updated 4/8/2009 12:38:45 PM ET 2009-04-08T16:38:45

Guest: Roger Simon, Michael Isikoff, Matt Taibbi, Harold Ford Jr., Bob Ehrlich

High: President Obama visits Baghdad as polling in the U.S. shows his popularity is surging and Republicans are hitting a record low.  A long secret report from the Red Cross has leaked out alleging that medical personnel were involved in abusive interrogation of terror suspects held overseas by the CIA.

Spec: Politics; Iraq; War; Pres. Barack Obama; Torture

DAVID SHUSTER, GUEST HOST:  Commander-in-chief.  President Obama visits Baghdad as the polling here at home shows his popularity is surging and Republicans are hitting a record low.

Let‘s play HARDBALL.

Good evening, everybody.  I‘m David Shuster, in for Chris Matthews.  Leading off tonight, surprise visit.  President Obama capped off his overseas trip with a surprise visit today to Iraq.  He met with U.S.  troops, and in the latest unraveling of Bush foreign policy, he told Prime Minister Maliki that the United States makes no claim on Iraq and its resources.

These types of presidential visits tend to be enormously popular with the American public, and even before Mr. Obama touched down in Baghdad, “The New York Times” was reporting that its latest poll with CBS News had the president‘s approval rating at 66 percent, the highest since he took office.  Meanwhile, the favorability rating for Republicans has dropped to 31 percent, the lowest marks for the GOP in 25 years.  We will have more on the president‘s Iraq trip and the significance of these new poll numbers.

Later: A key part of the president‘s journey through the Middle East involved the effort to smooth relations between the United States and the Muslim world.  That became more challenging today, thanks to a distressing new report from the International Red Cross about the U.S. treatment of terrorism suspects.  Will President Obama approve the release of all key documents and memos from the Bush administration?  It is a stirring and huge political fight here in Washington.

Also, Governor Sarah Palin has now weighed in on North Korea‘s failed missile launch.  She wants the federal government to build a missile defense shield to protect Alaska from a nuclear attack.  Fair enough, but why is Palin referring to Alaska as a sovereign state?  Oops.

Also, they started counting again in that endless Minnesota Senate race, and Al Franken is increasing his lead.  So is he in?  Not so fast.  Minnesota Republican governor and possible presidential contender Tim Pawlenty is about to face a huge certification decision in that Al Franken/Norm Coleman Senate race.  That and more in the “‘Politics Fix.”

And finally, the actor Kal Penn is abandoning his movie and TV career, at least for now, to join the Obama administration in the White House Office of Public Liaison.  Penn‘s most famous liaison with any president came when his character, Kumar, smoked marijuana with President Bush.  The famous scene is in the HARDBALL “Sideshow.”

But we begin with the president‘s surprise trip to Iraq.  Here‘s part of his message to U.S. troops in Baghdad today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  This is going to be a critical period, these next 18 months.  I was just discussing this with your commander, but I think it‘s something that all of you know.  It is time for us to transition to the Iraqis.  They need to take responsibility for their country and for their sovereignty.

(END VIDEO CLIP)

SHUSTER:  NBC‘s chief foreign affairs correspondent Richard Engel joins us now live from Baghdad.  And Richard, how big a surprise was this drop-in by the president, and how was it received?

RICHARD ENGEL, NBC CORRESPONDENT:  It was not a very well kept secret, I must admit.  Iraqi officials had been talking about this over the last several days.  Even this morning, the Iraqi president had been calling reporters to his residence, expecting to receive President Barack Obama.

However, the actual—actual details of the visit were something of a surprise.  The president had been expected to come into central Baghdad, but because of a sandstorm, all of that arrangements had to be changed in the last minute and the Iraqi officials ended up visiting him at a U.S.  military base.  So the details were something of a surprise and a complication, but everybody knew this trip was coming.

SHUSTER:  Richard, how is life different today in Iraq than it was a year ago?

ENGEL:  A year ago, things were considerably better in Iraq.  I think if you take it back to two years ago, there was a very different situation on the streets.  There were curfews.  There was—this country was in the midst of a civil war.  Now, according to General Odierno, he told the president today, violence is at its lowest level since the start of the war in 2003.  It‘s actually the six-year anniversary in a couple of days, when that famous scene happened when Iraqis and U.S. troops pulled down the statue of Saddam Hussein.

Now, however, things are considerably calmer.  People are out.  Schools are open.  I was out today, walking on the streets of Baghdad without a flak jacket.  There‘s quite a bit of calm now.  However, over the last 48 hours, people are concerned.  There has been a spike in violence, about 45 different people killed in different attacks across Iraq just in the last two days, David.

SHUSTER:  And Richard, how confident are the Iraqis about the American plan to essentially pull out most of the troops within essentially the next two years?  Do the Iraqis feel like the security forces are ready for that?

ENGEL:  The Iraqi government is expressing a great deal of confidence.  Many Iraqis, while they want to see that happen, are concerned.  And I spoke to at least one Iraqi official—I spoke to several, but one Iraqi official told me today that he is concerned.  He does not believe his own security forces are up to the task.

And we‘ve seen over the last several weeks an increased divide within the Iraqi security forces, particularly a reemergence of sectarianism, where Shi‘ite militias are attacking Sunni forces that were fighting al Qaeda.  So there is a concern that this wave of sectarian violence, the civil war a lot of people called it, is returning.

SHUSTER:  NBC‘s Richard Engel live from Baghdad.  And Richard, thanks, as always.  We appreciate the report.

And for more on the president‘s trip, let‘s bring in “The Washington Post‘s” Eugene Robinson, who‘s an MSNBC political analyst, and “The Politico‘s” Roger Simon.  And Eugene, first of all, your reaction to the president‘s trip to Baghdad today?

EUGENE ROBINSON, “WASHINGTON POST,” MSNBC POLITICAL ANALYST:  You know, it—I guess it was expected over there.  A lot of us here didn‘t know that he was going to make the stop.  And it‘s a picture, an image, that I think is important both for the president‘s relationship with the military, both in terms of reminding everyone that we still have tens of thousands of our forces in Iraq—we‘ve been talking a lot about Afghanistan recently, but Iraq is where the bulk of U.S. forces are—and sending a message, I think, to the country, again, Barack Obama as commander-in-chief, not as candidate.

SHUSTER:  And Roger, it really does put an exclamation point on something that we mentioned at the top, and that is the president‘s approval rating.  It stands at 66 percent, disapprove 24 percent, and that was before Americans started seeing these images, which almost by their nature will lift it up a couple of points more.  Every time President Bush went to Baghdad, his approval numbers went up.

ROGER SIMON, POLITICO.COM:  Right.  I think the trip and this last series of events in Baghdad really was a huge plus for the president, for his image, for his influence, and for the image and influence of the United States.  I mean, he seems also—Gene was saying he seems also totally comfortable around military people, around our soldiers and Marines.  I mean, you know, considering he never served in the military, he ran and defeated a military figure, a war hero, John McCain, he seems to really enjoy himself and the military seems to enjoy him.  He got a huge cheer for saying, Let‘s get Iraq to stand up and fight this war, and the U.S.  soldiers went crazy.  I mean, they loved it.  So I think it was really a good event for him.

SHUSTER:  He also seems quite comfortable making the point that he‘s made the last couple of days, that his own personal story, when he talks about himself, that that can help somehow repair the relationship between the United States and the Muslim world.  Here is what he said in Turkey at a town hall, where he‘s talking about himself, his own name.  Watch.

(BEGIN VIDEO CLIP)

OBAMA:  My name is very unusual for the United States, and so I think people saw my election as proof, as testimony that although we are imperfect, our society has continued to improve.  I also think that people were encouraged that somebody like me, who has a background of living overseas, who has Muslims in his family, who—you know, that I might be able to help to build bridges with other parts of the world.

(END VIDEO CLIP)

SHUSTER:  You know, it‘s so interesting, Eugene, as one of our producers noted, that‘s something he would have never said during the presidential campaign.

ROBINSON:  Oh, no.

SHUSTER:  He never would have gone there, but yet is it an effective way of trying to sort of bridge the gap between the United States and the Muslim world?

ROBINSON:  You know, I think it is, certainly, to a point.  I mean, I don‘t know how far it exactly takes an improving relationship.  I believe that answer was—that was actually an answer to a very challenging question from a young man, who essentially said, you know, yes, you look different, but are you really different?  Is this really a different—a different—a new relationship that we‘re embarking on now?

And he essentially said, I am different, but I am the American president, and so not everything is going to change.  And so he‘s going to try to take advantage of the fact that he doesn‘t look like other U.S.  presidents, that he has a name that‘s not like that of other presidents, but at the same time, advance U.S. interests, which often will not go down well.

SHUSTER:  And Roger, look at these new numbers.  As the president, you know, comes in the wake of this message that he delivered, look at these new numbers from “The New York Times”/CBS News poll.  Two thirds of the country now approves of the job the president‘s doing—that‘s even better than when he first started -- 39 percent now say the United States is headed in the right direction.  That‘s a dramatic improvement from January.  And the president‘s opposition is in horrific shape.  Just 31 percent have a favorable opinion of the Republican Party.  What do you make of it all?

SIMON:  The trend lines are so good.  I mean, Obama‘s personal approval has only gone up a little bit because it‘s so high.  But the turnaround in how people feel about America is dramatic, from 15 to 39, right track, wrong track.  Part of it is we‘re sick and tired of being sick and tired, but a large part of it is Barack Obama is driving these numbers himself.  People are seeing a dynamic, committed, activist president.

Activist I think is the most important thing.  Some of the things he‘s doing won‘t work.  Some will work.  But people are seeing a president who is trying things, rather than the last administration, which seemed buffeted by events, which seemed a hapless victim of large historic forces.  Now we have a president who‘s saying, Let‘s do stuff.  Let‘s try.

SHUSTER:  You know, there was something in the poll number that I found so intriguing, and this was about the president‘s banking plan.  And if you look at when the public is asked, Who‘s going to benefit, everyone or just the banks?  Right now, that number is 47 percent believe everyone benefits from the president‘s banking plan, just—and 40 percent believe the bankers benefit.  But if you compare that to February, in February, the number was 59 percent felt that bankers benefited and everyone benefited only 29 percent.  That‘s a dramatic change in the key economic issue he‘s trying to sell.

ROBINSON:  It really is.  What he‘s managed to get is a degree of buy-in from the public on the idea that this has to be done.  However, if you look at other numbers in the poll, people still don‘t like a lot of it.  They realize it has to be done.  They think it‘s going to benefit all of us eventually.  But if you ask, you know, Do you really like these banking—this banking aid, 58 percent, no, 33 percent approve of it.  If you ask people, Should there be more regulation of the financial system, if you ask people, Should there be higher taxes on people making more than $250,000 a year, overwhelming approval for both of those ideas.

So if, indeed, Obama told the bankers at the White House that he‘s the only one standing between them and the pitchforks, that‘s kind of right.

(LAUGHTER)

SHUSTER:  But it‘s almost as if the public now trusts the president.  If the president believes the proper message to the bankers or to anybody else is, OK, I‘m giving you another chance, or, We‘re going to have a dialogue, I‘m not going to take your jobs away, the public trusts him implicitly right now.

SIMON:  The public trusts him and wants him to accomplish something.  I mean, that‘s why he‘s trying so much right now, in the beginning.  And he even talks about it a little sardonically in his speeches, saying, People think I can‘t walk and chew gum at the same time, basically, I can do this.  He‘s got to do it now because his popularity is high now and because Wall Street is not helping him out.  I mean, he was trying to help Wall Street when Wall Street was taking those bonuses, and that, you know, cut his legs out from under him.

SHUSTER:  You know who is helping him out, in my view?  The Republicans.

ROBINSON:  Exactly.

SHUSTER:  Because as you see the president dealing with serious issues, and then you see the Republicans, they can‘t decide who their leaders are.  They seem like they‘re less than serious or they‘re engaged in the trivial stuff.  That makes the president seem even like he‘s more engaged in what the public wants (INAUDIBLE)

ROBINSON:  That‘s true.  And the screaming inference from all these numbers is that saying no, just sitting there saying, No, no, no, don‘t do this, don‘t do that, is not working for the Republicans.  And it‘s not going to work for the Republicans.  The president has seemed to be proactive, getting stuff done.  I think it is a mistake for the Republicans to be seen as being either obstructionists or passive in this whole (INAUDIBLE)

SHUSTER:  Gene Robinson and Roger Simon, thank you both for coming in. 

We appreciate it.

Coming up: Republicans are threatening to go nuclear if the Obama administration releases classified Bush-era memos showing which officials specifically approved the torture of terror suspects.  President Obama promised transparency, but is this a battle he wants?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to HARDBALL.  A long secret report from the Red Cross has leaked out alleging that medical personnel were involved in abusive interrogation of terror suspects held overseas by the CIA.  The report concludes, quote, “The infliction of ill treatment constituted a gross breach of medical ethics, and in some cases, amounted to participation in torture and/or cruel, inhuman or degrading treatment.”

Meanwhile, a nasty fight is brewing over the release of highly controversial Justice Department torture memos written by Bush administration officials.  The deadline for their release is next Thursday, April the 16th.  And “Newsweek‘s” Mike Isikoff reports there‘s an internal tug-of-war in the Obama administration about what to do.

Joining us is “Newsweek‘s” Mike Isikoff and MSNBC political analyst and radio talk show host Michael Smerconish.  And Mike Isikoff, explain why is the Obama administration conflicted about releasing these documents?

MICHAEL ISIKOFF, “NEWSWEEK”:  Well, it‘s actually a hugely consequential decision.  These are internal Justice Department memos that were written over the years -- 2005, three of them, Bush‘s second term, one 2002, in his first term—that essentially laid out and approved all the harsh interrogation techniques that were used by the CIA against high-level al Qaeda detainees—waterboarding, frigid temperatures, head slapping.  And I‘ve been told by sources that they are quite graphically detailed, and if released, would be—could be hugely embarrassing.  They‘ll certainly get a lot of attention.

Now, you have Eric holder, the attorney general, Greg Craig, the White House counsel, who have reviewed this matter and say, Look, we, the United States government, are no longer using these techniques.  Therefore, the argument that has been used throughout the years that we must keep these classified—that is, that we can‘t tell the bad guys what we might do to them—no longer applies because we‘re not doing these techniques anymore.  So therefore, there‘s no longer any reason to keep these memos classified.

There‘s been huge pushback from the intelligence community.  John Brennan in the National Security Council, Leon Panetta, now the director of the CIA, who is arguing that this could be—have extremely embarrassing consequences for the CIA and for foreign governments that participated in these interrogation techniques.  That‘s where the battle stands.

SHUSTER:  But Michael Smerconish, wouldn‘t it be helpful to the United States, and certainly helpful to President Obama politically, to say, You know what?  I‘m not doing this kind of stuff anymore, so let‘s air out our dirty laundry, let‘s show that we are transparent, as I‘ve suggested, and let‘s let the chips fall where they may?

MICHAEL SMERCONISH, RADIO TALK SHOW HOST, MSNBC POLITICAL ANALYST: 

David, I don‘t think so.  I think, to the contrary, that, you know, it‘s now his watch.  And of course, this is not continuing on his watch, but what‘s in the best interest of this administration I don‘t think is to relitigate the past.  On or about the 10th or 11th of January, before he came into office, he was asked about this issue, generally defined, and he said, I think we need to be forward-looking and not backward-looking.

I think, after all the good will that you‘ve just described, of him coming home from having made this historic trip, a lot of it would dissipate, even if it had occurred on President Bush‘s watch.  I don‘t know what the up side would be.  And so much of the grisly detail came out today with that Red Cross report.

SHUSTER:  But isn‘t the American public entitled, for example, to know who at the Justice Department during the Bush administration essentially came up with the memo saying, Yes, this is legal?  Are we entitled to know which officials were responsible for that?

SMERCONISH:  I would argue you‘re not, and frankly, that you already have that information.  I think that John Yoo is the fellow, and the Bybee memo.  I think that those who were paying attention to this could already identify those who were responsible.

And, you know, as you know from our prior discussions on this subject, I‘m not one who is offended by the contents of any of this information, because I think you need to take into account who we‘re talking about, the likes of Khalid Sheikh Mohammed, somebody who, you know, if he had his druthers, he would have been on one of those flights and cutting somebody‘s throats with a box cutter. 

SHUSTER:  Right.  But, Michael, we‘re also talking about officials who were simply swept up in the midst of all of this who, by many accounts, were not doing anything wrong. 

Sure, there are the terrorists, the people who wanted to inflict harm.  But part of the issue also involves the—involves people swept up by U.S.  forces who may have essentially been innocent and were charged. 

But, Michael, what—what‘s out there that we don‘t know?  What could we learn from these memos?

MICHAEL ISIKOFF, INVESTIGATIVE REPORTER, “NEWSWEEK”:  Well, look, let‘s just take this ICRC report that came out today.  Michael says that, well, we have got the detail; it‘s there. 

First of all, the detail is pretty grisly.  It goes beyond just the medical personnel.  You have these accounts from 14 high-level detainees, who describe very similar treatment, water-boarding, being locked in boxes, being kept in diapers in stress positions for hours on end. 

And, you know, it‘s pretty grisly stuff.  The question is, is that actually what happened?  Who approved that, if it did?  And we don‘t know the answers to that. 

The CIA has not confirmed that these accounts of the detainees are, in fact, accurate.  Vice President Cheney and others have said, not only did we not treat people inhumanely; we got valuable information from that.  Is that the case or not? 

You have others in the United States government who have said, no, that‘s absolutely not the case.  There‘s been a dead-end debate about this for the last several years now.

And we don‘t—the public, the Congress doesn‘t really know the truth

about this.  That‘s one of the reasons people want these documents

unleashed, so we can settle this debate, whether or not the United States -

what was done in the United States government‘s name during the war on terror, whether it was effective or not and whether people were treated inhumanely.

SHUSTER:  Michael Smerconish, your view? 

SMERCONISH:  The debate—the debate was settled.  It was settled on Election Day. 

And I don‘t know what is to be gained from continuing to litigate this issue.  I think it could cause embarrassment to this administration, even though it didn‘t happen on the watch of this administration, and among our allies, because I think that some of these rendition cooperating nations are now going to come to light in a way that heretofore they haven‘t.

But, look, I go back to where I began this discussion, which is that, in certain circumstances, in the ticking-time-bomb circumstance, you need to leave on the menu of available options the full range of things that can be done to get information from individuals who could kill innocent Americans, like occurred on September 11. 

SHUSTER:  Well, here is the most interesting part in all of this. 

And—and I don‘t necessarily disagree with you, Michael.  And I think, maybe politically, the wise move for the president might be to essentially let this sort of stay in the past. 

However, the American people clearly want some sort of investigation done.  When they were asked in the “USA Today”/Gallup poll as to—as to whether or not there should be some sort of investigation, 38 percent said, yes, a criminal investigation.  Twenty-four percent said there should be at least an independent panel.  Thirty-four percent said neither. 

So, in other words, you‘re looking at 62 percent want some kind of investigation into the Bush administration‘s possible war crimes.

And, Mike Isikoff, that seems like a very difficult number to ignore. 

ISIKOFF:  It is, although I would argue what we‘re talking about here right now is not whether there‘s going to be a criminal investigation, not even if there‘s going to be a truth commission or not, just whether the American public is going to learn the truth about what took place or not. 

That is sort of the minimal step that, it could be argued, the Obama

administration can take to address this.  Then, if, after these memos and

documents are released, people look at them and think it needs to get take

taken further, then you could have—take it to the next step, either a truth commission or some sort of criminal investigation.

But—but you can‘t even get there, and you will be left with those sort of muddled numbers and people sort of confused in their own minds, until we at least see what can be made publicly available, and people have a chance to read it. 

SHUSTER:  Michael Isikoff and Michael Smerconish, thank you both so much. 

So interesting.  And we will be watching to see what happens next week. 

Up next:  We have seen how President Obama‘s hanging tough in the polls, but with North Carolina‘s win in last night‘s NCAA title game, how did the president do in his tournament bracket? 

The “Sideshow” is next. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

SHUSTER:  Back to HARDBALL.  And time for the “Sideshow.” 

First up:  Watch out, AmeriCorps.  Conservative Congresswoman Michele Bachmann is warning that a new bill expanding the community service agency could lead to—get this—the brainwashing of America‘s youth. 

Here‘s Bachmann speaking out against AmeriCorps‘ expansion in a radio interview this past weekend. 

(BEGIN AUDIO CLIP, KTLK-AM)

REP. MICHELE BACHMANN ®, MINNESOTA:  I believe, when it‘s all said and done, this service that—I believe that there‘s a very strong chance that we will see that young people will be put into mandatory service.  And the real concern is that there are provisions for what I would call reeducation camps for young people. 

(END AUDIO CLIP)

SHUSTER:  Reeducation camps? 

Congresswoman Bachmann, that term refers to the camps operated by the government of North Vietnam, the camps where they imprisoned, tortured, and killed thousands of South Vietnamese military officers and government workers, all in the name of revenge and repression. 

Congresswoman, that‘s your view of AmeriCorps? 

Speaking of bizarre, with President Obama garnering sky-high approval ratings, the Republican search is on for a more down-to-earth target.  So, who is next? 

Well, one high-profile Republican strategist is saying it should be—

David Axelrod? 

Here is former RNC press secretary Alex Conant talking about the Obama

White House—White House senior adviser in a Politico.com op-ed—quote

“Given his,” Axelrod‘s, “unequaled influence over Obama and the public‘s intuitive unease with such Machiavellian relationships, it should be only a matter of time before David Axelrod is a public-relations liability for the White House.”

Let me get this straight.  You can‘t take on the president himself, so you target one of his advisers, and you pick the calm, affable, soft-speaking Axelrod, of all people? 

Hey, Alex Conant, the public-relations liability here is your own judgment. 

(LAUGHTER)

SHUSTER:  Finally, actor Kal Penn, formerly of the TV show “House,” is giving up life in Hollywood to move to D.C. and work in the Obama administration as a White House liaison. 

Penn said he had been thinking about getting involved in politics for a while and will help President Obama‘s team with public outreach. 

The presidential message, of course, will be quite different from what Penn delivered in “Harold & Kumar Escape from Guantanamo Bay.”  In that movie, Penn‘s character, Kumar, smokes marijuana with a dopey George W.  Bush. 

(BEGIN VIDEO CLIP, “HAROLD & KUMAR ESCAPE FROM GUANTANAMO BAY”)

UNIDENTIFIED ACTOR:  You don‘t have to believe in your government to be a good American.  You just have to believe in your country. 

KAL PENN, ACTOR:  Exactly.  Exactly right. 

UNIDENTIFIED ACTOR:  That‘s just good (EXPLETIVE DELETED) isn‘t it? 

(LAUGHTER)

PENN:  Yes, it is. 

(END VIDEO CLIP)

SHUSTER:  Yes, it is.  Bravo, Kal Penn. 

Now for tonight‘s “Big Number.” 

Just last month, President Obama put his college basketball judgment on the line.  He gave his NCAA brackets to ESPN.  And, in case you missed it, here is the school Mr. Obama picked to go all the way. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  That is the championship game. 

UNIDENTIFIED MALE:  OK. 

OBAMA:  Is there a drumroll around here? 

(DRUMROLL)

OBAMA:  I‘m going with the Tar Heels. 

UNIDENTIFIED MALE:  OK. 

OBAMA:  The Tar Heels that are watching, I picked you all last year.  You let me down.  This year, don‘t embarrass me in front of the nation, all right?  I‘m counting on you. 

(END VIDEO CLIP)

SHUSTER:  Well, the president put his faith in the right team.  UNC easily won the championship last night over Michigan State. 

But what about his other picks?  Out of all the tournament brackets submitted to ESPN.com, where did the president rank?  It turns out he did better than 80.5 percent of the bracket submissions.  He beat four out of five.  Among college basketball fans, Obama ranks in the 80.5 percentile, tonight‘s impressive “Big Number.” 

Up next:  That failed North Korean missile launch has prompted a response by Alaska Governor Sarah Palin.  She says the U.S. needs a missile shield, so her state doesn‘t get hit by a nuclear weapon.  But the bizarre way the governor described Alaska has prompted critics to declare her statement bombed. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Stocks are falling for a second straight day on worries about corporate earnings.  The Dow Jones industrial average tumbled 186 points.  The S&P 500 shed 19, and the Nasdaq dropped 45. 

Alcoa just kicked off earnings season after the closing bell, reporting a worse-than-expected quarterly loss.  But the company‘s sales were above expectations.  Alcoa shares are trading lower in the after-hours session. 

During the active session, General Motors said that it was reportedly in—excuse me—it was reported that General Motors is in intense and earnest preparations for a possible bankruptcy filing.  A source says that momentum is building for a plan to split GM into a new company made of successful units and an old one made of the less profitable ones.

And oil fell $1.90 today, closing at $49.15 a barrel. 

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

HARDBALL. 

SHUSTER:  Welcome back to HARDBALL. 

While the United Nations hashes out what to do about North Korea‘s missile launch, Alaska Governor Sarah Palin knows what to do: get her state more missiles. 

Here is part of her statement from yesterday—quote—“I am deeply concerned with North Korea‘s development and testing program, which has clear potential of impacting Alaska, a sovereign state of the United States, with a potentially nuclear armed warhead.  Alaska‘s strategic location and the system in place here have proven invaluable in defending the nation.  I continue to support the development and implementation of a defensive missile shield based in Alaska.  We are strategically placed to defend the critical assets of the United States and our allies in the Pacific Theater.”

Is her tough talk about jobs for her state, her own political ambitions, or a little bit of both?

MSNBC political analyst Michelle Bernard is president of The Independent Women‘s Voice.  And Rolling Stone‘s Matt Taibbi is author of “The Great Derangement.” 

And, Matt, what does Palin mean when—mean when she refers to Alaska as a sovereign state? 

MATT TAIBBI, “ROLLING STONE”:  I guess that she means that it‘s part of the union.  That was news to me.  I actually didn‘t know that it was part of the United States before today.

But...

(LAUGHTER)

TAIBBI:  I mean, I was—I was impressed, actually, that she—that she found North Korea on the map.  I mean, compared to Russia, it‘s a—it‘s a pretty small country.  So, we have to give her credit for that, at least, I—I guess. 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  You know, I—I...

(LAUGHTER)

BERNARD:  To be fair, it‘s quite possible that she was speaking, not just to us at home, but to an international audience, because what—what has happened with North Korea affects the entire world.  And maybe she wants to make sure that, in case somebody in another country does not know that Alaska is a part of the United States, that they now know.  She‘s doing her job as governor and selling her state. 

SHUSTER:  Great.  So, she‘s betting that maybe there are people overseas who take her more seriously than many Americans do.  That‘s interesting.

(LAUGHTER)

SHUSTER:  Well, here‘s a—just to remind our audience, Palin has thought about the strategic significance of Alaska before. 

Here she is from that interview with Katie Couric last summer during the presidential campaign. 

(BEGIN VIDEO CLIP, “THE TODAY SHOW”) 

GOV. SARAH PALIN ®, ALASKA:  As Putin rears his head and—and comes into the airspace of the United States of America, where—where do they go?  It‘s Alaska.  It‘s just right over the border. 

(END VIDEO CLIP)

SHUSTER:  Michelle, does anybody take her seriously?  I mean, when she‘s the one, as opposed to Senator Murkowski or Senator Begich, talking about what Alaska needs from the federal government in term of help, does anybody take Sarah Palin as more seriously than—than those two? 

BERNARD:  Well, you know, I think that, if you look at some polls, and if you look at places where Sarah Palin goes, there are a lot of people who obviously take her seriously, because I—you know, I‘m told, for example, the Alfalfa dinner that she attended in Washington, D.C., the line to see her was longer than anybody else that was there. 

There are people who like Sarah Palin.  I think John McCain, a lot of people would argue, received the number of votes that he did, not because of himself, but because Sarah Palin was on his ticket. 

She made an enormous number of gaffes during the campaign.  And she‘s had a lot that have happened since the election in November.  But she has a base of people who are—are die-hard Sarah Palin fans.  And they do take her seriously. 

SHUSTER:  And, Matt, do you think that base is growing or getting smaller these days? 

TAIBBI:  I think it‘s probably staying about the same. 

I think she‘s probably retaining her own base.  But I think she‘s making herself increasingly ridiculous.  I mean, she makes George Bush seem like Sir Isaac Newton out there.  She‘s unbelievable. 

(LAUGHTER)

SHUSTER:  Well, the latest came today, when she issued a formal statement on former Senator Ted Stevens, who, of course, was convicted right before the election.  His charges were just thrown out because of alleged prosecutorial misconduct. 

Here is what Governor Palin said today: “I know the agony the senator has felt.  And nothing can change what he‘s gone through or the loss of his Senate seat, which meant the world to him and to virtually much to—and virtually much to Alaska.”

Michelle, how can she possibly know the agony?  She hasn‘t served in the U.S. Senate.  She hasn‘t been convicted right before an election.  She hasn‘t been through any of this stuff.

BERNARD:  Well, she hasn‘t been exactly, you know, what he has been through. 

I would imagine that what she meant to say was that she can either imagine the agony.  Or, actually, she might be thinking about the vilification that she felt herself by fellow Republicans.  And it was a Republican administration and district attorney that did this to Ted Stevens.

And—and, you know, she was largely vilified by many people in the McCain campaign.  And maybe that is the parallel and the analogy she‘s trying to draw. 

SHUSTER:  In other words, Matt, it‘s all about Sarah Palin. 

TAIBBI:  Well, I think that‘s probably unfair.  In this case, I think she‘s just trying to express sympathy for a fellow member of her party, but it was a strange comment for her to make, sure. 

SHUSTER:  It becomes even stranger when you consider that before the election, she issued a statement after the trial where she said that even if Ted Stevens won, that he should step aside, and that there should be essentially a special election, a new election no matter what happened last fall.  So here she is taking both sides of the fence within a period of five months. 

BERNARD:  See, I don‘t think she‘s taking both sides of the fence though.  I think that that statement—if one had assumed that the allegations made against him were correct, that was perfectly appropriate to state.  But now it looks like he was basically set up and people ignored evidence.  So isn‘t it right and sort of almost just and moral thing to do to say—basically say I was wrong and I understand where he‘s coming from? 

SHUSTER:  Here is the bigger picture.  Sarah Palin gets a lot of attention from us and from others in part because there is this leadership vacuum.  And she‘s competing with the likes of Rush Limbaugh and Michele Bachmann and some of the others to try to take this attention and mold the Republican party perhaps to their own personal benefit.  Matt, isn‘t that a key reason why the Republican numbers keep going down in the polling? 

TAIBBI:  I think there‘s definitely a vacuum of leadership in the Republican party.  And it‘s definitely obvious that Sarah Palin is attempting to make herself the key national figure in the party by making these repeated press releases about every issue that comes up, and, in fact, even making—issuing a press release about Levi Johnston‘s appearance on “The Tyra Banks Show” last week, even though it seemed like it was maybe detrimental to her public relations image.  I think it actually kept her in the news too, and made her more of a national figure, which is what she‘s trying to do, clearly.

SHUSTER:  If she‘s just trying to be a national figure, she‘s certainly succeeded.  I guess I would worry that‘s causing her more damage than good.  In any case, Matt Taibbi, Michelle Bernard, thanks so much.  We appreciate it. 

Before we end this segment, a quick note.  This was opening day at Fenway Park in Boston.  Here is some video of Senator Ted Kennedy throwing out the ceremonial first pitch.  The senator, who is battling brain cancer, turned 77 earlier this year.  Kennedy was able to essentially—that‘s Jim Rice, the hall of famer, just got elected to the hall of fame. 

Again, the fact that Ted Kennedy can stand and attempt to do this with what he‘s been battling this last ten months is essentially nothing sort of a miracle.  He bounced one the first time.  Then he asked to do it again.  The second time he made it all the way.  There he is doing the second one. 

An amazing moment at Fenway.  There he is.  Got it to Jim Rice on the second try.  An amazing moment at Fenway. 

Up next, Al Franken‘s razor thin lead in that disputed Minnesota Senate race grows ever so slightly.  That‘s putting new pressure on Minnesota‘s Republican governor.  We‘ll get to that next in the politics fix.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

SHUSTER:  We‘re back and time now for the politics fix with former Democratic Congressman Harold Ford, who is also an MSNBC political analyst, and former Maryland Governor Bob Ehrlich.  Before we start, I heard the two of you talking a moment ago.  Governor Ehrlich, you said you had some friends in common.  Who would those be? 

BOB EHRLICH, FMR. MARYLAND GOVERNOR:  We have a lot of friends in common.  We served in the House together.  Harold and I—it really wasn‘t very newsworthy, because we liked each other.  We got along.  And as a result nobody wrote a story about it, right, Harold? 

HAROLD FORD JR., MSNBC POLITICAL ANALYST:  We‘ll leave it at that.

SHUSTER:  Set the stage for a lack of comment on these next two segments.  I got to ask you about some of the news coming out of Minnesota.  There was some more court developments in this race between Al Franken and Norm Coleman.  And the latest basically is that Al Franken has now stretched his lead from 225 votes to 312. 

I have to ask you, governor, if you were the governor of Minnesota, Tim Pawlenty, and this got appealed, and this got settled by the Minnesota supreme court, would you then certify the election results? 

EHRLICH:  Well, obviously it has to play out through the state appellate court first, which is I guess the predicate to your question.  And then, obviously, there‘s an appeal to the federal courts as well, the appellate process through the federal courts.  If I was Tim Pawlenty, I think I would let the whole thing play itself out before I took the drastic step of actually certifying, particularly given all the accusations back and forth, all the money, and, by the way, all the stakes as well, because what this is really about is 60 votes in the United States Senate and votes such as Card Check coming up on the agenda in the Senate. 

SHUSTER:  Harold Ford, what should Democrats do if the governor says, you know what?  OK, so the Minnesota courts have settled that Al Franken is the winner.  I‘m going to let the United States Supreme Court deal with this over the next year and a half.  Should Democrats just sit back and say OK? 

FORD:  I imagine that we won‘t.  I would hope that once it exhausts itself through the court system there in Minnesota that the governor would see fit to ensure that voters in Minnesota have a voice in the U.S. Senate.  This is a sensitive issue I think for every American voter, particularly those of us who remember the 2000 race so very well.  All votes should be counted, and the system should have a chance to work its way through. 

Once its exhausted the Minnesota system, I think the governor certainly would have grounds to say let‘s move on.  Let‘s send Al Franken there.  It‘s the thing I have to do as governor to certify the race. 

EHRLICH:  All votes should be counted, but yesterday the big news was 351 votes were counted.  But there‘s still 11,000 votes that are uncounted that are subject to challenge.  And I agree with Harold, all votes seem to be counted.  But what that means in this context, obviously, is really where the rubber meets the road.  So I really do believe that the entire process has to play itself out, because this is a true test of American democracy again.  We haven‘t looked very good in the recent past in this respect. 

SHUSTER:  Well, it‘s also such a fascinating political test of Governor Pawlenty, because if he does want a national political future, obviously he‘s going to have to pay attention to the conservatives who are going to say, look, let this fight all the way.  On the other hand, if he wants to continue to promote himself as somebody who is pragmatic, who is reasonable, who can reach across the aisle, he might decide, you know what, it‘s gone through the Minnesota Supreme Court.  Let‘s leave it there. 

In any case, here‘s what Governor Tim Pawlenty said on MSNBC yesterday about this very question.   

(BEGIN VIDEO CLIP)

GOV. TIM PAWLENTY ®, MINNESOTA:  You shouldn‘t assume that Norm Coleman‘s going to lose the appeal.  He‘s got legitimate legal issues that he‘s raised.  That same question might be asked of Al Franken.  The district court process is going to be revealed sometime in the next couple of weeks.  Like I said, then it will go to the court of appeals in all likelihood, or the Supreme Court in Minnesota, the state based system.  And that might take a month or two to decide. 

But then that federal court process is available. 

(END VIDEO CLIP)

SHUSTER:  Of course it‘s available.  He‘s not saying not saying that he would actually encourage that.  Governor Ehrlich, how awkward does this put your friend Tim Pawlenty? 

EHRLICH:  He is my friend.  It‘s not really up to him.  It‘s up to the Coleman campaign to pursue it.  If the lawyers believe they have reasonable grounds, they will clearly do it. 

SHUSTER:  But again, to clarify, though, he can certify the election at a certain point.  That‘s the key question for him.  

EHRLICH:  In the short term, there‘s no pressure because it still has to play itself out with regard to the appellate process at the state level. 

SHUSTER:  Harold, how much do you think that Al Franken gets under the skin of Republicans? 

FORD:  I think the number 60, it could be any Democrat.  Al may bring a particular irritation at some Republicans. 

EHRLICH:  You know, I agree with my friend. 

FORD:  The real issue is 60. 

EHRLICH:  The real issue is really 60.  The real issue is really 60.

FORD:  I‘ll tell you one of the things, David, I think that has to be considered here, and this is the second or third time we‘ve seen a race come down to having to be recounted and recounted.  We saw this in the state of Washington in a state race not long ago, several years ago, with the governor.  We need a better system in the country to settle this.  I hope that maybe Congress will take this up after they get—after we get through this conversation the financial recovery issues and the budget.  This is something that probably deserves a federal overlay, because as Governor Pawlenty said, even if it works its way through the Minnesota system in favor of Franken or of Coleman—

I would assume that if it worked its way in the favor of Coleman, the governor would still allow Mr. Franken to—give him the federal avenue to pursue, if need be.  We need a system, consistent way to bring resolution to these kinds of cases.  That‘s what not only people in Minnesota want, but people in Tennessee and people in Maryland and people across the country as well. 

EHRLICH:  It‘s ridiculous.  We had this situation in Maryland a number of years ago.  It‘s the greatest democracy in the history of the world.  And yet, as Harold said, we have to live through this every cycle or so.  It‘s embarrassing.  It embarrasses us in front of the world and there has to be a better way. 

SHUSTER:  I agree with you both.  But there‘s one area of disagreement, Governor Ehrlich.  That is, sure, the politics is because it‘s about 60 votes in the U.S. Senate.  But the fact of the matter is, I think you would agree, that Americans have the right to have representation in Congress, regardless of whether it‘s a crucial vote like that or not. 

EHRLICH:  I agree.  That‘s not my point.  But the reason both parties are spending—and I read the articles today—tens of millions of dollars, and they are both out there fund raising, is the fact that there are very controversial votes coming out in the United States Senate, very close votes, particularly this Card Check legislation.  And 60 really is the magic number. 

SHUSTER:  Bob Ehrlich and Harold Ford are sticking around.  We‘ll have more of the politics fix coming up.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

SHUSTER:  We‘re back with Harold Ford and Bob Ehrlich for more of the politics fix.  Gentlemen, I want to ask you about Vermont.  They became the fourth state to legalize gay marriage.  And also the Washington, D.C. City Council voted today to recognize same-sex marriages performed in Vermont, Connecticut, Massachusetts, Iowa and any other state.  Harold, where are we in this political debate? 

FORD:  Vermont is interesting because this involves a legislature overriding the veto of a governor.  In the past, we‘ve seen courts, apparently in the eyes of some, dictating to the public, although courts have every right to set law, obviously.  But for the legislature to do this, it creates a different political conversation.  Vermont, 30 years ago, would be considered a very conservative state.  Some may dismiss Vermont as a liberal state.

But what it may mean and may signal is that we‘re seeing a pretty significant shift politically in the minds of people across the country.  It is one that will reignite the debate amongst conservatives.  It will be very interesting to see how they argue with a legislature making this determination, not a court. 

EHRLICH:  Harold‘s point is very well taken.  I understand his point.  I hope he‘s wrong, but I think he‘s raising a legitimate point vis-a-vis the courts.  So I hope he‘s wrong.  There are bundles of rights that can attach to non-traditional relationships.  We‘ve had that debate in Maryland.  I‘m sure you‘ve had that debate in Tennessee, Harold, that without getting to the issue of gay marriage.  We had a very good debate in Maryland two years ago.  I signed a bill that helped negotiate that bill, in fact. 

But still, gay marriage is a vast minority view with regards to the American public.  A lot of people view the traditional marriage as a very unique institution.  And they are going to do everything that they can to protect it.  But to have not a court, a legislature do this, it puts at least this particular example in a different category. 

SHUSTER:  I‘m not sure what poll you‘re referring to.  But at least in terms of generational issues, but most people of my generation and Harold‘s generation see nothing wrong with gay marriage, and don‘t see how a gay couple getting married down the street affect the fact marriage that I have or Governor Ehrlich, that you have. 

EHRLICH:  I don‘t know what polls you‘re talking about.  Every poll I‘ve seen—even a state like Maryland, the majority view is marriage is a very unique institution.  It‘s a cornerstone of our society.  It should be protected at all costs. 

As I said, you can have a separate debate and a very constructive debate about bundles of rights that can attach to gay or non-gay relationships outside of marriage.  But as far as institutional marriage, I would disagree with your poll.  I can certainly site polls on the other side, plenty of them. 

SHUSTER:  We will have that debate, because it‘s an important one, with so many states moving in this direction.  I think it is time for America to have a full-fledged debate in every state about how somebody‘s marriage might affect somebody else‘s, and whether the bigger threat is something like, say, I don‘t know, divorce. 

In any case, thank you Harold Ford and Bob Ehrlich.  We appreciate it.  Join us again tomorrow at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for “THE ED SHOW” with my colleague, Ed Schultz.

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

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