updated 1/12/2012 11:16:35 AM ET 2012-01-12T16:16:35

CHRIS MATTHEWS, HOST: The Romney rollout. Let`s play HARDBALL. Good evening. I`m Chris Matthews, finally back in Washington after all that Iowa (ph) and excitement in New Hampshire. Leading off tonight: Fear or envy on the campaign trail. Mitt Romney has already begun his general election campaign. We heard it last night in his victory speech, and then again today. Romney`s clear. If you`re concerned out there about economic fairness in this country, you are just an envious complainer, perhaps, one of society`s losers. President Obama made a very different speech today, championing the middle class, and now therefore the battle lines are being drawn. And it`s only January. We`ve got a whole year of this ahead of us. The president may have unexpected allies in this fight, the other GOP candidates. If you closed your eyes, you`d swear all the recent talk about Romney and vulture capitalism actually came from Democrat, but it`s Republicans like Newt Gingrich and Rick Perry who are trying to take Mitt down with populist messaging. Are they doing President Obama`s work for him, or are they just giving Romney a chance on get his act together and try to respond to these charges? But before Romney makes his acceptance speech in Tampa this September, he`s going to have to get past South Carolina, which has in the past been a killing field of his -- of opponents. His opponents now know if he`s not stopped there, it`s probably over for him. And their strategy is clear: Attack him as a job killer and hope the South will be more hostile to Romney than Iowa or New Hampshire was. Don`t forget -- never forget -- what W did to John McCain down there 12 years ago. And Michelle Obama pushes back against a new book she says tries to portray her as an angry black woman. Finally tonight, "Let Me Finish" with -- is it what`s good for the Romneys -- is that really good for America? Think about it. We start with the politics of envy, as it`s called by the -- by the Republican challenger. MSNBC political analyst Chris Cillizza is down there with "The Washington Post" right now. In fact, he`s in the city room, as we used to call it. And CNBC`s John Harwood is with -- you still call it that (INAUDIBLE) Harwood`s with us here. He`s, of course, with "The New York Times," a somewhat superior newspaper, historically speaking. (LAUGHTER)

CHRIS CILLIZZA, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Oh! Gee!

MATTHEWS: Anyway, let`s go -- Mitt Romney trounced his opponents last night, and he got to give the big speech in primetime. I think he gave a speech more appropriate to a convention, as if he`d already won and picked up all the marbles, which is probably an arrogant thing to do. But his focus was clearly on President Obama, not the guys he beat yesterday. Let`s watch.

(BEGIN VIDEO CLIP) MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: President Obama wants to fundamentally transform America! We want to restore America to the founding principles that made this country great! (CHEERS AND APPLAUSE) ROMNEY: He wants to turn America into a European-style social welfare state! We want to ensure that we remain a free and prosperous land of opportunity! (CHEERS AND APPLAUSE) ROMNEY: This president takes his inspiration from the capitals of Europe! We look to the cities and towns across America for our inspiration! (CHEERS AND APPLAUSE) (END VIDEO CLIP)

MATTHEWS: Guys (ph) Chris Cillizza -- and you can`t see it. John and I can see it. His sons were lined up there like one of those Motown groups from the `60s...

CILLIZZA: I see them.

MATTHEWS: ... four of them lined up, you know, all in unison. They were doing everything but clap and show their rhythm.

JOHN HARWOOD, CNBC, "NEW YORK TIMES": The Four Tops.

MATTHEWS: Four Tops. Exactly right! (LAUGHTER)

MATTHEWS: Let me ask you about that speech last night. I want you to start, Cillizza, this thing here -- this politics of envy, this throwing -- trying to throw the Democrats backward on any charge that there`s unfairness in our tax system, that our economic structure is such that it`s very easy to become very rich now, or at least doable, and very hard to survive in the middle class, and saying anybody who talks like that is some sort of Trotskyite or something.

CILLIZZA: Right. And you heard, in fact, Chris, I would say on MSNBC last night John Sununu, the former New Hampshire governor, push back -- he`s a Romney surrogate -- push back against that idea, essentially saying that if you believe in what -- if you believe in the idea of government intervention at all, it`s anti-American. So a lot of hot rhetoric. I would say, look, there are two things. One, Chris, I think you`re 100 percent right, that speech was 95 percent Mitt Romney, aura of inevitability, I`m going to be the nominee, here`s what we`re going to be talking about in the general election. But 5 percent of it was still Mitt Romney having to go to South Carolina, the most conservative electorate he`ll face, trying to convince people through rhetoric -- European-style socialist welfare state, et cetera, et cetera -- that he and they are not that far apart in how they view the world. He still has to get over that South Carolina hump. Remember, he came in fourth in 2008 in South Carolina, Chris, and he spent lots of time and money there. It is definitely the most conservative electorate he`s going to face. And if he loses South Carolina, I still think he winds up as the nominee, but it`s a bumpier road. He and his advisers know that.

MATTHEWS: Well, here today, the president said his focus was -- of the president was on the middle class. Let`s listen to the president, to what he said in his speech at the White House about the American economy. This is President Obama. By the way, you can tell whether -- is this a veiled attack against anyone? Well, let`s listen to who he`s really talking about.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don`t want America to be a nation that`s primarily known for financial speculation and racking up debt buying stuff from other nations. I want us to be known for making and selling products all over the world stamped with three proud words, "Made in America." (END VIDEO CLIP)

MATTHEWS: John Harwood, you know all about economics and politics both. And here`s the clear overlap, it seems to me. Both the president and Rick Perry, of all people, and certainly Newt Gingrich, are all making the same charge -- there`s too many people in this country making money off money. In fact, the president and others said, We wish we had more kids coming out of college, the best colleges, in engineering rather than all wanting to go into equity. And it`s a consistent charge the American people sort of share. Our best minds are going into manipulating money. It`s interesting to see the president and the critics of Romney on the Republican side all making the same charge. It`s not a class argument, it`s about economic future.

HARWOOD: Well, exactly. It divides not only in a general election, but in the Republican primary. Remember, Chris, the Republican Party has more working class voters than it has in the past. You`ve got lot of these people who are Tea Party identifiers, conservative Christians who don`t make a lot of money, who aren`t Wall Street...

(CROSSTALK)

MATTHEWS: ... Nixon used to call them.

HARWOOD: Exactly. John McCain won -- beat Barack Obama among white voters earning under $50,000. There`s a lot of working class vote out there, and those people resent some of the Wall Street excesses just like Democrats do.

MATTHEWS: Well, when they see the gleaming...

CILLIZZA: Hey, Chris...

MATTHEWS: ... Romney Romney family -- let me go to you, Chris, on this...

CILLIZZA: Yes.

MATTHEWS: ... the gleaming Romney family, which rolled out yesterday like, This is what it`s going to look like, Mr. and Mrs. America. If you vote for me, you`re all going to look like us. Look how well we`ve done! If you want to be like the Romneys, vote for the Romneys. And maybe that`s just brilliant -- a brilliant roll-out, as I called it in our cold open tonight, but it`s a roll-out. If you like the -- look at this. This is the future. We`ve all got it made! Go ahead.

CILLIZZA: Now, Chris, I would say part of all politics -- President Obama tapped in to this, too. Part of all politics is making people`s vote aspirational. That is, this is what we want out of our country. Now, the other part of it -- and I think you`ve tapped into something that`s important...

MATTHEWS: But they already have it. (CROSSTALK)

CILLIZZA: Right. I agree.

MATTHEWS: Romneys already have it... (CROSSTALK) MATTHEWS: ... going on now.

CILLIZZA: That`s potentially the problem for Mitt Romney, though I don`t -- I`ll tell you why I don`t think it works in the Republican primaries. There is clearly a strain -- John touched on this. There`s clearly a strain of economic populism that exists in both parties. But in the Republican Party, Mike Huckabee tapped into that. He was that populist messenger. It`s why he beat Mitt Romney in Iowa. It`s why he probably would have beat him in South Carolina, if Fred Thompson was in the race. Who is that messenger now? I`ll tell you who it`s not. Newt Gingrich is not a populist. Rick Santorum, maybe, but his time in Washington makes it hard. The best populist, natural populist in the field is a guy from Texas named Rick Perry, who is at 1 percent in polls and largely irrelevant. And that`s the problem. Not that Mitt Romney isn`t vulnerable to an economic populist argument, but there`s no messenger to deliver that argument in this field.

MATTHEWS: You know...

(CROSSTALK)

MATTHEWS: ... if you look at the history of the Republican Party, the Democratic Party -- the Democratic Party has historically been much more open to old money, fed, Teddy Roosevelt, Franklin Roosevelt, the Stevenson family (INAUDIBLE) seem wealthy, the Harrimans. Whereas the Republican Party has been sort of soddy (ph) buster (ph) middle class, this much more Reagan self-made, Nixon, people that made a few bucks but aren`t rich, right? And got it their own way.

HARWOOD: Exactly. But we`ve got an economy right now where there are more people with talent and high education who have the ability to make a lot of money. And the question is, is that enough? How much more broadly do we need to share opportunity? I talked to David Axelrod about this the other day, the president`s adviser. He said Mitt Romney`s idea of a meritocracy is one where if you`re born with the advantages, you keep them, and if you are not born with them, you don`t get them. So there`s concern both in the general election sense, but in the primary. Romesh Ponneru (ph), the conservative writer at "National Review," tweeted during Mitt Romney`s speech last night, Careful Mitt, don`t suggest the only people opposing you are the ones who resent your success.

MATTHEWS: OK. Now, here`s -- it`s always interesting to watch a politician. And they`re all politicians, left, right and center. But here`s Governor Romney accusing the president of engaging in the politics of envy. Obviously, he wants him to stop what he`s doing, like they want Newt Gingrich to stop. You don`t attack somebody because you want them to keep it up. And this morning, Matt Lauer asked him if he was implying anyone who questions the distribution of wealth in this country, and power, was simply envious and jealous. Let`s watch what Romney said.

(BEGIN VIDEO CLIP) ROMNEY: I think it`s about envy. I think it`s about class warfare. MATT LAUER, CO-HOST, "TODAY": Are there no fair questions about the distribution of wealth without it being seen as envy, though? ROMNEY: You know, I think it`s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made this part of his campaign rally. Everywhere we go -- or he goes, we hear him talking about millionaires and billionaires and executives and Wall Street. It`s a very envy-oriented, attack-oriented approach, and I think it`ll fail. (END VIDEO CLIP)

MATTHEWS: This, Chris -- and this gets into a broader discussion of why Romney needs to be scripted, why he`s really good with a teleprompter, why he always gets in trouble in spontaneous moments. He seemed surprised by Matt Lauer`s question to the point he came out with an odd answer.

CILLIZZA: Well, I would...

MATTHEWS: We can talk about tax policy in "quiet rooms."

CILLIZZA: Yes, I...

MATTHEWS: That just hit me as the strangest idiomatic sound (ph) in a democracy. Let`s not talk about what kind of a tax structure we have with the people. Let`s have it in the quiet rooms where the people don`t hear it.

CILLIZZA: Well...

MATTHEWS: Boy, does that strike me as elitist.

CILLIZZA: You`re exactly right that -- look, Mitt Romney is what a management consultant would create if you were creating a political candidate. He is someone which the more rules govern an exchange, big debate, a big speech, the better he is, Chris.

MATTHEWS: Right.

CILLIZZA: The less rules that govern an exchange -- out on the stump, interviews with people like Matt Lauer -- the more difficult it is because he just has trouble thinking on his feet and relating to your average person. Now, that is something that the Obama campaign is going to relentlessly hit on. Mitt Romney is out of touch. This is a guy who made millions by bankrupting companies. And I would say Newt Gingrich and Rick Perry are really doing some of the Obama campaign`s work for them right now in South Carolina, hitting on those same themes. Now, that doesn`t mean that the Obama campaign wouldn`t have found this line of attack anyway, but they`re getting it validated by Republicans. Romney is going to have to in the near term figure out how he has better answers than, Let`s talk about this in quiet rooms, because I guarantee you it`s not going away in the general election.

HARWOOD: And Chris, here`s something that Mitt Romney is not talking about in quiet rooms, the counterargument to his complaint about billionaires and millionaires. All this stuff about European-style socialism...

MATTHEWS: Yes.

HARWOOD: ... and, I believe in America, and that sort of thing -- what Democrats see there is a suggestion that this president is somehow less than fully American. And there`s nothing that is more European style about President Obama`s position than Bill Clinton`s, who also wanted to tax the rich, who also wanted an activist government.

MATTHEWS: Except his name.

HARWOOD: Exactly. And so there`s a bit of a double standard when Mitt Romney says, Oh, you can`t talk about that inflammatory stuff about greed and envy and that sort of thing, but you can talk about the fact that I believe in America and suggest that your opponent may not.

MATTHEWS: You know, it`s interesting, Chris, and then John -- well, John, you start. It seems interesting that -- I didn`t put this together watching last night, but he accuses him of being a socialist. You say he`s getting his ideas from Europe, so he`s a foreigner and a socialist, like Newt Gingrich says he`s got these tendencies to think like a Kenyan anti- colonial. They always do the same sort of foreign-ization number. They almost deport him every night they talk, these guys. And then you tie it into the envy thing. So now you`re making him sort of a -- literally some kind of Trotskyite, some kind of communist guy that wants to take away the wealth of the upper middle class and give it to the poor people. I mean, that`s what they`re saying, he`s a socialist.

HARWOOD: I must say I`m struck...

MATTHEWS: Why do they...

HARWOOD: ... in recent years by the rhetorical inflation that Republicans have practiced.

MATTHEWS: Yes.

HARWOOD: They seem to think "liberal" isn`t as powerful as it once was. That word is drained of meaning. So you get all this socialist stuff. And then you flavor the socialism with the Europe stuff. President Obama is a liberal Democrat who believes in slightly higher taxes than Republicans do on some groups of people and slightly more government spending on education, scientific research and that sort of thing. It is not the difference between Europe and an American-style state of nature.

MATTHEWS: Chris, can`t we have an American discussion about the fairest tax system we can have without somebody being called out and called a foreigner? Can`t you discuss tax policy? We passed under President Wilson the income tax amendment to the Constitution. That was ratified by the states in conventions across the country with three quarters of the states doing so. That was a matter of public debate. Now along comes this, I would have to say, elitist thinking from Romney, We can`t talk about taxes in the company of the little people out there because they`ll get too envious. We better talk about wealth and taxation in the privacy of the club. It`s an amazing statement!

(CROSSTALK)

MATTHEWS: I don`t think he can handle this business sometimes.

CILLIZZA: I think we can have that conversation, Chris, but I`ll tell you what. It`s not going to -- and when I say "that conversation," a reasonable conversation about tax policy. There`s potential for it in 2013. There`s not potential for it between now and 2012 because...

MATTHEWS: Oh, I know.

CILLIZZA: ... the reality of campaigns is the kind of -- the kind of rhetoric that we`re hearing. It`s January! You know, we`re a long way from the November election. I think it gets back to sort of a fundamental disagreement or a conversation that we`re going to have in this country, which is how much government do we want and when?

MATTHEWS: OK, thanks, Chris.

CILLIZZA: That to me is the election in a nutshell.

MATTHEWS: Thanks, buddy. I always latch onto the weird phrase, like "the quiet room." This is one of those you can`t ignore! Anyway, Chris Cillizza, thank you. We`re all back to Washington. John Harwood, we were working together up there. What a long road trip this has been. Coming up: Romney still needs to get past South Carolina -- some people are going on the road again -- where his rivals are attacking him as a job killer. That`s Newt and also Rick Perry blasting away on this populist issue that that man right there is taking away your job. We`ll also get to the question of how well this fellow, given his background, will do well in the South among evangelical voters. We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`ve been talking about the potential fight between Mitt Romney and President Obama in the general election. We have new poll numbers on that and the matchup. And we`re going to check the HARDBALL "Scoreboard" for that. Nationally, look at that, President Obama leading Romney by 5. That`s according to the new Reuters Ipsos poll. But we have new numbers from key states, probably more important, starting with Florida, where Romney has a 3-point lead in the latest Quinnipiac poll. That`s 3 points ahead for Romney in Florida. Look at North Carolina, a state Obama managed to win last time narrowly. He hopes to hang on there. He has the slightest of leads over Romney there, but not bad. That`s pretty good. That`s also in the -- that`s actually in the PPP poll. But still not bad, given the way things are doing economically, 46-45. He`s still slightly ahead in North Carolina. We`ll be right back.

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(BEGIN VIDEO CLIP) GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Who`s South Carolina going to put forward? Because I -- you know, Iowa`s a fine state. New Hampshire is an -- is an interesting place. But the fact of the matter is, they winnow the field down. South Carolina is who picks presidents. (END VIDEO CLIP)

MATTHEWS: OK, welcome back to HARDBALL. South Carolina picks presidents -- that`s a great quote, and that`s the history Mitt Romney faces as he campaigns to win the state on January 21st, coming up in a week-and-a-half. South Carolina is known for its "take no prisoners" politics. We know that. And all the Republican candidates have their sights set on Romney down there. Can a Mormon win down there among evangelical voters? We`ll see if it even comes up. And the state hit hard by tough economic times -- look at the -- (INAUDIBLE) almost 10 percent unemployment down there, much worse than Iowa or New Hampshire. By the way, will attacks on Romney`s tenure at Bain Capital once again be the issue as the voters go to the polls? Let`s look at the state of play in the "Time"/CNN poll of South Carolina Republicans taken just last Wednesday and Thursday. Romney`s lead, 37 percent. Santorum and Gingrich are in second and third. Their combined total, however, equals Romney`s 37 percent. And Rick Perry gets just 5. But he`s going to spend some money down there. A PPP poll taken January 5th, more recently, through the 7th, gives Romney a narrower lead, down to 30 percent against Gingrich`s 23. So he`s within striking distance. And so is Santorum at 19. Again Rick Perry, at 5, could jump into this race. Congressman Mick Mulvaney represents South Carolina`s Fifth District. He`s a Rick Perry supporter a member of the Tea Party Caucus. And Mark Halperin of course is MSNBC`s senior political analyst and editor at large at "TIME." Gentlemen, thank you. Congressman, your district, is that Charleston, does that include Charleston, your district?

REP. MICK MULVANEY (R), SOUTH CAROLINA: No, sir, I have the northern tier of the state.

(CROSSTALK)

MATTHEWS: What are the towns? What towns do you have?

MULVANEY: Rock Hill would be the biggest town. Sumter is one other big town, Lancaster County, Gaffney, Cherokee County. It`s the north central tier of the state.

MATTHEWS: And that`s why you`re coming to us from Charlotte, North Carolina. You`re close. I should have remembered that. Let me ask you about Rick Perry. I don`t want to get into religion much. I hard ever talk about it on this show, but let`s try to be positive here. Does his Protestantism, just putting it positively, make him more connected to the voters down there or are we past that?

MULVANEY: I will be more direct because what you`re asking really, is Romney`s Mormonism an issue? And it`s absolutely not. I hear this a lot in Washington, I hear it nationally. You very rarely hear that discussion in South Carolina itself. And I use myself as an example. I`m the first Roman Catholic member of Congress we think in the history of the state. We have a governor who was raised as a Sikh. She is now Christian. But religion is not an issue in South Carolina like folks who don`t live here think that it is. MATTHEWS: Mitt Romney today addressed whether conservative evangelicals in South Carolina would vote for him. Let`s listen to his answer.

(BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: There are people who want to elect a commander in chief, and they`re not worried about electing a pastor in chief. I`m hopeful I will get great support in South Carolina, but I know that I have a lot of work to do. (END VIDEO CLIP)

MATTHEWS: Well, we don`t know whether he will have trouble winning over South Carolina evangelicals. I guess the question comes back -- Franklin Graham, by the way, son of Billy Graham, and not Billy Graham, told "The New York Times" -- quote -- "It`s going to be difficult for Romney as a Mormon with the evangelical community. For most Christians, Mormonism is an issue and he has a hurdle here that he is going to have to jump over and navigate around." Now, there you have Franklin Graham, who is pretty far right politically -- let`s put that on the table -- suggesting that Mormons are not Christians in the very statement he just made there. So he`s obviously stirring up the pot right there, right, Congressman? That`s not a helpful quote if you`re Romney.

MULVANEY: And, respectfully, I don`t know Reverend Graham, but he`s certainly not from South Carolina, not active in South Carolina politics. Look back to 2008, Mitt Romney got the endorsement at that time of BOB JONES III, a noted evangelical in our state. Didn`t help very much. I think he finished fourth or fifth in 2008. So again, I think religion is an issue for folks who aren`t from around here. We will pick our candidate based upon jobs and the economy primarily and conservative values after that.

MATTHEWS: Let me ask Mark Halperin. Is there any way of looking at this objectively at this point whether religion will cut down there, whether we should even be talking about it? I don`t know.

MARK HALPERIN, MSNBC SENIOR POLITICAL ANALYST: I think it`s very similar to what race was for President Obama in some states in 2008. Are there people who won`t vote for Mitt Romney because of his religion? I appreciate the congressman`s optimism about the state of his state right now. I expect there are some. but I don`t think that will keep him from winning the primary. He might lose a primary for other reasons, but don`t think there is a large enough member of people who won`t vote for him based on his faith to keep him from winning.

MATTHEWS: Let`s take a look at what could be the dominant issue down there, jobs. South Carolina has been hit hard by the recession, perhaps harder than other states. In fact based on unemployment numbers, it is. A pro-Gingrich super PAC called Winning Our Future intends to blanket the state of South Carolina with ads portraying Mitt Romney as a job killer. Let`s listen.

(BEGIN VIDEO CLIP, AD) NARRATOR: Mitt Romney became CEO of Bain Capital the day the company was formed. His mission, to reap massive rewards for himself and his investors. UNIDENTIFIED MALE: Mitt Romney and them guys, they don`t care who I am. NARRATOR: Romney took foreign seed money from Latin America and began a pattern exploiting dozens of American businesses. UNIDENTIFIED FEMALE: I feel that is a man that destroyed us. (END VIDEO CLIP)

MATTHEWS: Wow. I want to go -- John -- let me ask you, Mark, about that ad. That`s a powerful ad when you see this older woman who looks in very bad shape blaming Romney personally as the villain who cost her, her lifestyle, her life, basically. Is this going to cut down there?

HALPERIN: We don`t know what happens if you put hundreds of thousands or millions of dollars behind that kind of message, whether that will have an impact on him. I think there`s some people in the country who will look at this message which the Democrats would run against Mitt Romney and it would impact them. Again, I don`t know that it would stop Mitt Romney from winning the primary. It might cost him some votes, but I don`t think it will cut against him. And I think nationally it will help him, because, as we have seen, there`s been a closing of the ranks from Republicans saying this is not a good message to have within an intraparty fight. And even Speaker Gingrich today seemed to step back once again for the second time and say this isn`t a message we should be driving.

MATTHEWS: Well, read his latest iteration. He continues to go back and forth on that, Mark. We got a new bulletin just recently from him. He doesn`t like the headline in -- what was it called, the Politico, the Drudge Report, one of them.

(CROSSTALK)

MATTHEWS: Congressman, let me ask you about your candidate, Rick Perry. He`s used terms like vulture capitalism. He`s getting pretty tough on the method by which Romney got wealthy.

MULVANEY: He is. And I agree with Mark, I don`t think it`s the winning argument in South Carolina. I think Governor Perry got a little bit sidetracked yesterday. He used that term a couple of times. We discussed it with the campaign today and we think it`s misdirected. People are more interested in how they`re going to go back to work and I think that`s why Rick Perry does have a really good chance in South Carolina. We haven`t talked about that yet. I did understand -- I do understand that the last I had read the Politico article was that Gingrich was sort of walking that back. I think Mark is right. I think it`s not the direction that anybody wants to take the campaign. They want to focus on how to put people back to work, not what has happened in the past.

MATTHEWS: They`re taking issue with the question whether they crossed the line or not. They`re saying that headline wasn`t ever spoken by candidate Gingrich. It was spoken by The Drudge Report. Anyway, one last crack at you, Congressman Mulvaney. Do you think Mitt Romney in his private sector world was focused on job creation? Was that the focus of his career, creating jobs?

MULVANEY: No, I think his purpose was creating wealth, which is what a lot of folks to and most folks do when they try and go to work. Job creation comes as a function of success. I think beating up on somebody for going through the downsizing of companies that are no longer competitive, no longer efficient, it`s part of the ordinary process. You can look at our history. Henry Ford declared bankruptcy twice. Walt Disney went bankrupt. The creative destruction that comes with capitalism is part of the thing that nobody likes, but it is part of the system and I don`t think it`s going to be a central part of this campaign in South Carolina going forward for anybody.

MATTHEWS: Congressman Mulvaney of South Carolina, thanks for joining us, Mark Halperin, as always. Coming up, by attacking Mitt Romney`s career at Bain Capital, are his Republican rivals actually doing President Obama`s work for him? I think so. They`re making the same charge he is. The people who make money off money are not creating jobs. And up next, the HARDBALL "Sideshow." You`re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Now back to the "Sideshow." First up, for months, News Corp. CEO Rupert Murdoch has been mired in that massive phone hacking scandal surrounding one of the corporation`s tabloid newspapers, "News of the World," and the allegations continue, by the way. Still, Murdoch took to Twitter earlier today to offer his thoughts on what seems to be stopping Newt Gingrich from gaining momentum in the 2012 presidential race -- quote -- and this is from Murdoch -- "Can`t blame Newt G. too much. He was carpet-bombed with negatives by Romney. Brilliant, visionary, but just too much baggage and erratic." Well, Rupert Murdoch to Newt Gingrich: You have got too much baggage. Well, finally to the big screen. Actress Meryl Streep is once again wowing audiences, this time for her portrayal of former U.K. Prime Minister Margaret Thatcher in the new film "The Iron Lady." Well, true to form, Streep did her research and some of the information about the staunch conservative leader might surprise you. Let`s hear from the actor herself.

(BEGIN VIDEO CLIP) MERYL STREEP, ACTRESS: There`s always stuff to be learned, especially many years out from an administration. But I was very surprised to learn that she didn`t try dismantle the national health. She thought that that was a right, to have the national health -- that she was pro-choice. She would be drummed out of the American conservative party. There would be no question. (END VIDEO CLIP)

MATTHEWS: Wow. Well, Michele Bachmann referenced the Iron Lady relentlessly during her presidential campaign and held her in high regard. But with the views Streep just mentioned, Bachmann might have been first in line to drum her out of the Republican Party today. Up next: Newt Gingrich and Rick Perry are trying to take down Mitt Romney, as we have been saying, by calling him a vulture capitalist who engages in financial manipulation, but are they actually doing President Obama`s work for him? Yes, they are. And that`s ahead. You`re watching HARDBALL, only on MSNBC.

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JULIA BOORSTIN, CNBC CORRESPONDENT: I`m Julia Boorstin with your CNBC "Market Wrap." The Dow Jones industrials finished down 13 points. The S&P 500 just barely ended in positive territory. And the Nasdaq is up eight points. One of the factors hanging over the market may be fears about Europe`s debt crisis. Today, the euro hit a 16-month low against the dollar after comments from ratings firm Fitch. It urged the ECB to buy up Eurozone debt to prevent a collapse of the currency. Here in the U.S., the Fed`s so-called Beige Book survey showed the end of 2011 was a strong point for the economy. In most of the Central Bank`s 12 districts, consumers spent, factories were busy, and travel spending also rose. However, the report also said that housing remained weak. And speaking of housing, home builder Lennar said fourth-quarter income fell 5 percent because of rising expenses. But revenue was up 11 percent as home deliveries rose. Shares of Lennar were up 7 percent and that helped boost other housing stocks as well. That`s it from CNBC, first in business worldwide -- now back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL. Mitt Romney is obviously coming under assault right now for his big business background, but it`s not liberals championing the populist anti- Romney theme. It`s Newt Gingrich and his fellow Republicans like Rick Perry. So why is the GOP taking a page from the Democratic playbook, you might say, and could they be permanently damaging the most credible candidate they have to take on President Obama? Chris Chocola is a former Republican congressman from Indiana who now runs the Club For Growth. And Andrew Ross Sorkin is the of course co- anchor of "Squawk Box" on CNBC and a columnist for "The New York Times." He`s also author of "Too Big to Fail." This phenomenon here, I wouldn`t have expected it. I think it`s a perfect storm. I think Newt Gingrich is an opportunist. My assessment is that he saw this movie that was made, this documentary basically trashing Mitt Romney`s role as head of Bain Capital. And he also has some money to pay for ads. He put it together and said here`s a way to stop Romney. What are you making of the fact that Newt is going after Bain Capital as a job destroyer, not job creator?

CHRIS CHOCOLA (R), FORMER U.S. CONGRESSMAN: Well, I think he is helping Obama. I don`t think it is an unexpected attack. It is, I think, an unexpected source and I disagree with the substance of the attack greatly that Newt Gingrich is delivering. But in a weird way, he may be helping Romney a little bit. Romney knew this was going to come. It gives him a practice round in South Carolina, where the stakes may be a little bit lower, in the sense that if he can`t rebut these, practice his response in South Carolina, in the general election, he would have no chance of doing that. He`s probably helping Obama, too, because Obama gets to sit back and watch Romney`s response. And he gets to hone his attack based on how Romney responds to Gingrich. So I think it`s the wrong attack coming from a Republican. I don`t think it`s a surprise on any businessperson running for office. They are all going to be accused of these things. And Romney gets to have a practice round... (CROSSTALK)

MATTHEWS: Are there businesses out there that go out there, the chop shop companies that were founded by the person who founded the company, they chop them up like Gordon Gekko, they sell them in pieces, and/or they reduce their efficiency to the point -- or they pretend to cut their costs so much, they end up destroying the company, but they make a killing? Doesn`t that go on, or is that just a phantom notion? There are equity companies that basically are vultures.

CHOCOLA: There`s bad behavior in every industry and every profession known to man. But over a long period of time, people who engage in the free market system, people that embrace economic freedom can`t succeed unless they create value. I`m not here to defend Bain Capital. (CROSSTALK)

MATTHEWS: We have seen these people, by the way, in these ads, as we have shown them tonight, who have lost their livelihoods because of Bain Capital. What do you make of those presentations?

CHOCOLA: There are probably very ugly incidents that Bain Capital was involved in. But when you look at the...

MATTHEWS: Are they fair game for a political opponent to raise?

CHOCOLA: Everything is fair game in politics. MATTHEWS: OK. Let`s take a look at Chuck Todd. Here is an interview, Newt Gingrich defending his attacks on Bain Capital. Let`s watch.

(BEGIN VIDEO CLIP) NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: There`s a big difference between financial manipulation and capitalism. Capitalism is when entrepreneurs go out and investors go out, they start something real, they grow something, and it has real impact. CHUCK TODD, NBC NEWS POLITICAL DIRECTOR: And you don`t feel like that`s a class warfare argument? That is what some... GINGRICH: No, I think that`s -- I think that`s... TODD: ... some sort of Romney defenders are saying... (CROSSTALK) GINGRICH: Well, from -- first of all, OK, is he allowed to cite his record or not? If he`s allowed to cite his record, is somebody else allowed to criticize his record or not? Criticizing one businessman for one set of practices is not an assault on capitalism. (END VIDEO CLIP)

CHOCOLA: Well, Chris, I think that this is a preview to the whole election and the general election. This is going to be an election about, do we believe in -- which candidate is better at communicating their experiences in life to the voters? President Obama believes in more and bigger government. If Romney is the nominee, he`s going to believe in economic freedom.

CHRIS MATTHEWS, HOST: This isn`t about economic freedom. It`s about the performance of Bain Capital and job production or destruction. Let me go to Andrew Ross Sorkin. Andrew, if you`re reporting on this, is it that ready to figure out what the net effect of Bain Capital was? Was it destructive or constructive for American jobs?

ANDREW ROSS SORKIN, THE NEW YORK TIMES: You know, covering this industry for the past decade or more, it is very difficult to actually ascertain whether it`s destructive or constructive. Having said that, I think, Mr. Romney -- Governor Romney has made job growth part of his platform. He has put out there that he has created, as he likes to say, more jobs in the private sector that he says that President Obama has created in the public sector. As a result of trying to take credit for that, he then has to answer for all of the jobs that were lost. That becomes the issue. We had Mitt Romney on the show this morning and we talked about this issue. And the question becomes actually, does he deserve credit for either of them? Ultimately, I give him credit for starting Bain and being a good investor. But that`s what he was. He was a good investor. Did he create all these jobs? I`m not so sure. Did he kill all these jobs? I`m not so sure either.

MATTHEWS: Well, here is Gingrich defending his attacks on Romney by saying the Republican nominee must be vetted before the Obama campaign has a chance to take him on. Let`s watch.

(BEGIN VIDEO CLIP) GINGRICH: I`m a middle class. My dad was Army officer. I grew up in middle class background. I have middle class values. And I find powerful rich people rigging games very distasteful.

CHUCK TODD, NBC NEWS: You think what you`ve done, once the super PAC is done, he`s going to become less electable or viewed as less electable.

GINGRICH: I don`t know, but I think the time to find out is right now. I mean, the last thing Republicans ought to do is nominate somebody who has not been thoroughly vetted and then sit there watching Obama and Axelrod destroy them. (END VIDEO CLIP)

MATTHEWS: You know, he sounds like my dad who was a cloak coat Republican, who voted Republican always every election, but was very upset during the G.E. price fixing scandal years ago, because he thought those guys were manipulating and abusing the capitalist freedom, of free enterprise freedom. Newt Gingrich makes a blue collar argument. Not a blue collar, it`s a clock coat Republican argument. We believe in free enterprise, we didn`t like people who are basically bandits who use the system, to basically make a lot of money, but not create any wealth for the country. I mean, he knows what he`s doing here politically.

CHOCOLA: This is a political play. And you asked me is it fair game, and I suppose it is, but it`s not fair in the sense that you can`t judge the free market system or one person`s career in that free market system by a very small slice of it. You can`t take a few people talking to him said, you like this guy or don`t like this guy? Did this deal work or not work? You have to look at the totality of their career. And again, I`m not here to defend Bain, but Bain is looked at as a respected company that has grown value for their investors and their investors are people like teachers` pensions, firefighters pensions, university endowments.

MATTHEWS: OK.

CHOCOLA: And some individual investments.

MATTHEWS: Let me throw at you -- let me throw something at both of you guys. It seems that what Romney did and Newt is exploiting is Romney made a calculated decision. Don`t run on his record as governor of Massachusetts because there he was for health care, he was pro-choice. Don`t talk about his public sector career which is intended to help the general public, which would be a logical argument. Andrew, you pick up on this. So he picked his private sector career which is not intended to help the general public and bragged, oh, I created jobs there. That`s when I was really a public servant when I was out making money. SORKIN: Right. And I think that`s the hardest part to justify on either end. But the question, though to me that -- and it`s the issue that you raised at the very beginning of this segment is, does this take the wind out of the sails of President Obama later on? Are we going to be talking about this issue -- if he`s the presumptive nominee, are we talking about this issue? And does this punch land now or will it land later? And oddly enough, despite the sort of popular rhetoric around this issue, it doesn`t feel like it`s landing. You know, I`ve seen the movie now. I think it pulls at your heart strings. But I don`t know if it fundamentally lands with the American public and then again more importantly whether it can be exploited again come this fall.

MATTHEWS: Good question. Thank you, Chris Chocola. Thanks for joining us, of Club for Growth. And Andrew Ross Sorkin, a great reporter for "The Times." Up next, First Lady Michelle Obama pushes back against a new book she says tries to portray her as an angry black woman. I don`t know if that`s a fair charge, but we`re going to listen to it. Here it is. HARDBALL is coming back in just a moment on MSNBC.

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MATTHEWS: So far, the Republican contests have been played in states whose economies are on relatively solid ground. Iowa and New Hampshire, for example, both have unemployment rates are among the lowest in the country. New Hampshire at 5.2 and Iowa at 5.7, far lower than the national average of 8.5. But now, the race is shifting to three states whose economies are among the hardest hit. We mentioned early South Carolina`s unemployment rate is 9.9 percent. The next two states, Florida and Nevada, are even worse off. Nevada has the highest unemployment rate in the country at 13 percent. We`ll be right back.

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(BEGIN VIDEO CLIP) MITCHELLE OBAMA, U.S. FIRST LADY: I guess it`s more interesting to imagine this conflicted situation here and a strong woman and, you know -- but that`s been an image that people have tried to paint of me since the day Barack announced, that I`m some angry black woman. I just try to be me. And my hope is that over time, people get to know me. And they get to judge me for me. (END VIDEO CLIP)

MATTHEWS: Wow. We`re back. That was, of course, First Lady Michelle Obama responding to her portrayal as she heard it as combative and meddlesome in a new book about conflict inside the White House. The book`s called "The Obamas." It`s written by a New York reporter Jodi Kantor. We`re going to try get her on. She was interviewed by the way -- she interviewed, by the way, she said, the author, 30 current and Obama staffers. But White House has pushed back against the book, saying it`s an over-dramatization of old news and noting that Kantor did not interview the Obamas for the book. Of course, they don`t let her interview them. And they said she didn`t interview them. Anyway, that`s an old one. Ed Rendell, of course, was governor of Pennsylvania. He`s now an MSNBC analyst. I don`t know how he got dragged into this. And Joan Walsh, editor at large for Salon.com. No way, Governor, that you can say anything about this that doesn`t caused more trouble. That`s why we`re doing it. Joan Walsh, I read on the book. It doesn`t sound -- I`m not going to knock it because I got another book out on Kennedy I`d rather people read. But I just wonder if it`s overwritten. Is there something in there that justifies 200 or 300 pages of hashing over the relationship among the -- between the Obamas and among the Obamas and their staff people like Valerie Jarrett and the rest of them?

JOAN WALSH, SALON.COM: Look. You know, it`s fascinating. It actually is. We care about these people. They are our leaders. So, you know, I think there`s enough potentially there. I think the problem is, I respect Jodi Kantor. I think she did a good job of reporting. But one thing she does a little too often is put herself in the first lady`s head. She`s got -- she does what a lot of reporters do and a lot of writers do. She acts like she`s sitting there, you know, and she`s Michelle Obama when she hasn`t talked to her. She`s reconstructing it from other people`s accounts. And I do think that`s dangerous. I also want to say, I admire the first lady, and I have that in common with the rest of the country. She`s one of the most admired women in America. So, this notion that the right has -- she`s right behind Hillary Clinton and Oprah Winfrey. This notion that people are not going to like her if they know her and that they can damage her is kind of ridiculous. We love her. And I just wish she wouldn`t fight down. I wish she wouldn`t dignify people by responding to some of the garbage thrown at her.

MATTHEWS: The interesting thing, Governor, is that she never said, nor did he, Barack Obama, as a candidate, you get two for the price of one. There was never any presentation, if you will, of the two of them as political partners, as Hillary Clinton certainly has been for all these decades with her husband, Bill. They are political partners, both political players, if you will. She`s sort of been somewhere between Laura Bush, a more recessive personality and someone a bit more modern, if you will, but also not trying to run the West Wing in any way as a co-president. I`m trying to find a way, the right way to say it. But I think she`s trying to be very subtle about the role she`s drawn for herself.

ED RENDELL, MSNBC ANALYST: Yes, I think that`s true, Chris. I think she`s actually been the antithesis of the angry African-American woman or the angry first lady. As Joan said, she`s been portrayed and she is, a very happy, upbeat, optimistic person who Americans love. Her Move It campaign is terrific. It`s an inspiring. I`ve been with her at a couple of speeches she`s made on it. And, boy, she lifts the crowd. And people love her. So, I think this is all inside baseball. It`s not going to have the slightest effect on the campaign or the slightest effect on her image. Her image is great.

MATTHEWS: I just wish they`d give us more interviews with her, to be honest with you, Joan.

RENDELL: Sure.

MATTHEWS: I`d love to have her on this program for a half an hour, an hour. I love to do a college campus with her and go -- are they listening? Go to a college tour and have her talk to the students. I think she`d be a wow.

WALSH: It would be.

MATTHEWS: And "New York Times`" Jodi Kantor portrayed contentious relationships between the first lady and many White House staffers, especially chief of staff Rahm Emanuel, who`s no longer there. He`s now mayor of Chicago. Quote, "Her strains with the advisers were part of a continuing debate over what sort of president Mr. Obama should be. With Mrs. Obama reinforcing his instincts for ambitious but unpopular initiatives like the overhaul of health care and immigration laws, casting herself as a foil to aides more intent on preserving congressional seats and poll numbers." So, Joan, you and I had these discussions a million times. Should Obama be more aggressive, more historically transformational president? Or should he do what`s more practical, protect his power and get done what he can? This is as old as anything. Why wouldn`t they have these discussions? I mean, it seems to be the most normal thing in the world.

WALSH: It`s the most normal thing in the world. And it`s an important tension. And, you know, I`m reading the book now. I haven`t finished it. But my feeling reading the book is, I`m so glad she`s there. She has his back. And honestly, I think she has our back. You know, she really is representing the higher ideals and the transformational goals and the values that this president has that can sometimes get lost in the day-to-day shuffle of politics. So, there`s nothing unseemly or untoward about it.

MATTHEWS: Yes.

WALSH: And she`s also a woman who had her own career who is now being, you know, kind of shuffled around and told to do this and that, stand there. And that`s got to be disconcerting, too. Who would adjust to that?

MATTHEWS: I only want her here. Please sit here. Madam First Lady, we want you sitting here. We`ll come to you, obviously. Thank you –

RENDELL: And we were in Pennsylvania, Chris.

MATTHEWS: I think anybody who cares about the Democrats success this November want her everywhere. Governor Rendell, thank you, sir. And thank you, Joan Walsh. When we return, "Let Me Finish," with whether what`s good for the Romneys is actually good for America. That is the question. You`re watching HARDBALL only on MSNBC. (COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" with this: There was something startling about Romney`s appearance last night. It was less a victory speech on a primary night, more a restoration. In presenting himself and his family, the former Republican governor of Massachusetts, seemed to be confronting the American people with a fait accompli saying, take a good look at us. We`re here to take the country back. What they are doing, Romney and his advisers, is fairly clear. They are offering the American people a comfortable picture. You want it all back -- the economy of the 1990s, the profits, the new house, the high net worth, the new gadgets of the communications age, the brilliant outlook for your kids, the security your older parents felt? You want that gleaming positive feeling back that we knew before hell hit? I`m here to show it to you to see how our well-off family of mine is doing. See how attractive and successful we look. See the self-confidence and gleaming good light that shines forth from us? That`s what I`m bringing back to America. That`s what I am to you -- the promise of the same good life for you and yours. Pretty stunning, isn`t it? And it`s all protected in this armor that says, don`t get caught up in this politics of envy. Don`t be thinking that what`s been good for us isn`t going to be good for you down the road. Don`t vote for someone who says those wealthy Republicans have built up their wealth by unfair tax policies. Don`t resent us because we`re rich and well-off and worry-free. Elect us because we`re successful at business because you`ll get the benefit of the same thing. Well, what we see here is really what the Republican campaign will be all about. It will be people being asked to believe that what has been good for the Romneys will be good for you. Vote the way they ask you, and you will be as well off as them -- or something like it. And that`s HARDBALL for now. Thanks for being with us. "POLITICS NATION" with Al Sharpton starts right now.

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