updated 2/16/2012 12:25:55 PM ET 2012-02-16T17:25:55

CHRIS MATTHEWS, HOST: Showdown. Let`s play HARDBALL. Good evening. I`m Chris Matthews down in Washington. Leading off tonight: Republican food fight. Remember this classic scene from the movie "Animal House"? (BEGIN VIDEO CLIP) JOHN BELUSHI, "ANIMAL HOUSE": Food fight! (END VIDEO CLIP) MATTHEWS: Great scene. Well, Mitt Romney knows this much. If he loses the first of his five home states -- that would be Michigan -- he will be in big trouble. Big trouble. So Romney`s now trying to do to Rick Santorum what he did to Newt Gingrich, bury him with negative ads. But Santorum is fighting back on Romney`s weak side, his lack of a sense of humor. The Republican food fight is our top story. While the Republicans are knocking themselves out trying to knock each other out, things are suddenly looking unusually good for President Obama. He looks like a winner on the payroll tax and on the birth control fight. His poll numbers are going up, and at least for now, he beats all the Republican candidates for president easily. Plus, a story in today`s "Wall Street Journal" shows just how scrambled the current GOP race has become. The analysis has Newt Gingrich`s human ATM -- you know him, Sheldon Adelson of Las Vegas -- funding Gingrich now to hurt Santorum, in order to help Romney, so that Romney can beat Obama in November. So is it really time for Republicans to act like they`re in a panic? Apparently so. And with Europe planning sanctions to stop Iran`s nuclear program, Iran announces it may cut off oil sales to much of the continent of Europe. And what could that do to gas prices right here that are already high? Finally, "Let Me Finish" with why Romney is beginning to look -- I`m sorry, he`s a dignified guy normally -- he`s beginning to look goofy. We begin with the Republican food fight between Mitt Romney and Rick Santorum. Chip Saltsman was campaign manager for Mike Huckabee`s 2008 presidential campaign. And Joan Walsh is editor of Salon, and is, of course, an MSNBC political analyst. Thank you both. I want you to look at the new polls out. CNN Opinion Research has joined the other polls this week now showing Santorum`s momentum. You can see here that in three of the four national polls now, he`s snuck ahead of Mitt Romney. Only in the Gallup poll does Santorum still trail, but only by a couple of points, 2 points. You`ve been through this, Chip Saltsman. Here we are, what`s is looking like finally the gunfight at the OK corral. It`s finally come down, it looks like, between two candidates, what I`ve always believed was going to be Romney`s problem. Out there in the clear with one true-blue conservative candidate, he`s got problems.

CHIP SALTSMAN, REPUBLICAN STRATEGIST: Yes. I mean, this is going to be a challenge for him. And I think you`re right. It`s a little bit like the food fight, and we haven`t figured out who`s Bluto yet, the John Belushi character who starts it all.

MATTHEWS: Yes. (LAUGHTER)

SALTSMAN: But we don`t know -- I know he gets out unscathed, so who knows? But this is an ebb and flow type thing. Primaries are never pretty. Rick Santorum has all the momentum right now. He`s going into a lot of delegate-rich states over the next two weeks. I think there`s something like 400 or 530-some-odd delegates between now and after super- Tuesday. And there`s a lot of proportional states in there and there`s a lot of states that look good for Santorum, except maybe Virginia. I`m pretty sure Romney`s going to win Virginia. But Romney`s to make this stand, I think you`re right, in one of his home states, which is Michigan. And if Michigan goes down, if Santorum wins Michigan, he`s probably not going to have a great super-Tuesday.

MATTHEWS: Let me go to my friend Joan on this. Looking across the aisle, across the middle politically, it is enjoyable, isn`t it, to watch this.

JOAN WALSH, SALON, MSNBC POLITICAL ANALYST: It`s very -- yes, it`s very enjoyable. All of these candidates are doing President Obama`s work for him, so we can sit here and laugh. And we also have a situation where I think 62 percent of Republicans in a recent poll said they wished somebody else would get in. They`d like to have another candidate. So they`re in trouble, Chris, and we know it. But I think what`s really striking about this latest Romney barrage -- I have just taken it for granted that negative ads work, and he bloodied up Gingrich and he`s going to do the same to Santorum. But if you look at these latest ads, I don`t know. They`re pretty weak tea. They`ve got -- they`ve got that same voice of concern and doom. (LAUGHTER) But you know, earmarks and pork, like it or not, everybody has done it. Hillary Clinton, like her or not, she`s not as polarizing as Nancy Pelosi. He voted with her...

MATTHEWS: Yes. WALSH: ... on a hot button issue. But there`s something a little bit interesting about this because I think -- I always thought he could smear Santorum, but he hasn`t really landed a punch as far as I can see.

MATTHEWS: Well, you -- Joan, you`ve teed it up for us. Here he is, the pro -- here it is, the pro-Romney super-PAC, Restoring Our Future, ad that was unleashed. It`s all negativity. It`s going at Rick Santorum in three upcoming states, Michigan, we`re talking a lot about now, Arizona, Ohio. Here`s their latest ad from the Romney-aligned PAC. Let`s watch.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: How did Rick Santorum actually vote? Santorum voted to raise the debt limit five times and for billions in wasteful projects, including the "bridge to nowhere." In a single session, Santorum co-sponsored 51 bills to increase spending and zero to cut spending! Santorum even voted to raise his own pay and joined Hillary Clinton to let convicted felons vote. Rick Santorum, big spender, Washington insider. Restore Our Future is responsible for the content of this message. (END VIDEO CLIP)

MATTHEWS: Oh. Well, the Santorum ad has produced this ad in response. It`s called "Rombo," and it mocks Romney`s reliance on negative ads, like you just saw, to destroy his opponents. A lot of people think this is a very smart ad. Let`s watch it.

(BEGIN VIDEO CLIP) RICK SANTORUM (R-PA), FMR. SEN., PRESIDENTIAL CANDIDATE: I`m Rick Santorum and I approved this message. UNIDENTIFIED MALE: Mitt Romney`s negative attack machine is back on full throttle. This time, Romney`s firing his mud at Rick Santorum. Romney and his super-PAC have spent a staggering $20 million (INAUDIBLE) attacking fellow Republicans. Why? Because Romney`s trying to hide from his big government "Romney care" and his support for job-killing cap-and- trade. And in the end, Mitt Romney`s ugly attacks are going to backfire. (END VIDEO CLIP)

MATTHEWS: Gotcha! That really does look like a slightly chunkier Mitt Romney! They got a great actor in their from their casting. And he looks kind of like a crazy person, almost like -- you know, I`m trying to think of one of the cartoons. Who was the guy that was always chasing Bugs Bunny, you know? Elmer Fudd. (LAUGHTER)

MATTHEWS: I mean, he didn`t look like a real Rambo, he looked like Elmer Fudd as Rambo. Your thoughts on that ad`s power?

SALTSMAN: Well, I think the ad`s very good. I mean, it takes a very negative environment that we`ve been in for the last couple weeks and makes fun of it. And I think it`s kind of a very relaxed ad. It kind of sneaks up on you. And at the end of the day, you`re, like, Hey, that`s right, Governor Romney is trying to throw mud and -- against my guy, Rick Santorum, or against the candidate Rick Santorum. And I think it`s a very effective ad for Santorum. And I think on the Romney side, you see what they`re trying to do. They`re trying to paint him as Rick Santorum, another Washington insider. And that`s where the lines are drawn as we move forward for the next two weeks.

MATTHEWS: Joan, I don`t watch television the way most regular people do, meaning a lot -- most people that come home, they`re tired. They go in the living room, maybe they watch TV while their wife, in some cases, is making dinner, or the husband in some weirder cases is making dinner. And they watch television throughout the night. If you`re a normal person like that in this season and you`re living in, say, Detroit or somewhere in Michigan now, you`re about to live a miserable next month or two. I mean, the next couple weeks, you`re going to be watching nasty, nasty, nasty. I can`t believe that a regular person likes it.

WALSH: I can`t, either. You know, sometimes I play a regular person. I walk around trying to be one, Chris. And I think that you look at that Santorum ad -- I loved it, you know? And I... (CROSSTALK)

MATTHEWS: I`m talking about the Romney ad, which is, like, the same old...

WALSH: Well, right. But I mean, I think...

MATTHEWS: ... negative, negative stupidity. Go ahead.

WALSH: I think that`s why the Santorum ad -- Chip and I don`t agree on much, but you know, that could cut through this clutter and cut through the negativity. I think all of us can agree that we don`t want to see Mitt Romney buy this election, whether it`s, you know, fighting Rick Santorum or fighting President Obama. So there`s something populist in this reaction to it. And I agree, people sitting on their couches are not going to want to hear that droning voice telling them what a bad guy Rick Santorum is.

MATTHEWS: You know, Chip, what`s your...

WALSH: Romney has still not -- go ahead.

MATTHEWS: No, go ahead. Go ahead. WALSH: Well, Romney has still not sold himself. He`s still -- he`s still doing this tired old thing of trashing his opponent, rather than saying, This is what I`m for and this is what I`m going to do as president. And I think that`s a real problem.

MATTHEWS: I was refreshed to see that Rick Santorum actually put his name right at the beginning of the ad and I think at the end of the ad there. Chip, I mean, he`s -- he`s loving the identification with this funny ad, whereas the other one, the spooky ad that Romney`s running, it`s run by some, you know, phantom PAC.

SALTSMAN: Well, I think what you`re seeing is Santorum is having a great time. He`s kind of playing the role of happy warrior.

MATTHEWS: Yes.

SALTSMAN: He`s talking about the issues that he believes in. He`s passionate. You can see that with him. He knows who he is, what he believes and why he`s running. And I think if Mitt Romney`s going to be successful, he`s got to kind of do the same thing. We got to know who he is, what he believes, and how he`s going to be as president.

MATTHEWS: OK.

SALTSMAN: And he hasn`t quite done that yet.

MATTHEWS: OK, in the spirit of fun, here we are. It`s Wednesday. We`re going to have some real fun now. Here`s the Mitt Romney ad that was out yesterday, with him driving around "Duh-twa," Detroit, reminiscing about his Michigan childhood. Keep an eye on -- this is his home state, according to this ad. Let`s watch.

(BEGIN VIDEO CLIP) MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL CANDIDATE: I grew up in Michigan. It was exciting to be here. I remember going to the Detroit Auto Show with my dad. That was a big deal. How in the world did an industry and its leaders and its unions get in such a fix that they lost jobs, they lost their future? President Obama did all these things the liberals have wanted to do for years, so the fact that you`ve got millions of workers out of work, home values collapsing, people here in Detroit distressed... (END VIDEO CLIP)

MATTHEWS: OK, in the spirit of levity, back in July, Romney drove around New Hampshire remembering his family moments in that state. (LAUGHTER)

MATTHEWS: Let`s watch this. (BEGIN VIDEO CLIP) ROMNEY: We`re headed to Berlin today in the north country. We used to come here early on with our boys, played in the streams and went to the woods and climbed through the crevasses, Franconia Notch, to get to the (INAUDIBLE) rocks and get quite a -- quite a sense of nature up here. It`s really an extraordinarily beautiful place. (END VIDEO CLIP)

MATTHEWS: Well, Chip, he`s got five states to draw and he`s got a house now in California. He lives in New Hampshire. He lives in Massachusetts. He was from Detroit. He, of course, made his bones out there in Salt Lake City. How many places is he going to be driving this year? Except`s is never going to show us driving to Montreal with the poor dog strapped to the roof! He`s not going to show us that driving scene, is he, Chip. SALTSMAN: Yes, my dog -- my dog does not like that story. (LAUGHTER)

WALSH: No, mine, either.

SALTSMAN: And I really like the beginning of these ads, but then it goes -- we go through the hills and crevasses. I don`t know. I grew up going through hills and valleys and gullies, not crevasses. And he`s just got to kind of tear down the talking points and just tell us who he is and what he believes. I liked the very beginning driving through Detroit, going to the auto show with his dad, but then he kind of pivots and then goes after the president on what`s going -- and the unions, which I understand that, but I still think if he would just talk about who he is Look, this is a guy who`s raised a great family. He`s been very successful in business. He was a good governor. He did a great job in turning around the Olympics in Salt Lake.

MATTHEWS: Yes.

SALTSMAN: Those are the things I think people would like to know about him. He`s just not talking about them.

MATTHEWS: What do you think of this driving scene? I don`t know, Joan. It`s -- it doesn`t grab me (INAUDIBLE)

WALSH: I can`t wait to see him driving through California. I guess we`re another one of his home states, Chris. But you know, to what Chip is saying -- I think he`s got a problem because we saw the more we focused on Bain Capital, the more he looked like Mr. 1 percent. The more we focus on his record as governor of Massachusetts -- look, there are some things about it I like. If he`d stayed that guy, he might have been a different guy and a more electable guy in the general election, but he wouldn`t get through a primary. So he can`t go, and you know, brag about either Bain or Massachusetts because he`s trying to run away from both of those records. He can`t explain them in words that resonate with either primary voters or maybe even, you know, unaffiliated voters. So that is part of his problem. He may well be a great guy with a great family, but you know, Rick Santorum has more kids, and I`m not sure he`s even going to win on that head-to-head battle. So this is tough for him. I don`t think any -- we sit here and we, like, act as though, Oh, well, I can tell Mitt Romney what to do. I can`t. I have no idea what he should do.

MATTHEWS: You know, I`m getting very tired, Chip, of candidates in both parties constantly acting like they`re regular people, and we know they`re not, the big masquerade. I`m just a regular guy driving around in a car. I own a quarter billion dollars. Anyway, thank you Chip Saltsman. You should be running a campaign. You`re too smart to be doing this. (LAUGHTER)

MATTHEWS: Thank you, Chip, for coming in.

SALTSMAN: Appreciate it, Chris.

MATTHEWS: No, you sound really smart. Please come back. And Joan, of course you are. You`re like me. We watch this thing, we don`t do it. Coming up: All of a sudden, things are looking unusually good for President Obama. Wait until you see these polls coming back. He`s up in those polls. And he`s got a new spring in his step. Look at that. He`s up. This guy is going places, maybe back to the White House for four more years. You`re watching HARDBALL, only on MSNBC.

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MATTHEWS: Well, you might have missed this moment from President Obama`s trip to Wisconsin today. There`s the president being greeted at the tarmac by Wisconsin`s Republican governor, of course, Scott Walker, who gave him a custom Milwaukee Brewers baseball jersey. Walker is facing a tough recall right now after pushing through anti-union legislation. The meeting between Walker and President Obama was cordial and without incident, unlike the welcome, well, the president got last month in Arizona from -- there she is, putting that finger up at him! That was Jan Brewer being real tough on the tarmac. We`ll be right back. (COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. There`s a long way to go, of course, until November, but the White House might have reason to be in a celebratory mood right now. That`s because on issue after issue now, things have been going the president`s way. And there are new numbers out from "The New York Times"/CBS poll that are sure to make the president happy. Take a look. His approval is at a nearly two-year high now, not counting that blip after the Osama bin Laden raid, 50 percent now versus 43 percent who disapprove -- 50-43 positive for the president. That`s the exact opposite -- if you want a comparison to last September, back in the fall, it was the other way around, 43 negative, 50 positive. Anyway -- or actually 43 positive and 50 negative. Just as important for the president and the Democrats, they`ve closed what they call the "enthusiasm gap" with Republicans. Just last month, the numbers were lopsided, with the Republicans more enthusiastic to vote this November. We`ll take a look at the new numbers. An equal number of voters now from both parties say they`re more enthusiastic to vote, which means people are just as hot to get out there and vote for the president as vote against him, which is amazingly, a big development. On the economy, there`s been a big shift now in how Americans view the recovery. This is objective reality -- 34 percent say things are getting better. Back in September, it was just 12 percent said that. And far fewer people are saying it`s getting worse. So all in all, the numbers are looking much better for the president than they did just recently. To look at the numbers, Chuck Todd`s the chief White House correspondent and political director for NBC News, and Major Garrett`s the White House correspondent for "National Journal" -- two of the smartest guys in the business right now, smartest people -- no, really. No, really. I`m not always sarcastic!

CHUCK TODD, NBC POLITICAL DIR./WHITE HOUSE CORRESPONDENT: No, I know. (CROSSTALK)

TODD: And I`ll take it.

MATTHEWS: I want to know (INAUDIBLE) the White House have got happy feet over this.

TODD: Cautious happy feet, but they do. I mean, number one, I think we know why the numbers have improved. It`s because the economic data has been coming up positive...

MATTHEWS: The objective reality. TODD: ... three straight months. You know, we`ve seen these blips up and down for the last two years, and every time -- I remember our own pollsters would say, Let`s see if he can put the -- let`s see if the country will feel like it`s getting better on the economy for three straight polls, and they couldn`t do it for the longest period of time. Well, now you have the combination of -- you see the jobs reports coming, the stock market is up...

MATTHEWS: Yes.

TODD: ... and in a weird way, I have this -- I think the European disaster, if you will, economically, what`s going on over there, is having a weirdly positive effect over here (INAUDIBLE) You know what? Things aren`t as bad as it is over there. We`re in relatively good shape. So you throw all of that together, and that has just slowly elevated...

MATTHEWS: Isn`t the Greece situation getting better?

TODD: ... numbers -- well, they seem to be coming to resolution...

MATTHEWS: Yes. Yes.

TODD: ... but it all of a sudden makes business -- doing business with America again not so bad.

MATTHEWS: Let`s talk about reality here and perception. Major, is it the way you see it the same way, that it is the reality has changed the perception, the voters are smart, they can pay attention? The only bad number out there I saw last night is when I filled my gas tank coming home last night.

MAJOR GARRETT, "NATIONAL JOURNAL": Right.

MATTHEWS: It blew me away. I`ve never seen $75. I know I buy supreme, but 75 bucks to fill the tank is -- I know it`s a world record for me. TODD: Go to Virginia, by the way.

GARRETT: That is a variable that is going to be and is a concern in the White House because even if nothing happens unexpected in the Middle East -- and we have to imagine that something unexpected might happen, everyone is concerned about that. But even if it doesn`t, the Department of Energy is already projecting in urban areas that have to have reformulated gasoline during the summertime, gas prices of $5.50 or above in Chicago, New York, Philly, places like that. Those are going to be high, high gas prices early in the summer, not late in the summer. That is one variable. But, Chris, as you well know in politics, you can`t tell people things they don`t actually believe and get them to believe it. They have to believe it around themselves. And people do believe net-net the economy though not great is moving at least in a positive direction. But remember this. The president didn`t move from the low 40s to the 50 in one poll. He moved gradually. Why? Because in September, the White House said, you know, we have spent eight-and-a-half months with Republicans. We went through three different debt and deficit debates. None of them resolved well. All of our numbers are down. We`re done with that. We`re going to campaign. We will govern when we have to and when Republicans come our way. The payroll tax rollover this week is a classic example. But in the main, we are going to campaign. We are going to divide issues. We are going to put our side on one side and the Republicans on the other and we will let the people decide. They have been doing that consistently, persistently since September, and they are now yielding some of the fruits of that strategy. (CROSSTALK)

MATTHEWS: So the bottom line of the Republicans screwing them on the deal and saying we won`t even take a 10-1 deal on revenue suspending, we won`t cut any deal, we can`t get the Tea Party to do it, so we`re not going to do it, that in a way has helped the president, because he says, I`m not going to waste time with you guys anymore. I`m going to campaign on jobs. TODD: Because he -- they went and said, well, they`re campaigning. They have made the decision that they are done working with us. They have made a political decision. MATTHEWS: They`re screwing... (CROSSTALK)

MATTHEWS: Yes.

TODD: So we`re going to do the same. (CROSSTALK)

MATTHEWS: But you agree with Major? (CROSSTALK)

TODD: Absolutely. (CROSSTALK)

MATTHEWS: Ever since September, this guy has been running for reelection on the jobs issue.

TODD: And it`s been a message we`re going to get the whole -- what is it, we can`t wait was their fall mantra. They have changed it a little, but it`s the same idea. Look what he is doing today. But let`s not also overlook the fact that the Republican -- there isn`t yet a Republican, an optimistic Republican alternative. And I think that is helping the president. Because these debates have sort of dragged down everybody in the Republican Party in this presidential race, there isn`t -- you say those enthusiasm numbers. It is as much about the Democratic number going up as frankly the Republican number is going down.

MATTHEWS: Yes.

TODD: And that`s because there is just less enthusiasm for this field.

MATTHEWS: Let`s take a look at the president. He gave a rousing speech out in Milwaukee today. Listen to what he had to say about the state of the economic recovery. Let`s watch.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We`re still recovering from one of the worst economic crises in three generations. And I`m not going to lie to you guys. You know it -- we`ve still got a long way to go before everyone who wants a good job can find it. But here`s what I want everybody to remember. Over the last 23 months, businesses have added nearly 3.7 million new jobs. (CHEERING AND APPLAUSE) OBAMA: Manufacturing is coming back. Companies are starting to bring jobs back. The economy is getting stronger. The recovery is speeding up. (CHEERING AND APPLAUSE) OBAMA: And now we have to do everything in our power to keep our foot on the gas. (CHEERING AND APPLAUSE) OBAMA: And the last thing we can afford to do is go back to the same policies that got us into this mess. (END VIDEO CLIP)

MATTHEWS: How did he luck out in having a guy who looks like he is still one of the two front-runners, Romney, vote completely against the auto bailout and HE is walking around as Mr. 1 Percent? He almost ought to have 1 percent on his jersey, this guy Romney.

TODD: Well, you know, and it struck me listening to the president there he feels as if he now has an optimistic message to sell. Hey, we have turned the corner. It is starting to get better. See, our policies are working. And we`re watching Mitt Romney test out in Michigan right now this message of, yes, it`s getting a little bit better or, yes, the auto industry is back and that`s good, but that was the wrong way to do it.

MATTHEWS: Yes.

TODD: Selling a more pessimistic message of saying, no, that was the wrong way to do it. How will voters buy that? Granted, this is just a little Petri dish test of inside a Republican primary, but I think it is a tough message for Romney to sell. It`s sort of saying, yes, things are getting a little bit better, but, boy, it should be even -- should be even better at this point. He did things all the wrong way and it has got to be selling a more... (CROSSTALK)

TODD: It`s harder. It`s harder. (CROSSTALK)

MATTHEWS: There`s something sour about that. It`s like saying to a guy, you bought a car without talking to me? It`s like knocking the success we`re getting.

GARRETT: Right. That is all true. I think there is also something that is very important worth noting both politically and a matter of policy this week. The president`s budget in fine print said for the whole country to look at what he has said rhetorically, which is, I am going to raise taxes on the wealthy. The president has said that before in previous budgets, but he has added new proposed tax increases in this budget year. I have got a piece that I`m working on for the magazine this week. I don`t recall -- and I`m trying to research this, but I don`t recall a Democrat running for reelection and proposing higher taxes since 1948, since Harry Truman. The president believes not only is that good policy, but importantly - - and I think it`s kind of a Rubicon he has crossed here politically -- that he can talk to the country aggressively about raising taxes, not just the Bush tax cuts for the wealthy expiring, but things of his own, the Buffett rule, dividends, other things like that and saying I`m going to do that. (CROSSTALK)

MATTHEWS: Do you buy the Nate Silver theory that he is consciously saying, OK, I will lose some upper income people, but I`m going to get a lot more regular people in that tradeoff?

GARRETT: Yes. Absolutely. MATTHEWS: That`s what he`s playing... (CROSSTALK)

MATTHEWS: That seems to be what he`s up to. (CROSSTALK)

GARRETT: I think that he`s translated -- when you take rhetoric and you put it in your budget -- even though it`s kind of a political document, it is still a governing document, it`s the intention of a president for the entire country to see. That is an important signal that I think the president is sending both politically... (CROSSTALK)

MATTHEWS: ... by the way, he is trading off a couple of rich people to get a lot more working...

TODD: Well, I don`t know if it`s a tradeoff. I just think it`s a -- if you`re going to do this fairness message and frankly if you`re going to have this conversation about the deficit that clearly is coming, he can`t box himself in governing.

MATTHEWS: Yes.

TODD: He is being sort of honest about where things are going to be in the way he wants to bring down the deficit.

MATTHEWS: Right.

TODD: Keep in mind, November is going to decide the fate of the Bush tax cuts, not just his health care plan, but the fate of the Bush tax cuts. That`s a lot on the line. I love where Major is going with this because it is -- people need to realize that is -- we have not had sort of that sort of... MATTHEWS: You mean elections matter. I like it when they do. (CROSSTALK)

MATTHEWS: We have got to go. I`m sorry. (CROSSTALK)

GARRETT: Fully-engaged debate on taxes.

MATTHEWS: I know. I really do believe elections should matter and they should respond to the result of the voters. Listen to the voters, politicians, and do what they tell you. (LAUGHTER)

MATTHEWS: Chuck Todd, thank you. Major. I`m sure they`re listening. Up next: President Obama makes a prediction about what we will see at the Republican Convention this summer down in sweaty Tampa. That`s next in the "Sideshow." You`re watching HARDBALL, only on MSNBC. (COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Now for the "Sideshow." First up: Crashing the party? When President Obama was interviewed by a local NBC affiliate down in Tampa yesterday, he predicted that the Republican Convention there this August would feature a lot of anti-Obama messages. Let`s listen to the president.

(BEGIN VIDEO CLIP) QUESTION: You know, we have a Republican National Convention coming to Tampa. Chance of seeing you in the neighborhood any time? OBAMA: Well, I suspect there will be a lot of signs with my face on it from some of those Republicans, but it may not always be flattering. QUESTION: Santorum, Romney? OBAMA: Oh, I -- you know, I`m not going to pick it. QUESTION: Gingrich? OBAMA: But I`ll tell you what, though. I hope that they spend a lot of money in Tampa while they`re there and create some good business for folks. (END VIDEO CLIP)

MATTHEWS: Well, do I detect an upbeat tone in the president`s voice? I think so. And, finally, still having doubts? Over the weekend, Sarah Palin said she wasn`t convinced that Mitt Romney is conservative enough for either her or the Republican voter out there. Well, here is Romney responding to what Palin said. And then listen to what Palin said about Romney -- which Romney said.

(BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We should probably spend time with Sarah Palin, although she is hard to find. I`m not quite sure what she would be preferring to. I`m pro-life. I`m pro-traditional marriage. I believe in the Second Amendment. SARAH PALIN (R), FORMER ALASKA GOVERNOR: A lot of this has to do with somebody`s past. You know, were they were they pro-abortion before and now perhaps they`re pro-life, and what allowed that switch, kind of that flip- flop? Were they pro-big government, pro-increase of taxes back then? And where are they now? So it`s subjective when you try to measure somebody`s conservative quotient. (END VIDEO CLIP)

MATTHEWS: Well, I think she is talking about his past, so she can get him off his present. I think she is hedging, in other words. And I think if Romney wins, Governor Palin does not want to be left stranded up in Alaska. Up next: big question for Republicans. Is it time to hit the panic button? We are seeing evidence they`re doing just that. And that`s ahead. You`re watching HARDBALL, only on MSNBC.

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BRIAN SULLIVAN, CNBC CORRESPONDENT: I`m Brian Sullivan with your CNBC "Market Wrap." The Dow ends its worst session of the year, fell 97 points, the S&P off seven, the Nasdaq off 16. But overall industrial production was flat last month. Factories though were busy, with manufacturing up 0.7 percent. The minutes from the Fed`s last meeting show the members were divided about another round of bond buying to try to boost the economy. And John Deere says strong sales have profits up 4 percent. Investors though expecting more -- shares lost 5 percent. That`s it from CNBC, first in business worldwide -- now back to HARDBALL.

MATTHEWS: Well, back to HARDBALL. The flip side to all of this positive news for President Obama is all the negative news there is for the Republican candidates these hours. There`s been little for the GOP to celebrate, let`s face it, starting with a primary season that has left even Republican voters wondering, is this all there is? Our question tonight, is it time for Republicans to hit the panic button and start looking for other candidates, even now? Joining me now is an old friend, Ed Rogers, former aide to President Herbert Walker Bush. He goes way back. (LAUGHTER)

MATTHEWS: And MSNBC political analyst David Corn to enjoy the festivities here. He is with "Mother Jones," a magazine that covers the Republican Party instinctively. (LAUGHTER)

MATTHEWS: Republican voters don`t seem to care for any of the candidates. Take a look at these latest CBS/"New York Times" poll numbers, which show that only one-third of Republican voters are even satisfied with the candidates still standing -- 62 percent wish there were other choices out there, in other, words other candidates. Compare that to the beginning of October, when Republicans were evenly split on the issue, 46/46 in terms of were they happy with their field. Where are you, Ed Rogers? Are you happy with this field that now has come down to basically Mitt Romney, who is only ahead in one of the three big national polls, and Santorum, who is right ahead of him in a couple of these three polls? And, of course, Newt is still in the race too.

ED ROGERS, REPUBLICAN CONSULTANT: Yes, it is not a flattering time for our party. We are into a hand-to-hand combat phase that doesn`t serve the Republican Party very well.

MATTHEWS: Do you like the combatants?

ROGERS: There will never be a better contrast than there is with Obama now. MATTHEWS: Do you like the combatants in your field? ROGERS: You play -- you fight with the Army you have got. (CROSSTALK)

MATTHEWS: What happens? (CROSSTALK)

ROGERS: It`s going to be one of those two guys. We`re not going to have another nominee. (CROSSTALK)

MATTHEWS: Is there still a structure, a hierarchy in your party that can meet somewhere at the petroleum club somewhere?

ROGERS: I wish. (LAUGHTER)

MATTHEWS: You wish. DAVID CORN, MSNBC POLITICAL ANALYST: Yes.

ROGERS: What happened to the smoke-filled rooms? I never made it. No, it`s going to be -- our primaries are going to resolve this. It`s going to be one of two people, it looks like. The prediction business is a dangerous business.

MATTHEWS: Yes.

ROGERS: But, yes, it`s going to be Romney or Santorum. But in the end, it`s going to be a -- if the Republicans do a good job, it`s going to be a referendum on Obama. It`s not going to be about the Republican nominee.

MATTHEWS: I accept that because the economy is so rocky. If the economy drops, I would go with that. Let me ask you before I get to David here, who is looking at the other team here -- you`re the team. (LAUGHTER)

CORN: Thank you. (CROSSTALK)

MATTHEWS: Do you think Santorum could stand the muster and the incredible scrutiny he will get in a general election, with all those comments about women and gay people that are so divisive to a lot of people, and offensive even? Can he take that kind of assault of scrutiny? (CROSSTALK)

ROGERS: He is about to see the kitchen sink up close and in person.

MATTHEWS: Yes.

ROGERS: We`re going to find out everything and more than we ever wanted to know about Rick Santorum. And that will suggest what his vulnerabilities could be in a general election contest.

MATTHEWS: You`re going to get it from Romney. Romney will serve it up. (CROSSTALK)

CORN: Oh, yes, with a lot of money behind it.

MATTHEWS: What about the Democrats? Do the people of the White House and the people on the Democratic side, are they storing up for him if they`re lucky to get him?

CORN: I will tell you something. I contacted some of the Democratic strategists who worked against him on the Bob Casey race when he was beat in Pennsylvania by 18 points.

MATTHEWS: By 18 points.

ROGERS: Seventeen.

CORN: And I called with some questions. And they said, we`re not talking about Rick Santorum yet. They have gobs of opposition research back in those days. And they`re just kind of sitting on it. They`re waiting to see what is going to happen, which is the smart move for them to make. You know, the interesting thing, if you look at the numbers that you just put up, about 60 percent of Republicans being dissatisfied with the race on the Republican side...

ROGERS: Well, 100 percent are dissatisfied with Obama. CORN: No, no, no. Well, maybe with Republicans. But if you go back and look at 2008, that was a hard-fought race between the Democrats, but the people weren`t saying we`re not dissatisfied with Hillary Clinton or Barack Obama. They still liked them a lot. MATTHEWS: OK. OK. Let`s look at the numbers. Here are the favorable/unfavorables right now on the Republican front-runners. Gingrich, 63 percent unfavorable, 25 percent favorable. Look at that spread. Romney, 54 percent unfavorable, 34 percent favorable, a 20-point spread there. Santorum, he`s relatively OK, 38 percent unfavorable. 32 percent favorable. He at least -- well, he doesn`t have a positive, but he doesn`t have a bad negative. CORN: That is pre-kitchen sink. MATTHEWS: Pre-kitchen sink. So you guys -- the one that`s best known, Gingrich, who has been around forever, is almost two-thirds negative right now. And Romney`s majority negative. ROGERS: I don`t think Gingrich has ever had a positive/negative popular ratio. (LAUGHTER) MATTHEWS: Just after he was born? CORN: Since 1978.

MATTHEWS: You think mommy didn`t like him? (CROSSTALK)

ROGERS: Since he`s been a public figure.

MATTHEWS: OK.

ROGERS: Those numbers are interesting, but they`re not relevant.

MATTHEWS: What?

ROGERS: You can`t take those numbers and extrapolate out to a general election. Eighty percent of what is going to drive votes in November of 2000 -- of 2012 lies in front of us, not behind us. This is not –

MATTHEWS: Let`s take look at this Limbaugh comment because I want to race forward to this comment because I think your right wing auxiliary on radio and on FOX has lost its voice. People like Bill, what is his name?

DAVID CORN, MOTHER JONES: Kristol.

MATTHEWS: Kristol -- are all dumping on your candidates.

CORN: Yes.

MATTHEWS: Here`s worse than dumping on your candidates.

ROGERS: That`s a good sign.

MATTHEWS: Here`s an example of a crazy guy -- not crazy, smart normally. But here`s Limbaugh taking you guys off the cliff with him by talking about -- and here is a big guy, a male figure -- talking about birth control yesterday. Not about the church, just birth control.

(BEGIN VIDEO CLIP) RUSH LIMBAUGH, RADIO TALK SHOW HOST: What do Democrats inherently fear about pregnancy? Well, they`ve made it into a disease. Pregnancy is a great health risk for women. Could it be that Democrats fear kids? I mean, they are aborting their own people. The vast majority of people having abortions are Democrat voters. (END VIDEO CLIP)

MATTHEWS: OK. Is that helpful to your campaign? ROGERS: That is what is called in politics playing to your negative stereotype. Rush Limbaugh is a good man and a wise man. He ought not to say that. CORN: Oh, Ed.

ROGERS: It`s definitely not helpful to the Republican cause. You ought not -- and the worst thing you do in American politics is play to stereotypes. (CROSSTALK)

MATTHEWS: You mean, a guy with four wives and no kids –

ROGERS: I hope he has your next diatribe on his show.

MATTHEWS: Doesn`t bother me any.

CORN: If this plays with the Republican base –

MATTHEWS: This hatred of birth control.

CORN: It shows -- this is the problem Mitt Romney is having. The Republican primary base has moved so far to the right but it`s also animated by a tremendous hatred of the left, of Obama, and Democrats.

ROGERS: You always say that. Democrats always say the Republicans hate –

MATTHEWS: That sounds like hatred of women. That`s a weird kind of message.

CORN: But this is expanding it beyond Obama to saying Democrats are aborting their own, Democrats are immoral. They don`t like women. Women - - I don`t like women. I don`t know what he is even saying there but whatever. He is one of the leaders of the right. (CROSSTALK)

MATTHEWS: He is challenging the right of a woman to decide who wants to get pregnant. It is an astounding assault on women`s rights that he`s playing over there. I don`t care what language he uses about aborting and all that. He`s basically saying me, this big guy, this big guy is telling women there`s something wrong with you and deciding whether you want kids or not. He`s been married four times without kids. I wonder if birth control has something to do with it. It`s a joke.

ROGERS: Oh, come on. There is no point in personalizing it.

MATTHEWS: I have to. CORN: Rush Limbaugh personalizes everything.

MATTHEWS: He said the Democrats are aborting their young.

ROGERS: You are playing to a Republican negative stereotype and I wish he hadn`t done it. It is not going to drive votes. It`s not going to make anybody vote one way or the other in November based on what Rush Limbaugh says. (CROSSTALK)

MATTHEWS: We should have more women on the show right now.

CORN: This is the problem your party has.

ROGERS: I agree.

CORN: The problem the party has is that stuff plays. He doesn`t say it for no reason. You have people out there who want to suck that stuff up -- and that`s what Mitt Romney has so much problem with.

ROGERS: The Democrats are not without their whacky stuff. I mean, it`s not stuff -- (CROSSTALK)

MATTHEWS: Rush Limbaugh has lost his compass because that`s not helping your candidates. Thank you.

ROGERS: It didn`t help.

MATTHEWS: Ed Rogers, thank you. We agree on that. Three men agree. So women out there say about time. Up next, Iran announces new advances in its nuclear project. This is scary. Now, it is threatening to cut off oil sales. What`s that going to do to our gas prices? I`ll talk about it in a moment, once you pay about 5 bucks. How worse can it in some places this summer? Well, this is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Well, another Kennedy is running for the United States Congress, Joseph P. Kennedy III, the grandson -- boy, has time marched on - - the grandson of Bobby Kennedy will announce his candidacy for Congress tomorrow. The 31-year-old Kennedy is running for the seat currently held by Congressman Barney Frank who is retiring. There hasn`t been a Kennedy in Congress since Congressman Patrick Kennedy of Rhode Island retired in 2011. That`s only two years ago. We`ll be right back.

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MATTHEWS: Welcome back to HARDBALL. Iran is ratcheting up the level of international tension with a series of recent developments. Well, today, the Iranian president made a big show. Here he is, Ahmadinejad, unveiling the country`s first domestically produced fuel rods in a ceremony that aired on Iranian TV. Second, there are conflicting reports out now that Iran intends to cut off oil to six European countries. And, third, there is a suspicion Iran was involved in Monday`s attacks on the Israeli diplomats in India and the former Soviet republic of Georgia. And botched attack just yesterday in Bangkok. We go now to Ali Arouzi, who`s NBC Tehran bureau chief. Run through all of those. First of all, the nuclear advance. How would you calibrate it?

ALI AROUZI, NBC NEWS: Well, for Iran it`s a big thing, Chris. They`ve really played it up on state TV, it`s been all over the news, Iran basically claiming they`ve mastered the nuclear fuel cycle. They have achieved 20 percent uranium enrichment -- which is a very difficult thing to do. It`s very difficult to get from 3.5 percent to 20 percent. They said they`ve manufactured their own centrifuges that are very sophisticated, much better than the last generation. And they said that they don`t need anybody else`s help. They`ve done this on their own despite sanctions, despite nuclear scientists being targeted. They`ve mastered the cycle on their own, and they don`t need anybody`s help and they`re going to forge ahead with this program. So, the big statement from Iran today, and also not far away from the parliamentary election where they want to appeal to people of national interest -- Chris.

MATTHEWS: Are they just daring Bibi Netanyahu, the prime minister of Israel, and, Ehud Barak, who`s the defense minister, to attack them? It looks like they`re just putting their chin out and saying, "Go ahead, punch me".

AROUZI: Well, there are people here who say there is a faction in Iran that is inviting an attack because it would galvanize support for the regime. The regime has become a lot weaker after the 2009 disputed election, and there is nothing like a war to solidify support for a nation. Now, there are other people who say, no, Iran doesn`t want that. They`re only looking after their self-interest and are not interested in a nuclear bomb. This is purely for civilian interests. But they seem to be pushing the envelope pretty far and this war of words with Israel is escalating beyond anything I`ve seen in the last seven years that I`ve been in Iran.

MATTHEWS: Well, thank you for that report. We`re now up to date -- Ali Arouzi over in Iran. How will escalating the tension over Iran`s nuclear program affect the U.S.? Well, earlier today, New York Senator Kirsten Gillibrand who sits on the Armed Services Committee itself described the stakes. Let`s listen to her.

(BEGIN VIDEO CLIP) SEN. KIRSTEN GILLIBRAND (D), NEW YORK: The problem is that Iran is determined to create not only an existential threat to Israel but to the United States. (END VIDEO CLIP)

MATTHEWS: Well, Robin Wright is a scholar the Woodrow Wilson Center and author of "Rock the Casbah: Rage and Rebellion Across the Islamic World," "Rock the Casbah." Well, there`s somebody -- I mean, Kirsten Gillibrand is pretty sound. What is she talking about -- existential threat to the United States? Is that a real -- how do they destroy us, Iran?

ROBIN WRIGHT, WOODROW WILSON INSTITUTE OF PEACE: I think it`s virtually impossible at least at this stage. First of all, Iran is not there yet. There is growing concern about what Iran`s capabilities are and its announcements today are kind of in your face, we can do it alone and we can do what we want. But it also comes not only in context of a new election two weeks away that will determine who is in parliament and who makes important decisions, but also on the eve of what may well be another round of diplomatic talks. At the same time, it may –

MATTHEWS: So, is this politics on both sides?

WRIGHT: Absolutely. The fact is that the Iranians sent a letter today to the head of the European Union Foreign Ministry to discuss the invitation to sit down at the table again.

MATTHEWS: Well, let`s take a look at the guy we cover relentlessly around here, President Obama. Do you think based upon his words, based upon his pattern, based on his advisers that he would attack Iran this year before the presidential election?

WRIGHT: No, not before the presidential election. I don`t think there will be an attack probably this year, unless there`s something –

MATTHEWS: How about the Israelis?

WRIGHT: Well, that`s a good question. But the issue is -- are there enough of these little incidents that happened in -- as in Georgia, India, in Thailand that then spiral out of control and become the cause for something much bigger?

MATTHEWS: Well, let me go back to my original speculation which I raised with Ali Arouzi over there in Tehran. You`re basically saying to Israel which does face a existential threat. You hit Tel Aviv with a nuclear weapon, you don`t even want to talk about it -- the damage it would do to humanity over there. And yet, this guy, they`re bombing, they`re killing people, they`re engaging in terrorist assassinations plots around the world. They`re bragging about their nuclear advance. It looks like they`re just saying every day -- imagine how this is playing in Tel Aviv, on television over there. They`re watching this guy -- this crazy guy, this zealot talking of what -- he`s talking nuclear.

WRIGHT: Well, most of what the Iranians are doing are actually legal under the terms of the Nonproliferation Treaty. They claim it`s all part of a nuclear peaceful energy program.

MATTHEWS: Again, Robin – W

RIGHT: I know, no –

MATTHEWS: -- imagine regular, the middle of the road Israeli watching this on television, you`re saying, Bibi, get your trigger finger ready?

WRIGHT: I think there`s a real split in Israel. I think there are some who are prepared to go whenever offered the opportunity. I think there are also many in the military who are very wary that you think Iraq and Afghanistan were tough, you try Iran. The repercussions are not simply the fallout in the immediate aftermath of a strike on a suspected nuclear facility. It is how it plays out across the region in changing the political dynamics.

MATTHEWS: Everybody sides with Iran against Israel.

WRIGHT: No, not at all.

MATTHEWS: The Arabs are secretly with Israel on this, aren`t they?

WRIGHT: Absolutely.

MATTHEWS: Aren`t they secretly anti-Iranian? They don`t want them to have a nuclear weapon. WRIGHT: And not only that, but the real danger is also that if Iran gets nuclear capability, that you then see proliferation in the Gulf and elsewhere.

MATTHEWS: I just wonder down the road about those -- most of us who care about Israel`s future, that you got to wonder what happens when all those countries go nuclear? What happens when Egypt, the new government, the new Islamist government that`s coming in, they want a nuclear weapon? What happens when the new government in Libya decides they want one? The previous government Gadhafi was headed that direction. What happens if a new government in Syria, which is Islamist starts going that direction?

WRIGHT: Wait a minute, you are jumping way ahead of where anyone is. The fact is, most of these countries are so desperate economically, not only could they not afford a nuclear program, they can`t even create jobs to keep their people happy.

MATTHEWS: They can`t buy with oil? WRIGHT: Egypt doesn`t have oil.

MATTHEWS: There`s a lot of former Soviet engineers floating around out there. Anyway, thank you, Robin Wright. You`ve made me feel better. When we return, "Let Me Finish" with why Romney -- that`s Mitt Romney -- is beginning to look a little goofy out there. We`re going to get to that. You watch HARDBALL right now -- you`re watching only on MSNBC. (COMMERCIAL BREAK)

MATTHEWS: "Let Me Finish" tonight with this: Ever since this campaign began, I thought if a conservative candidate could catch Mitt Romney in an open field, just the two of them out there, it would be a tough afternoon for the man from Massachusetts. Well, that day has come and it`s clear as day what we`re looking at. We`re looking at a candidate of the center-right trying to take on the real thing, someone who speaks, feels, and sweats the talk of the Republican base. Watch the next time you see Santorum speak to a crowd. He speaks as one of the people who`s in the room. He`s one of them. They can tell he`s one of them, just another true blue conservative. You can see the common idiom he uses, the common emotion, the passion that people talk to each other like people of the same tribe, you know, the passion of political tribe in this case. Now, watch Romney. Watch a guy who looks like he dressed for the occasion, the jeans, the open collar, the slightly mussed hair, as if he were headed to a costume party and he was told to dress like a conservative, like one of those people who show up at Tea Party meetings -- only just a little better, don`t you think? It`s like he`s bought the designer version of what the little people wear. The rich fellow`s dressed up to look like, again, the sort of people who come to Republican rallies. Well, it`s touching just a little, isn`t it? Jack Kennedy once said he felt sorry for his rival Richard Nixon because Nixon didn`t know what Richard Nixon to be each day. Well, that`s certainly no problem for Rick Santorum. You may think him an anachronism. You may think him zany or fear him as theocrat -- you know, a guy who wants his religion to be state`s religion, his values to be national law. All that may be true but Rick is what he is. He`s never changed the whole time I`ve known him. Romney doesn`t change either. He just pretends to. And that`s what`s begun to make his otherwise dignified man look so politically goofy. And that`s HARDBALL for now. Thanks for being with us. "POLITICS NATION" with Al Sharpton starts right now.

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