updated 1/3/2011 4:44:15 PM ET 2011-01-03T21:44:15

Guests: Richard Wolffe, Karen Finney, Richard Engel, Shartia Brantley, Michelle Bernard, Charlie Rangel, James Zogby, Matt Cooper

CHRIS MATTHEWS, HOST:  Liberals on defense.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews up in New York. 

Leading off tonight: What do progressives want?  That‘s the big question as we head into President Obama‘s third year in office.  Do progressives have an agenda for 2011?  Come to think of it, what‘s the president‘s progressive agenda himself?  Are they with the president again after his wins on “Don‘t ask, don‘t tell”?  Progressives and President Obama, that‘s our story tonight.

Also, preparing for the worst.  Starting next week, Republicans will try to de-fund “Obama care,” cut programs dear to liberals and launch investigations designed to delegitimize the Obama presidency.  How do Democrats plan to fight back?  Charlie Rangel is on the front lines.  He‘s coming here, the dean of the New York delegation, on HARDBALL tonight.

Plus: Get out of Iraq.  Iraq‘s prime minister, Ali (SIC) al Maliki, says he wants U.S. troops out of Iraq by the end of next year, this year coming.  Is Iraq really strong enough to hold off its enemies after we leave?  And by the way, strong enough to stay together?

And the most fascinating story of the year—or the day—President Obama calling the owner of the Philadelphia Eagles and praising him for giving Michael Vick a second chance after his prison time for dog fighting.  It‘s not the first time the president‘s skated out of his lane and weighed in on a cultural issue.  What are we to make of this one?  The Michael Vick story, why is Obama involved in this one?

Finally, check out Sarah Palin trying to—ahem! -- refudiate the idea that she thought “refudiate” was a real word.  Remember, Sarah, it‘s not the crime, it‘s the cover-up.

We start with the progressives and President Obama tonight.  Richard Wolffe‘s an MSNBC political analyst—great to have you—author of “Revival”—and MSNBC political analyst Karen Finney‘s a former communications director for the Democratic National Committee.

Lady and gentleman, I want you both to start.  I want you to answer the question.  We‘re looking forward now to the end of the year.  We‘ve been through DADT, we‘ve been through the nuclear arms issue, the whole fight over taxes, the whole fight over the public option.  We‘ve been through all those yesterday fights behind us.

Now the big fight.  Hardest question in the world.  I‘ve been wrestling with it all afternoon.  Richard Wolffe, give me the iconic achievements that the liberals, the progressives want to achieve by the end of this year, by next December?  What will they count and say, This is what we wanted to get done this year?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Well, I‘m going to separate style and substance here.  I think what progressives want to see most of all is the fight.  They want to have this hand-to-hand combat with Republicans, and they don‘t think the president has really stepped up, at least until late last year.  So they want to see something that he‘s not that comfortable doing, unless he‘s in a campaign setting.  Of course, we‘re going to be heading into that campaign.  So they may get more of the fight they‘re looking for.  I suspect, though, he may be treading that middle ground and looking for bipartisan angles, so they may be disappointed on that front.

But on the substance, look for him to actually deal with two things and maybe make some progress on at least one of them, energy and climate change.  On the climate change thing, of course, Republicans are not going to be there.  He‘s going to have to use executive authority.  But on energy, there is room for a deal.  The president wants to go for it.

The second thing, immigration reform.  He‘s not going to get anywhere with it, but just opening up the debate and setting it up for 2012 is going to be something that progressives really want to get into.

MATTHEWS:  So energy, climate—energy and immigration are the agenda items on the progressive front, in addition to a general all-out war with the right.  Let me go right now to Karen to counter those thoughts.  Where do you see the progressive agenda this coming year?

KAREN FINNEY, MSNBC POLITICAL ANALYST:  I think a couple of things.  One, we know that deficit reduction is going to be a big topic in the coming year, and there‘s a lot of anxiety among progressives about what does that mean for entitlement spending.  So I think one of the big accomplishments will be, Can we get through this conversation about deficit reduction, you know, sort of without letting the debate kind of go off the tracks and actually preserve those things that progressives care about?

I also think, though—I agree with Richard that immigration reform is something progressives care about, and I think it‘s an opportunity where it‘s one of those issues where we can win, even if we don‘t win.  And by that I mean I think Republicans are more afraid of this issue, frankly, than Democrats in many ways because they don‘t want to see and they can‘t afford this debate getting to be how divisive it was in 2005.  And I think we can stand up for values.

I think that‘s part of what progressives want to see when they talk about fight.  It‘s not just about drawing blood, but it‘s about standing up for what we believe in as progressives.  That‘s what they want to see on the table.

MATTHEWS:  Well, what‘s stunning about both your responses—I‘m looking for some kind of social agenda, positive social agenda for the Democrats and the progressives.  I don‘t hear anything, Richard.  Why am I not hearing anything from you?  A social agenda like public option, like health care, like something like that?  Why are—well, let‘s just start with that.  Where‘s the social agenda for 2011?

WOLFFE:  I can give you the whole wish list of what people want, but what‘s realistic here—and of course, neither of us have mentioned the most obvious thing of all, which is the economy.  It‘s about jobs and the unemployed.


WOLFFE:  That‘s the most progressive social piece of the agenda that you could possibly imagine.  And of course, what does that entail?  People want to see the results.  They want to—there are going to be all sorts of small bills that get through.  How much does that really move the needle on unemployment?  I suspect this economy is on its—it‘s on a track now.  We‘ve seen from the retail spending the last couple of months that it is independent of what Congress does.

But on the social agenda, what are you going to do with a House run by John Boehner?  You know, you‘re going to have the House doing stuff and the Senate doing stuff and neither of them getting along, and the president caught in the middle.

MATTHEWS:  OK, rights agenda, try that, Karen, because I‘m getting—

I‘m getting goose eggs here.  No social agenda except hoping the unemployment rate drops.  Where‘s the rights agenda, like we had this year with DADT?

FINNEY:  Well—

MATTHEWS:  Is there a rights agenda, human rights agenda for—on gender, race, ethnicity or whatever?  Is there anything like that on the horizon this year?

FINNEY:  I don‘t think so, other than something that you actually mentioned, Chris, and that actually is protecting what was done in the last Congress.  We know that the Republicans are going to come after health care reform.  They‘re going to try to come after some of these other major issues where the president had some success.  So I think actually protecting on those social issues is going to be a part of the agenda.

But look, “Don‘t ask, don‘t tell”—I mean, that was a major civil

rights accomplishment.  We‘ll see if that means that we go to the next part

of the conversation that I think some want to have, and that would be gay

marriage.  I‘m not sure that we‘ll get there in this Congress.  But again -


MATTHEWS:  What kind of Congress action would that be?  What would Congress do on same-sex?

FINNEY:  Well, I mean, I don‘t know that it would be Congress, I just mean the progressive community sort of bringing that to the fore as an issue for debate, particularly putting pressure—because look, part of what we‘re going to be seeing next year is both sides are going to be trying to position themselves as competent leaders as we head into the 2012 election cycle.

We know that President Obama‘s got to show he can get things done.  Republicans—they‘re going to be, you know, in the House, reelected in two years.  They‘ve got to show not only can they, you know, halt the Obama agenda, which they keep saying is their key focus, but they‘re actually going to have to show that they can get something done.

MATTHEWS:  Let me go—


MATTHEWS:  I‘m not getting anywhere with you guys.  I‘m getting immigration and I‘m getting a little bit on climate.

WOLFFE:  Chris—

MATTHEWS:  By the way, cap-and-trade didn‘t—


MATTHEWS: -- exactly win anything last year politically?  How can you go further on that front, Richard?

WOLFFE:  Well, first of all, isn‘t immigration a civil rights issue?


MATTHEWS:  OK, let me ask you this.  The fight over immigration to me has been totally ethnic so far.  Democrats are for people who come here, undocumented workers.  Republicans have been against them.  Let‘s be blunt.  That‘s been the fight.  Neither side has offered a compromise proposal which would actually become law which would deal with the problem.

I believe the Republicans are BS‘ing the country about the fact they‘re going to throw out 20 or 30 million people.  It‘s never, ever, ever going to happen.  They‘re just promising something that‘s never, ever going to happen.  The Democrats, on the other hand, have been pretty much weak in stating exactly how they‘re going to stop illegal immigration.  I don‘t hear them giving me clarity as to how they‘re going to prevent the continued flow of illegal people coming into the country.  I don‘t even think they want to stop it.  That‘s my belief so far.  They like it.


WOLFFE:  Well, that‘s—

MATTHEWS:  So I don‘t trust either—

WOLFFE:  Wait a second—

MATTHEWS: -- party on this issue.  Do you?

FINNEY:  But Chris—

WOLFFE:  There was—there—go ahead, Karen.

FINNEY:  I was going to say, Chris, I think to your point, Chris, though, this is why I think immigration reform—you know, we—some people were lamenting that we didn‘t get the Dream Act passed.  I actually think this is an issue where, to take a page out of Sarah Palin‘s playbook, God forgive me, we need to reload, not retreat.  We need to stand firm on this issue of immigration reform.  We have Republican members of Congress talking about opening up and changing the Constitution of—

MATTHEWS:  OK, that‘s a good argument.

FINNEY: -- the United States of America and on birthright—

MATTHEWS:  I know why you‘re doing this.


MATTHEWS:  Because you don‘t want to address the key issue.  Do the Democrats—

FINNEY:  No, I do want to address the key issue.  I think Democrats—

MATTHEWS: -- have a program for—OK—

FINNEY: -- need to stand up very firm for it.

MATTHEWS:  OK.  We are not going to get anywhere on immigration reform, which you both mention as a priority issue, unless both sides trust the other side.  It seems to me that Democrats are not trustworthy on the issue of enforcement.  Are they?  Tell me I‘m wrong.  Do they really want to stop illegal hiring in this country, which is the main recruitment tool of people coming into this country, the prospect of a job?

WOLFFE:  The Obama White House has deported more people than any other administration.

MATTHEWS:  No, not—are they stopping the lure of jobs in this country?  Are they doing that?

WOLFFE:  And they have done more employer raids and the whole works.  These guys have been—they have gone out there and tried to prove how tough and muscular they are on enforcement precisely because they thought that would somehow buy them something with Republicans, which I think has turned out to be a false deal.

MATTHEWS:  So in other words—

WOLFFE:  And by the way—by the way—

MATTHEWS: -- they‘re enforcing the law—

WOLFFE:  Wait a second!

MATTHEWS:  You‘re saying they‘re enforcing the law in order to impress the Republicans, not because they believe it‘s the right thing to do.


FINNEY:  I don‘t agree, Richard.  I don‘t totally agree with that.  I think they‘re enforcing the law because part of the problem with our broken system is we haven‘t been enforcing the law.  I mean—


FINNEY: -- you know, I think that‘s part of the job of what they‘re supposed to be doing.  But look, I also think when we talk about cracking down on those who hire me (ph), that is the sticky little piece that always seems to get away.

MATTHEWS:  It sure does.

FINNEY:  If you look at what‘s happened in California and Arizona.  Every single time at the state level, any kind of legislation that not only punishes those people who are in the country illegally, but also goes after those folks who maybe are contributors to big campaigns, who hire those folks—


FINNEY:  That always seems to get watered down.  So you‘re right, that is a place where Democrats—

MATTHEWS:  Did you ever ask Harry Reid—

FINNEY: -- can take a firm stand.

MATTHEWS: -- if he‘s for a real ID?  Did you ever ask Harry Reid if he‘s for a biometric, Checkable ID card, if he‘s really serious about stopping illegal immigration in the state of Nevada?  Ask him sometime.

WOLFFE:  But if I could—

MATTHEWS:  You will not get a clear answer.  That‘s the problem.

WOLFFE:  By the way, Chris, there was a time not so long ago when President Bush proposed immigration reform.  John McCain had a reasonable position on immigration reform.  It was only a couple of years ago.  This Republican Party you kind of dismissed here.  But the sensible people—talk to Texas Republicans.


WOLFFE:  They know where the demographics are going.  They know what the reasonable position is here.  I don‘t think it‘s as far away as you might think—


WOLFFE: -- judging by the rhetoric coming out of the last election cycle.

MATTHEWS:  Well said.  I think there is hope if you look at—get back together, both—I think all three of us can—if you want to get something on immigration reform which is fair, liberal, supportive of American values, but also gets a system that actually is workable, I think you‘ve got to go back and look at Schumer‘s position, Lindsey Graham‘s position, the late Ted Kennedy‘s position.  I think that was sound.  It was centrist.  It dealt with the people living here.  It dealt with the flow of illegal people coming in the future and created what I think is a plausible system for the future.  And I don‘t think the Democrats are there yet.  I hope I‘m—well, I hope I‘m as hopeful as you are, Richard, as the year—


WOLFFE:  This is America!

MATTHEWS:  If this is the progressive agenda, so that people don‘t have to worry about raids anymore and people who‘ve been here 20 and 30 years know they can stay here, I think that‘s a victory.  But it will only be achieved if we stop the illegal immigration.  Anyway, thank you, Richards Wolffe.  Thank you, Karen Finney.  Happy new year.

Coming up—

WOLFFE:  Happy new year.

FINNEY:  Happy new year.

MATTHEWS: -- Democrats will be playing defense when Congress resumes, and on the front lines, U.S. Congressman Charles Rangel, dean of the New York delegation, is about to sit next to me.  He‘s next, only on MSNBC.


MATTHEWS:  Well, as the next presidential campaign nears, President Obama and former Alaska governor Sarah Palin may be going in different directions.  According to a new CNN/Opinion Research poll, 78 percent of Democrats say they want to see Obama at the top of their party‘s ticket in 2012.  Only 19 percent say they prefer someone else.  On the Republican side, the survey suggests Sarah Palin may have some work to do convincing her own party members if she decides to run for president.

There she is at the bottom of the list, trailing Mike Huckabee, Mitt Romney and even Newt Gingrich.  That‘s—you‘re in trouble if you‘re below Newt Gingrich.

We‘ll be right back.


MATTHEWS:  Welcome back.  Well, when House Democrats find themselves back in the minority next week, they will face a Republican Party primed to undo much of what President Obama has accomplished, and then defeat him in 2012.  That seems to be the game plan on the right.  Standing in their way will be the Democrats like New York‘s Charlie Rangel, who‘s about to begin his 21st term in Congress.

Congressman Rangel joins us right now.  We had lunch today, sir, so we talked about these issues.  And I keep thinking this is an unusual—you‘ve been through the mess of being in the minority.  You know what it‘s like.

REP. CHARLES RANGEL (D), NEW YORK:  You bet your life on that!

MATTHEWS:  You know what it‘s like.  So what happens when the tables are turned and Speaker Boehner gets the gavel, and he comes in there saying, My number one—it may not be his goal, it‘s the Tea Partiers.  They want to get rid of everything Obama‘s got done.  What‘s that going to be like?

RANGEL:  They can‘t do it.  It‘s so easy to knock a program than to take away services.  Everybody‘s against government spending, except when they‘re the ones that‘s the beneficiary of it, I don‘t care what part of the country you‘re from.  So I think the first challenge is going to be they want to cut spending and reduce the deficit.  Well, they‘ll have one big chance because, as you know, we have a debt ceiling.


RANGEL:  The executive can‘t borrow anything without the consent of the Congress.

MATTHEWS:  So the Tea Partiers, those brand-new 60-some members, are going to have to vote to raise the debt.

RANGEL:  Well, they‘re going to have to push the Republicans to do the right thing.


RANGEL:  That‘ll be—


MATTHEWS:  You guys aren‘t going to help them, are you.

RANGEL:  Well, we want to save the country.  But if we don‘t do it, the whole government collapses.  What they will be doing is saying that they think the government should borrow more than $14 trillion.

MATTHEWS:  And how do they sell that at home?

RANGEL:  I want to see how they‘re going to sell that.  So that‘ll be the first big test, and that comes up early.

MATTHEWS:  Let‘s talk about those points.  Couple things.  First of all, the big fear on the right has always been people like social welfare.  They like government when it works.  They like Social Security.  They think -- and you were kidding at lunch about how Medicare—they think it was a private sector program.  Don‘t let the government get involved in it.  Health care—they‘re going to like the pre-existing condition protection.  They‘re going to like the fact that young—your 20-year-old kid, 25-year-old kid‘s going to be on your plan.  Is that what they want—the voter wants to protect?

RANGEL:  The voter wants to protect whatever they think a benefit‘s going to be there.  Seventy percent of the people already have health insurance, so it‘s easy to say, You don‘t need it, Jack.  And they say, That‘s why I‘m against it, because they don‘t get out there for the 30 percent.  But the more and more they find out how dependent they are on this health insurance, how they‘re the beneficiaries—and I saw a private insurance company now pushing the president‘s health program.  They didn‘t say that, but they said, You‘re entitled to new benefits under the president‘s proposal.

So I think that we‘ll do better in health care.  We‘ll do good in Social Security, and as in Medicare or anything else.  Where I‘m really apprehensive is in education.  Somehow, we‘re so far behind other countries -- our whole future depends on education.

MATTHEWS:  Why do Republicans want to crack federal aid to education? 

Are they against it in principle?

RANGEL:  Yes.  Well, quite frankly, if they don‘t have an obligation to spend, they don‘t want to do it.  They think it‘s a state program.  They don‘t like obligations being placed on local government.

But I am telling you, Chris, that I am so frightened, more than any other area.  I mean, I don‘t stay awake at nights worrying about the deficit, but I do worry about the debt that we have to pay on the deficit.  It is right there behind health care and defense, the interest on the debt.  Education is the easiest thing to dismantle because older people really are not that involved with it.  But the future of our country is tied into technology—


RANGEL: -- creativity and education.

MATTHEWS:  Everybody that watches this show or everything else on MS (SIC) knows where the Republicans are coming.  They‘re going first of all to try to kill “Obama care.”  They call it de-funding.  Are they willing to have an up-or-down vote in the House right now, January 5th, call HR1, repeal health care?  Would they try that?

RANGEL:  No, indeed.


RANGEL:  Because they‘re not going to win with that.  It will give us an opportunity once again to explain the benefits of it.  And I think we have so many moderate Republicans that are scared to death of the Tea Party pushing them right over the cliff.  You know, in every movement, I don‘t care whether it‘s black or Irish, there‘s always somebody that says, I am more for the program than this guy.


RANGEL:  And the tea baggers set the standards as to what you‘re going to fund and not fund, what taxes you‘re going to have and not have.  And so the best Republican is going to be which one is following the tea baggers, and that‘s got to be a rough road to do.

MATTHEWS:  What do you make of Boehner coming in? 

And let me talk about Speaker Pelosi.  You worked with my old boss Tip O‘Neill, your friend.  You work with Pelosi.  She‘s tough.  She‘s a disciplinarian.  Can the Republicans match her in terms of that kind of party discipline?  Do you think they‘re going to go in there and get taxes cut again?  Are they going to get programs really cut that hurt regular, middle-class people?  Is Boehner going to be able to lasso enough to get 218 votes time after time to raise the debt ceiling, cut programs, do the whole works? 

RANGEL:  I don‘t see Nancy Pelosi‘s role right now as providing leadership for the Democratic Party, as much as it is keeping our party together to make certain that we don‘t have conservative Democrats trying to act like moderate Republicans. 

I—I really see her job as to come up with a creative theme that keeps our party together.  And I cannot think of anything—I think one of your earlier people said it—would be jobs.  When you talk about jobs, you talk about self-esteem, you talk about patriotism, you are talking about small businesses, you are talking about hopes, you‘re talking about dreams, you‘re talking about confidence. 

And, you know, I‘m 80 years old and I can say that I really think that I‘m old enough to remember when Americans really start—started dreaming that—that wealth was something that they could attain. 


RANGEL:  I remember, when my uncle bought a house in Jamaica, we thought he was the richest guy in the whole world.  Now his kids can‘t buy a house.  That dream has been shattered. 


RANGEL:  Unemployment has done so much to adversely affect Americans as to what America used to stand for, making something—


RANGEL: -- having it stamped “Made in the USA” and someone saying, I helped make that. 


Mr. Rangel, hardball, number one:  What‘s unemployment have to get down for Barack Obama to get reelected?  It‘s 9.8.  Reagan got it down to 7, and it was morning in America.  What‘s the Democratic president—


RANGEL:  I don‘t know the numbers as well as you. 

MATTHEWS:  Well, 8?  No, you know the numbers.  It‘s 9.8 now.  What does it have to get down to?


RANGEL:  It has to get down to everyone kind of feels that their job is secure. 


MATTHEWS:  OK.  Would that be 8 or would that be 7?  How low does it have to go? 

RANGEL:  Well, I don‘t know.  It has to go where someone can say, I feel pretty secure and I haven‘t heard this week that my cousin lost his job; my son and grandkids are working.  


MATTHEWS:  Does it have to go down?

RANGEL:  Of course it has to go down.  And it will go down.  Everyone knows that.


MATTHEWS:  OK.  Will Barack Obama be challenged by anybody in the Democratic Party in 2012?  You know the party.  You know the New York—you know the liberal wing.


RANGEL:  If you had asked me this before the lame-duck session, I said, can we talk?  Not now. 


RANGEL:  I think he‘s rehabilitated.

MATTHEWS:  Feingold won‘t go?  Dean won‘t go? 

RANGEL:  Who won‘t go?

MATTHEWS:  Russ Feingold won‘t run?

RANGEL:  No, no, no.  This is a different president after the lame-duck. 


MATTHEWS:  So, he salvaged all the problems; he dealt with all the problems with the left? 

RANGEL:  No, he hasn‘t.  But we know one thing.  He‘s much stronger than we thought he was. 

MATTHEWS:  Hillary Clinton is now secretary of state.  You were raving about it, I think appropriately so, at lunchtime, what a great job she‘s done as secretary of state, as has the former President Bill Clinton. 

She will be almost 70 in 2016.  Do you think that she might be eligible and interested?  Start with eligible.  Do you think she‘s an appropriate candidate in 2016 for president of the United States, Democratic candidate?  Because I know, Charlie, you brought Hillary into New York to beat Rudy.  You were a very important catalyst to that.  So you know how to king-make or queen-make. 

Can she take on the Republicans in 2016? 

RANGEL:  I had a whole lot of support from a guy named Bill Clinton. 

Don‘t discard that. 


RANGEL:  It wasn‘t all—



MATTHEWS:  OK.  All right. 

Hillary Clinton in 2016, Mr. Rangel, I want some quote out of you here. 

RANGEL:  I was born in 1930.  When you talk about 2016, I have to refer you to Claude Pepper, who once said, “At my age, young man, I don‘t buy green bananas.”


MATTHEWS:  I know.


RANGEL:  So, it‘s kind of hard for me to be talking about 2016.  I‘m so excited about this term with Obama.  My hopes were so high.

MATTHEWS:  You were better at lunch. 


RANGEL:  No, but really. 

MATTHEWS:  OK.  All right. 

RANGEL:  Imagine.  That‘s—that‘s a long time away. 

MATTHEWS:  Would she make a great president? 

RANGEL:  There‘s no question she has all of the qualities.  But why replace a great president?  When he finishes his term—

MATTHEWS:  Oh, when he‘s done, yes, of course. 

RANGEL:  I don‘t know what the heck is going to happen when he‘s done. 

MATTHEWS:  Charles Rangel—

RANGEL:  We may make the Democrats the permanent party, as I once heard someone say. 

MATTHEWS:  Dean of the New York delegation, sir, thank you. 

RANGEL:  Thank you, Republican

MATTHEWS:  Happy new year to you, Charles Rangel. 

RANGEL:  Best to you.


MATTHEWS:  Up next:  Sarah Palin makes up stuff, then explains how she did it, like words—words—words are fumble-mental. 

You‘re watching HARDBALL, only on MSNBC. 


MATTHEWS:  Welcome back to HARDBALL.  And time for the “Sideshow.” 

Well, first up, remember when Sarah Palin made up the word refudiate?  Well, here she is on the day after it happened on the latest episode of her TLC reality show.  Let‘s listen.


SARAH PALIN ®, FORMER ALASKA GOVERNOR:  Oh, geez.  Yesterday, I Twittered the word refudiate, instead of repudiate.  I pressed an “F” instead of a “D,” and people freaked out.  So, now we‘re saying no, no, no, the English language is a moving, breathing, evolving art.  I can invent a word. 

So, now guess what?  Refudiate is now the number-two searched term on Google trends.  Make lemonade out of lemons. 


MATTHEWS:  Listen to her:  I pushed the “F” instead of the “D.”  Was she trying to say “redudiate”?  Sarah Palin—reading is fumble-mental.

Last year, for the first time ever, New Jersey elected a lieutenant governor whose job it is to run the state if the governor has to leave office or even on some occasions just leave the state temporarily. 

Well, this week, Governor Chris Christie is on vacation with his family down in Disney World, but it‘s the state senate president who is the acting governor.  Why?  Because the lieutenant governor who just got the job is also on vacation in Mexico. 

You would think, if her prime job is to sub for the governor, she‘d be in Jersey when the governor isn‘t.  You would think that anyway.

Next, failed New York gubernatorial candidate the great, unforgettable Carl Paladino has holiday greetings for his supporters in a new e-mail.  He writes—quote—“I made a lot of mistakes, but I think we sent out a clear message and certainly raised the bar for Andy.”  That‘s who he calls the new governor, Andrew Cuomo—raised the bar.

I guess so.  Well, among other things, as long as incoming Governor Cuomo doesn‘t—quote—“threaten reporters” or cite—or recite statements to groups that the groups themselves wrote for him—that‘s the stuff that Paladino pulled off last year—then I think he will do very well. 

Up next:  Iraq‘s prime minister says he wants the U.S. out of the country by the end of this coming year.  Well, what if Iraq isn‘t ready for us to pull out?  This is the most amazing story.  They want us to leave.  We went in there to save that country.  They want us out of there.  Let‘s see if that can happen. 

You‘re watching HARDBALL, only on MSNBC. 


SHARTIA BRANTLEY, CNBC CORRESPONDENT:  I‘m Shartia Brantley with your CNBC “Market Wrap.”

Another mixed close on light holiday week trading, the Dow Jones industrials climbing 20 points to a new 28-month high, the S&P 500 up a point, but the Nasdaq was down 4. 

A weak housing report and all that snow offsetting a strong day for energy stocks, single-family home prices falling for the fourth straight month in October.  All those foreclosures have led to a massive supply glut. 

Retailers under pressure as well on worries Monday‘s heavy snowfall could keep post-holiday shoppers at home.  But energy shares were higher as oil prices spiked and the dollar weakened.  GM shares surging 2 percent on a virtual blizzard of positive ratings as it heads into a new product cycle.  Hewlett-Packard up a point after winning a $2.5 billion contract with NASA.  And Apple advancing on a report it has patented a 3-D holographic computer screen. 

That‘s it from CNBC.  We‘re first in business worldwide—now back to


MATTHEWS:  Well, after nine months of intense negotiations, Iraqi Prime Minister Maliki managed to cobbled together a unity government over there that has the country‘s three main factions all at one table. 

And he said “The Wall Street Journal” today that—yesterday, rather

that the remaining 50,000 American troops over there will leave Iraq on schedule at the end of this coming year.  He said: “The last American soldier will leave Iraq as agreed.  This agreement is not subject to extension, not subject to alteration.  It is sealed.”

Well, so, can Iraq hold itself together as we withdraw the last of our troops? 

James Zogby is president of the Arab American Institute and author of the new book “Arab Voices.”  And Richard Engel is the NBC News chief foreign affairs correspondent. 

Richard, thank you.  I have great respect for you.

And I‘m a great friend of Jim Zogby‘s.

Jim, I want to ask you this question.  Is—do you have confidence, knowing the fact that most of our friends in the Arab world are Sunnis, that they‘re going to allow that government of Maliki to stay up there, with Muqtada al-Sadr waiting in the wings, a real Iranian-connected country?  After all this bloodshed by Americans, we have set up a new surrogate country for Iran that‘s hated by our Sunni friends in the region. 

Have we set up an unstable situation that is going to cause more wars in the future? 

JAMES ZOGBY, PRESIDENT, ARAB AMERICAN INSTITUTE:  Well, it is an unstable situation.  I‘m not sure what it causes more wars, but we‘re not out of the woods yet.  They‘re not out of the woods yet. 

And I think there‘s a lot that we have to be looking out for over the next year, you know, the issue of we have one more year there and a lot can happen in that time period.  A lot can happen immediately afterwards.  But I think we will get a good indication during the next year as to whether or not al-Maliki has the support base, is able to reconcile competing factions. 

Forming a government was part of the solution.  There‘s a lot more yet to be done.  But I don‘t think it becomes an outpost of Iran, but it can become a problem. 


My—my big reason for opposing the Iraq war, besides common sense, was, you go into a region and then you come home, it goes back to where it was when you started.  If the Sunnis always ran that country—and they all were running out of power when we went in there—we knocked off Saddam Hussein.  Fair enough.  They all went into hiding.  Their army took off their uniforms, disappeared with their guns. 

Aren‘t they just waiting for us to leave?  The minute we leave, they begin their—their latest insurgency? 

RICHARD ENGEL, NBC CHIEF FOREIGN CORRESPONDENT:  The U.S. entered into a much, much longer conflict. 

Saddam Hussein was one of many, many Sunni leaders in Iraq.  He was a terrible dictator.  He was hated. 


ENGEL:  But Sunnis had been running Iraq for 1,300 years. 


ENGEL:  They are not willing to give that up. 

MATTHEWS:  Right. 

ENGEL:  And I have spoken with many Sunni leaders in that country.  They do not understand why the United States, even though Saddam was horrible, traveled thousands of miles to enter into a Sunni-Shiite fight and bring Shiites to power.  They are not over this.  They are not going to be over this. 

And, as American troops pull back—they have been acting somewhat as a stabilizing factor there in the last several years.  As they pull out, there is a very likely chance, history would say, that, after 1,300 years, it will resume again. 

MATTHEWS:  So, that‘s my question, again, back to you, Jim.  You were a little careful in the answer, but I think that‘s the answer I have been looking for. 

The country of Jordan, pro-Western, the country of Egypt for years now pro-Western, our friends in the region are all pro-Western, obviously, and Sunni.  They don‘t like the fact of what we put together in Iraq.  They don‘t like the fact Muqtada al-Sadr is waiting in the wings.  They don‘t like a government which is dominated by pro-Iranian Shia. 

Have we in fact cooked up a situation which is just going to reverse itself the minute we pull out of there, and all those lives, American lives lost, and people who have lost their arms and legs, and lives ruined, will just take us back to square one after it‘s all over, and Bush will be proven a fool for having done this?  Just a question mark, not a declaration. 

Is that true? 


ZOGBY:  It could easily go back to square one, but not the square one you suggest, not necessarily a pro-Iranian sort of bastion in the heart of the Arab world.  I don‘t think that‘s the case. 

I think that there are internal problems in Iraq and regional problems in Iraq that have not been resolved and are not going to be resolved.  And I think that we have to understand, at some point, we‘re going to have to deal with the fact that 4,400 Americans lost their lives in a war that they were misled about and that, in fact, has not been a victory and does not become a victory for America or for the goals that were set for America by the former administration. 

I think, look, this is a terrible thing to have to say, but I don‘t think this was worth it. 


ZOGBY:  I don‘t think this produces a result that in the end we will feel good about and that history will think well of us about. 

MATTHEWS:  Grand neo-conservatism, I mean, the grandest form was that we would establish in the Middle East a model state which was democratic, no longer run by old families, monarchies, no longer Baathists—

ENGEL:  But a democracy would be planted.


MATTHEWS: -- that something would say to the Arab people, the Arab street, as we used to call it, hey, look, you don‘t have to be run by the old hegemony.  You don‘t have to live in the old parasitical kind of governments that are over there.  You can have your own government and run your own country. 

Is there any chance that the Bush dream, to be fair to Bush—I called him potentially a fool here for what he did.  Is it possible he will turn out to be a genius, that this will turn out to be a democratic government as a model for that region? 

ENGEL:  I don‘t think it will be a democratic government and any kind of model for the region. 

Regions follow success, and they emulate success.  So, if the idea was, bring in democracy, and had Iraq become some flourishing success, yes, it could have caught on.  But what has—


MATTHEWS:  Like, in Syria, they would have said, hey, it works next door. 

ENGEL:  Yes, especially in countries that aren‘t doing well. 


ENGEL:  But what has been the alternative?  Which kind of governments there are doing well?  They are Dubai, which is not a democracy.  People would like to emulate Dubai much more than they would like to emulate Iraq -- small country run more like a corporation than any kind of democracy.


ENGEL:  There‘s no real voting there.

That‘s the more successful model, the more contagious model in the country right now.  And I think because—unless Iraq suddenly turns around and becomes a big success, I don‘t think democracy is going to be flowing out of there.

MATTHEWS:  Final question to Jim.  You know a lot of the Arab leaders personally, I know you do.  And when we found out through this Assange thing that came out a couple of weeks ago, the big break and what really they say, it didn‘t surprise you or me that the Arab leaders who are friends of ours would love us to knock off or do something to reduce the threat from Iran, from Ahmadinejad.

That said, if we ever move against them or collaborated with the Israelis, or the Israelis move and it looked like we are part of it, would we lose all their support?

ZOGBY:  Look, if Israel were to attack Iran, it would be devastating.  It would be a disaster for the region and frankly, would make no sense at all.

MATTHEWS:  Well, they would be protecting themselves from a nuclear state that hates them and wants them annihilated.  It would make sense to them in that regard.

ZOGBY:  A nuclear state, it‘s not.  We have far greater problems with Iran in the region.  Its support for Hezbollah and Hamas and its destabilizing work with Gulf itself with Gulf countries.  And the fact that it has created a real mess and helped sort of create, rather, a bigger mess even in Iraq than the one that we created all by ourselves.

I mean, together Iran and the United States are viewed by Iraqis as a source of the problems in the country.  But let‘s understand, if Israel were to take this action, it would be devastating for America.  It would be devastating for the region.

At the same time, if America were to attack Iran at this point, I think it would also be devastating because we would not be able to follow up on any of the goals of an attack on Iran.


ZOGBY:  And the result would be a strike that would unleash a terrible wave of violence across the region that we would not be able to put out.  And so, it is something to take off the table, not even worth considering at this point.  Too dangerous and stupid.

MATTHEWS:  OK.  Do you agree with that?


MATTHEWS:  Or you can‘t take a position as an NBC correspondent?

ENGEL:  Well, I‘m not going to take a position saying we should go or not go for war, but I can tell you, I think the WikiLeaks discussions and cables talk about Arab leaders reflect a lot of truth in it.

MATTHEWS:  I‘m so glad to hear that because it hit me as these guys have always not liked Iran.

ENGEL:  I‘ve spoken to a lot of them.  They‘re much more concerned about Iran than anything else.

MATTHEWS:  They are, after all, Persians.  Anyway, thank you.

ZOGBY:  I don‘t think that that‘s—I don‘t think that‘s true.  I mean, they‘re concerned about Iran, but they‘re also concerned about Israel and the Palestinian issue.  They can walk and chew gum at the same time, and they do.  They‘re concerned about both.  I think you have to understand that.

MATTHEWS:  “Arab Voices,” the author of “Arab Voices”—thank you, Jim, for coming on the show.  “Arab Voices.”

ZOGBY:  Thank you.

MATTHEWS:  Richard Engel, thank you, sir, as always.  I have tremendous respect for your guts.  I mean, what you have to do is cover this place.

Anyway, up next: President Obama has weighed in again on a cultural issue.  Is he taking a chance by, well, praising the NFL for bringing Michael Vick back to a job, and what a job he‘s doing.  This guy could go to the Super Bowl for the Eagles.  They‘re playing tonight against the Vikings.

Good luck, Ed Schultz.

This is HARDBALL, only on MSNBC.


MATTHEWS:  The Library of Congress has 25 new additions to the National Film Registry that they consider culturally, historically, or esthetically significant.  This year‘s picks include some great ones like “All the President‘s Men.”  The great (INAUDIBLE) of course, with Robert Redford and Dustin Hoffman.

Here‘s the great Washington one.  “The Exorcist,” people sometimes forget that‘s a Washington movie over there in Georgetown.  I love that movie.

And “Airplane” with Leslie Nielson, one of my favorites from the great, as I said Leslie Nielson.  Those films and 22 others will be preserved for all time in the Library of Congress.

HARDBALL will be right back.


MATTHEWS:  Welcome back to HARDBALL.

Well, here on HARDBALL, we don‘t always talk about—in fact, rarely talk about sports.  But President Obama has now weighed in on one of the most talked-about people in the country, Michael Vick.  The Philadelphia Eagles quarterback went from beloved football star, of course, years ago to reviled animal abuser.  Now, back to even bigger beloved football star.

Here‘s “Sports Illustrated‘s” Peter King on NBC this Sunday night. 

Let‘s listen.


UNIDENTIFIED MALE:  It looks like we have another member of the Michael Vick story fan club.

PETER KING, SPORTS ILLUSTRATED:  No question about it, it‘s Barack Obama. 

I talked to Jeffrey Lurie, the owner of the Eagles, this week and he said he was very, very surprised, picked up the phone one day and Barack Obama calls him to praise the Philadelphia Eagles for signing Vick and giving him a second chance. 

Lurie told me that the president was passionate about the fact that it‘s rarely a level playing field for prisoners once they leave jail.  And he said the message was what the Eagles had done with Vick was important for society.


MATTHEWS:  Well, joining me right is “The National Journal‘s” Matt Cooper, who can do just about anything—smart, funny, intelligent, witty, whatever, whatever we want; and Michelle Bernard, my pal.

Thank you both for joining us tonight.

This is an unusual topic and it‘s unusual for this president.

Matt and Michelle, it seems like only two or three occasions, maybe four or five at the most in the last two years the president has left the pocket.  He‘s gone off and talked about something outside his job as president.

Michelle, I want you to answer this: why do you think the president has singled out Michael Vick for this extraordinary attention, calling out his name and calling up the owner of the Eagles and making the case what a great job they did in hiring this guy after getting out of prison?

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  You know, there are people, Chris, that say that this was, you know, an accidental statement, that the president didn‘t mean for it to come out the way that it did.

I completely disagree.  I think if you look at the tone and tenor of various speeches that the president has given either as candidate Obama or as President Obama, there‘s always a method to the madness.  I mean, when is the last time that you‘ve heard anyone in the last year or two years talk about the criminal justice system.  What we do about inmates.  Do we believe in redemption, do we believe in resurrection?


BERNARD:  There‘s a possibility of that—of that being a part of the policy discussion going on in 2012.  And, you know, one of the things that I want to—I think is important to point out is the vast majority of people in the prison system in the United States are African-Americans—

African-American men that could not be lost on the president that this a way to advocate for a second chance, not only for all Americans but particularly people in our community who find themselves in need of a second chance.

MATTHEWS:  Well, is this because—just the facts, just the stats, a lot of young African-American men get involved with the legal system, they break the law?  Maybe it‘s a small crime.  It‘s not really a deadly crime but it‘s a violent crime even, and then the rest of their lives, they are really losers?  Is that what he is trying to kill here, the idea that once you‘ve done something bad, that you‘re finished?

BERNARD:  Yes.  I think that‘s what he‘s trying to kill.  There are a lot of people with the sentiment of either once somebody‘s been locked up, throw away the key, leave them there forever.  I think actually for some crimes, I‘m probably one of the people that are in that camp.

But, you know, I think the president‘s statement was it‘s important because if you look at Michael Vick, and I got to tell you, I‘m absolutely disgusted by the crimes that he committed—but if you look at him, look at the football comeback he has made, it makes people, even the hardest people on the criminal justice system, the true nonbelievers in terms of whether or not people can, you know, change what‘s in their heart, if you look at him, you have to ask yourself, don‘t we want people who leave the criminal justice system to actually have a really good role and contribute to our—you know, contribute something to the country?

And Michael Vick, you know, it‘s better to have him playing football than committing another crime.  I think that‘s an important statement.

MATTHEWS:  What do you make—what do you make of this pattern, Michelle?  He intervened in the case with the Muslim community center down near Ground Zero, which came out in favor of it obviously, in principle, the right to practice religion.  He went after the policeman involved in that Professor Gates case up in Boston.

Let‘s watch him here because these are so rare, these cases.  Let‘s listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I think it‘s fair to say, number one: any of us would be pretty angry.  Number two: that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.


MATTHEWS:  You know, Matt, you‘re weighing (ph) here, like this—I only have a minute or two here, but the president rarely steps out of the pocket, as we say, say in football, like quarterback, although Michael Vick is always out of the pocket.  The guy is running like an athlete, not a quarterback.


MATTHEWS:  This unusual thing of him calling up the owner of the Eagles, how you pronounce it the Eagles, calling up and saying this guy is great and thanks for hiring him—what do you make of that?  And put it in context of the unusual position he‘s in of a president of the United States getting involved in this personal case.

COOPER:  Well, as we‘ve seen, he does like to step into the popular culture mixes, you know, I think even more than Bill Clinton.  He‘s got a real interest in pop culture.  You know, Bill Clinton didn‘t do e-mail.  Obama‘s, you know, weighed in on lots of things, although he didn‘t know who Snooki was.


COOPER:  But he‘s comfortable in that zone.  And—but any political gain out of it, yes, I don‘t see it for every, you know, NFL fan you might get excited that you annoy a dog owner.  So, I don‘t know.

MATTHEWS:  Well, I‘m going back to your thought, because I remember Lenny Bruce once saying something about the Lord hiring ex-cons in a totally convoluted weird meaning he was trying to make in his usual Lenny Bruce fashion.  But giving people a second chance, to me, is very American.  F. Scott Fitzgerald said there are no second acts in American life and, in fact, there are a lot of them.

And maybe Obama lost a couple of races for politics before he got elected, too.  You know, the idea that you don‘t always make it your first try.

But Michael Vick, I‘m telling you—Michelle, do you follow the NFL? 

Have you seen this guy in action?  Watch him tonight.

BERNARD:  I can‘t say I‘m going to watch him tonight, but I have seen the clips just because we‘ve been talking about this.  I‘m not a big football follower.  But I think that based on what everyone else is telling me, that he‘s been able to accomplish just as particularly—just getting out of prison.  This guy is at the top of his game, and you can‘t take that away from him.  It‘s sheer hard work and skill.

And I think the president was right.  He deserved a second chance, and he got it, and hopefully, he will not throw it away.

MATTHEWS:  Matt Cooper, is this a smart or bad move for the president to get involved and saying Michael Vick is getting a second chance is a very good thing?

COOPER:  Yes.  You know, I think it‘s always good when a president connects with people where they live.  And this is what people were talking about at bars and kitchen tables.  You know, Michael Vick, they‘re not talking about HR-1231 all the time.  And he‘s living where people live.

MATTHEWS:  And guess what?

COOPER:  And he doesn‘t seem aloof when he does that.

MATTHEWS:  Wait until they see the ratings on this game tonight with the Vikings and Eagles, I‘ll tell you.  Eagles are 10-4.  This is going to get a huge rating tonight.

And, by the way, the people are not going to talk about the president throughout this game tonight.  So, it‘s not going to hurt them, you are right.  I think he‘s intervened in something people cared about.  End of season NFL is a good topic.

Anyway, thank you, Matt Cooper, who can do anything.  And Michelle Bernard, our good friend here.

Happy New Year to both of you.

BERNARD:  You, too.

MATTHEWS:  When we return, “Let Me Finish” with why I think it‘s time for the Democrats to play some smart defense, big D, as we say in sports.  Time for some big D.

You are watching HARDBALL, only on MSNBC.


MATTHEWS:  “Let Me Finish” tonight with something completely different, or at least different than we‘ve been talking about politically lately.  It‘s time for the Democrats to play some smart defense.  They spent the first two years of the Obama presidency breaking down barriers, pushing a major jobs bill, regulating Wall Street, rescuing the American auto industry, creating a national health care system, building an arms control treaty with the Russians, ending “don‘t ask, don‘t tell.”  Now, it‘s time for the progressives to think smart and boldly about defending what they have gained the past two years and building when and where they see an opening.

The key is to be as aggressive on defense as they were on offense, sitting back and waiting for the other side to attack is not smart, never was.

The Democrats know one thing for sure: the Republicans are coming at them.  Senator Mitch McConnell has made it clear.  House Republicans like Darrell Issa made it clear.  They are coming to destroy everything the Democrats have built, to attack everything they have done and that includes the social programs.  Number one: health care.  It includes going after the economic programs, including the commitments to rapid rail.  It means going after Democrats‘ stewardship of existing development and regulatory programs.

Will Democrats meet the challenge?  Will they go out there and meet attackers?  Will they be aggressive in fighting off the Republicans‘ attempt to roll back what they have done the last two years?

Well, the best test of whether they deserve re-election to the White House and whether they should regain control of the House is the vigor and intelligence of their defense and what they have done so far.  If they can‘t defend in the next year what they have accomplished in the face of a rabid Republican attack, who‘s going to bet on them defending the president who led all the accomplishing in 2012?

That‘s HARDBALL for now.  Thanks for being with us.  Right now, the time has come for “THE ED SHOW” with Ed Schultz.



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