updated 1/19/2012 5:39:50 PM ET 2012-01-19T22:39:50

Guests: Mark Halperin, David Corn, Brian Sullivan, Bob Shrum, Joan Walsh, Donna Edwards, James Peterson, Michael Hastings

CHRIS MATTHEWS, HOST: Can Newt beat Romney?

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington. Leading off tonight:
"Dirty," "dishonest," and "desperate." Newt Gingrich knows that the South
Carolina primary is like those old signs in the desert, "Last gas for 400
miles." If he can`t stop Mitt Romney here, he won`t stop him anywhere.

So today Newt did what Newt does. He got nasty. He called the Romney
campaign "dirty," "dishonest," and "desperate." Team Romney is getting
nervous, and Newt knows it.

On the subject of Mitt and taxes, it`s not really Romney`s fault, you
could argue, that he pays an effective tax rate of only 15 percent. Those
are the rules. But it`s also true that Mitt wants to change the rules. He
wants to tilt the playing field even more toward the wealthy. And it
doesn`t help when Mitt refers to the $374,000 he made a year making
speeches as, quote, "not very much." It`s seven times, Mitt, the average
family income in this country.

Also, you don`t have to be an Airedale to hear the racial dog whistles
in this Republican race. Can this kind of thing really work in 2012, or
are the Republicans playing a dirty game well past its sell-by date?

And remember Michael Hastings, the journalists whose reporting led to
the firing of General Stanley McChrystal? Well, he`s out with a new book
saying that where once President Obama used to get pushed around by the
Pentagon, he`s the one doing the pushing now.

And "Let Me Finish" tonight with the robotic nominating process that`s
moving toward Romney.

We start with Gingrich versus Romney. Mark Halperin is an MSNBC
senior political analyst and "Time" magazine editor-at-large, and David
Corn is an MSNBC political analyst and Washington bureau chief for "Mother

Let`s take a look, gentlemen, at the new numbers just come -- new
numbers just out from "Time" magazine, "Time" and CNN. And the Opinion
Research do show a new rise for Newt Gingrich there in South Carolina.
This poll was taken from last Friday through Tuesday of this week. But
he`s gained 5 points from early this month, while Romney has dropped 4
points. Gingrich has a decent edge over conservative rival Rick Santorum.

Mark, you`re a student of these numbers. I`m just wondering if you
can see a projection from here until Saturday morning that could allow for
Newt to overtake Romney and win that all-important South Carolina primary.

could. I think he could also come close enough that if his team is deft
enough in spinning it, he could go into Florida with an effective one-on-
one matchup with Romney over -- for 85 percent of the vote.

The trajectory is good for him. As you point out, the poll was done
through Tuesday. That debate performance that was strong or Gingrich was
Monday, so most of the poll doesn`t have that in it. And Gingrich is doing
well now. He`s focused. He`s driving a pretty good message.

I`d say the biggest unknown we have besides the debate tomorrow night
is the television advertising. It`s not really clear right now who`s on
the air with what, who has what money to spend. But I think Gingrich is
set up as right now, today, the only one who can stop Romney in this
primary and maybe for the nomination. It`s still a long shot, but I do
think it`s possible.

MATTHEWS: How much do you think, or you know, probably, of the South
Carolina Republican electorate who voted in these primaries are hard right,
people who really want to vote tough right?

HALPERIN: Well, it depends how you break that down. There is tough
right on social issues. There`s tough right anti-Obama. There`s a fair
amount of establishment Republicans. Remember, the person who`s won this
primary every time in the modern era since Bush 41 has been the
establishment candidate, not necessarily the most hard-right candidate.


HALPERIN: Romney has that right now. It`s also been won by the
person who`s been the most deft in negative politics. I think most of
that, if it`s going to happen, is still to play out.

MATTHEWS: OK. Interesting. Is that your view, David, that it`s
still a plus for Romney because they tend to want to vote for the winner,
it`s fair to say?


MATTHEWS: Who`s going to be the nominee.

CORN: ... I mean, McCain won, I think, with about 34 percent of the
vote last time, and he wasn`t the far-right candidate. So South Carolina
has a reputation of being conservative, but they also -- they are prey to
the people with the most resources who get the nastiest.

And I think Mark is right. The thing to pay attention to in the next
few days is not the debate that`s going to come Thursday night. We can
expect that Newt will do well. Maybe Romney will do a little bit better
than the other night and be feistier. But what`s going to happen on the
ground with campaign ads and also with push-polling and all these other
techniques that they do so well in South Carolina right up to Saturday.

Newt got a justifiable bounce from his dog whistle performance on
Monday night, but I`m pretty damn sure that the Romney empire will be
striking back hard in the next couple days.

MATTHEWS: Yes, they`re bringing in Sununu. They`ve already brought
in Chris Christie.

Let`s take a look at this. Gingrich predicted a nasty campaign, as
you said, from Romney between now and Saturday`s primary. Let`s listen.


fully expect the Romney campaign to be unendingly dirty and dishonest for
the next four days because they are desperate. They thought they could buy
this. They`re discovering they can`t buy this.

I think they`re now going to have -- I think they have internal polls
that show them losing, and I think they will do anything at any level. And
I need your help. People power will beat money power, and I need your help
to beat Romney!



MATTHEWS: What a great opportunist. People power. There he is, Newt
Gingrich, the man of the people!

Today in Spartanburg, South Carolina, Romney took on Newt Gingrich, as
Gingrich predicted. Let`s watch.


disappointed over the last couple of weeks to see one of my opponents
attacking free enterprise, just like the president was. That`s -- that`s
not the role of the Republican Party. That -- that makes us sad.

Actually, you know, the speaker the other day at the debate was
talking about how he created millions of jobs when he was working with the
Reagan administration. Well, he`d been in Congress two years when Ronald
Reagan came to office. That`d be like saying 435 congressmen were all
responsible for those jobs.

Government doesn`t create jobs! It`s the private sector that creates


ROMNEY: Congressmen taking responsibility or taking credit for
helping create jobs is like Al Gore taking credit for the Internet.



MATTHEWS: You know, that`s another Stu Spencer (ph) line, the
Internet. They don`t come from Romney. What do you think, Mark? Do you
think he cooks up those Lucille Ball lines, and Kardashian lines himself?
I don`t think so.

Let me ask you about this thing here. David I were just talking.
This is an interesting word here. He said that makes us "sad." Now, is
that the way he thinks, that when somebody trashes venture capital firms or
equity firms, that makes us "sad"? And who`s the "us," Mark. He is now
speaking in this sort of regal, second -- what do you -- what are we
talking here? Is he talking about the plural "we" now, the "us,"
(INAUDIBLE) what is he talking about, the party? What`s he talking about
when he says, "That makes us sad"?

HALPERIN: You`re going to have to spend a little more time getting --
learning to appreciate the comedy stylings of Mitt Romney because they may
be with us for a while.


HALPERIN: He is sad by that. That, I think, is a genuine reflection
of his heart. He thinks lovers of America and lovers of capitalism are sad
when people run down capitalism.

I think the fact that he went after Gingrich today -- they did a
conference call about him this morning with Susan Molinari and Jim Talent,
two former members of Congress who served with Gingrich. They`re clearly
worried to some extent.

I don`t think they have polls showing themselves behind, but there`s
some real question of, again, as I said before, what if it`s 32-26? Does
that give Gingrich the ability to go to Florida, forcing Perry and Santorum
out of the race, and having Romney along with Ron Paul one on one?

That`s a potentially dangerous situation. They`ll have more resources
than here (ph). They`ll have more resources then in Florida, but Romney
one on one against Santorum or Gingrich, there`s a bit of an X factor there
that they`d rather not see. They`d rather leave here with a strong enough
win that no one goes to Florida strong but Mitt Romney.

MATTHEWS: And you`re talking about the new Florida, the Rick Scott
Florida, the Florida of the last election, more Tea Party than in the past,
right, a much more rightist party.

HALPERIN: Well, and it`s a closed primary. It`s only Republicans.
And you know, it wasn`t that long ago that Gingrich was way up in Florida,
overwhelmingly. Now our poll today, the "Time" poll, has him -- has Romney
up by a lot, but the number could bounce back again if Gingrich has a
performance here that he can spin.

I can`t emphasize enough his campaign has not always taken advantage
of victories. Rick Santorum has not done that, either. If they do well
here, they need to take advantage of it to go to Florida and have a chance.

MATTHEWS: Let`s take a look at Sarah Palin, who`s always newsworthy.
The game changer herself said on Fox last night, where she works, that if
she lived in South Carolina, she`d want this primary fight to continue.
Let`s listen to her reasoning here, Sarah Palin`s.


South Carolina, in order to keep this thing going, I`d vote for Newt. And
I would want this to continue -- more debates, more vetting of candidates
because we know the mistake made in our country four years ago was having a
candidate that was not vetted to the degree that he should have been, so
that we know -- knew what his associations and his pals represented and
what went into his thinking, the shaping of who our president today is.
That vetting did not take place.

I want to see that taking place this time because America is on that
precipice. It`s that important. We need this process to continue.


MATTHEWS: She wants to see if Newt -- Mitt Romney may turn out to be
a Barack Obama, after all.

CORN: Well, when she said -- when she said we didn`t have enough
vetting of the candidate last time, I thought she was talking about


CORN: I mean, does she not remember she was on the ticket, she wasn`t


CORN: ... and that`s why the Republicans -- one reason why the


CORN: ... lost?

MATTHEWS: But the fact is, she`s entered into this process. Will her
endorsement of keeping this process going by voting for Newt Gingrich

CORN: It`s a semi-endorsement. She said -- you know, her husband
fully endorsed Newt Gingrich. She won`t do that. I think she has lost a
lot of the pull she had. I imagine a lot of her voters are already with
Rick Santorum, maybe with Newt Gingrich, some with Ron Paul, and that she
doesn`t have much persuasive powers over the electorate at this point in

MATTHEWS: OK, there`s sniping among conservatives down there about
who could best take on Romney and the Democrats continue on the trail again
today. Here was Gingrich this morning addressing the field of Republican


GINGRICH: If conservatives come together, we beat Romney decisively.
If conservatives are split, he might squeak through with a plurality. So
I`m trying to get every conservative voter in this state to decide that
while they may like somebody else, that historically, we need to get the
vote for Gingrich.


MATTHEWS: And here`s another view. Not to be outdone, Rick Santorum
also lashed out at Gingrich this morning, passing the punch back to him.
Let`s listen.


in this race has ever beat a Democratic (INAUDIBLE)


SANTORUM: The hubris, and I might even go so far as to say the
arrogance, of Speaker Gingrich to suggest that I don`t have the experience
to run a campaign, to win a national campaign, having won four elections in
four heavily Democratic districts and states -- he ran in one of the
heaviest Republican suburban districts of Georgia with diversity being
nonexistent in his electoral plans.


MATTHEWS: Well, he is getting strong there. Let me ask you, Mark,
about this possibility, that we have a hard count tomorrow morning coming
out of Iowa. They`re actually counting the precinct written reports to be
certified. If it comes out that Santorum actually did out-point, get more
votes in those caucuses a couple weeks ago than Romney, will it matter?

HALPERIN: Again, I don`t want to create a misleading impression of
what I think. Romney is overwhelmingly the favorite to be the nominee. In
the short term, I think he is still the favorite to win in this state and
effectively end it.

If you`re putting together a scenario where that doesn`t happen, I
think -- you know, I think Santorum is going to have to really have a
strong debate and other things to occur to have him be the alternative.

But if you have a combination of more polling showing Gingrich strong
in South Carolina, Romney losing the ability to argue that he won the first
two contests, and a strong debate performance by Gingrich, weak debate
performance by Romney, that all sets up, I think, again, for Gingrich,
negative for Romney. But I don`t think Santorum being declared the winner
is enough to revitalize his prospects in this state overall, but it could
be bad for Romney.

Conservatives and others who want to stop him will look at that and
say, Holy cow, we`re crowning a guy -- assuming he loses South Carolina
hypothetically -- We`re crowing a guy who won his adopted home state and
lost the first other two contests in the South and in the Midwest.

MATTHEWS: Yes, and I wonder how the lemmings in the Republican
electorate -- they`re not all lemmings, but the ones who are -- will say,
Wait a minute, I`m supposed to vote for the guy whose turn it is who has
won the first two. But wait a minute. He didn`t win the first two? How
am I supposed to vote for him? Do I still vote for the guy that won the
first one and the third one? And if I don`t vote for him in the third one,
as you point out, Mark, he will have lost 2 of 3. They get very confused
in terms of this automatic, robotic kind of voting here, of voting for the
guy simply because he got voted for.

CORN: There is one problem.


CORN: And that is that the...

MATTHEWS: I think I got...


CORN: The alternative may be Newt Gingrich.


CORN: I mean, if it was anybody with, like, one tenth of that

MATTHEWS: I think you`re picking a point. But we`re going to get to
Newt Gingrich`s problems wholesale here.


CORN: I`m sure you will!

MATTHEWS: We`re going to (INAUDIBLE) It`s a great irony that we like
a fight, even if we don`t like one of the contestants. Anyway, Mark
Halperin, sir, thank you. Great analysis. Thank you, David Corn.

HALPERIN: Thanks, Chris.

MATTHEWS: Coming up: Mitt Romney admits he pays an effective tax rate
of -- wouldn`t you like to pay this rate? -- 15 percent. That`s it, 15
cents on the dollar. He wants to cut taxes on the rich even more and get
it below 15. That`s a pretty good deal for a guy that owns maybe a quarter
of a billion dollars. This story isn`t going away, and it could prove to
be Mitt`s biggest Achilles heel, should he be the nominee up against
President Obama. That`s ahead.

You`re watching HARDBALL, only on MSNBC.


MATTHEWS: The Obama administration has rejected that controversial
Keystone oil pipeline project, a decision being hailed by
environmentalists. Well, the $7 billion pipeline would have carried oil
from Canada to refineries down in Texas. Supporters said it would have
created jobs and helped wean America off Mideast oil. But the Republicans
in Congress mandated that the president make a decision on the project by
late next month, a deadline administration officials said doesn`t leave
enough time for environmental reviews.

We`ll be right back.



ROMNEY: What`s the effective rate I`ve been paying on -- it`s
probably closer to the 15 percent rate that I think is my last 10 years. I
-- my income comes overwhelmingly from investments made in the past. I get
a little bit of income from my book, but I gave that all away. And then I
get speakers` fees from time to time, but not very much.


MATTHEWS: Welcome back to HARDBALL. Mitt Romney there, in what
appears to be an off-the-cuff remark about his income and taxes, has laid
bare what could be his greatest political vulnerability this year, his
immense wealth, his low tax rate, and the fact that his tax plan, the one
he`s putting forth right now, would benefit rich people like him.

The most (ph) based on Romney`s comments yesterday, the left-leaning -
- based on it, the left-leaning Think Progress organization is out with a
"wanted" poster now -- there it is -- for Mitt, calling him the "tax
loophole exploiter-in-chief."

And the progressive PAC American Bridge 21st Century made a new Web
video. Let`s watch.


ROMNEY: I got a little bit of income from my book, but I gave that
all away. And then I get speakers` fees from time to time, but not very


ROMNEY: And then I get speakers` fees from time to time, but not very


ROMNEY: But not very much.



MATTHEWS: Well, will Romney`s tin ear on wealth fit perfectly into an
Obama campaign strategy to emphasize the president`s defense of the middle

Bob Shrum is a Democratic warrior. Joan Walsh is editor-at-large of
Salon. Bob, you`ve been through these wars before with Romney, and you had
a pretty good candidate in Ted Kennedy, and you walloped the guy in the

This -- let`s talk about the facts. What do you think bugs the
average voter who`s going to vote next November most, the fact that the guy
is just simply worth so much money -- that bothers some people, not
everybody. He`s worth about a quarter billion, it looks like -- the fact
that he`s paid somewhere around 15, perhaps less, he says "close to," could
be closer to the -- it could be closer from below than you think, than he`s
willing to suggest, or that he`s for a tax break that`s even greater for
the rich?

You put all three together, what -- individually, what bugs people the

BOB SHRUM, DEMOCRATIC STRATEGIST: I don`t think the first thing
particularly bugs people. Look, the Kennedys were rich. The Roosevelts
were rich. People had the sense that they cared about them, that they
fought for the middle class, that they tried to create a society of greater
economic justice.

What you get with Mitt Romney is not only someone who pays close to 15
percent -- and by the way, I`ll bet that may be under 15 percent.

MATTHEWS: Yes, he didn`t say it was above.

SHRUM: Right. And I also will bet they`ll only release one year,
2011, that they can engineer to the needs of the campaign.

Obama`s released his all the way back to 2002. We need to see all of these
to see if there were years where he didn`t pay taxes at all.

I think it does bug people. And when you combine it with the gaffes
that keep on giving -- and that`s Romney`s style -- he`s becoming the face
of the 1 percent. And in that sense, he may be the strongest of a weak
Republican field, but he could turn out to be an ideal foil for the
president and for the argument he`s making about standing up for economic

MATTHEWS: Joan, it`s like he speaks another language that he`s been
told not to use. And I`m not talking about French, which is fine with me.


MATTHEWS: Actually, I like French. It`s a beautiful language.


MATTHEWS: But he seems to speak a language of incredibly wealthy
people who really do think in terms of the fact that $350,000 a year is
chicken feed, when in fact it is seven times the national average. I know
compared to the $250 million he owns, it may be small.

WALSH: Right.

MATTHEWS: But it`s huge. And when you`re talking the public, where
people are struggling, the working poor in this country, for example, hear
that, they go, what is he talking about?

WALSH: The working poor, the middle class. My favorite part of that
clip is when he kind of giggles at the end, like it`s not very much.



WALSH: Is he giggling because he knows he is lying or is he giggling
because he really means it; it`s not very much? His speaking fees alone,
Chris, put him in the top 1 percent of all income earners, as income.

That in itself is unbelievable. And then there are the millions and
millions of dollars on top of that. So Bob is right. He is really the
perfect candidate for this political and economic climate.

And by perfect, I mean great for the Democrats. He is Mr. 1 percent,
and increasingly every time he opens his mouth he says something really
stupid about issues of class and wealth and inequality in this country. He
can`t get it right.

MATTHEWS: Well, let`s take a look at some of those comments he`s
made. You could call them in sports terminology unforced errors in the
campaign, most having to do with wealth. Let`s listen because there is a
pattern here. Let`s face it. Let`s look for it.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Corporations are people, my
friend. We can raise taxes on -- of course they are.

I know what it`s like to worry whether you`re going to get fired.
There were a couple times I wondered whether I was going to get a pink

ROMNEY: Rick, I will tell you what, 10,000 bucks, $10,000 bet?

betting business. But...


I want individuals to have their own insurance. That means the
insurance company will have an incentive to keep you healthy. It also
means that if you don`t like what they do, you can fire them. I like being
able to fire people who provide services to me.


MATTHEWS: There is something there. I am not -- you know, let`s
start with you, Shrummy.

I know you have written ads for people. And there is something in the
way I guess you would call it his idiom, his way of talking, that it sounds
like appropriate to a boardroom meeting with a bunch of other wealthy guys
or in Winnipesaukee with some other corporate leaders, where you can talk
like that, maybe the New York Athletic Club years ago when they talk about
I love to see the -- what is it, I love to see the workers work or
something like that.

It`s a condescending -- I don`t know whether it`s nasty exactly. It
just doesn`t sound right to a guy who is trying to get people to vote for


Look, he walks with millionaires and billionaires and he lacks any
sense of the common touch. When you listen to him for example saying he
likes to fire people, they try to explain it away by saying, well, he is
talking about health insurance companies.

He doesn`t even understand that the problem in this country isn`t that
people can`t fire their health insurance companies. It is that their
health insurance companies fire them when they get sick.


WALSH: Right.

SHRUM: And they`re left all on their own maybe with a terminal

But I think what`s happened is that Stuart Stevens, his consultant,
has very tightly scripted him.

MATTHEWS: So well.

SHRUM: That is mostly what we have seen in the debates. Every time
he gets off the leash, he goes out there and says one of those things that
I think reveals a lot about who he really is...

MATTHEWS: Well said.

SHRUM: ... and who he really cares about.

MATTHEWS: And when are we going to get a good look at that, Bob?
When are we going to get a full salvo of the real Mitt, not just a guy who
is 95 percent scripted with things like Lucille Ball and Bigfoot and the
Kardashians, all written by Stu Stevens, obviously? And then when he does
stuff off the cuff, it`s this horrible old big shot talk.


MATTHEWS: ... if that`s the right word, it`s something like old money


SHRUM: I think assuming he wins the nomination, the debates with
Obama are going to be very tough for him, because he`s not going to get
away for example on Bain Capital with saying how dare you attack the free
enterprise system, because it is not that Bain didn`t have some successful

The question he won`t answer is how there were companies that failed
even if they got a federal bailout where everybody got laid off and he,
himself, and his partners made tens of millions of dollars?


WALSH: Right.

SHRUM: That is the question he has to answer because it is vulture


Last word, Joan, quickly. Your thoughts about the idiom. What is
worse about the guy, when he says stuff that isn`t true or says stuff that
really is true to him? I mean, I got to wonder.


WALSH: They`re both terrible.

And I just want to say his father was the first to release his tax
returns. He released 12 years of tax returns. So if Mitt wants to be just
half the man his father was, he can release six. And then we can see what
kind of tax loopholes he is taking advantage of. That is my compromise
proposal for Mitt Romney.

MATTHEWS: Anyway, good work on that Kipling reference there, Bob
Shrum, about walking with millionaires and keeping the common touch. What
a poetic guy you are.

Anyway, thank you, Bob Shrum.

SHRUM: Thank you.

MATTHEWS: Thank you, Joan Walsh.

SHRUM: Thanks, Joan.

WALSH: Thanks.

MATTHEWS: Up next: Chris Christie didn`t want to run for president
himself but there is one job he would jump at. And that`s next in the
"Sideshow." Now, there`s a regular guy.

You`re watching HARDBALL, only on MSNBC.


MATTHEWS: Back to HARDBALL. And now for the "Sideshow."

First up: Governor Chris Christie of New Jersey still won`t say
whether he would accept an offer to be Mitt Romney`s running mate. Well,
Christie says he isn`t anxious to leave his post in New Jersey, but if you
heard him this morning there is one job that wouldn`t have Christie
thinking even twice about skipping town.

Let`s hear what he had to say earlier today on "MORNING JOE."


WILLIE GEIST, MSNBC ANCHOR: Your next project is to turn around the
New York Mets.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Pitchers and catchers report.
I`m in physical pain over that, physical pain.


GEIST: Even you couldn`t turn around the Mets at this point.

CHRISTIE: Well, don`t say that now, Willie.

Mr. Wilpon, my number you have got it. Give me a call.

General Manager Christie.

Let me tell you something, the people of New Jersey, I have got to go.
I have been offered the general managership of the Mets. It`s time for me
to move on.



MATTHEWS: What`s he talking about? Anyway, he`s talking Northern New
Jersey there.

Anyway, I guess that is the fire in the belly he has missing or
certainly had missing when he decided not to run for president this time.
I think he would have been a heck of a candidate.

And more from the politics and sports front. Former NBA star Kareem
Abdul-Jabbar was appointed by Hillary Clinton today to a cultural
ambassadors position. In his new role, the basketball legend -- he`s got
so many records, that guy -- will travel the world to mentor young people
in many different areas of the world, including education.

The high-ranking Clinton, by the way, found herself in a somewhat
lower position this afternoon I should say physically as she made the
appointment official. Let`s watch this comparison of heights here.


you have agreed to do this. I know you will be going to Brazil later I
think in the month.

And what a great opportunity to meet with and talk to young people.
It`s a great story that you not only tell, but exemplify, from the streets
of Harlem to the NBA and all that you`re doing with your foundation, which
we also think is terrific.


MATTHEWS: Well, I have to brag a little here. Kareem actually
watched me and my friends play basketball once. We were outside at the
outdoor basketball court up at Holy Cross. He stopped by in his car,
looked out of the window. We all looked over and said, there he is. He
might go to this school. He went to UCLA instead.

Up next: When Newt Gingrich calls Barack Obama a food stamp
president, he knows exactly what he is doing. Everybody watching knows
what he is talking about. It`s called code, racial code to appeal to a
certain type of unpleasant voter. And he is not the only Republican doing
this stuff this year, talking this language.

You`re watching HARDBALL, only on MSNBC.


"Market Wrap."

The Dow closes up 97, the S&P 500 up 14, closing above 1300 for the
first time since July. And the Nasdaq is up 41. Fourth-quarter earnings
from Goldman Sachs beat lowered expectations. The investment bank cutting
compensation by 21 percent helped offset a slowdown in trading. And a
short time ago, online auction site eBay reported earnings and revenue that
exceeded most estimates. Shares are indeed higher in after-hours trading.

That is it from CNBC, first in business worldwide -- now back to

MATTHEWS: Welcome back to HARDBALL.

One of the biggest stories from Monday night`s big debate was Newt
Gingrich`s exchanges about race with debate moderator Juan Williams.
Gingrich`s comments at the debate weren`t the first time in this political
cycle that a Republican presidential candidate used what many believe to be
and I believe to be racial code or dog whistle to appeal to a certain type
of voter. Let`s watch.


most successful food stamp president in American history.


people`s lives better by giving them somebody else`s money. I want to give
them the opportunity to go out and earn the money.

state of -- of Texas is under assault by federal government. I`m saying
also that South Carolina is at war with this federal government and with
this administration.


GINGRICH: If the NAACP invites me, I will go to their convention and
talk about why the African-American community should demand paychecks, and
not be satisfied with food stamps.


MATTHEWS: Well, talk -- we`re -- joining us right now are a couple
people to talk about these statements, Congresswoman Donna Edwards from
nearby Maryland here. She represents an area right near Washington. And
Professor James Peterson is director of Africana studies at Lehigh.

Thank you both for coming.

I am going to sit back. I had my say on this last night. It`s your

The dog whistle, I said in the opening you don`t have to be an
Airedale to hear this dog whistle. It is loud and clear.

Your thoughts, Congresswoman?

REP. DONNA EDWARDS (D), MARYLAND: Well, Chris, that`s what I think.
It is not a dog whistle or a code anymore. It`s plain as day.

And I think the American people get this and we don`t want to take a
50-year step back in history. And that`s what these Republican candidates
are doing. I think frankly that they`re doing it because they want to take
us off the fact that there is great income inequality in this country and
they`d rather divide poor white people and poor black people and middle-
income black people and middle-income white people, instead of focusing on
the fact that we need to create jobs in this country and opportunities,
because far too many people are on food stamps because of the bad policies
and the dangerous policies of the Republican Party.

MATTHEWS: Professor?

JAMES PETERSON, LEHIGH UNIVERSITY: I agree with that wholeheartedly.
This is the politics of distraction for sure.

And my sense here is that we -- kudos to you, Chris, for the "Let Me
Finish" segment last night, because we`re going to need more allies in this
battle to sort of confront some of the ways in which Republican politics is
embracing these racialized discourses.

If you about it for a second, Juan Williams has kind of been the
punching bag on NPR, a crazy soldier. For him to come in and for Mr.
Williams to be disrespected in that way and for there to be so much of a
robust applause for the dismissal by Speaker Gingrich of the idea that
someone might be offended by being sort of implicated in their sort of
racial organization of how food stamps are applied in this country is
really absurd.

MATTHEWS: Well, if you think -- if you think I am intimidating
Gingrich, we`re all wrong. Here he is actually trying to capitalize off
that exchange with Juan Williams on Monday.

PETERSON: Unbelievable.

MATTHEWS: Take a look at the latest Gingrich ad. It is called "The


NARRATOR: Only Newt Gingrich can beat Obama.

GINGRICH: More people have been put on food stamps by Barack Obama
than any president in American history.


GINGRICH: I`m going to continue to find ways to help poor people
learn how to get a job, learn how to get a better job, and learn some day
to own the job.


GINGRICH: I`m Newt Gingrich, and I approve this message.


MATTHEWS: You sure do.

And here is some evidence that Gingrich`s tactics we have been talking
about may be working in South Carolina. Listen to this exchange from a
Gingrich event earlier today.


UNIDENTIFIED FEMALE: I would like to thank you, Mr. Speaker, for
putting Mr. Juan Williams in his place the other night.


UNIDENTIFIED FEMALE: His supposed question was totally ludicrous.
And we support you.

GINGRICH: Thank you very much.


MATTHEWS: Well, there is old-time language, guys, Congresswoman, put
him in his place.

EDWARDS: Well, again...


MATTHEWS: I don`t know who -- Scarlett O`Hara country here. I don`t
know what we`re talking here, in place, uppity. I`m waiting for the uppity
word to show up here.

PETERSON: It`s coming.

MATTHEWS: And it`s coming.

EDWARDS: Well, Chris, you know it`s coming. You know it`s coming.
Here`s the reality.

Across this country, Speaker Gingrich knows full well that the reason
that so many people are on food stamps in this country is because we
haven`t done what -- the Republicans in this Congress haven`t actually put
forward a single jobs bill to get people back to work.

More people are receiving food stamps, whether they`re black or white
or anything in between, because people are struggling. And we want to make
sure that they have the ability to take care of themselves and their

And so this is not an accident that the Republicans who are desperate
for a nomination are using this to win in a Republican primary, but I`m
going to tell you something. This is not a loaf of bread that`s going to
sell anyplace else in this country.

MATTHEWS: You know, Professor, let me just tell you as a broadcaster
and a political student, I have to tell you I haven`t heard the phrase food
stamps in years.


MATTHEWS: In political discussion. It`s not something that most
middle class people fortunately don`t have to deal with that often because
they don`t rely on them. If you`re poor, you certainly do. If you`re
below the poverty line, you`re eligible. We know all that.

But it`s not like a conversation, like talking about the Redskins or
the Eagles or talking about politics or who is winning this, or the
conversation you have normally in politics about the economy or how things
are going or who is doing well. You don`t bring it up except for one

PETERSON: Exactly.

MATTHEWS: I don`t know anybody else that brought it up in this
campaign except Newt. And why he did it I think is transparent.

PETERSON: It is absolutely transparent. Mr. Gingrich is aware of
the fact almost 60 percent of the people receiving this kind of assistance
are white folk which is fine. We don`t want to play into this sort of
racialized politics here.

But the bottom line is he is also a student of history, so he knows
the ways in which history -- in history, we`ve discussed some of these
things and they have been racialized, particularly welfare and food stamps.

MATTHEWS: Welfare queen.

PETERSON: Exactly.

MATTHEWS: Ronald Reagan -- excuse me for using an old-time phrase,
I`m not even sure Reagan came upon it, young buck.

PETERSON: Exactly.

MATTHEWS: Coming in the line at the Safeway with food stamps to buy
gin with. I mean, that was pretty graphic to put it likely.

PETERSON: Gingrich understands all of that and it`s political
cowardice, Chris, because the bottom line is he`s playing to the basis
elements of a sort of minority even within his own party.

MATTHEWS: I agree.

PETERSON: Listen, the idea that you would have to lecture black folk
who are descended from enslaved people in this country about work ethic is
offensive. It`s offensive to my family, to the people who are in my
community, and people all over this country. We cannot conduct American
politics in this way.

MATTHEWS: How about 250 years without pay?

PETERSON: How about that?

MATTHEWS: Is that right? How about that?

Thank you. U.S. Congresswoman Donna Edwards, I`ve always been a big
supporter of yours actually, and I`m proud to say.

And, Professor, it`s great to know. James Braxton Peterson of the
great Lehigh University, a member of the Patriot League and great rival of
Holy Cross there.

Up next, President Obama is no longer getting pushed around by the
Pentagon. It`s an interesting story coming up. Really interesting, inside

Instead he is the one doing the pushing. He`s the commander-in-
chief. In fact, very interesting development we haven`t known about
according to a new book by journalist Michael Hastings. He`s the guy who
blew the whistle on McChrystal. This is going to be a fascinating

This is HARDBALL, only on MSNBC.


MATTHEWS: New poll numbers on the presidential race should Mitt
Romney win the Republican nomination. Let`s check the HARDBALL scoreboard.
Again, nationwide, here it is. President Obama is ahead of Romney 49 to
44. That`s nationwide. That`s not bad. That`s a five-point spread.
That`s according to the new PPP poll. It`s a five-point spread as I said.

But look at the key battleground state of Ohio. Obama and Romney are
much closer in the Buckeye State. There, Obama up by two. Don`t bet on it
according to a new Quinnipiac poll. It`s Obama 44 and Romney 42, and
that`s within a margin of error.

Keep in mind -- those polls were taken before we learned Mitt Romney
pays an effective tax rate of just 15 percent. I think that would be
called a push poll. Here we go.

We`ll be right back.


MATTHEWS: We`re back. Back in June of 2010, President Obama made a
dramatic decision. He fired his top commander in Afghanistan Stanley
McChrystal after a story in "Rolling Stone" magazine quoted McChrystal and
his top staff criticizing the White House and even making fun of Vice
President Biden himself.

Well, Michael Hastings wrote that story. He`s out with a new book
now about the incident about McChrystal and about the president`s
relationship with the Pentagon. It`s a relationship that has evolved he
argues significantly. The book is called "The Operators: The Wild and
Terrifying Inside Story of America`s War in Afghanistan."

Michael Hastings joins us now.

Thank you very much. I`m very skeptical about that war and is ever
getting where we want to get.


MATTHEWS: I always believed that once we leave, they`re still there.


MATTHEWS: And you can`t affect the time after you leave.

Let`s get to the quotes. One of the quotes you begin your book with
this telling one from former president or late President John F. Kennedy
after the Bay of Pigs fiasco. "The SOBs with all their fruit salad just
sat there nodding saying it would work." He is talking about SOBs are the
top generals and admirals. He said, "Don`t worry we`ll beat the Cubans.
We`re going to do it with our Cuban exiles."

What`s your view of the president now and how he`s evolved from the
time he walked in there?

HASTINGS: Well, I think you can make the argument that Obama had his
Bay of Pigs moment with the escalation in Afghanistan, essentially a young
commander-in-chief comes into office. I have a scene in the book where
literally when he goes over to the Pentagon, the brass he`s meeting with,
the generals, they say he`s intimidated by the crowd. You know, didn`t
have the respect that one would usually have for the commander-in-chief.
Nine months later, they wage a campaign to get as many troops as possible
and box the president in. It`s been that fight.

MATTHEWS: Are the top generals and admirals generally Republican?

HASTINGS: They have been. McChrystal wasn`t but you got to
remember, the last three defense secretaries have been Republican.
Throughout that bureaucracy at the Pentagon, there are Republicans
everywhere. So, Obama is going into hostile territory and how he`s done
that over the two years is I think one of the under reported but --

MATTHEWS: How does a president like that, who`s a center-left guy on
foreign policy -- like I am --


MATTHEWS: -- how does he influence a right wing or center right
military? How does he begin to make it his presidency? He is commander in
chief. He was elected. They weren`t. How does he bring about his policy
with these guys?

HASTINGS: You do it by firing a general. You do it by putting in
your own guy there, Leon Panetta. You do it by getting rid of the other
celebrity general, David Petraeus, who is now over at CIA.

MATTHEWS: Do you think that was purposeful to get him out of the
combat situation?

HASTINGS: Whether it was -- I write about this in the book. The
White House`s fear of Petraeus as president --

MATTHEWS: Well, I fear of it, too, because you keep hearing it from
the American crowd, too.


MATTHEWS: The guys in the middle up in New York.



HASTINGS: No, I think -- I think it`s a very valid fear. Whether --

MATTHEWS: Although it didn`t work with Huntsman very well, did it?


MATTHEWS: No. You give him a job and he comes back and runs against
you anyway.

HASTINGS: Petraeus would probably pull much like 20 times higher
than Huntsman, just by, you know --


MATTHEWS: Let`s take a look at a dramatic moment in 2010 when the
president announced General McChrystal`s dismissal following the release of
your article. Here it is.


the recently published article does not meet the standard that should be
set by a commanding general. It undermines the civilian control of the
military that is at the core of our democratic system. I welcome debate
among my team, but I won`t tolerate division.


MATTHEWS: I think one of the geniuses of our Constitution is that we
made our president commander in chief. I think we`re the only country that
the top military person is our highest elected official, so that the
American people are represented when we go to war. It hasn`t always been
honored. I think sometimes they have been dragged into wars.

But your thoughts about this president. Is this president now in

HASTINGS: I think -- I think he really is. Look, he overruled
Secretary Gates twice on two big operations, Libya and the bin Laden raid.

MATTHEWS: They didn`t want to go in? They didn`t want to lead from

HASTINGS: No, no. Gates did not want to go into Libya. And with
bin Laden, he wanted to do a missile strike.

MATTHEWS: Now, a missile strike would have probably left us perhaps
with the same result except politically, we wouldn`t have known it was him,

HASTINGS: It would have -- yes, it could have been potentially
disastrous to have a missile strike that deep into Pakistan.

MATTHEWS: Because Pakistan would have denied probably it was even
him, right?

HASTINGS: How could you have proven it, right? How could you have
proven it?

MATTHEWS: Yes. And then say we shot into their territory without
their permission. We wouldn`t get the credit in our morale building, which
is very important to us that we got the guy.

HASTINGS: Right. Right.

MATTHEWS: They would still be able to claim he was alive. But by
bringing -- they had to get his teeth and stuff like that to make sure it
was him, right?

HASTINGS: Right. And fingerprints and then they put him in the
ocean. Yes. I mean --

MATTHEWS: But they made sure it was him before the mission was


MATTHEWS: That was the main reason. Catch him, kill him if you have
to, make sure it`s him.

HASTINGS: Right. But that`s the confidence. I mean, this is the
growth and confidence of President Obama in terms of how --

MATTHEWS: OK. This is still disturbing to me. You wrote something
really interesting about the Afghanistan war. You were talking about one
specific offensive in Helmand Province and the question of why we were
fighting there. You said it represents the warped logic of the war.

Well, I think the whole war is warped --


MATTHEWS: -- because you can`t win a counterinsurgency if you are
eventually going to leave. The insurgents will win.

Quote, "We`re there because we`re there and because we`re there,
we`re there some more. It`s against every martial instinct to withdraw, to
retreat, to leave land where blood has been spilled."

Therefore, the biggest challenge to a war -- you go into a country, a
third world country, far off country. Eventually have to come home. But
if you come home, people always say, all that was wasted if you come home.

HASTINGS: And the military doesn`t want to leave. I mean, General
McChrystal just recently said that we`re only halfway there in Afghanistan.
He wants 10 more years.

MATTHEWS: To do what?

HASTINGS: To do what they`ve been doing. You know, the military --

MATTHEWS: Can you kill all the Taliban who dislike you?

HASTINGS: No, you can`t. And every general knows that. And that`s
what Mitt Romney said the other night, that oh, he`s not going to negotiate
with the Taliban. It`s utter nonsense.

MATTHEWS: Aren`t there -- isn`t the Taliban an ideology and,
therefore, anybody can pick up on that ideology and our mere presence there
probably encourages young people to consider it, right?

HASTINGS: Ninety-nine percent of the people we`ve fought and killed
in Afghanistan pose no threat to the U.S. homeland, maybe even more than 99
percent. That is the big lie of this war. That is why we shouldn`t
thereby because it`s not making us safer. And it goes to what you say.

The Taliban are enemies because we`re in the villages where the
Taliban are. The Taliban think they are fighting the Soviets, some of


HASTINGS: They`ve never heard of September 11th. They don`t know
why we`re there. They just see, you know, a couple of white guys walking
through their field.

MATTHEWS: Why did Obama increase the complement of troops in the

HASTINGS: I think he was boxed in. I think he had made a promise on
the campaign trail to focus on Afghanistan. He originally gave 21,000.

MATTHEWS: I know. That`s no excuse to surge.

HASTINGS: I think it`s tough. See, this is where I --

MATTHEWS: I was with Biden on that one. Biden was against doing it.

HASTINGS: Biden is right.

MATTHEWS: Biden says go to counterterrorism. That`s why we there
are to fight terrorists. We`re not there to take over the country, rebuild
the country or fight in its civil war.

HASTINGS: And we`re moving --

MATTHEWS: By the way, I know this sounds awful, but the Taliban are
one of the contending forces in that country, right? But it`s their
country, whatever we think of them.

Anyway, thank you, Michael Hastings. This book is going to be read.
Great book, "The Operators."

Thank you, Michael Hastings.

HASTINGS: Thank you, sir.

MATTHEWS: When we get back, "Let Me Finish" with the robotic -- and
I`m really knocking them -- Republican nominating process. They are acting
like robots, inching towards Mitt Romney without giving it a whole lot of
thought, or any heart. Does anybody really want this guy?

You`re watching HARDBALL, on MSNBC.


MATTHEWS: "Let Me Finish" tonight with this:

Words coming tomorrow morning of the official results of the Iowa
caucus. Mitt Romney says it doesn`t matter who officially won. Does it
matter who won? A competition as people put all those millions of dollars
into that he spent that campaign fighting out there? It doesn`t matter who
won in Iowa? Is that what he`s saying?

Then I thought, you know, Romney`s probably right at this point
because the effect of the word that he did win in Iowa a couple of weeks
ago served its purpose. It saved him in New Hampshire, had Santorum gotten
credit for the win out in Iowa, that caucus night. Romney would have had
to come to New Hampshire a loser, a guy desperate to win at home what he
couldn`t win on the road, needing to at least win at home because the
country at large had rejected him. And that didn`t happen.

Romney got all the benefits of being the winner in Iowa. Next week,
he won in New Hampshire, which made him the winner of the first two
Republican presidential contests. Suddenly, it was his turn. He was the
person that good Republicans were meant to vote for, should vote for.

And this what many who are not Republicans find odd about how
Republicans pick presidential nominees. They just wait for the person
that`s been waiting in line and vote for him. It`s what they did with
Nixon, Reagan, Bush, Dole, Bush, Jr., and then McCain. You vote for the
guy who`s turn it is and leave it at that.

Ask a Republican why they are all of a sudden now telling pollsters
that they like Romney. Could it be simply it`s clear now that he`s going
to be the nominee and therefore that right to do is to support him? Is
that all there is to this?

Again, I ask, what is it, Mr. and Mrs. Republican, that is suddenly
lit up your charts for Romney? That he`s won in Iowa and New Hampshire?
What if it turns out tomorrow morning when you do get the actual people
(ph) count that he didn`t win in Iowa? Would you still be for him or is
the real issue that he waited in line and won credit for winning that first
contest in Iowa and then the easy one in New Hampshire because clearly, no
one would have given a guy who was governor of Massachusetts, spent his
summers in a house in New Hampshire, his own house, and a big credit for
simply win in New Hampshire against a big field of outsiders?

See, this is the odd part. Republicans are voting for a guy in the
national polls right now because it looks like he`s the candidate they are
supposed to. And, therefore, they will. One thing I can say, Republicans
sure don`t act like Democrats. Democrats will tell you they are for the
candidate they actually like.

And that`s HARDBALL for now. Thanks for being with us. "POLITICS
NATION" with Al Sharpton starts right now.


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