updated 7/7/2010 10:33:59 AM ET 2010-07-07T14:33:59


Guests: Chris Cillizza, Jonathan Alter, John Hofmeister, Mike Papantonio
CHRIS MATTHEWS, HOST:  Steele speaks, Republicans freak.
Let‘s play HARDBALL.
Good evening.  I‘m Chris Matthews in Washington.  Leading off tonight:
Steele kicking.  The Democrats woke up today thrilled to find Michael Steele is still head of the RNC.  For Democrats, he‘s the gift that keeps on giving.  And despite the fact that some prominent hawkish Republicans are now calling for his dismissal, his job appears to be safe.
Plus, President Obama‘s approval among white voters is plummeting.  Improving the economy may be the only way to get those voters back.  Is there anything the president can do to make that happen?
Also, payback time.  The president has been tough on Wall Street and now Wall Street‘s getting tough on him, a lot of Democrats up there finding that when they call Wall Street for campaign contributions, no one‘s home.
And the oil spill.  Where have you heard this before?  Things aren‘t going so well in the gulf as expected.  The giant skimmer deployed in the gulf, that I‘ve been pushing for, that was supposed to be scooping up all that oil, isn‘t working as expected.  Is this nightmare ever going to end?
Finally, “Let Me Finish” tonight with the key to which party wins the White House in 2012.  Big surprise.  But I think you know who it is.
Let‘s start with Michael Steele.  We got to start with Michael Steele!  MSNBC political analyst Eugene Robinson, who loves this topic, is a columnist—a Pulitzer Prize-winning columnist for “The Washington Post,” and Patrick J. Buchanan‘s an MSNBC political analyst.
I don‘t know where to start except to say that this guy, even on a bad news day, is a good news story.  Here‘s Michael Steele last Thursday at the Republican fund-raiser up in Connecticut.  He didn‘t know he was being taped.  Guess what?  He was.  Let‘s listen.
(BEGIN VIDEO CLIP)
MICHAEL STEELE, RNC CHAIRMAN:  Keep in mind, again, federal candidates, this was a war of Obama‘s choosing.  This is not—this is not something the United States had actively prosecuted or wanted to engage in.  Well, if he‘s such a student of history, has he not understood that, you know, that‘s the one thing you don‘t do is engage in a land war in Afghanistan?
(END VIDEO CLIP)
MATTHEWS:  Patrick Buchanan, is there something about Republican heads that they just don‘t move?  Are those people so inanimate up there that when he said—let me get this straight—that this war was of Obama‘s choosing...
PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Right.
MATTHEWS:  ... that Obama took us into Afghanistan.  I think it was George W.  I‘m not arguing about the war now, just the history.  How could they just not even move their heads slightly when he said Obama chose to take us into that war?
BUCHANAN:  I don‘t think they were listening, Chris.
(LAUGHTER)
BUCHANAN:  They‘re all—you‘ve been to those contributors things, Chris.  They‘ve all had a couple of drinks and they‘re talking to each other.  But you‘re right.  Look, on the facts, clearly, Michael Steele was mistaken.  But what bothers me a lot more is the immediate piling on by people like McCain and Lindsey Graham and Bill Kristol and the others, who were wrong about Iraq, insisting now that if you don‘t support Obama‘s war, you‘re somehow not a loyal Republican.
This is an attempt to impose an orthodoxy on the party on a war that the policy is going to be decided at a Republican convention two years from now, and an election even further away than that.
MATTHEWS:  Well, hold that thought, Pat, because it‘s my thought.
(LAUGHTER)
MATTHEWS:  That‘s why I want you to hold it because it is the hawkish people.  It‘s not the party regulars, the guys that have to—and women who have to raise money.  It‘s not the people that are Republicans year in, year out.  It‘s particularly the hawkish neo-con crowd that are raising hell about this.
BUCHANAN:  Sure.
MATTHEWS:  It‘s not the people that care about Republicans.  Here—I got to let—well, let McCain talk, and then you, Gene.
EUGENE ROBINSON, “WASHINGTON POST,” MSNBC POLITICAL ANALYST:  OK.
MATTHEWS:  Here‘s John McCain doing it his way on ABC this Sunday. 
Let‘s listen.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN ®, ARIZONA:  I think those statements are wildly inaccurate, and there‘s no excuse for them.  But the fact is that I think that Mr. Steele is going to have to assess as to whether he can still lead the Republican Party as chairman of the Republican National Committee and make an appropriate decision.
(END VIDEO CLIP)
MATTHEWS:  Well, that‘s the warrior John McCain talking, not just the Republican.
(LAUGHTER)
MATTHEWS:  Your thoughts, Gene Robinson?
ROBINSON:  Well, first, I want to point out that, clearly...
MATTHEWS:  But you‘re laughing!
(CROSSTALK)
ROBINSON:  ... a slip of the tongue by Pat.  He referred to it as “Obama‘s war.”
MATTHEWS:  Oh, did he?
ROBINSON:  Yes, he did, and...
(CROSSTALK)
MATTHEWS:  Afghanistan‘s Obama‘s?
ROBINSON:  Yes.  Right.  That...
(CROSSTALK)
ROBINSON:  ... a slip there.  And it was just a—just a—I mean, he misspoke.  Look, Michael Steele is not the gift that keeps on giving to Democrats.  He‘s the gift that keeps on giving to columnists so—because we‘ve got a slow day.  Chairman Mike‘s got something to say.  What he had to say was half ridiculous and half right.  The ridiculous part was that this was a war of Obama‘s choosing.
MATTHEWS:  Wrong!
ROBINSON:  Wrong.  That‘s ahistorical.  That simply didn‘t happen. 
But...
MATTHEWS:  But also, he said—the second line was pretty good.  This was not something the United States had actively prosecuted or wanted to get into.  We were in war for, like, seven years before he came into office.
ROBINSON:  Tell that to the families of the soldiers...
MATTHEWS:  Yes.
ROBINSON:  ... who were killed in Afghanistan.  But I mean, that‘s—
that‘s absurd, and on that level, you know, almost obscene.  However, the
second part about, doesn‘t he know about waging a land war in Afghanistan -
you know, Alexander the Great found out about that.  The Russians found out about that.

MATTHEWS:  That‘s true.
ROBINSON:  The Brits found out about it.  That‘s true.  That could have come from one of my columns, so I can‘t argue with him there.  However, he‘s got to answer to the likes of John McCain and Lindsey Graham. 
And this is a problem.
MATTHEWS:  OK.  Let‘s watch Lindsey Graham here, guys.  First of all (INAUDIBLE) Pat.  Here‘s Lindsey Graham.  They all jumped in on this one.  By the way, perfect timing for a so-called gaffe, which Michael Kinsley calls something where telling the truth.  Let‘s go.  Here‘s Lindsey Graham on Sunday.  Everybody was talking this Sunday about this.  Here he is on CBS.  Let‘s listen.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  It was an uninformed, unnecessary, unwise, untimely comment.  I want to separate myself from that statement.  And the good news is Michael Steele is backtracking so fast, he‘s going to be in Kabul fighting here pretty soon.
It‘s up to him to see if he can lead the Republican Party after this comment.  I‘m going to leave it up to the Republican National Committee.
(END VIDEO CLIP)
MATTHEWS:  Pat, a little mirth there from Lindsey Graham...
BUCHANAN:  Right.
MATTHEWS:  ... on this front.  But you got the two hawks there that have been always supporting the war.  But then you‘ve got Ron Paul.
BUCHANAN:  Right.
MATTHEWS:  Quote—here‘s his statement.  “I would like to congratulate Michael Steele for his leadership on one of the most important issues of today.  He is absolutely right.  Afghanistan is now Obama‘s war.  Michael Steele should not resign.  Smart policies make smart politics.”
Wow!  I think Ron Paul is a lot more popular today than he was a couple years ago, when Rudy Giuliani was pushing him around in all those debates, Pat.
BUCHANAN:  Exactly.  And let me say, when I say Obama‘s war, it is Obama‘s war in the sense that Vietnam—Jack Kennedy put 16,000 troops there.  After LBJ had the Gulf of Tonkin and he put 500,000 in there, we called it, legitimately I think, LBJ‘s war.  That‘s what they‘re saying.  But let‘s take John McCain...
MATTHEWS:  And then it became Dick Nixon‘s war.
BUCHANAN:  Exactly.  Exactly.  You could say that.  And let me say this.  John McCain is maybe the titular leader of the Republican Party, but he‘s been repudiated.  The Bush/Cheney/McCain policy was repudiated in 2006, 2008.  And the idea that he and Lindsey Graham are imposing their hawkish views—you know, “We are all Georgians now”—on the entire Republican Party and we‘re disloyal if we oppose it is preposterous!
MATTHEWS:  Pat, you are a true believer!  But isn‘t it—I‘m going to ask you, Gene.  I‘m going to ask the liberal columnist for “The Washington Post”...
(CROSSTALK)
MATTHEWS:  ... who has the heart of the Republican Party, the hawks or the people who think this war has gone on too good—or rather, too long for America, that we‘ve been in that war for nine years, and now it‘s become Obama‘s war and they ought to just—they ought to just take advantage of that political fact?
ROBINSON:  Look, I suspect that Pat is onto something in that, clearly, the center of gravity among the elected officials, the poo-bahs of the Republican Party here in Washington and in the state capitals and especially those with presidential ambitions is to support the war.  I mean, look at—look at—look at the support that Obama is getting in Congress for war money, for—in anything he wants to do, basically, he gets support from...
MATTHEWS:  Would you put this on the top of your bragging list...
ROBINSON:  However...
MATTHEWS:  ... if you were a Republican running for Congress this year would say, I dislike the war in Afghanistan?
ROBINSON:  No, I certainly wouldn‘t.  And I think that what Pat is onto and what Chairman Mike was onto is that there are there are a lot of Republicans out there who question the war, just like a lot of Democrats out there question the war.
MATTHEWS:  Why don‘t they talk?
BUCHANAN:  Well...
ROBINSON:  That‘s a good question.
MATTHEWS:  Why don‘t they talk?
(CROSSTALK)
MATTHEWS:  Why don‘t people like you, Pat, traditional conservatives like Barry Goldwater, who recognize the limits of American power in the world, who don‘t think we should be the world‘s policeman, who do not believe that we can set up some sort of neo-colonial new entity out there, some new reign...
BUCHANAN:  Right.
MATTHEWS:  ... some new raj over there—why don‘t you guys talk?
BUCHANAN:  Well, listen, Chris...
MATTHEWS:  Why do you let the hawks do all the talking?
BUCHANAN:  Well, look, I wrote a couple of books, “Republic Not an Empire”...
MATTHEWS:  Yes, but...
BUCHANAN:  Tony Blankley is a conservative columnist, as is Kristol, and George Will is a conservative columnist with hundreds of papers.  You‘ve got him out there.  You‘ve got Ron Paul.  You‘ve got Joe Scarborough on this network.  You‘ve got a lot of anti-war conservatives and paleo-conservatives that have magazines.
They don‘t get the attention the neo-cons do.  There‘s no doubt the neo-cons are on the big papers, “The Washington Times”—excuse me—
“Washington Post,” “Washington Times,” “New York Times.”  But there are people out there that oppose this war, and they‘re the ones, Chris, I mean, who really object deeply to the fact that our patriotism is going to be questioned again if we don‘t go along with Barack Obama.
MATTHEWS:  Yes.  Well, I‘m amazed that the Cheney family seems to have
a mimeograph machine in their basement, and no matter who in the family has
a thought or a wink or a burp on the question of foreign policy, we know
about it.  So I don‘t understand what the family (INAUDIBLE) It‘s like the
what‘s that crazy family, the Munsters?  I mean, how do they—how do they...

(LAUGHTER)
MATTHEWS:  Does everybody have an opinion on war?
(CROSSTALK)
BUCHANAN:  Now you‘ve gone a bridge too far!
(LAUGHTER)
ROBINSON:  I think you have.  I think you have.
MATTHEWS:  OK, then let‘s stick with the Cheneys, not the Munsters.
ROBINSON:  OK.
MATTHEWS:  Let‘s take a look at some of Michael Steele‘s greatest hits of the last 18 months, a little comic relief here.  Let‘s listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE:  Like Rush Limbaugh, who is the de facto leader of the Republican Party...
STEELE:  No, he‘s not.
UNIDENTIFIED MALE:  Well, I‘ll tell you what, I‘ve never heard...
(CROSSTALK)
STEELE:  I‘m the de facto leader of the Republican Party.
UNIDENTIFIED MALE:  Is there any professional jealousy?
STEELE:  Not on my part.  What would I be jealous of?
UNIDENTIFIED MALE:  He‘s the president of the United States.
STEELE:  I‘m chairman of the RNC.  So what‘s your point?
UNIDENTIFIED MALE:  Do you think you can take over the House?  Do you think Republicans...
STEELE:  Not this year.  And Sean (INAUDIBLE)
UNIDENTIFIED MALE:  You don‘t think so?
STEELE:  Well—well, I don‘t know yet because I don‘t know who all the candidates—we still have some vacancies that need to get filled.
UNIDENTIFIED MALE:  Do you feel that as an African-American, you have a slimmer margin for error than another chairman would?
STEELE:  The honest answer is yes.
Neil, have you been reading my press lately?  I don‘t think the last thing you can say about me is that I‘m part of the establishment here.
UNIDENTIFIED MALE:  Well, that‘s true.  Everybody hates you.
(END VIDEO CLIP)
MATTHEWS:  Michael Kinsley, 19 -- 2002, rather, “The Guardian” over in London, said, quote, Pat, “A gaffe is when you tell the truth.”
BUCHANAN:  A gaffe is when you tell...
MATTHEWS:  Is he proving it?
BUCHANAN:  ... an impolitic truth and then you‘ve got to draw it back, but you‘ve actually spoken the truth.  That‘s what Steele did in part of what he said, Chris.  And I really do hope—I mean, Republicans have got a fighting chance to get the White House, that people like Romney and Sarah Palin and the others don‘t get into this piling on Steele because he‘s questioned this Afghan war and they leave this debate for the primaries.  They‘re two years off or a year-and-a-half off.
MATTHEWS:  Yes.
BUCHANAN:  And they really ought not to lock themselves into a policy the American people may not want by 2012.
MATTHEWS:  Well, maybe they‘ll be smart and let you speak at the convention.
BUCHANAN:  They did that once before, Chris, and they don‘t think it was smart.
(LAUGHTER)
MATTHEWS:  Thank you, Eugene Robinson, and thank you, Pat.  If you want those tapes, I think they go back to 1992.
BUCHANAN:  Oh, the tapes are great.
(LAUGHTER)
MATTHEWS:  Up next—Houston, I think.  Up next, white flight.  President Obama‘s approval numbers among white voters is heading south and he may take the Democrats down with him.  Can he get those voters back?
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS:  Out in Nevada, the race between Sharron Angle and Harry Reid has taken an odd turn.  Angle‘s campaign sent a “cease and desist” letter to Reid after the Reid campaign refurbished an older version of Angle‘s campaign Web site, including some controversial policy positions by her, like eliminating the Department of Education.  Reid‘s camp responded by calling the suit frivolous.  The Reid Web site, which the campaign called Therealsharronangle.com, is no longer active.
We‘ll be right back.
(COMMERCIAL BREAK)
MATTHEWS:  Welcome back to HARDBALL.  Just four months until November‘s mid-term elections.  They‘re coming up quick, and the mood is grim for many Democrats.  The tide of President Obama‘s victory in 2008 lifted a lot of smaller boats with him, but now it looks like stormy waters ahead.
Look at our latest NBC News/”Wall Street Journal” poll.  These numbers tell you quite a bit.  A year ago, President Obama‘s approval rating among white voters who will vote in this heavily older—these mid-terms are always older and whiter, if you will—was at 49 percent, disapproval among white voters 40.  Today approval among white voters down to about a third, 36 percent, disapproval up to well past half, 56 percent, among again white voters.
Should Democrats be afraid, and does a no-growth economy make things that much worse?  Well, “The Washington Post‘s” Chris Cillizza‘s an expert.  He‘s managing editor of Postpolitics.com.  And “Newsweek‘s” Jonathan Alter‘s got a great book out called “The Promise.”  It‘s a hell of a book and everybody‘s talking about it.  It‘s causing a lot of trouble for Obama because he and Joe Biden seem to have different views about the outcome in Afghanistan.
That said, let‘s talk about unemployment in this situation.  Look at these disapproval numbers among whites.  Now, Chris, just so our people at home understand why we‘re doing this, why are we singling out the white voters, as opposed to minority voters, and why is it significant?
CHRIS CILLIZZA, POSTPOLITICS.COM:  All right.  Well, first of all, Chris, white voters always make up a large majority of the electorate.  But small differences matter, especially in low turnout mid-terms.  In 2008, white voters made up 74 percent of all voters.  In 2006, the last mid-term before that, 79 percent.  So white voters make up a bigger proportion of the electorate in mid-terms traditionally.
If you move that out, you‘re talking about three million more white voters, if it‘s like 2006 than if it‘s like 2008.  With President Obama‘s numbers, like you just showed, like that with white voters, in a lot of these rural Midwestern districts, it‘s going to be a harder sell unless his numbers can bump up a little bit there.  He‘s not going to win them.  He came closer to winning white voters than John Kerry did, than Al Gore did.  All that said, he needs to be above the 39 percent that you just cited.
MATTHEWS:  Jon, we have a lot of viewers out there that got out and came out of nowhere to vote for Obama last time.  They may not always vote.  Younger voters, younger white voters, minority voters may not always vote, but they got out for this guy we‘re looking at right now.  They wanted him to be president of the United States.  He is president of the United States.  These are troubled waters in terms of the economy.  Will they get out to vote this November to offset this advantage among white older voters?
JONATHAN ALTER, “NEWSWEEK”:  You know, we don‘t know the answer to that, but if you just go back to the 2006 totals, those were very good for Democrats.  That was a very, very good year for Democrats.  So they can have the same percentage of the white vote turning out and do fine.  But they‘ve got to get these independent voters.
I see it less as a racial white-minority thing than independents versus Democrats.  Obama will do fine with hard-core Democrats.  The Democratic Party will do fine in these mid-terms—of course, Obama‘s not on the ballot himself—with hard-core Democrats.  It‘s the independents that they‘re losing.  He‘s got to get them back.  He‘s got to get into the game of stigmatizing the Republicans.
You know, I remember from the Roosevelt years, from studying them, Roosevelt with delight would talk about Martin, Barton and Fish (ph)...
MATTHEWS:  Right.
ALTER:  ... you, know, he‘d really go right after the Republicans.  Well, you got a Barton there right now and Obama‘s starting to go after him.
(LAUGHTER)
ALTER:  But you know, why not...
(CROSSTALK)
MATTHEWS:  He‘s the biggest BP defender.  But let me go back to...
ALTER:  Yes, Barton, Boehner and BP!
MATTHEWS:  OK...
ALTER:  You know, just go right at them!
MATTHEWS:  Well, here‘s the question about whether he can do a blame game now, right now, Chris Cillizza, and that‘s the question.  Will the country listen to Barack Obama if he starts beating up on—I agree.  I think the Republican leadership is pretty hard to defend.  Mitch McConnell says, Vote no, obstruct, obstruct, obstruct.  Jon Kyl‘s just a wild hawkish maniac sometimes politically.  You‘ve got Eric Cantor, who‘s a young Richard Nixon, basically.  And you‘ve got Boehner, who looks like a golf guy that just blew a putt.
(LAUGHTER)
MATTHEWS:  They‘re not exactly the most exciting, positive group of people, but yet they‘re not running for office this time.  The people are voting negative on a bad unemployment situation, Chris.  They don‘t like the high unemployment, so they‘ll vote for the out party.  Is there anything Barack can do about that, the president?
CILLIZZA:  Well, he can hope that—look, the unemployment rate is not going to drop significantly.  It may drop some.  It‘s not going to drop to 5 percent, Chris.  You and I know this.  And I certainly don‘t have a degree in economics, but everybody I know who does says it‘s unlikely.  So what he has to show is movement in a semi-positive direction.  Can he show that?
The other thing is your point, Chris. 
MATTHEWS:  Well, can he get down it down to 8?  No.
CILLIZZA:  Is it a referendum—is it—is it a referendum or is it a choice?  The White House thinks it‘s a choice.
People don‘t like Republicans.  That‘s different than 1994.  Remember, Republicans had been out of office for 40 years.  The public was more willing to give them a chance.  They were just fired twice in a row, 2006 and 2008. 
MATTHEWS:  Right. 
CILLIZZA:  They have bad numbers.  So, is it a choice, or is it simply, you know what, Democrats control everything, we want a little bit of balance, let‘s put Republicans in and see what they can do? 
ALTER:  That‘s the problem.
CILLIZZA:  We don‘t know the answer to it.
ALTER:  They have to...
(CROSSTALK)
MATTHEWS:  Jon, you got—Jon, I like your—I like it, offering the voters a choice.  Do you like the R‘s or you like the D‘s?
But you know, when you walk into a voting booth, you basically vote the sort of impulsive yes or no.  I like the way things are going, I‘m going to vote for the party in power.  I don‘t like the way things are going, I‘m going to vote for the party out of power. 
You only get that one vote, yes or no.  It‘s very hard to vote no, you don‘t like the way things are going, and still vote for a Democrat this time.  Isn‘t that the hardest thing in the world? 
(CROSSTALK)
ALTER:  No.  You can vote no on a return to the past.  And Obama has talked about this in some speeches.
MATTHEWS:  That‘s not the way people vote.  They vote on the present.
(CROSSTALK)
ALTER:  Not just the president, no.  No, you can nationalize an election in a lot of different ways.  The idea that some Democrats have that they should give up on nationalizing this is ridiculous.  Of course you want to go for the local angles where you can to keep your guys in power.
(CROSSTALK)
MATTHEWS:  When is the last time a party has been able to run against the party that‘s not in power? 
(CROSSTALK)
ALTER:  Look, it‘s very, very hard. 
MATTHEWS:  Thirty-four.
(CROSSTALK)
ALTER:  Thirty-four and 2002 are the only times in 100 years where the power controlling the White House has won the first midterm elections.  So, they‘re not going to gain seats.  It‘s a questioning of limiting the losses. 
And to say—to educate the country that if the Republicans take control, the guy Joe Barton becomes head of all energy policy from the Congress, this is a guy who wants to apologize to BP.  And he‘s going to be running our energy policy. 
(CROSSTALK)
CILLIZZA:  Do people know who Joe Barton is?
ALTER:  You have to explain it.  You have to educate.  That‘s up to the president.
(CROSSTALK)
MATTHEWS:  Let me run this by you, Chris Cillizza. 
CILLIZZA:  Sure.
MATTHEWS:  You‘re an absolutely objective reporter.  You have no opinions on anything.  I know this is true.  You are completely clean of any opinion or beliefs.  OK?
Now here‘s the question.  Can Barack Obama between now and late October, before the elections, November 2, can he run pictures of top Republicans like Barton and Boehner and those guys and say vote against this crowd, they‘re a bunch of burgers, business, rich guys, they‘re all with corporate interests, they‘re not the kind of people that look out for regular people?  Can they make them the bad guys and win this—at least cut their losses, as Jon says?  Can they do it?  It‘s never been done.  Can they do it? 
(CROSSTALK)
CILLIZZA:  I‘m skeptical of it, Chris, for one basic reason.  Most people have no idea in this country who Joe Barton and John Boehner are.
Can you argue that they are indicative of sort of this is what the Republican Party will do?  Yes.  And I think the DNC and individual candidates will make that case.  But, remember, Republicans tried to make elections about Nancy Pelosi for a very long time.  And not enough people knew who she was for it to work. 
(CROSSTALK)
ALTER:  But, Chris, this is about the president acting as party leader, which he‘s been reluctant to do.  If he wants really to go out there and turn Joe Barton into a household name, he started to do it on his radio address last weekend.
(CROSSTALK)
CILLIZZA:  You‘re right.
ALTER:  He does it five more times in five more radio addresses, gets out there and makes quips about him, everybody will know who he is. 
(CROSSTALK)
MATTHEWS:  Just blue-skying this, maybe he has to do what Olbermann does every night, worst person in the world, go after the top four Republicans, just blast them away, say these are the guys.  Maybe it works.
ALTER:  Not crazy.  That‘s what Harry Truman did. 
(CROSSTALK)
MATTHEWS:  He did it what?  In ‘48.
ALTER:  In ‘48.  Run against the Congress.  Run against these Republicans in the Congress.  They‘re extreme enough, Chris, they‘re out of the mainstream enough, that it is possible and worth a try for the Democrats. 
MATTHEWS:  It‘s hard to do when you control both houses, though, and the Supreme—well, you don‘t control the Supreme Court. 
(CROSSTALK)
MATTHEWS:  Anyway, thank you.
(CROSSTALK)
MATTHEWS:  Thank you, Chris Cillizza.
I hear one argument here, which is to run against Republicans. 
And your argument, Chris, is just take your lumps, right? 
CILLIZZA:  I just think, Jon is right.  It‘s an issue of limiting loss.  DNC, Democrats, the White House are going to do it by recreating in some way that 2008 coalition, African-American voters, Hispanic voters, young voters. 
MATTHEWS:  OK. 
CILLIZZA:  Anybody they get in there helps.  But the electorate and the composition of the electorate is going to make it tough.  And history suggests they‘re headed for losses. 
MATTHEWS:  OK. 
Thank you, Chris Cillizza.
Thank you, Jonathan Alter.
ALTER:  Thanks, Chris. 
MATTHEWS:  The name of Jonathan‘s big book, “The Promise.”  It‘s a huge book, got to read it, about Obama and what is going on right now.
Up next:  It‘s the end of the road for former Ohio Congressman Jim Traficant.  Bad news, right?  Sort of.  Not really.  We will tell you why he‘s finished. 
You‘re watching HARDBALL, only on MSNBC.  
(COMMERCIAL BREAK)
MATTHEWS:  Back to HARDBALL.  Now to the “Sideshow.” 
First:  Alvin Greene‘s campaign goes even deader.  Greene is that South Carolina Senate candidate who won last month‘s Democratic primary with no prior experience in office, no staff, no campaign, period. 
Now for the latest bulletin courtesy of the Associated Press.  Dateline: Manning, South Carolina—quote—“Two weeks ago, Greene asked the same AP reporter he had welcomed into his home to leave, saying he was a busy man and repeating, ‘Go, go, go, go,‘ while avoiding eye contact.  A phone call to arrange an interview later that day was met with a gruff request to return a week later at 1:30.  When the appointment time arrived, Greene wasn‘t there.”
Please come back when I‘m not here.  Sounds like Major Major Major in “Catch-22.” 
Next:  The comeback comes to an end.  Ohio Congressman Jim Traficant, just released from federal prison last year, has been ruled ineligible for the ballot this fall.  Traficant had been hoping to make his return to Congress as an independent candidate.  But the election board ruled that he fell 107 signatures short of qualifying.  He had over 1,000 signatures ruled invalid.
Finally: a campaign flashback.  The 2008 primary fight followed Hillary Clinton all the way to a town hall in the Republic of Georgia yesterday.  Watch what happened. 
(BEGIN VIDEO CLIP)
HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE:  I saw two women wearing T-shirts from my presidential campaign, which reminded me—if I needed reminding—that I ran a very hard race against President Obama. 
I tried with everything I had to beat him.  Many people around the world have said, well, how could you be a political opponent and now be working with your former adversary?
But there‘s a very simple answer.  We both love our country.  And, in a democracy, there comes a time when politics stops and governance must start. 
(END VIDEO CLIP)
MATTHEWS:  Well, good for her.  That was Hillary Clinton at her best. 
Time now for the “Big Number.”
One of more notable quirks of the 111th Congress, that crowd of senators that weren‘t elected.  They were just appointed to office.  All in all, how many do we have right now?  We have got half-a-dozen senators who weren‘t elected, Michael Bennet, Kirsten Gillibrand, Ted Kaufman, Roland Burris, George LeMieux, and the needs-to-be-appointed senator in West Virginia to replace Robert Byrd—six appointees sitting right now in the United States Senate not elected.  That‘s tonight‘s “Big Number.”
Up next:  The oil is, well, still leaking into the Gulf.  Is there anything—anything—that BP can do to clean up this mess or to stop it? 
This is HARDBALL, only on MSNBC. 
(COMMERCIAL BREAK)
AMANDA DRURY, CNBC CORRESPONDENT:  I‘m Amanda Drury with your CNBC “Market Wrap.”
Stocks bouncing around all day, but finishing on an upswing, the Dow Jones industrials adding 57 points, the S&P 500 climbing 5.5, and the Nasdaq tacking on two points. 
A lot of movement in the retail and energy sectors today—Citigroup slashing its forecast for a number of big retailers.  Citi says U.S.  consumers went on a buying binge in the first quarter, and will be nursing their hangovers in the second. 
But Barclays came out bullish on the oil and services sector.  They say shares have been oversold and there are plenty of bargains out there.  Financials did well after learning of a backup bailout plan for the Eurozone.  Meantime, France says all of its banks are expected to pass the euro‘s own stress test. 
And today‘s IPO of China‘s third largest bank met with incredibly strong demand.  It is expected to top $22 billion, making it the largest IPO in history.
That is it from CNBC, first in business worldwide—now back to
HARDBALL. 
MATTHEWS:  Welcome back to HARDBALL.
Well, it‘s day 78 of the oil spill disaster and still no good news.  Tar balls have now hit Texas, and a huge converted super tanker—it‘s called A Whale—there it is—has been deployed in the Gulf to skim up oil.  But, so far, it‘s hard to tell if this behemoth skimmer is any match for the oil. 
John Hofmeister is president and—former president, rather, of Shell Oil, and Mike Papantonio has filed a class-action lawsuit on behalf of fishermen, oystermen and others businesspeople down there affected by the Gulf spill. 
John, let me ask you this.  How are we doing on your theory?  Weeks ago, if not months ago, in the midst of this horror, you have been recommending that we get a skimmer in there, a big oil tanker to go in there and start skimming up the oil off the surface. 
Is it working, this big whale we have got out there? 
JOHN HOFMEISTER, AUTHOR, “WHY WE HATE THE OIL COMPANIES: STRAIGHT TALK
FROM AN ENERGY INSIDER”:  Well, there‘s two different ways to use the supertanker.  And one is skimming, which we see apparently the results over the weekend were inconclusive, because of the wave action. 
And you can understand why it needs a still body of water if you‘re going to be skimming off the surface.  The part that hasn‘t been used yet is called the suck and salvage method, where you‘re actually putting pipes down into the water and sucking oil out of the water once and for all.  It‘s suck, salvage and separate.
And that hasn‘t been tried yet.  It‘s been discussed for over two months, still hasn‘t happened.  I‘m glad to see the supertanker and the skimmer out there.  But I would rather see more supertankers with the suck and salvage method as well. 
MATTHEWS:  Is that suck and salvage the Kevin Costner method? 
HOFMEISTER:  That‘s—yes, but it‘s a much larger scale.  Kevin Costner‘s product is fairly small, does so many barrels per hour. 
This would be big supertankers that have multiple pipes hanging off the sides sucking simultaneously. 
MATTHEWS:  Yes, we‘re looking at it.  Well, it looks like it‘s working in this depiction.  But do you know if it‘s ever been proven to work on a large scale, like we have in the Gulf now, with 60,000 barrels a day, having accumulated over the 78 days? 
HOFMEISTER:  Well, the only story I have heard is one that‘s denied in the Persian Gulf.  It‘s denied by Saudi Aramco—or Saudi Arabia—I‘m sorry.
And I don‘t know if that took place or not.  With the closed media over there, some things happen you never know about.  But it‘s alleged that there was a major spill, that this method was used, and that it worked. 
MATTHEWS:  Well, let‘s go to Mr. Papantonio. 
You‘re an attorney for the people hurt down there.  What is your sense of the efforts of BP so far to try to clean up this mess?  Are they trying as hard as the people care they are trying to do this job of getting this collected that is coming out still every second at the rate of 60,000 barrels a day? 
MIKE PAPANTONIO, ATTORNEY FOR FAMILIES SUING BP:  Chris, to put that in perspective, this supertanker has the capability of sucking up 21 million gallons a day. 
Let‘s compare that to BP‘s P.R. flotilla that, in 10 weeks, has been able to get a whopping 28 million gallons.  There‘s a reason for that, Chris.  Right now, you have Tony Hayward on a whirlwind tour around China, Libya, wherever he can go to raise cash for this company. 
The reason he‘s doing is because he wants this company to look more attractive.  You have to understand, this is a company that—you had Moody‘s and Fitch‘s drop their bond value to just above junk value.  So, what are they doing to us?  What does that mean to us on the coast? 
Here‘s what it means.  They‘re cutting back.  Rather than bringing any of these supertankers like John was talking about 10 weeks ago, Chris, like you were talking about 10 weeks ago, they have tried to put on a P.R. scam to where they put 1,000 people on the beach with a shovel and a bag and make it look like they really care. 
Here‘s what‘s really happening.  They put have dispersants on the oil.  It sinks to the bottom.  And you know what?  The oil doesn‘t come up for another year.  BP has a very clear plan here, Chris.  It is to amortize their—amortize their cleanup costs over 10 to 15 years, rather than doing it in 18 months, which is...
(CROSSTALK)
MATTHEWS:  Well, that‘s another word—that‘s a fancy word for postpone, right? 
PAPANTONIO:  Exactly.  They want to spread it out.  They want to spread it out. 
(CROSSTALK)
MATTHEWS:  Justice denied—justice delayed—I mean, you‘re the attorney here.  Justice delayed is justice denied.  Is that what‘s going on here? 
They‘re going to let this mess sit out here in the bottom of that Gulf for years because it‘s good economics for them?  That‘s what you‘re saying.  And do you have any evidence to back that up?  Do you have any evidence to back up that charge? 
(CROSSTALK)
PAPANTONIO:  The evidence—yes, the evidence is this.  The evidence is clear. 
We know that a supertanker can take 21 million gallons a day and it can keep it from getting to our beaches.  What they‘re counting on is, let it come to the beaches.  They don‘t care about Pensacola.  They don‘t care about Mobile.  They don‘t care about the coast, because all they want to do is put people with a shovel and a bag out there to make it look like they‘re a caring, compassionate company. 
And, really, all it is, is cost-benefit analysis. 
(CROSSTALK)
PAPANTONIO:  Bottom line, they care about cash.  That‘s what this whole thing is about. 
MATTHEWS:  I‘m going to go back to John and then come back to you, Mike. 
There‘s a word out there—I got it over the weekend—that maybe this talk of $10 billion in escrow is just talk at this point, that the law states under that this company only has to pay out $75 million, under the law, under the statutes.  That hasn‘t been changed.  This side deal with the president that was done sort of extralegally, if you will, has no binding legal power.   
Do we have any evidence, John Hofmeister, that BP is going to pay out anything like $10 billion to the claimants that are represented in some part by—by Mike? 
HOFMEISTER: I think that BP is very concerned about losing their license to operate in the U.S.  And the U.S. is one of the most—one of the richest sources of future earnings growth for BP as a company.  So, I think there is a moral commitment, as I understand the White House deal that I think, it‘s $20 billion, Chris, that the $20 billion set aside $ 5 billion a year for four years is—
MATTHEWS:  Is that legal?
HOFMEISTER:  No, it‘s not legal—it‘s not a legal agreement that I know of.  But it‘s a moral commitment.  And I don‘t see them backing away from it if they want to continue to operate in the U.S.
(CROSSTALK)
MATTHEWS:  John, are they going to change the statute and raise the cap and what can be grabbed from that company or not?
MIKE PAPANTONIO, ATTORNEY FOR FAMILIES SUING UP:  Let me tell you this: we‘re kidding ourselves about the $20 billion.  You know what I learned last week in a meeting up in New York with the people who are in charge of trying to distribute this money?
The money is not even securitized as we sit here.  If this company were to move to bankruptcy tomorrow, there‘s no security interest that the U.S. government has in that money.
Secondly, $20 billion has not been escrowed.  There hasn‘t been money escrowed at this point at all.
So, as we sit here and it‘s kind of like having a shiny thing out there, Chris—the shiny thing is making us believe that BP is on top of this financially.  But you ask the question: is this money securitized?  And they‘re going to tell you, no, because that‘s what they told me last week.  They told eight major law firms that are involved in the litigation.
I looked across the table and I asked the man directly, is this money securitized?  The answer was no.  The air went out of that room because we know—
MATTHEWS:  That‘s right.
PAPANTONIO:  -- when you talk about moral obligations with a company like this, it‘s meaningless.  It is absolutely meaningless.
MATTHEWS:  Let‘s keep working on that one because I want to make sure from a TV point of view, if we have any belief at all that the moral obligation holds water.
Let‘s go to this question of the relief well effort.
John, based upon your expertise, do you have confidence that the relief well which we‘re told of today in the wire services, it‘s a week ahead of schedule --  have you any assurance that it‘s going to reach target and going to relieve this problem by mid-August, as they claim it will by BP?
HOFMEISTER:  No assurance, Chris.  But it‘s got to be tried. 
They‘ve tried every other option.  They‘ve got to try this option.
And they‘ll try right through to the second well—second relief well.  If that doesn‘t work, then they‘re back to what do we do now.  And I think that‘s when we‘re into a serious question of imploding the well at that point.
They‘re talking about siphoning the oil through a pipeline and making use of it, but I just don‘t see that happening in the time frame.  I don‘t think the American people can stand more months of this gushing.  I think imploding the well, if the relief well doesn‘t work, is a better option.
MATTHEWS:  And the assumption is that the pipe down there, that the well is solid enough if you jam it at that point where they intersect—we‘re looking at it right now—the relief well intersects the initial well.  If the well is solid enough at the base down there it will hold, right?  That‘s the assumption.  It won‘t blow apart down there, below that line.
HOFMEISTER:  That‘s the assumption and that‘s why I‘m not giving it a very—I mean, I‘ve given it—I hope a 50/50 chance at least.  But there has to be something for the cement to hold onto.  And if the casing has been destroyed, if the outside of the casing is actually a channel flowing oil, then they‘re really in bad shape.  And I don‘t know how they get enough cement pressure unto it to make it stick.
MATTHEWS:  And what happens to the responsibility of this company, Mike—and you‘re litigating this thing—what happens to this responsibility, if we‘re looking at 60,000 barrels a day, hard to imagine.  Not just 78 days, but perhaps going into the hundreds of days—because nobody knows when the pressure is going to equalize down there, when it‘s going to stop flowing naturally out of that hole.  No one knows that yet.
PAPANTONIO:  Chris, I‘ll tell you, there‘s no—at this point, there‘s no way to put a projection on this.  And this is what bothers everybody.  Look, if this goes bad, you‘re talking about 2 billion-- 2 billion gallons of oil moving into this Gulf.
Now, if that happens, there is no—BP has no plain.  Hayward can do his world tour.  He can go to China, Libya and Saudi Arabia, and ask for cash.  They‘re not going to be around.
And I got to tell you something: people are not paying enough attention to that right now.  I‘m already hearing on the coast where the company is meeting with bankruptcy lawyers at the same time that they‘re telling everything—telling us everything is OK.
MATTHEWS:  Well, the fascinating news is that the stock value of BP has gone up today.  So, that‘s what‘s happening economically with that company.  Who can figure?
Thank you very much, John Hofmeister.  It‘s always great to have you pushing with us.  We really rely on you, sir.
And, Mike Papantonio, just as true with you.
Up next: Wall Street backed Obama in 2008.  But now that President Obama and the Democrats cracked down on Wall Street, they‘re doing it next week.  The bill is going to pass.  That supports drawing up.  They don‘t like to be policed up there apparently.
What are the Democrats going to do if the Wall Street backlash means no more financing for the 2012 election?
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS:  In West Virginia, Governor Joe Manchin is facing new pressure to name himself a successor to the late Robert Byrd.  Labor and business leaders apparently in the United States want the popular Democratic governor to change his mind and put himself in the United States Senate.  Manchin has said he would not appoint himself to fill Byrd‘s seat, even though he‘s widely expected to run for it in 2012.  Manchin supporters say he should be in the United States Senate sooner rather than later, and that he‘s the best candidate in West Virginia to fill Byrd‘s huge shoes.
HARDBALL will be right back.
(COMMERCIAL BREAK)
MATTHEWS:  Well, big Wall Street donors are revolting against the Democratic Party because of their push for financial regulation reform up on Wall Street.  Contributors from banking and huge hedge fund and executives are down 65 percent from two years ago.  So, what does this fundraising backlash mean for Democrats come November?
Mark Halperin ought to know.  He‘s MSNBC senior political analyst.
Mark, you‘re aboard our operation now.  So, let‘s go to the toughest question.
Here‘s a seedling of a question: why do rich Wall Street guys give to Democrats?  They‘re self-interest is in no regulation.  Their self-interest is in lower taxes.  They‘re making a ton of money.  They‘re making it fast.
Are they just Democrats because they grew up Democrats?  Their mom and dad were Democrats, and now, they‘re reaching a crisis in their lives.  They‘re realizing that their self-interest is Republican.
Well, Chris, both.  They‘re falling in love with Obama, and now, they‘re falling out of love with Obama.  It‘s one of the most interesting sociological and psychological political stories going today.
There are lots of reasons why Wall Street sometimes goes for Democrats.  First of all, they are the party in power.  Second, a lot of them are liberal on social issues, or have spouses who are liberal on social issues.  And remember, the last administration engaged in a war that was not popular on Wall Street in Iraq and also ran up big deficits which Wall Street doesn‘t like.  So, I think there‘s just one reason.
Obama also is great in Manhattan living rooms, and I think that really helped him.  Bill Clinton was the same way.  They could come up to Manhattan and go into these salons and just court people with their charm, their intellect, their Ivy League degrees.
MATTHEWS:  But isn‘t it true that what they really want on Wall Street is lower taxes and less regulation?
HALPERIN:  Well, there‘s great frustration within this administration now, Chris, as you know.  There are people in there who say, you know what, the country wants regulation on Wall Street, these men and women got rich, you know, they deserve whatever they get out of this bill.
There are those though who think that this administration is almost a crisis, not just because of campaign contributions, but if the president wants to move a lot of his agenda—immigration, energy, more on the economy—he‘s going to need the support of people not just on Wall Street but in the wider business community.  And right now, you‘re right—they‘re thinking about their self-interests.
And the administration officials are frustrated.  They call them in.  They have meetings with them.  They said what should we do—and they basically say, cut our taxes.
MATTHEWS:  Well, you know, you hear these stories like I do, Mark.  We all hear them that the president doesn‘t have any warmth for Israel, for example.  You hear he doesn‘t have any warmth for business people generally.
He‘s sort of a liberal, a progressive.  You know, he‘s for the (INAUDIBLE) looks out for the Palestinians.  He looks out for poor people out there.  He doesn‘t have any sympathy for rich guys.
And yet, you know, the Democratic Party, you‘ve got to get your money from these guys, you have to make friends with them personally.  You know like I know this, you make personal friendships.
Is this the conflict here between—he‘s asking these people to be traitors to their class basically and they‘re tired of it.  They don‘t want that part anymore.
HALPERIN:  They think he should be wearing a beret and standing off, you know, playing hacky sack.  He did not have a lot of relationships—
MATTHEWS:  What does that mean?  I‘m sorry.  You got me there with that reference.
HALPERIN:  Check with the junior staff, that‘s what they play during the breaks.
Look, he did not have relationships with a lot of business executives when he was a senator.  He‘s just not been on the national scene long enough.  So, he doesn‘t have a reservoir of goodwill, and it‘s been widely said there are not a lot of people in this administration with ties to the business community.
So, now, Chris, you find the same thing—anybody who travels around the country and talks to people in business finds: they not only think he‘s too liberal.  They don‘t think he knows a thing about the economy.
MATTHEWS:  That‘s what I hear.
HALPERIN:  And that‘s a really, really dangerous thing because as I say, any Democratic president has a high hurdle.  Bill Clinton knew this, and he worked it hard.  With Bob Rubin and others, he was constantly thinking: how do I get the Pentagon on my side and how do I keep the business community on my side?
This president is in a dangerous place with the business community and with Wall Street.  And the regulation bill, when this thing passes and they have the signing ceremony, it‘s going to push a lot of Democrats further away from the White House, and that‘s dangerous—again, not just for campaign contributions, but for his agenda.
MATTHEWS:  OK.  Mark, just project this down in November towards the election—between now and November, he‘s going to have to play the blame game.  He—if this economy looks as bad as it does from November, he‘s got to blame it on somebody, blame it on Wall Street, blame it on business.
The more he does that, the more he‘s a populist, you know, the more he‘s Williams Jennings Bryan out there.  That‘s going to cause more anger up there, right?
HALPERIN:  Well, and it causes anger at the slightest little bit of a shot, you know.  He‘s not demonizing them every day, and he‘s not a wide-eyed liberal in terms of—he has great respect for the private sector, but if he says now one syllable—he‘s like on triple probation with Wall Street.  If he says anything, if he proposes anything, if he uses a word choice they don‘t like, they‘re acutely sensitive to that, and, again, the dynamic for him is all in the wrong direction.
And like I said before, when he does this signing ceremony for this
re-regulation bill of Wall Street, you can bet the big Republican
fundraisers are going to be up in this neighborhood, in Manhattan, going to people saying, you see what the president did?  He‘s blaming you.
And if the president uses that in the fall campaign, believe me, the money is going to continue to flow less to the Democrats and more to the Republicans.
MATTHEWS:  The big problem, of course, is the country doesn‘t like Wall Street.  They‘re mad at them.  They are always mad at the rich guys when times are bad.  They don‘t mind them when times are good, but when times are bad, they don‘t like them.
And his politics are clearly in a blame game atmosphere.  If you go out to Kansas, you go out—anywhere in the country, you want to blame the rich guys.  You want to be a real Roosevelt out there, and you‘re saying that‘s going to cause him more trouble in fundraising.
Anyway, thank you, Mark Halperin, for jumping in here.
HALPERIN:  Thanks, Chris.
MATTHEWS:  When we return, let me finish with some thoughts about the decisive issue of the Obama presidency, one number: the unemployment rate.
You‘re watching HARDBALL, only on MSNBC.
(COMMERCIAL BREAK)
MATTHEWS:  Let me finish tonight with a decisive political issue of 2010 and beyond: the unemployment rate.
You want to know something?  When Jimmy Carter beat Gerald Ford back in 1976, the unemployment rate was 7.8 percent.  When Ronald Reagan beat Jimmy Carter, the unemployment rate was 7.5 percent.  When Bill Clinton beat the senior George Bush, the unemployment rate was 7.4 percent.
What—does recent history suggests that high unemployment means you get booted from the American presidency?  Yes, but.  The “but” was 1984 when the rate was almost as high as these numbers.  It was 7.2 percent, but having come down, way down, from double-digit levels the year before.  It was truly morning in America in that Reagan re-election year, 1984, because it had been a nightmare so recently.
So here we go—it‘s July 2010 right now.  We‘ve got two and a half years to go until November 2012.  If Barack Obama can get unemployment headed dramatically down from now, from its current 9.5 percent, people will forgive him for it still being up around 7 percent.  If not, history shows they will not forgive him.
The only question then would be whether the Republicans can mount a credible candidate to run against him.  This is the Republican formula: high unemployment and holding an incredible candidate for president.  Think of Richard III: My kingdom for a horse.  If they‘ve got the horse and Obama has got high unemployment, bet on the Republicans.  That‘s what history teaches.
The Obama formula: find a means of getting the American economy on to a growth arc, get people buying and business investing again, get the wheels of capitalism turning again, get the demand for goods and services rising—because if that doesn‘t happen, all the Republicans need to do is find a horse, to find a good candidate.
That said, finding a horse in a party right now divided by tea party zealots and regular Republicans might be almost as hard as getting the jobless rate down.  Anyway, I think I‘ve just defined the competition.
That‘s HARDBALL for now.  Thanks for being with us.
Right now, it‘s time for “THE ED SHOW” with Ed Schultz.
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