voters kind of pulling back, they don‘t fundamentally trust either party.  They‘ve given one party all of the power.  Maybe they‘re sort of putting some brakes and saying, gosh, maybe we shouldn‘t have given Democrats everything and just sort of.

(CROSSTALK)

MATTHEWS:  Is this the tax and spend problem the Democrats are facing right now? 

COOK:  Well, I think they.

MATTHEWS:  Spending a lot of money, threatening to tax a lot. 

Aren‘t those the ingredients for Democrat defeat?

COOK:  Well, I think what they‘re.

MATTHEWS:  Even in a bad time? 

COOK:  Well, it‘s—they like President Obama.  They think he‘s really smart, really kind of find him interesting.  But this budget, this stimulus is like, wow, a lot of mixed messages, lots of zeros and thinking, huh, I‘m not sure about all of this.  And I think they‘re just.

(CROSSTALK)

MATTHEWS:  I think they are sure.  I disagree.  I think people—this country is always roughly balanced between the two parties because of one word, taxes.  The Republican comfort zone is, change the topic from Iraq Wars to—from corruption, from any general discussion of personality to one issue, do you want to be taxed?  And most Americans don‘t want taxed.  The Republicans play that baby. 

RON BROWNSTEIN, THE NATIONAL JOURNAL:  The size and scale of government is probably the central Republican argument in 2010 and the argument that Obama is just putting too many straws on the camel‘s back.

But having said that, the actual tax increases that we‘re talking about are targeted at a very small slice of the population.  I would agree with Charlie that this number... 

MATTHEWS:  Do you think people believe that? 

BROWNSTEIN:  I think people are going to be kind of mixed about that.  And in many ways, I think that it will be somewhat overshadowed by the overall trajectory of the economy. 

But I would say I would agree with Charlie, there is a clear kind of warning signal to Democrats here about how far and how fast to go on how many fronts.  But I would say this, if you look at the next two years, I would say that Obama‘s approval rating is probably a better predictor of where the 2010 election is going to end up than anything congressional... 

(CROSSTALK)

MATTHEWS:  Take a look at it right now.  OK.  Here it is right now.  We have got the new Obama National Public Radio again.  And this is, you know, people think NPR, they think liberal.  Let‘s be honest about it.  But look at this number, 59 percent, down from the low 60s, 35 percent disapproving.  What do we make of that?

BROWNSTEIN:  Well, that‘s—by the way, that‘s exactly what.

MATTHEWS:  And by the way, 49 percent among independents. 

BROWNSTEIN:  Yes.  That‘s exactly where his average is in the pollster.com compilation which is conducted halfway between our two offices. 

COOK:  Right.

BROWNSTEIN:  The equidistant point. 

Look, if Obama stays at 59, 60 percent through 2010, amid everything else that‘s going on, the odds are.

MATTHEWS:  But you‘re smiling. 

(CROSSTALK)

MATTHEWS:  Because you know he‘s not in that direction. 

BROWNSTEIN:  Because it is—he is—look, his approval rating is holding up pretty well given the magnitude of things that he is attempting to accomplish at this point in his presidency, which is why I think comparisons with other presidents are a little misleading because he has had a lot—he is in the arena, doing a lot of controversial things. 

MATTHEWS:  Right.

BROWNSTEIN:  That is going to cost him some points.  But I do think that is the fundamental measure we ought to be watching, (INAUDIBLE) Charlie‘s thought, but over the next two years I think where Obama is, is probably the best indication of where Democrats are going to be. 

MATTHEWS:  Right.  And I have a sense, Charlie, that he‘s pushing up his popularity as high as he can by doing “60 Minutes,” Jay Leno last night, the big press conference, because I think he wants an early vote on his program.  I think he wants a vote in the next couple of months on the whole shebang.

Is that your thinking? 

COOK:  Well, I.

MATTHEWS:  He doesn‘t want to let this stretch out and have a vote on health care next October when it‘s way too far from now.  If these numbers keep going down, doesn‘t he want a fight now and have a vote now? 

COOK:  Well, I think it‘s more basic.  I think it‘s just this day and age, you‘ve got to connect with as many different groups of people with whatever they‘re.

(CROSSTALK)

MATTHEWS:  So that‘s why did the ESPN numbers?

COOK:  Yes.  The gardening thing, I mean, that Michelle Obama did yesterday, I mean, it was a little thing for her to try to reach out to gardeners.  I mean, they‘re just trying—they‘re pushing every button out there trying to cover this. 

MATTHEWS:  The March Madness, going into basketball predictions. 

COOK:  Oh yes. 

BROWNSTEIN:  They‘ve been very conscious even as a candidate of reaching beyond.

MATTHEWS:  But he‘s the president.

BROWNSTEIN:  . the typical audience for cable.

MATTHEWS:  OK.  Here‘s my question.

BROWNSTEIN:  . and Sunday morning talk shows, and trying to expand the bandwidth of who you talk to. 

MATTHEWS:  OK.  Do you think he made a mistake the other day when he had a stakeout heading out West to California saying, I‘m going out to meet with voters?  Should he still think of people as voters when he is president of the United States or think of them as citizens?  It‘s a point of language. 

BROWNSTEIN:  Well, I mean, I take your point.  I mean, I think thinking of.

MATTHEWS:  Does he look like a pol? 

BROWNSTEIN:  No.  No, I—look, I think the projection that he is trying to send is that he is still in touch, that he is still their ambassador to Washington rather than the other way around.  That is the consistent thread of this image that he... 

(CROSSTALK)

MATTHEWS:  Is he running the country or running in the country? 

Charlie Cook, is he a candidate or president?

COOK:  I think you are seeing sort of a perpetual candidacy.  But also, I think, President Bush trademarked my fellow Americans, so he wanted to say something different but—because that was the term he always used. 

MATTHEWS:  LBJ did, too.  You‘re from Louisiana? 

COOK:  Yes. 

BROWNSTEIN:  I should say though, polling does show, even, as you say, the controversy is eroding some of the numbers, particularly among Republicans, but it does show that people see him as a strong leader.  And he still leads by 15 or 20 points consistently in polls when you ask, who do you trust more to find a way out of the economic mess, Obama or the—

MATTHEWS:  Can he lay this thing off on these bonuses we talked about all this week and may talk about next week on Geithner?  Can he blame a cabinet secretary for a big mistake. 

COOK:  I think they‘re just muddying the water and hoping that nobody can reach a conclusion, that—I‘m not sure who to blame.  I want to blame somebody.  I‘m looking to blame somebody.  But I can‘t really tell who I‘m supposed to blame. 

MATTHEWS:  He wants to muddy this up a bit, and move on to the big question of the budget issue. 

BROWNSTEIN:  Right. 

MATTHEWS:  Solutions. 

BROWNSTEIN:  First of all, the financial bailout, going back to last Fall, has always been the most unpopular element of the overall response to the economic calamity.  And it still is in this polling. 

MATTHEWS:  If there‘s one thing worse than giving money to poor people, it‘s giving money to rich people.  Anyway, thank you, Ron Brownstein.  Thank you, Charlie Cook.  We‘ll be right back for the politics fix. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  Time for the politics fix.  We have some experts here today.  Jonathan Capehart is an MSNBC contributor.  He‘s also a writer on the editorial page of the “Washington Post.”  And Matt Taibbi, an extremely popular fellow these days.  He‘s editor of “The Rolling Stone,” of course, and he‘s author of “The Great Derangement.”

Let‘s dig into the mystery surrounding the AIG bonuses, who knew what and when, and who is going to get hit with this.  Matt, you first, who‘s getting burnt the hottest on this?  Who‘s going to walk away with scolding burns throughout their career because of what happened in the last couple of weeks with these bonuses of up to 165 million dollars going to people who look like they don‘t deserve them? 

MATT TAIBBI, “ROLLING STONE”:  I don‘t know that any politician in particular is going to get burned all that badly.  I think it‘s just important that, you know, the policy is reversed.  I mean, this hasn‘t been a secret.  We have known since—I was doing interviews about these bonuses back in January.  This was a news story back then.  So I don‘t know why—

MATTHEWS:  Well, the president said he was stunned by this on Leno last night.  He was stunned.  You weren‘t?  You knew? 

TAIBBI:  I don‘t know how anybody or—Secretary Geithner also said he was stunned, but this was on CNN back in—you know, in January, right after the New Year.  So I don‘t know how anybody was surprised by this. 

MATTHEWS:  The president is stunned.  Geithner said he didn‘t know until last week in full, which is an interesting cover. 

TAIBBI:  Right. 

MATTHEWS:  I didn‘t know the full extent. 

(CROSS TALK)  

MATTHEWS:  I didn‘t know how much I had to pay in taxes until I paid them all.  Then I realized how much I had to pay.  You know you have to pay taxes. 

JONATHAN CAPEHART, “THE WASHINGTON POST”:  Right, right.  I didn‘t know how pregnant I was, exactly. 

MATTHEWS:  That‘s a thought. 

TAIBBI:  Hello. 

MATTHEWS:  Not you.  OK.  Go ahead. 

CAPEHART:  I think there are two people who stand to get burned in this.  I think it‘s Senator Dodd. 

MATTHEWS:  Why? 

CAPEHART:  Because of the mix-up he‘s gotten into, the dust-up between him and the White House, between him and Treasury, about this provision that he wrote. 

MATTHEWS:  So he writes a provision saying you can‘t have bonuses if you‘re getting Tarp money.  Then he‘s told, according to him and according to Geithner, Treasury officials came to his staff and said, you got to grandfather in or exempt people who already had contracts signed.  And he said, OK.  And for that—

CAPEHART:  And for that, it comes out—now he‘s catching all kinds of grief back in Connecticut.  And, you know, this is a guy who everyone saw as being vulnerable already going in to reelection next year.  And so this doesn‘t help. 

And the other person who stands to come out of this scolded or burned, as you say, I think is Treasury Secretary Geithner.  There is no way around it.  This is a guy who—

MATTHEWS:  Is his goose cooked already?  Does ha have a time fuse?  Let me ask you, Matt, up in New York, do you have a sense that this guy, a New York fellow, has a limited life politically? 

TAIBBI:  I think it is going to be very, very hard for him to disentangle himself from this mess, because remember, before Geithner was the Treasury secretary, he was the head of the New York Fed.  He was intimately involved with the AIG bailout that key weekend.  He was there that entire weekend.  There were hundreds of investment bankers pouring through the AIG books. 

So all of this stuff was known.  This was in the company‘s SEC filings.  He surely new about everything that was going on at AIG.  So he‘s going to have absolutely no deniability. 

MATTHEWS:  Matt—Matt, you are up in New York, uniquely qualified to answer this.  There‘s one winner in this.  That‘s Andrew Cuomo, the AG up there.  Attorney general of New York is hot on this case.  He‘s had a reputation as a trust buster already, a reformer.  He‘s knocking the hell out of AIG.  He‘s asking for the list of people that got the bonuses.  He‘s really showing some strength as a public official.  He could be governor in a couple of years because of this, right? 

TAIBBI:  Well, I mean, sure.  That is no-lose issue for any kind of politician who is going to go after the stuff.  This one tiny unit of AIG-FP was basically responsible for blowing up the universe.  They made a 440 billion dollar bet with money they didn‘t have.  And now they‘re trying to take bonuses from a company that‘s, you know, taken 160 billion dollars of taxpayer money.  They‘re the most, you know, politically unpopular people on the planet right now.  To be on the other side of that is going to really help a politician like Cuomo, sure. 

CAPEHART:  Yes.  Well, I don‘t know if Andrew Cuomo is going to run for governor in two years.  I think that would require the current governor, David Paterson, to say he is not running. 

MATTHEWS:  Do you think he wouldn‘t challenge for renomination? 

CAPEHART:  No, no, no.  I say this because he ran—Andrew Cuomo ran against H. Carl McCall (ph), an African-American. 

MATTHEWS:  But then pulled out. 

CAPEHART:  Cuomo pulled out. 

MATTHEWS:  Right. 

CAPEHART:  And then Carl McCall lost.  And Cuomo spent the next two years repairing relationships around New York state, particularly with the African American community, because of what he did.  So I don‘t think he wants to go a round two—

MATTHEWS:  Do you want to bet?  I say he runs.  Gentlemen‘s bet. 

We‘re going to be right back to talk more about this—

(CROSS TALK)  

MATTHEWS:  Gentleman‘s bet, is that fair?  I can end on that point.  It‘s for drama.  You know, end a segment with some drama.  Me and Jonathan Capehart, this young fellow with all the brains, thinks Andrew Cuomo is not going to run for governor and I do.  We‘ll be right back with Matt Taibbi and Jonathan Capehart, two smart guys.  You‘re watching HARDBALL, as we approach the end of the week of AIG.  We‘ll be right back. 

(COMMERCIAL BREAK

(BEGIN VIDEO CLIP)

LENO:  One last question, now, when is the dog coming?  I keep hearing about the dog.  It seems to me—What was the dog supposed to be there by? 

OBAMA:  Listen, this is Washington.  That was a campaign promise. 

LENO:  Oh, wow.  Wow.  Man. 

OBAMA:  The dog will be there shortly.  We have actually sort of been laying the ground work here.  We have got a trip—I have got to go to the NATO summit.  When we get back, dog will be in place. 

(END VIDEO CLIP)

MATTHEWS:  We‘re back.  That was President Obama, of course, on the “Tonight Show” with Jay Leno.  John Capehart is an editorial writer for the “Washington Post,” sometimes writes under his own name.  And Matt Taibbi is a contributing editor at one of the hottest magazines in the history of mankind, “The Rolling Stone.”

Matt, I want you to start with this.  I want to say something nice about Jay Leno.  Jay Leno go this get.  It wasn‘t so hard, because obviously the administration said, let‘s go on “The Tonight Show.”  But I thought it was very wonderful the way he treated last night.  He said this is going to be a night I will always remember as a citizen.  Kevin Eubanks, the band leader, wore a suit last night.  Everybody dressed up. 

We were talking about formality and occasion.  I thought it was great the way this American show business world adapted to the presence of our chief executive.  Your thoughts as a man of our pop culture? 

TAIBBI:  Well, I think it‘s important for the president to be

accessible at a time like this.  And I think it‘s important for people -

it‘s great for Jay Leno to bring an issue like this economic crisis to a popular audience, at a time when people are trying to avoid looking at this issue directly in the face.  I think it is incredibly important for the president to do it.  It was a good thing. 

CAPEHART:  I agree.

MATTHEWS:  And it wasn‘t too casual? 

CAPEHART:  I don‘t think it was too casual at all.  I think the president was attempting to do three things, get out of the Washington bubble, get away from us, the Washington media, and the third thing is to talk directly to the American people.  I think you said earlier on the show, what was his rate, 20 million people? 

MATTHEWS:  Huge crowd.  Always trying to figure this out over time.  But in terms of the metered market, it was very high.  It was as big as he got when “Cheers” had its last night and gave everybody at NBC a huge number that night. 

CAPEHART:  So the president goes and talks directly to the American people, 20 million or so people, you can‘t buy that. 

MATTHEWS:  Let‘s talk politics.  Let‘s change the cosmos to a conservative.  When Ronald Reagan was president, he was very effective, Matt and Jonathan, by pretending almost that he wasn‘t from Washington.  He had a job there, but he lived in California.  He was forever going back to California, and going up to the ranch with his wife Nancy, and portraying himself as a citizen, citizen politician.  I don‘t really run this country.  It‘s too hard to run, I‘m one of us.  These guys in Washington, these bureaucrats, these liberals, these journalist, these Democrats, they run the country. 

I am just sort of our tribune of the people.  I come there once in a while and try to keep them honest.  Jonathan, can he get away with that?  Isn‘t he in fact head of the government now?  It‘s not Geithner, it‘s not Nancy Pelosi, he‘s in charge. 

CAPEHART:  There‘s a different motive here.  It‘s not that I don‘t run Washington.  It‘s I run Washington and I have got a lot of problems on my plate that I need you to understand.  I need to communicate to you directly, not go through the filter of the folks who needle Robert Gibbs every day in the briefing room.  But I want to tell you directly what I‘m trying to do, what I think about AIG.  I‘ll even take questions about AIG.  I‘ll take the uncomfortable questions, so that I can talk to you directly. 

TAIBBI:  I totally agree.  I think President Obama, he‘s trying to contrast himself with the Bush administration, where for years and years and years, it was like pulling teeth getting any kind of straight answer from the Bush administration about important issues like the Iraq war.  And here, President Obama agrees to sit in an unscripted setting and just take questions about anything in the middle of a crisis.  It‘s just something that we haven‘t seen from a president for the last eight years. 

MATTHEWS:  You do get the feeling that if one of our major cities was flooded, he would be aware of it.

(CROSS TALK)

MATTHEWS:  He wouldn‘t be hiding somewhere in Texas.  He would be aware, because we see him aware. 

TAIBBI:  You mentioned casual before.  What he was doing wasn‘t casual.  Casual was Condoleezza Rice going to see “Spamalot” during Hurricane Katrina.  That was casual. 

CAPEHART:  Yes.

MATTHEWS:  You naughty memory person.  You‘ve got a memory.  Let‘s talk about the problem with these bonuses.  Trillions of dollars mean nothing to people.  It‘s almost like—I know it‘s a terrible metaphor and I‘ll pay for it.  You know when you walk down the street, your dog with you.  And that dog sees the other dog.  We see each other as equals.  We can‘t imagine trillion-aires.  But we can imagine somebody grabbing a bonus who doesn‘t deserve. 

We can‘t imagine millions, really.  But we can imagine these guys.  You know what I mean?  See what I‘m saying?  I get the feeling, for months, we have been talking trillions and billions and nobody understands.  All of a sudden, they hear somebody just grabbed some money that I can sort of understand.  I can imagine who is going to be a millionaire.  This person stole some money. 

So I think my hunch is this has finally caught the nerve endings here.  We don‘t like it. 

CAPEHART:  No, we don‘t like it. 

MATTHEWS:  We‘re barking. 

CAPEHART:  I think for a lot of people it‘s free money.  These are people who are getting money for nothing in particular.  And that‘s the second part, these folks, if they did a good job, that‘s money for nothing.  But these are folks who, by and large, did a bad job and they‘re being rewarded. 

MATTHEWS:  Last thought from you, Matt, at the end of the week? 

TAIBBI:  I‘m sorry.  What?

MATTHEWS:  Last thought.  Why are we so angry about the bonuses at

AIG? 

(CROSS TALK)

TAIBBI:  Well, I think it‘s important to remember that even the 700 billion dollars of Tarp, even that is dwarfed by the trillions of dollars that the Fed is lending out right now.  And I think people just aren‘t aware of the magnitude of this problem.  This is something they can focus on. 

MATTHEWS:  You‘re right.  One dog can see another dog.  I‘m sorry, that metaphor will hurt me.  Jonathan Capehart, Matt Taibbi, thank you.  Join us again Monday night at 5:00 and 7:00 Eastern for more HARDBALL. 

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

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