Guests: Scott Cohn, Pat Buchanan, Charlie Cook, Ron Christie, J.D. Hayworth, David Corn, Dennis Kucinich, John Larson
CHRIS MATTHEWS, HOST: Something about Mary.
Let‘s play HARDBALL.
Good evening. I‘m Chris Matthews in Washington. Watergate—federal marshals have arrested a group of conservative activists in New Orleans for allegedly trying to wiretap the offices of Democratic senator Mary Landrieu. The leader of those arrested, James O‘Keefe, was the same conservative activist who became a right-wing hero for imitating a pimp at various ACORN officers. He together with three others were taken into custody after being caught trying to bug the offices of Senator Landrieu, a moderate Democratic lawmaker. They had represented themselves as telephone repairmen.
The attempted bugging is a throwback to the 1972 break-in and similar attempted bugging at the Democratic National Committee headquarters at the Watergate office complex in Washington. That incident and attempt to cover it up led to the destruction of Republican president Richard Nixon.
President Obama is calling for a spending freeze on many domestic programs to show his seriousness about deficit reduction. Politically, that may help with nervous independent voters, but it‘s not what liberals wanted to hear. We‘ll debate that at the top of the show.
Also, how vulnerable is Senator John McCain to a challenge from the right? Former congressman and radio talk show host J.D. Hayworth calls McCain a moderate and is going for his seat. He‘ll be here on HARDBALL.
Plus, the Democrats got some good political news in Indiana, of all places. We‘ll fill you in on that later in the program.
Finally, if you‘ve been thinking that Joe Lieberman would be more comfortable as a Republican than as a Democrat, so does he. Maybe. Check out his party-switching musings in tonight‘s “Sideshow.”
We start, however, with the attempted bugging of Democratic senator Mary Landrieu‘s office phones in New Orleans. David Corn is Washington bureau chief for “Mother Jones” and Pat Buchanan is an MSNBC political analyst.
We‘ve got the facts—four arrests, $10,000 bail. These guys are already in red prison jumpsuits, David. They tried to bug—they tried to wiretap—there‘s an old-time term—wiretap the phones of Mary Landrieu down in New Orleans. This does have a certain redux quality to those of us who grew up in the eyes and the realities of Watergate.
DAVID CORN, “MOTHER JONES”: (INAUDIBLE) old guys!
(LAUGHTER)
MATTHEWS: Why is it that this is coming back?
CORN: Well...
MATTHEWS: Why would anybody try to bug a Democratic senator‘s offices in this environment?
CORN: Well, this is Watergate meets YouTube. I mean, James O‘Keefe became a hero to the right, and I‘m waiting to see what they‘re going to say about his latest caper now, when he did these undercover videos that seemed to suggest that some people in ACORN were helping, you know, a pimp and his whore. He played the pimp himself.
Now, it turned out at the time...
MATTHEWS: We‘re watching...
(CROSSTALK)
CORN: It turned out at the time that a lot of ACORN offices, or several, came out and said, We threw him out, and that he adulterated some of the tapes. You know, he caught some ACORN people doing things they shouldn‘t have. But the right just went wild on this. ACORN lost its contracts. You know, 10 percent federal funding from New York‘s government, lost all that. Big stir.
But now, what—you know, what is the right—what are his sponsors on the right—FOX News, my old conservative friend, Andrew Breitbart—what are they going to be saying about the fact that he not just, like, you know, went into an office and pulled a stunt, but he seems to have been—he has been arrested for a felony? You know...
MATTHEWS: Well, Patrick Buchanan...
CORN: ... this is big stuff.
MATTHEWS: ... just on the surface of things, that other caper looked a lot more attractive in terms of pastimes than bugging telephones. What is it with the right wing that they have to get into people‘s telephones?
PAT BUCHANAN, MSNBC POLITICAL ANALYST: Well, I think, first, if this is true, this seems like an absurd act.
MATTHEWS: Well, a federal marshal arrested these guys. They‘re already in red prison suits.
BUCHANAN: All right, but...
MATTHEWS: And they‘re out on $10,000 bail.
BUCHANAN: If that‘s what they‘re doing, bugging her—the New Orleans office of a United States senator? What in heavens name do they think they‘re going to pick up in one of these ridiculous offices that‘s not even in Washington...
MATTHEWS: Well, what was Liddy trying to find out back in ‘72? You had the same reaction then.
(CROSSTALK)
MATTHEWS: ... political operatives do this kind of stuff for?
BUCHANAN: Well, what I said, Why would you bug the Democratic National Committee? They all blab their heads of to everybody in sight!
(LAUGHTER)
BUCHANAN: It‘s ridiculous. But I will say this. Look, we‘re hearing from David, We hope the right wing covers this. I‘m sure the right wing will give this a little more coverage than the left wing gave to the ACORN scandal...
(CROSSTALK)
CORN: Listen, I tell you, if there was an office they were going to bug, if they wanted to continue on the theme that they started with, it should be David Vitter. You know, you ought to go after somebody down in Louisiana who has a known problem—using phones, particularly. Then you...
MATTHEWS: OK, let me get...
(CROSSTALK)
MATTHEWS: ... getting in the spirit of it. Everybody‘s watching this sort of exciting picture of this guy with his pretend prostitute. But here we go. Listen to this. A conservative activist who posed as a pimp to target the community organizing group ACORN—he‘s also the son of a federal prosecutor from Shreveport...
BUCHANAN: Right.
MATTHEWS: ... were among four people arrested by the FBI and accused of trying to interfere with phones at Senator Mary Landrieu‘s office on Monday. Activist James O‘Keefe (INAUDIBLE) showed up claiming to be telephone repairmen.
What is this about? And they were—they were picked up. They‘ve already been hit with a $10,000 bail.
CORN: Well, there‘s a serious question here. I mean, we‘re joking a little bit about it. And that is...
MATTHEWS: Because it‘s ludicrous.
CORN: No, but also, who else knew about it? Was he—now, was he working in cahoots with any of the bloggers, any of the right-wing groups that have supported him and given money to his ACORN crusade? I mean, has he talked to any reporters at FOX and anyplace else?
BUCHANAN: Let me tell you what...
(CROSSTALK)
BUCHANAN: That‘s a very good point. Immunize the guys—and convict them and then immunize them and make them testify whether there‘s higher-ups involved. I mean, that‘s—that‘s...
MATTHEWS: What were they trying to find out? Were they trying to connect...
BUCHANAN: That‘s the key question.
MATTHEWS: ... Senator Landrieu with this administration with regard to a deal?
BUCHANAN: The question—Chris, here‘s what they‘re up to, I think, and it‘s surmise. They must have some kind of inkling—because it looks like such a patently stupid thing to do, they must have some kind of inkling that something is going on down there that they can pick up and make themselves bigger and bigger heroes.
MATTHEWS: Yes.
BUCHANAN: Now, what is it?
CORN: Well, they could have—another scenario is, is that they were going to try to pull some stunt that they needed to tape the phone call in order to make it work.
BUCHANAN: Well, yes.
CORN: There are two possibilities. One is they‘re trying to listen in on a legitimate conversation to get some goods to drop on her...
BUCHANAN: But...
CORN: ... or that they were trying to create news, and to make it work on the YouTube...
BUCHANAN: Well...
CORN: ... they needed the audio portion of it, as well.
BUCHANAN: But my suspicion—my suspicion is somebody told them,
Something‘s going on and you guys could be big heroes, and they were drawn
into this. But it‘s a good question. Who else knew about this? Is this a
you know, are these guys acting as cowboys on their own?
CORN: When did the conservative blogosphere know and when did it know it?
MATTHEWS: Well, you know, what‘s interesting in this case is where people commit criminal acts, apparently—this is obviously going to be tried in court.
BUCHANAN: Right.
MATTHEWS: Fair enough. They‘re not proven guilty yet, but they have been put out on bail. They were already thrown in the prison suits on this regard. David Corn, this issue of criminality on the—on—the in the political sphere, we don‘t get a lot of it, overt criminality...
CORN: Right.
MATTHEWS: ... like this, like Scooter Libby, the vice president‘s chief of staff, picked up for four felony charges and convicted of all four. But this is criminal behavior. It‘s not a joke. It‘s only ludicrous because it sounds like old-time, you know, what do you call it...
CORN: Well, the Nixon -- ...
MATTHEWS: ... fun politics of the worst kind.
CORN: Well, the Nixon people had a term that we can‘t say on air. It was called...
MATTHEWS: Dirty tricks.
CORN: Well, no, no. There was even more—Donald Segretti...
BUCHANAN: It was called “rat”...
CORN: ... “rat” something that—you know, beginning with an F. And so—but we haven‘t seen an explicit use...
BUCHANAN: But you know...
CORN: ... of this sort of political dirty tricks in a long time.
That doesn‘t mean...
BUCHANAN: Right. But let‘s not be...
CORN: ... it doesn‘t happen.
BUCHANAN: Let‘s not be naive. Look, FDR used Hoover to do this. They wiretapped our plane when we campaigned in 1968. Nixon, as soon as he got out of the vice presidency, has his tax returns reviewed. This kind of hardball, Johnson and Kennedy, and FDR especially, used it. There‘s not hard evidence...
CORN: No one...
BUCHANAN: ... that Carter did or that Truman did.
CORN: But nothing—no other White House talked about bombing the Brookings Institution. You‘ve got to...
(CROSSTALK)
MATTHEWS: We‘ve got some other issues tonight.
BUCHANAN: Sure.
MATTHEWS: First of all, it seemed to me that—politics turns in about a minute here. First of all, the president was going to face his Waterloo. Now the Republicans are back to Watergate. It is a weird time, Patrick.
BUCHANAN: Well, but look, this is—I mean, my—from what we know, this sounds like a silly, stupid thing by this guy who...
MATTHEWS: These are felonies!
BUCHANAN: Yes, but if they convict them and they go to jail, it‘s not
going to have anything to do with national politics unless there‘s somebody
unless Cornyn...
MATTHEWS: OK, let me say...
(CROSSTALK)
MATTHEWS: Just because somebody is stupid doesn‘t mean they can‘t commit a felony. O.J. Simpson is now in prison now for one of the craziest scams we‘ve ever seen, trying to get back his old souvenirs.
(CROSSTALK)
CORN: The question that we don‘t know...
MATTHEWS: It wasn‘t exactly thought out, of course.
BUCHANAN: Yes, but he had a little bit of a record, too, Chris.
CORN: The question that we don‘t...
(CROSSTALK)
CORN: The question that we don‘t have an answer to yet, because the story just broke, is whether this is a third-rate burglary, which is what they called Watergate at first, or whether it leads to more. In the beginning, you know, Pat‘s old friends in the Nixon White House said, There‘s nothing to this.
MATTHEWS: OK. OK. Well, we do have the headline, and that is going to be around the—it will be very viral, I think you were suggesting. This is going to get around, which is these conservative activists, who were the coolest guys on the block a few weeks ago because of pretending to be a pimp and prostitute, have now been caught as good old-fashioned Watergate burglars.
David Corn, thank you. Thank you, Pat Buchanan for your expertise.
(LAUGHTER)
MATTHEWS: Coming up: President Obama will propose a spending freeze on domestic programs. It‘s a symbolic move meant to stem criticism that he‘s a big spender.
By the way, I have to compare that. One time we were on a show together, you and Liddy were on, and said, Yes, Pat and I were old colleagues together. Yes, you were a speech writer, he was a burglar!
(LAUGHTER)
MATTHEWS: That debate‘s coming up, by the way. We‘re going to talk about the spending and the recession. That debate is next.
This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: President Obama‘s calling for a spending freeze on many domestic programs, in fact, an overall freeze over the next three years, in an effort to show the country he‘s serious about deficit reduction. But while that may be a smart strategy politically, isn‘t government spending what kept the great repression from turning into a second-rate Depression?
U.S. Congressman Dennis Kucinich is a Democrat from Ohio who sits on the oversight and government reform committee. And U.S. Congressman John Larson is a Connecticut Democrat who sits on the Ways and Means Committee.
First Congressman Kucinich and then Congressman Larson. Your views on this proposal the president‘s going to call for in his State of the Union to freeze overall domestic spending at something like $447 billion over the next three years? Your thoughts, Mr. Kucinich?
REP. DENNIS KUCINICH (D-OH), OVERSIGHT AND GOVT. REFORM CMTE: Well, first of all, it‘s not clear that it covers the Pentagon, which is over 50 percent of discretionary spending. But more to the point, this is a time we should be investing in America, investing in job creation, investing in infrastructure, investing in education and health care and transition to green technology. And instead, the economy‘s going into a stall. And these are insufficient measures to be able to get us where we need to go, which is out of the recession.
MATTHEWS: Well, let me go to Mr. Larson. Do you think the president‘s right to call for a freeze on overall discretionary spending, actually social spending, it seems? He‘s not going to touch defense, from what I hear.
REP. JOHN LARSON (D-CT), WAYS AND MEANS CMTE: Well, as long as I think the core values of the Democratic Party, which include Social Security, Medicare, Medicaid, are exempt, and we understand that that‘s the case—certainly, I agree that Dennis has a point. And certainly, our caucus will review an awful lot of this with interest. But I think if the president uses a scalpel, if he is not going after this with a hatchet, that that‘s an approach that can work. And we‘re happy to roll up our sleeves and work alongside the president.
MATTHEWS: Mr. Kucinich, Congressman, the debt now—the deficit, the current fiscal year, which ends at the end of September, is about $1.3 trillion, $1.4 trillion. That‘s pretty high by any standards. Of course, this president inherited something well over $1 trillion in deficit.
KUCINICH: He did.
MATTHEWS: Do we run the risk of rolling deficit after deficit and
scaring the hell out of the world money markets to the point where we can‘t
we can‘t borrow any money for the Chinese anymore, the dollar begins to shrink? Isn‘t there a danger? Even as a liberal, aren‘t you worried about a shrinking dollar, or not?
KUCINICH: Well, we should be concerned about the deficit. The question is, how do you deal with the deficit? And what most economists who want to look at deficit reduction in a serious way who are progressive maintain is that you can invest your way out of the deficit.
I mean, that‘s what we did after the Depression. You know, Roosevelt didn‘t talk about, Well, let‘s cut spending. What he said is, We‘re going to invest. We‘re going to invest in jobs and do WPA, bridges, water systems, sewer systems.
We can do that. And the president still has the power to do that. But this talk about deficit reduction by cutting social programs? This is like trying to lift up a big cargo plane and then you‘re sending it into a stall at the moment you need to give it some gas so you bring the economy up. He‘s not doing that, and I think it just cannot work. It won‘t work. It‘s the wrong move at the wrong time.
MATTHEWS: Congressman Larson, what‘s the positive case for this freeze?
LARSON: Well, I think the positive case is that we‘ve done this before, we can do it again. We were able to create through innovation and jobs and deal with the deficit under President Clinton. We can do it again. I think that this provides the president with a great opportunity. You know, we had Eric Schmidt (ph) before our caucus, and Schmidt talked about how we can innovate our way through this. And I believe that that‘s the case that can be made.
And I think what the president is calling upon is to make sure that he uses a scalpel in areas where it needs to be used, but then not to rule out the necessity of job creation. Our caucus has been all about the creation of jobs, the need to invest in the American economy. And that includes our infrastructure, but that also includes the kind of innovation that Mr.—that Eric singled out very specifically and what we need to do to grow this economy. And I think that‘s the positive step forward.
MATTHEWS: Mr. Kucinich, let me ask you about a political question. Let‘s be honest, a good part of this is politics. If you were the president, or his people around him up there at the White House, would you try to do something that moved to the center politically? Would you nod to the center of this country, to the independents at this point, given what happened in Massachusetts, or would you go hard progressive? Just pure politics, what‘s the way to save the Congress?
KUCINICH: I think the way you save the country is to create millions of new jobs. And I think the vote in Massachusetts was a disgust with the economy and with the health care plan, but we—and also the fact that so many people are losing their homes. We need to focus on job creation, focus on housing, and try to do something to revive a semblance of health care. And if we do that, we‘ll regain the confidence of the American people.
You got to remember this, Chris. Banks aren‘t lending money right now for job creation. Most of the wealth that was created from 1980 to 2005 in terms of job creation came from people who were tapping their home equity line of credits to be able to create business opportunities. That money‘s not there anymore. Government is the last resort in terms of investment.
We don‘t really have a choice here. We‘re either going to go forward and invest, or this economy is going to continue to tank.
MATTHEWS: Well, here‘s the interesting part, Mr. Larson. Here are the exemptions the president‘s proposing in his budget freeze—Defense, Homeland Security, Veterans Administration, Medicare and Medicaid, Social Security. You know, I wonder what does get cut. What does get frozen after you leave all those things to float up with costs?
LARSON: Well, we have a very skeptical caucus, as you might imagine, Chris. And certainly, we‘re as interested in where those cuts are going to be made. What we‘re concerned about—and I think a lot of the anger up in Massachusetts was about process, as well, and what happens down here in Washington. We need a more kind of open process.
I‘d like to see these discussions and these cuts be held open to C-Span. I‘d like to see the Republican alternatives. They haven‘t joined on this bandwagon at all, even though they‘ve been screaming about it. Let‘s go back and remind people how we got into this situation, who created this enormous deficit. They should have passed out coal miner hats to each and every one of us the day that the president got sworn in, so we could see how far and how deep that this recession was...
MATTHEWS: Right.
LARSON: ... and the deficit that he had left us. So let‘s open it up.
MATTHEWS: I agree with you on that, sir. I think one of the biggest mistakes of this administration is not reminding us how close we came to the abyss. And if this president hadn‘t spent our way out of it, we‘d be in it.
Here‘s Senator Evan Bayh, a moderate Democrat up for reelection, encouraging the president on this freeze. Let‘s listen to Senator Bayh from Indiana.
(BEGIN VIDEO CLIP)
SEN. EVAN BAYH (D), INDIANA: But we can do something right here, right now, starting next week. The president can say in his State of the Union address, I‘m going to include in my budget a freeze on discretionary spending. I‘m drawing a line in the sand, and I‘m willing to use my veto pen to enforce that.
UNIDENTIFIED MALE: Do you think he will do that?
BAYH: Not—not 10 months from now, not two years from now, but right now.
UNIDENTIFIED MALE: Do you think he will do it?
BAYH: I think there‘s a fighting chance that he will.
UNIDENTIFIED MALE: You do?
BAYH: That‘s what I‘m looking for.
(END VIDEO CLIP)
MATTHEWS: How can Indiana be so far away from Cleveland, Congressman Kucinich, in your thinking? I mean, here‘s a moderate Democrat, and you are, I think, a progressive, a liberal Democrat from Cleveland. Why are you so different in your view of this freeze? Can you explain it?
KUCINICH: First of all, I told you, half of it isn‘t—we don‘t even touch the Pentagon. You want to talk about drawing a line in the sand? Why don‘t we get out of the sands in Iraq, and why don‘t we get out of the rocks in Afghanistan, and start to take care of things here at home?
We need jobs. And the government is in a position where it can invest to create jobs. And it‘s not going to be creating jobs by cutting social spending. That‘s hogwash.
MATTHEWS: Yes.
KUCINICH: We need to start focusing on job creation. And this—this proposal could actually send the economy into a stall, as opposed to helping to lift it up.
MATTHEWS: OK.
KUCINICH: And that‘s what my concern is.
(CROSSTALK)
MATTHEWS: Mr. Larson, Mr. Kucinich took a bye on that question. He didn‘t want to compare himself to Evan Bayh.
But here‘s Evan Bayh fighting for reelection in a relatively conservative state like Indiana, a purple state, at best, if you‘re a Democrat. He seems to think his future lies in moderation, not in progressivism. Is he right?
LARSON: Well, I think he is for where Evan Bayh is coming from and where a lot of members—we have a diverse caucus, Chris. So, I try to use what I call the Augie & Ray‘s barometer. That‘s a little luncheonette in East Hartford, Connecticut.
And, there, they‘re concerned about the kitchen table discussion.
They‘re all tightening their belts.
MATTHEWS: Yes.
LARSON: They all have to go for a freeze. And, so, there‘s a lot of sentiment for that.
But the question remains, at the core values—and I think it comes down to this. The Democrats trust this president enough to make sure, when he‘s using a scalpel, that he‘s going to be using it in the right way. And that means that the core values of Medicare, Medicaid and Social Security, that‘s our bread and butter issues.
And I think that‘s what Evan Bayh was just...
(CROSSTALK)
MATTHEWS: OK.
LARSON: I come down on the side of Dennis in terms of wanting to make more investments.
MATTHEWS: OK.
LARSON: But I think Evan Bayh made the right political choice for Evan Bayh.
MATTHEWS: By the way, both you congressmen and everybody else watching should stay tuned tonight at 7:00 Eastern to catch our latest poll. I think you will be enlightened by it, the positive aspects of what Congressman Larson just said. It‘s amazing to hear a politician speak the absolute truth, according to our poll.
Anyway, thank you very much, Mr. Larson.
Thank you, Mr. Kucinich.
Up next: Is Joe Lieberman thinking about switching parties again? Well, what is he now, an independent? He can‘t decide between Betty and Veronica again. Wait until you hear his latest sort of twitching on the subject.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: Back to HARDBALL. Time for the “Sideshow.”
First, Joe Lieberman is still playing Archie from the old comic books, trying to decide between Betty and Veronica, trying to decide whether he‘s a Democrat, Republican, whatever. Let‘s see. Well, lately, he just can‘t decide. Continuing to play the field as an independent or go with Betty?
Let‘s listen. Here he is, the latest.
(BEGIN VIDEO CLIP)
SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: I like being an independent. So, if you ask me, I would say that‘s probably the most likely of the choices.
UNIDENTIFIED MALE: So, could you see yourself being a Republican, or is that far-fetched?
LIEBERMAN: It‘s possible.
(CROSSTALK)
LIEBERMAN: Yes. Yes. No, it‘s possible.
UNIDENTIFIED MALE: And...
LIEBERMAN: A good old-fashioned New England moderate Republican.
(END VIDEO CLIP)
MATTHEWS: Wow. He can now see himself as a good old-fashioned New England moderate Republican. Let‘s see, he‘s been a Democrat, an independent. Well, he‘s tried everything. Sounds like he‘s getting himself comfortable with that one. Then again, if you listen to him, he‘s a smart pol. He may just be trying to be make the moderate Republicans comfortable with him if he decides to file next time as a Republican.
Next: masters of deceit. Look at this mailer sent out by the Republican National Committee. It comes in an envelope labeled, do not destroy, official document. The form‘s called the 2010 Congressional District Census. And it‘s got political questions and, of course, a request for donations.
A little too official-looking, right? Well, party chairman Michael Steele doesn‘t clear matters up. He writes in an inside note in this letter: “Strengthening our party for the 2010 elections is going to take a massive grassroots effort all across America. That‘s why I have authorized a census to be conducted of every congressional district in the country.”
He‘s authorized a census? He‘s put out this official document? A tad misleading, wouldn‘t you say, especially in a census year, 2010? Anyway, the real Census Bureau says they have already received complaints from voters about Michael Steele‘s latest mailing. And they‘re figuring out what steps to take next.
On a lighter note, the president declared which Super Bowl team he‘s rooting for last night. Here he is.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Colts? Saints?
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You know, I think both teams are terrific. I guess I‘m rooting a little bit for the Saints, as the underdog, partly just because I—you know, when I think about what‘s happened in New Orleans over the last several years, and how much that team means to them, you know, I‘m pretty sympathetic.
(END VIDEO CLIP)
MATTHEWS: Well, I‘m just thinking this is going to be one of great battles of quarterbacks down there in Miami. Anyway, I‘m going.
Now for the “Number.”
Next month‘s tea party convention in Nashville is already running into issues, particularly over the event‘s sky-high ticket price. The rate of admission to this grassroots gathering. Catch it, $549 to get in the door. And guess what? A lot of that is going toward Sarah Palin‘s reported—catch this -- $100,000 speaking fee to talk to her home crowd. Isn‘t she a tea party leader? Anyway, $549 to get in, $100,000 for her -- $549, tonight‘s very exclusive big-ticket price and our “Big Number.”
Up next: Former Arizona Congressman J.D. Hayworth wants to challenge John McCain in the Republican primary out there in Arizona. I will ask him why he‘s doing it—when HARDBALL returns with J.D. Hayworth.
(COMMERCIAL BREAK)
SCOTT COHN, CNBC CORRESPONDENT: I‘m Scott Cohn with your CNBC “Market Wrap.”
Stocks lose some steam in the home stretch. The Dow Jones industrial average settle about two-and-a-half points lower, the S&P 500 down four-and-a-half, the Nasdaq down seven points.
Two rosy economic reports helped lift the markets around midday, consumer confidence hitting its highest level in nearly a year-and-a-half in January. And a trade group forecast a 2.5 percent rise in retail sales in 2010. But then financials led the decline in the afternoon. China is putting its plan to tighten lending requirements into effect. And investors could be worried about the move‘s impact on the pace of recovery globally.
Travelers Insurance the biggest gainer on the Dow today. The large U.S. Insurer reported a better-than-expected 60 percent boost in fourth-quarter profits.
And Yahoo! reports just after the closing bell earnings and revenue were in line with forecasts. Shares are moving slightly higher after-hours.
That‘s it from CNBC, first in business worldwide—now back to
HARDBALL.
MATTHEWS: Welcome back to HARDBALL.
J.D. Hayworth represented Arizona‘s 5th District in the House of Representatives from 1994 to 2006. A few days ago, he announced he had stopped doing his Phoenix-based radio talk show, and now he sounds ready to challenge John McCain in the Republican primary for Senate this August.
Mr. Hayworth joins us right now from Phoenix.
J.D., thank you for joining us.
I guess you have—you have been there, you have been outside, and you want to come back into politics. What lessons have you learned in this rich ride from inside to outside and perhaps back into inside again? What lessons?
REP. J.D. HAYWORTH ®, ARIZONA: Well, I think the—the biggest lesson is, it‘s—it‘s been good to be home with the people. It‘s been good to be away from the—the kind of bubble on Capitol Hill that can develop. And I can tell you, so many Arizonans reached out to me as a broadcaster.
I know, Chris, you have had a foot in both worlds, having worked on—on Tip O‘Neill‘s staff, and then as a White House speechwriter. And now as a broadcaster, you hear from a lot of people.
MATTHEWS: Right.
HAYWORTH: And, of course, one at point, too, you considered...
MATTHEWS: I have learned a lot along the way as well.
But let‘s—but you‘re about to do..
HAYWORTH: Yes. And you considered...
(CROSSTALK)
HAYWORTH: You took a look at running for the Senate from your native state of Pennsylvania, and decided not to.
MATTHEWS: Yes.
HAYWORTH: So, I took a look...
(CROSSTALK)
MATTHEWS: But you‘re talking about running against John McCain. He‘s a hero out there in Arizona, isn‘t he?
HAYWORTH: I will tell you, nationwide—oh, look, I think—and you will recall, 10 years ago, I mean, I was very active in John‘s presidential campaign.
But while I—I think all of us think the world of John McCain, have a lot of respect for him and his service to our country in so many different ways, the fact is, he‘s just been in Washington too long.
And now there‘s a clear divergence of opinion on several issues of substance, where John is, quite candidly, a moderate who describes himself as a maverick. And I‘m a commonsense, consistent conservative who I believe better reflects the values of Arizona conservatives and Arizona Republicans.
MATTHEWS: Would you be a finer representative from Arizona than the present senator? Would you be a finer person to represent Arizona in the U.S. Senate than John McCain?
HAYWORTH: Well, I—I believe that everyone has different qualities they bring to bear.
I think, again, as I touched on earlier, I would be a consistent, commonsense conservative. For example, let‘s take a look at the economy. John McCain voted for a bailout of the big banks, $700 billion, including many earmarks.
During the presidential campaign, he embraced a plan and announced a plan that would have been $300 billion to basically take over bad mortgages. And, during my time in the House, as the only Arizonan to serve on the Ways and Means Committee, I consistently fought for tax cuts. And , sadly, John McCain went to the well of the United States Senate and said those were—quote—“tax cuts for the wealthy.”
In terms of national security, you and I both know, as do your viewers, John McCain paid an immense physical and personal price for his duty to country. And yet we have some very different opinions on how to deal with Islamofascism. John McCain does believe in enhanced interrogation techniques.
Indeed, John McCain would confer upon enemy combatants the rights and privileges afforded by Geneva Convention signatories.
MATTHEWS: Yes.
HAYWORTH: I disagree with that.
And I think that, sadly, in a lots of ways...
MATTHEWS: Well, where...
HAYWORTH: ... Though, no—nobody can doubt John‘s sincerity, and it may not be have been his intention, but, sadly, he has enabled President Obama to move even further to the left in terms of these enemy combatants, in terms of the troubling spectacle of bringing the 9/11 organizers...
MATTHEWS: OK.
HAYWORTH: ... to—to New York City and possibly to have trials of other enemy combatants in Washington, D.C.
MATTHEWS: Well, you have hit some serious points there.
Let me go back to the issue of enhanced interrogation techniques, as you call them. Most people call them—well, certainly, we‘re talking the same language here. He doesn‘t like water-boarding. He says that‘s torture.
You disagree?
HAYWORTH: I do disagree.
MATTHEWS: You say it‘s not torture?
HAYWORTH: As I understand it—well, as I understand it, that enhanced interrogation technique is something that our own military undergoes training, certainly our own special forces.
And let‘s not forget, if memory serves, it has been credited in several different publications as preventing no fewer than four 9/11-type attacks.
MATTHEWS: Yes.
HAYWORTH: That is a serious benefit we accrued...
MATTHEWS: Well, that was to train...
HAYWORTH: ... from enhanced interrogation techniques.
MATTHEWS: But that was to train our service people to be prepared for what they would face in North Korea with the Chi-coms up there, the Chinese communists, that would do anything to our guys.
We were training them by using water-boarding. We didn‘t do it to them for some sort of—get any information out of them. We got them to have to deal with a horrible enemy.
HAYWORTH: No, no, to train...
(CROSSTALK)
MATTHEWS: Do you want to be as bad as the enemy?
HAYWORTH: No, no, that‘s exactly the preparation we go through.
And if we wanted to be as bad as the enemy, I don‘t think anyone is suggesting here that we behead our own troops, as the Islamofascists have done to both troops and journalists.
MATTHEWS: OK.
HAYWORTH: Look, we have to—we have got a serious fight on our hands. And while I respect John and his service, we have a disagreement when it comes to that, one of many disagreements.
MATTHEWS: Is it better for the state of Arizona that he be dropped as the senator and you be replacing him? Is it better to dump John McCain and replace John McCain with you, sir? Is that a better deal for Arizona?
HAYWORTH: I believe, in the long term, yes, it will be a better deal.
I think John has served admirably. We have some disagreements, but he has served in the Senate for close to a quarter-century. And it‘s time for him to come home.
I think, on the issues I just outlined, on a clear commonsense conservative philosophy, that I will be the choice of Arizona Republicans to go to the United States Senate during our primary August 24.
MATTHEWS: OK.
What changed your mind? On November 6, you wrote a letter, a public letter, urging the newly elected president to make him secretary of state of the United States, one of the most demanding positions there is in the country. And now you want to retire him.
In only a few months, you have chosen to go from a position of urging to put him into one of the high-intensity positions in the country, demanding all kinds of energy and intelligence and sharpness of mind, and now you‘re saying he‘s tired and he ought to quit or leave.
HAYWORTH: No, no, no, no.
MATTHEWS: It‘s an amazing change of mind on your part, isn‘t it?
HAYWORTH: No, Chris. I never said he was tired. I never said he was tired. And believe me, in this campaign...
MATTHEWS: Well, you think he can‘t do the job.
HAYWORTH: ... I know John McCain—no, I think he has served too long in the Senate. And, indeed a change of scenery over at State...
MATTHEWS: But he should be secretary of state?
HAYWORTH: I would are venture to say, with all due respect to Mrs. Clinton, John McCain probably would have probably been a better secretary of state, if the president was intent on truly having a nonpartisan foreign policy.
MATTHEWS: OK. OK.
HAYWORTH: That would have been an important signal. So, I think that‘s something he could have considered. Of course, that was then. This is now.
And if John McCain chooses to run again for the United States Senate, which, of course, is his right, I respect that. But I will vigorously oppose him, and I intend to win the Republican nomination in August of this year.
MATTHEWS: OK.
Most people will look at this race as John McCain being a—somewhat of a middle-of-the-road conservative, I guess a mainstream conservative, and you as a bit further right than him. I most people will look at that.
Are you as far right as the Birthers? Are you one of those that believes the president should have to prove he‘s a citizen of the United States and not an illegal immigrant? Are you that far right?
HAYWORTH: Well, gosh, we all had to bring our birth certificates to show we were who we said we were and we were the age we said we were to play football in youth sports. Shouldn‘t we know exactly that anyone who wants to run for public office is a natural-born citizen of the United States, and is who they say they are?
Let me pause and make another point, because I‘ve read—
MATTHEWS: No, I‘m reading your letter that says the president should go back and get his birth certificate from the governor of Hawaii. You dated this November 6th, 2000. I‘m just asking, do you stand by this letter? Should the governor of Hawaii produce evidence that the president is one of us, an American? Do you think that‘s a worthy pastime for the governor of Hawaii right now?
HAYWORTH: No, look—
MATTHEWS: Should she do it?
HAYWORTH: I‘m just saying, the president should come forward with the information. That‘s all. Why must we depend on the governor of Hawaii?
MATTHEWS: OK. Let me ask you about former Governor Palin. This is always interesting in your party, because it‘s a conservative party and that‘s fair enough. That‘s how our country runs, liberals against conservatives. It seems to be a finer argument now. Sarah Palin is backing John McCain. Sarah Palin‘s a hero to the far right in your party. Now she‘s backing McCain. How do you figure that allegiance?
HAYWORTH: Well, listen, we all understand gratitude in politics. I think, obviously, Governor Palin feels strongly that John McCain gave her an entrance to the national stage and put her on the national ticket. That‘s all well and good. And certainly we invite a lot of tourist dollars into Arizona, and we‘ll certainly welcome the former governor of Alaska back here.
Chris, in the final analysis, it‘s not Sarah Palin from Alaska; it‘s Sarah Jones from Payson, Arizona. It‘s not Scott Brown from Massachusetts doing robo calls; it‘s Scott Davis from Tucson. In other words, with all due respect to fellow Republicans, and fellow conservatives, Arizona Republicans will decide who the Arizona Republican senate nominee will be in August.
MATTHEWS: Will you be one of the choices?
HAYWORTH: Oh, yes. We‘re moving forward. Now, again, because we sought to criminalize politics in the name of reform, let me say we‘re in the process of filing the documents. I guess you would say it‘s the ivory soap. I‘m 99 and one fourths percent certain, barring some cataclysmic family event, to make this race.
MATTHEWS: I‘d love to moderate that debate. Thank you very much, J.D. Hayworth of Arizona.
MATTHEWS: We‘ll invite you out. You‘ve got a chance to make news right now. We invite you. Yes, indeed.
MATTHEWS: Thank you very much.
Up next, it‘s looking bleak for the Democrats in this fall‘s midterm election, some say. Is the situation bad enough that the Republicans could take control of congress? Political prognosticator Charlie Cook will join us to tell us what the air looks like out there for the Democrats, for the president, for the other party. This is HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We‘ve got some big news on the front on the conservative side of things. Quinnipiac‘s new poll of Florida Republicans finds former State House Speaker Marco Rubio, Pat Buchanan‘s hero, leading Governor Charlie Crist for the first time in the primary down there. Rubio‘s lead is only three points and that‘s within the margin of error. But catch this, three months ago—this is how times change in this country—
Charlie Crist was up by 30.
This tells you a lot about the rest of the country and what‘s going on out there in the fight for 2010. We‘ve got two experts now, nonpartisan expert, NBC political analyst Charlie Cook, and somewhat partisan—by the way, he‘s editor and publisher of “The Cook Report”—and a familiar Republican strategist, Ron Christie, who was an adviser to George W. Bush and Dick Cheney.
Let me ask you first, and then we‘ll get to the partisan. Praise your party when you get a chance. Charlie, as a nonpartisan observer, it looks to me like the right is grabbing the Republican party, that there is no center right anymore. There is no moderate right. And there seems to be that mainstream conservatives are having a problem holding on.
CHARLIE COOK, “THE COOK POLITICAL REPORT”: The intensity factor is so great on the more conservative side of the Republican party, just white-hot intensity. This Florida race is a little different because Charlie Crist, who had always been considered to be a decent politician—Ron and I were talking before the show. He‘s become a political hemophiliac. You cut him and he bleeds like hell.
MATTHEWS: But why?
COOK: It‘s sort of he‘s always—
MATTHEWS: He‘s a popular governor. He‘s sort of a middle of the road Republican. All of a sudden he‘s dying. Why?
COOK: He‘s always tried to sort of trim, do the safe thing. And the thing is, Republicans—
MATTHEWS: Why was it safe three months ago but not now?
COOK: Conservatives right now, they don‘t want safe. They want action.
MATTHEWS: What is your party up to?
RON CHRISTIE, REPUBLICAN STRATEGIST: I think that‘s right. I think Charlie Crist‘s problem is a question of authenticity. People look at him and say, well, he‘s always been a masterful politician. But he seems to take the expedient course.
MATTHEWS: Here he is hugging the president, coming up, of the United States here in a minute. That apparently is something—it‘s not like hugging Yasser Arafat‘s wife, is it?
CHRISTIE: But it‘s hugging the president and seemingly endorsing his stimulus package, which is roundly rejected by most of the conservative base. The conservatives look at Charlie Crist and say, does he really believe what we believe in. We are so fired up right now, the conservatives. You look at a guy like Charlie Crist and say, he‘s not authentic.
MATTHEWS: Wait a minute. If you‘re a pragmatist, does that mean you‘re not authentic?
CHRISTIE: No, I think people look at Charlie Crist and say, what are your rock-solid conservative principles.
MATTHEWS: I thought it was good enough to say you just want Florida to succeed. If you get jobs down there, that‘s a good thing.
CHRISTIE: No, I think his problem, again—and Charlie I think would agree to this—is that he‘s done always what‘s expedient for his political career, rather than --
MATTHEWS: Charlie, is that the way of the world. Is he right that unless you‘re red-hot on the Republican side, you‘re not a Republican? You have to be a red-hot?
COOK: Right now, Republicans are in a primal scream phase. If you‘re not screaming, they don‘t want to hear it.
MATTHEWS: Does J.D. Hayworth have a shot against McCain?
COOK: Hayworth is a hoot. I don‘t know. I don‘t know because McCain‘s numbers have not been where they used to be in Arizona for a long time. And J.D. taps very, very—
MATTHEWS: McCain‘s a conservative, isn‘t he?
COOK: He‘s kind of a hybrid.
MATTHEWS: I think you‘re flitting off to the right. How far are you going, Ron? You‘re to the right of Cheney now, it looks like.
CHRISTIE: I‘ve always been a conservative.
MATTHEWS: Would you vote for Hayworth over McCain?
CHRISTIE: Yes.
MATTHEWS: Would you vote for Rubio over Crist?
CHRISTIE: Yes.
MATTHEWS: Let‘s go through the list. I guess you like Pat Toomey.
CHRISTIE: I do.
MATTHEWS: Who else do you—
CHRISTIE: Keep going, yes.
COOK: That‘s where the center of gravity is in the Republican party now.
MATTHEWS: That‘s where the wind is blowing. Let me ask you about the Republican party. Is it going to be able to win up north with moderates, while it is serenading these right-wingers all around the rest of the country? Will people in Pennsylvania notice that it‘s a party being repopulated with rightists when they go to vote in states like Connecticut, Pennsylvania, New Jersey, New England? Wait a minute, I don‘t want to elect somebody from that crazy party.
MATTHEWS: The real test is going to be in the Illinois Senate race. Can Mark Kirk, who‘s sort of been a moderate, but certainly moving to the right rhetorically lately—but can he hold on or does the more aggressive, meat-eating wing of the Republican party sort of chew him up in a primary. Mark Kirk will probably win a general election in Illinois. Somebody else? Not so much.
CHRISTIE: I take exception. It is not the crazy party. It‘s the conservative base that‘s been remobilized by we‘re tired of big government. We‘re tired of big spending. It is not a question of craziness.
MATTHEWS: Birthers. What is that about? Why did Hayworth put out a statement saying the governor of Hawaii should release the birth certificate of the president of the United States? What‘s that about?
CHRISTIE: That‘s J.D. Hayworth being J.D. That does not constitute
--
COOK: When J.D. ran for Congress, he used to say—asked if two teenagers could reproduce in the back seat of a car, why do spotted owls need 5,000 acres apiece. J.D has built an entire career off being flamboyant. But it resonates—
MATTHEWS: You like this stuff. You‘re sucking this stuff up. I thought you were a reasonable gentleman lawyer. You are going with the flow.
CHRISTIE: Actually—
MATTHEWS: You have become a reed shaken by the wind.
CHRISTIE: I have been consistent.
(CROSS TALK)
CHRISTIE: Wait a second. You throw out the ideological barbs. One thing I‘ve been as consistent for my entire career. I worked for John Casic (ph) for nine years when --
MATTHEWS: He‘s not a right winger.
CHRISTIE: John Casic is very conservative.
MATTHEWS: He‘s not J.D. Hayworth and Rubio.
CHRISTIE: What is so wrong with saying one is conservative? Those on the left said, oh, you‘re a right winger.
MATTHEWS: If conservatism means check the passport of the president of the United States—
CHRISTIE: I said that‘s crazy as well.
MATTHEWS: Why is this guy doing it.
CHRISTIE: Hey, look, J.D. can speak for himself.
MATTHEWS: I thought you were on his team.
CHRISTIE: I like him.
MATTHEWS: You were mailing him checks two minutes ago.
CHRISTIE: I am not mailing him checks. I like him.
MATTHEWS: I‘m trying to get constancy out of you. Two minutes ago, you were with J.D. Hayworth. Now you say you don‘t know anything about this guy.
CHRISTIE: OK, Chris.
MATTHEWS: We‘ll be right back. Just as consistent, but it‘s more fun with you. Charlie Cook, Ron Christie, back with more of the fix. You‘re watching it, as you can tell, HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS: We‘re back with Charlie Cook and Ron Christie. Tomorrow night, the president of the United States addresses the country in the State of the Union. It always reaches, Charlie and Ron, a huge audience. You could be passe about this, but the average American wants details. They want to know how it affects them personally. They loved Bill Clinton for this reason. They love stuff. They almost take notes. It is impressive how people are such citizens tomorrow night.
COOK: They never make any difference. The thing is Gallup actually, about an hour ago, released a report where they looked at before and after polls for the last five presidents. They don‘t make any difference.
The only one that did was Clinton‘s in ‘98, when the Monica Lewinsky scandal broke that morning, and he went up by ten points. The thing is, these are a laundry lists. They‘ve horrible speeches. It‘s like reading a phone book.
MATTHEWS: Do you work for this network? You get paid by this network? I‘m watching the State of the Union tomorrow night. This guy is the biggest downer. You are the new Jack Germond (ph), I decree. You are the new Jack Germond. In other words, it‘s like everything else. Everything is the same.
You know what? I think he‘s going to have to explain himself tomorrow night. This is not just a reset button tomorrow night, Ron, it is a time for him to say what he‘s learned in his first year. You‘re supposed to learn.
CHRISTIE: Absolutely right, Chris. The stakes could not be higher for him. The election in Massachusetts I think has sent a shockwave throughout the country. People are saying, government‘s spending far too much money. Does Obama really have what it takes to be the president? Is he leading Congress or are they leading him around. He‘s got to come out and—
MATTHEWS: There‘s another way to say it. That‘s a nice way to say it.
COOK: Ronald Reagan averaged a decline of one point before or after State of the Unions.
CHRISTIE: What were you going to say?
MATTHEWS: I think politics is a learning profession. The ones who lead learn how to lead, and the ones who are good and become great get better every year. They get better at it. Kennedy got better every year he was president. I think that this president has a lot of growth in him. I think h e did get a little bit lost out there, a little bit unconnected.
I think he‘s going to prove tomorrow night that he can lead the country and connect again. I think he has to. There will be a lot of people watching. You get your Nielsen—
I am really upset with you. I‘m going to make some bets with you, by the way. Was Arlen Specter right to change parties? I mean, talk about being a wrong-way Corrigan. He becomes a Democrat in the year everybody‘s becoming a Republican. Is that a smart move?
COOK: He may have been screwed either one.
CHRISTIE: Yes. But he was the biggest loser out of this election, other than Coakley.
COOK: It‘s like Parker Griff down in Alabama. Do I want to lose a general or do I want to switch parties and lose a primary?
MATTHEWS: The big headline tomorrow night, president‘s freeze? Will it be a freeze? What will it be tomorrow night?
CHRISTIE: It will be a freeze. But I think people are going to look at this and say it is cynical. Are you talking 15 billion a year? For goodness sakes, his stimulus package cost 787 billion. He needs to be more specific, more bold, rather than blaming Bush and blaming the Republicans.
MATTHEWS: What will the headline be tomorrow night, other than you won‘t be watching?
COOK: No, I‘ll be watching. I hope that it is a great speech. But I don‘t—they rarely are. I want to hear some “I‘ve learned something.”
MATTHEWS: Good. I think that‘s how you reconnect the American people. You announce that you‘ve been listening, not just to your truck driver in Massachusetts, as attractive as he is, but the people in this country want the president to succeed. We‘re going to have some poll numbers on tonight that I think will demonstrate that. I can‘t give them away.
But our numbers show that he remains incredibly popular as a person, more popular that either political party, and that people still have their bets on this guy. That‘s an incredible position to be in as president of the United States. I think, tomorrow night, he has to say to the American people, you made the right bet. Your thought? Last thought?
CHRISTIE: I agree with that. Coming out of that, he could be like Bill Clinton in 1995. He could show the country he really got the message that was delivered.
MATTHEWS: Charlie?
COOK: I think both sides, Republicans too, need to show we‘ve learned a lesson, we screwed up, when we were in charge, we blew it.
MATTHEWS: Wait for Governor McDonald to announce the Republican party had eight years of horrendousness.
Thank you, Charlie Cook. Thank you, Ron Christie. Join us again tomorrow night at 5:00 and 7:00 Eastern with a big preview of tomorrow‘s State of the Union. We‘re going to be great on that, lots of information to give you before the president speaks, right here on MSNBC. We‘ll be back tonight at 7:00 with the big one. Now it‘s time for “THE ED SHOW,” with Ed Schultz.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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